Tuesday, October 15, 2013

A Repo Implosion The Nightmare Scenario

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President Barack Obama is determined to prevail in his battle with GOP congressional leaders on the debt ceiling issue, but not for the reasons stated in the media.  Obama is less concerned with the prospect of higher interest rates and frustrated bondholders than he is with the big Wall Street banks who would be thrust back into crisis if there is no resolution before October 17.  Absent a debt ceiling deal, the repurchase market–known as repo–would undergo another deep-freeze as it did in 2008 when Lehman Brothers defaulted triggering a run on the Reserve Primary Fund which had been exposed to Lehman’s short-term debt. The frenzied selloff sparked a widespread panic across global financial markets pushing the system to the brink of collapse and forcing the Federal Reserve to backstop regulated and unregulated financial institutions with more than $11 trillion in loans and other obligations. The same tragedy will play out again, if congress fails lift the ceiling and reinforce the present value of US debt.


Repo is at the heart of the shadow banking system, that opaque off-balance sheet underworld where maturity transformation and other risky banking activities take place beyond the watchful eye of government regulators.  It is where banks exchange collateralized securities for short-term loans from investors, mainly large financial institutions. The banks use these loans to fund their other investments boosting their leverage many times over to maximize their profits. The so called congressional reforms, like Dodd Frank, which were ratified after the crisis, have done nothing to change the  basic structure of the market or to reign in excessive risk-taking by undercapitalized speculators. The system is as wobbly and crisis-prone ever, as the debt ceiling fiasco suggests. The situation speaks to the impressive power of the bank cartel and their army of lawyers and lobbyists. They own Capital Hill, the White House, and most of the judges in the country.  The system remains the same, because that’s the way the like it.

US Treasuries provide the bulk of collateral the banks use in acquiring their short-term funding. If the US defaults on its debt, the value that collateral would fall precipitously leaving much of the banking system either underwater or dangerously undercapitalized. The wholesale funding market would grind to a halt, and interbank lending would slow to a crawl. The financial system would suffer its second major heart attack in less than a decade. This is from American Banker:

As banking policy analyst Karen Shaw Petrou describes it, Treasury obligations are the “water” in the financial system’s plumbing.

“They’re the global reserve currency and they are perceived to be the most secure thing you can own,” said Petrou, managing partner of Federal Financial Analytics. “That is why it is pledged as collateral. … The very biggest banks fear that a debt ceiling breach breaks the pipes.”….

Rob Toomey, managing director and associate general counsel at the Securities Industry and Financial Markets Association, said institutions are concerned about whether Treasury bonds that default are no longer transferable between market participants.

“Essentially, whatever the size is of the obligation that Treasury is unable to pay, that kind of liquidity would just disappear from the market for whatever time the payment is not made,” Toomey said.”

By some estimates, the amount of liquidity that would be drained from the system immediately following a default would be roughly $600 billion, enough to require emergency action by either the Fed or the US Treasury. Despite post-crisis legislation that forbids future bailouts, the government would surely ride to rescue committing taxpayer revenues once again to save Wall Street.

Keep in mind, the US government does not have to default on its debt to trigger a panic in the credit markets.  Changing expectations can easily produce the same result. If the holders of US Treasuries (USTs) begin to doubt that the debt ceiling issue will  be resolved, then they’ll sell their bonds prematurely to avoid greater losses.  That, in turn, will push up interest rates which will strangle the recovery, slow growth, and throw a wrench in the repo market credit engine. We saw an example of how this works in late May when the Fed announced its  decision to scale-back its asset purchase. The fact that the Fed continued to buy the same amount of USTs and mortgage-backed securities (MBS) didn’t stem the selloff. Long-term rates went up anyway. Why? Because expectations changed and the market reset prices. That same phenom could happen now, in fact, it is happening now. The Financial Times reported on Wednesday that “Fidelity Investments, the largest manager of money market funds…  had sold all of its holdings of US Treasury bills due to mature towards the end of October as a “precautionary measure.”

This is what happens when people start to doubt that US Treasuries will be liquid cash equivalents in the future. They ditch them. And when they ditch them, rates go up and the economy slips into low gear.  (Note: “China andJapan together hold more than $2.4 trillion in U.S. Treasuries” Bloomberg)

Now the media has been trying to soft-peddle the implications of the debt ceiling standoff by saying, “No one thinks that holders of USTs won’t get repaid.”

While this is true, it’s also irrelevant. The reason that USTs are the gold standard of financial assets, is because they are considered risk-free and liquid. That’s it. If you have to wait to get your money, then the asset you purchased is not completely liquid, right?

And if there is some doubt, however small, that you will not be repaid in full, then the asset is not really risk free, right?

This is what the Fidelity flap is all about. It’s about the erosion of confidence in US debt. It’s about that sliver of doubt that has entered the minds of investors and changed their behavior. This is a significant development because it means that people in positions of power are now questioning the stewardship of the present system. And  that trend is going to intensify when the Fed begins to reduce its asset purchases later in the year, because winding down QE will precipitate  more capital flight, more currency volatility and more emerging market runaway inflation. That’s going to lead to more chin scratching, more grousing and more resistance to US stewardship of the system. None of this bodes well for Washington’s imperial aspirations or for the world’s reserve currency, both of which appear to be living on borrowed time.

The media has done a poor job of explaining what’s really at stake. While, it’s true that higher interest rates would make consumer loans more expensive and put the kibosh on the housing recovery, that’s not what the media cares about. Not really. What they care about is the looming massacre in shadow banking where USTs are used as collateral to secure short-term loans by the banks so they can increase their leverage by many orders of magnitude. In other words, the banks are using USTs to borrow gobs of money from money markets and financial institutions so they can finance their other dodgy investments, derivatives contracts and ancillary casino-type operations. If there’s a default, the banks will have to come up with more capital for their scams that are leveraged at 40 or 50 to 1. This systemwide margin call would trigger a deflationary spiral that would domino through the entire system unless the Fed stepped in and, once again,  provided a giant backstop in the form of blank check support.   Here’s how Tim Fernholz sums it up over at Daily Finance:

“…Many informed people are worried” (about) “A freeze in the tri-party repo market, akin to the cascade of troubles that followed the Lehman Brothers bankruptcy in 2008.”….

In 2008, more than a third of that collateral was mortgage-backed securities. When Lehman went bankrupt, its lenders began a “fire sale” of the securities it used as collateral, which drove down the value of other mortgage-backed securities, which led to more fire sales. This dynamic would eventually lead to a freeze in the repo markets, which, at the time, provided $2.6 trillion in funding to the banks each day…..

Today, most of the collateral in use is U.S. Treasuries and “agency securities” — mortgage-backed securities guaranteed by the U.S. government:

… if the ugly day of a default comes, lenders may simply stop accepting U.S. debt as collateral. That will have the effect of sucking some $600 billion in liquidity out of the banking system. Unable to get funding for Treasurys, securities dealers would be pressured to sell them-or other assets-to find new funding, creating a fire sale dynamic…..

And, of course, this scenario is only about how the Treasurys work in the repo markets. U.S. debt is used as collateral for derivatives swaps and numerous other transactions; if they are suddenly worth less than expected, lenders can be expected to demand more collateral up front, putting even more pressure on the financial system. That’s why pressure is building to raise the ceiling before the world’s largest economy enters a scenario with so much uncertainty.”

Repeat: “That’s why pressure is building to raise the ceiling before the world’s largest economy enters a scenario with so much uncertainty”.

So the Obama team isn’t worried that Joe Homeowner won’t be able to refi his mortgage or that the economy might slip back into recession. They just don’t want to see Wall Street take it in the shorts again. That’s what this is all about, the banks. Because the banks are still up-to-their-eyeballs in red ink.  Because they still don’t have enough capital to stay solvent if the wind shifts. Because all the Dodd Frank reforms are pure, unalloyed  bullsh** that haven’t fixed a bloody thing. Because the risks of another panic are as great as ever because the system is the same teetering, unregulated cesspit it was before. Because the banks are still financing their sketchy Ponzi operations with OPM (other people’s money), only now, the Fed’s over-bloated balance sheet  is being used to prop up this broken, crooked system instead of the trillions of dollars that was extracted from credulous investors on subprime mortgages, liars loans and other, equally-fraudulent debt instruments.

Can you see that?

This is why the media is pushing so hard to end the debt ceiling standoff; to preserve this mountainous stinkpile of larceny, greed and corruption run by a criminal bank Mafia and their political lackeys on Capital Hill. That’s what this is all about.

3 Disturbing Fukushima Facts the Government is Covering Up

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The mega Fukushima meltdown continues to assault the planet on a daily basis with barrages of radioactive fallout that have infiltrated everything from our international food supply to the Pacific Ocean. But instead of alerting us to this reality and helping us to be prepared for what’s coming, both the United States and Japanese governments have chosen to ignore and downplay the devastating affects of Fukushima in order to pretend that nothing is wrong.
And in return, of course, the result is the continued and unchecked nuclear contamination of the planet — and it’s getting worse. Let’s examine a number of deeply disturbing facts regarding Fukushima’s increasing emission of radiation, the advancing stages of meltdown, the downright insane management of the disaster, and of course how it is affecting us on a daily basis.

1. Fukushima Radiation Readings Continue to Hit New High

One of the most absurd lies put forth by TEPCO (Fukushima plant operator Tokyo Electric Power Co.) and backed by the government is the notion that Fukushima is really nothing to worry about. In fact, the incident was classified as a ‘Level 1 anomaly’ before it was revealed that radiation levels were skyrocketing to new highs as recently as September 4th of 2013. And it was this same revelation last September that forced the Nuclear Regulation Authority (NRA) to acknowledge this reality and change the classification of the Fukushima disaster to a Level 3 ‘Serious Incident’.
 
The radiation levels were high enough to kill an unprotected human within hours.

2. Plant Operators Caught Faking Radiation Readings

The very core of the Fukushima disaster timeline that has been regurgitated by the mainstream media and government agencies alike was almost exclusively based on information provided by plant operator TEPCO — a company that is now on record as having lied to the population of the world in a major way. And there were no signs they would ever tell the truth unless forced to. It wasn’t until an independent investigation revealed the actual levels of radiation released from the plant (around 2 1/2 times more than TEPCO would even admit) that TEPCO was forced to go on record and state that the radiation levels they released were indeed much lower than reality.
We can only imagine what else they are lying about.

3. Radioactive Caesium-137 was Mostly Drained into Pacific Ocean

The independent investigation into Fukushima radiation levels not only exposed the lies by TEPCO regarding the radiation explosion at the plant, but that around 78% of the caesium-137 released by the plant was funneling into the Pacific Ocean. The plant now states that the three reactor meltdowns at the Fukushima Daiichi plant released about 900,000 terabecquerels of radioactive substances. About 20% fell on Japanese land, 2% somewhere on land outside the country, and a whopping 78% remainder is believed to have entered the Pacific Ocean.
Meanwhile, fisheries continue to operate and governments continue to pretend nothing has gone wrong. And at the same time, the mainstream media (the dying media that continues to lose trust ratings according to major Gallup polls) pushes the propaganda that Fukushima is nothing at all to worry about — just keep eating seafood from Japan and don’t mind the fact that radiation levels are still spiking. And definitely don’t mind the EPA raising ‘acceptable limits’ of radiation in your food supply.
The answer is clear: exposing this information and inciting a reality check throughout the planet is essential to actually forcing the establishment to respond to Fukushima. Unfortunately, it once again appears that we are required to fend for ourselves on a survival level until we can reach the point where the public has truly had enough.
Personally, after speaking with top doctors and creating what is now a top natural health website worldwide, I teamed up with the internationally recognized expert Dr. Edward Group to create what is now the only form of nascent iodine I use — the Infowars Life Survival Shield nascent iodine product. A form of iodine that doctors have been utilizing for years since we have seen the incremental and intentional removal of iodine from the food supply at large.
It is essential to spread the word on the devastating depth of Fukushima before we see even higher levels of radiation enter the biosphere through the mismanagement and downright blackout surrounding the entire event on behalf of the government.

There Is a Vast Oligarch Conspiracy Afoot to Destroy the Retirement Plans of Millions of Workers

Pretending public pensions are the primary cause of state budget problems allows greedheads and ideologues to distract attention from their beloved corporate welfare.

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As state legislatures prepare for their upcoming sessions, you will no doubt hear a lot about public pensions. More specifically, you will hear allegations that states are going bankrupt because of their pension obligations to public employees. These claims will inevitably be used to argue that states must renege on their pension promises to retirees.

This is what I've called the Plot Against Pensions [3] in a report I recently completed for the Institute for America's Future. Engineered by billionaire former Enron trader John Arnold, championed by seemingly nonpartisan groups like the Pew Charitable Trusts and operating in states throughout America, this plot is not designed to strengthen pensions or to save taxpayer money, as its proponents claim. It is designed to slash public employees' guaranteed retirement income in order to both protect states' corporate welfare and, in some cases, enrich Wall Street.

Consider the math of state budgets. According to Pew's estimates, "The gap between states' assets and their obligations for public sector retirement benefits (is) $1.38 trillion" over 30 years. As the Center for Economic and Policy Research notes, this gap was not caused by benefit increases, as conservatives suggest. Data prove that most of it was caused by the stock market decline that accompanied the 2008 financial collapse.

Of course, regardless of cause, a $1.38 trillion shortfall sounds like an emergency. But it is a relatively tiny problem -- one that may require small changes, but does not require radical schemes to entirely eviscerate retirement benefits. That's because, as CEPR points out, in most states the shortfall "is less than 0.2 percent of projected gross state product over the next 30 years."

To put those numbers in perspective, remember that the 30-year $1.38 trillion pension shortfall is just $46 billion a year -- and "just" is the operative word in comparison to the amount states give away in the form of corporate subsidies.

According to a 2013 study by the U.S. Public Interest Research Group, states lose roughly $40 billion a year thanks to loopholes that let corporations engage in offshore tax avoidance. Additionally, a New York Timesanalysis recently found that "states, counties and cities are giving up more than $80 billion each year to companies" in the form of subsidies -- many of which create no jobs.

State and local governments, then, aren't bankrupt. Indeed, contrary to pension-cutters' assertions, they are so flush with cash that they spend a combined $120 billion a year on corporate handouts -- almost three times the total pension gap.

That's why, as the National Association of State Retirement Administrators, says: "The idea of imminent (public pension) insolvency is a gross distortion." It is also why McClatchy Newspapers declared that "there's simply no evidence that state pensions are the current burden to public finances that their critics claim."

Why, then, are public pensions being targeted by an Enron billionaire, the Pew Charitable Trusts, corporate front groups and right-wing activists? Because pretending public pensions are the primary cause of state budget problems allows greedheads and ideologues to distract attention from -- and therefore prevent cuts to -- their beloved corporate welfare. In some cases, it also allows them to embed language in pension "reform" proposals that transfers worker retirement money into alternative investments -- the kinds that incur expensive hedge fund fees and enrich Wall Street.

Lost in the debate, of course, is the simple fact that promises to workers are sacred - workers base career decisions on them. In the public sector sphere in particular, many workers traded the possibility of higher private sector wages for the promise of stable retirement benefits in the future.

For this reason, a plot that uses pension money to enrich the already rich should be called what it is: not just tragic or unacceptable, but downright immoral and inhumane.

Sydney’s week-long military extravaganza foreshadows new wars

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In November 2011, the former Labor Party Prime Minister Julia Gillard stood beside US President Barack Obama to align Australia with Washington’s military and diplomatic “pivot” to Asia. American and Australian strategic documents have been explicit about the purpose of this “pivot”—to position air and naval forces that will be used to wage war against China, and prevent the Asian power from attempting to supplant US imperialism in the Asia-Pacific region.
Behind the backs of the Australian population, the Australian military is being integrated into the US military’s AirSea Battle doctrine. Under this plan, US forces will launch attacks on the Chinese mainland, while Australian forces will cut off China’s maritime trade links with the Middle East and Africa, starving its economy of oil, gas and other essential resources. To this end, the former Rudd and Gillard governments committed to acquiring new warships and aircraft over the coming years. The newly formed Liberal-National government of Prime Minister Tony Abbott is seamlessly continuing these plans, pledging to significantly increase military spending to enable their realisation.
As the 100th anniversary of the outbreak of World War I approaches, a new war, with catastrophic global consequences, is being prepared. For the ruling elites and governments responsible, smothering the population—especially the youth—in an ideological fog of nationalism, patriotism and militarism is critical in order to mobilise the necessary cannon fodder, and to suppress the broad popular opposition to war.
This fact lies behind the unprecedented spectacle organised in Sydney over the past week. The city was transformed into an arena for the shameless glorification of militarism and war, ostensibly to commemorate the centenary of the entry into Sydney Harbour of the first fleet of warships purchased by the Royal Australian Navy (RAN) on October 4, 1913.
The character of the multi-million dollar extravaganza, dubbed “International Fleet Review”, had been determined by the Gillard Labor government and military commanders in late 2011. It featured the entry into the harbour of 19 Australian naval vessels, 18 warships invited from 17 other countries and a flotilla of tall-mast sailing ships. Tens of thousands of people crowded the foreshore last Saturday to watch as the ships, with jet fighters and helicopters flying overhead, were reviewed by the governor general, the Australian representative of the British monarchy, and by Prince Harry, fourth-in-line to the throne.
On Saturday evening, over one million reportedly assembled to watch what was billed as the largest fireworks and light display in the city since the 2000 Sydney Olympic Games. The iconic “sails” of the Sydney Opera House and the pylons of the Harbour Bridge were used to screen a sanitised “history” of the Navy, complete with broadcasts of wartime propaganda footage, laser lights, frenetic techno-rhythms and martial themes. After the playing of the “Last Post” and a minute’s silence, more than 7.7 tonnes of fireworks were blasted into the night sky from warships, barges, the bridge and city skyscrapers. To conclude the festivities, “We Salute You” and the emblem of the RAN were beamed onto the Opera House.
Every second of the mind-numbing event was aimed at covering over the ghastly realities of war, and whitewashing the war crimes of Australian imperialism.
The state-owned media outlets, the Australian Broadcasting Corporation (ABC) and the Special Broadcasting Service (SBS), joined with Fox-owned Sky News to televise enthusiastic, breathless commentary. As well as the inevitable homage to the bloodbaths of the two imperialist world wars, International Fleet Review saluted the RAN’s involvement in such brutal neo-colonial enterprises as the Korean War, the Vietnam War, the 1991 Gulf War on Iraq, the 2001 invasion of Afghanistan and the 2003 invasion of Iraq. Even Operation Resolute—the ongoing use of the Navy to intercept boats carrying desperate refugees and prevent them from claiming asylum in Australia—was proudly projected as worthy of acclaim.
The media-backed festivities continued throughout the week. Last Sunday and Monday, many thousands paid to make guided tours of the warships and tall ships, as a “once-in-a-lifetime opportunity”, while military bands performed throughout the city. On Wednesday, around 4,000 sailors from several countries marched through Sydney’s central business district, flanked by cheering and flag-waving onlookers, with yet another fly-over of the city by military helicopters. The week-long event formally ends today, as the convoy of warships leaves Sydney Harbour.
The glorification of the armed forces has become an ever more prominent feature of Australian social life. Between 2008 and 2012, the Rudd and Gillard Labor government created three additional days honouring the military and requiring annual services—Bombing of Darwin Day, Battle for Australia Day (1942–43 Pacific War) and Merchant Navy Day—on top of Anzac Day and Remembrance Day. The Anzac Day marches on April 25 have become ever-more jingoistic, with school children in particular drawn into annual patriotic services. In 2012, Labor allocated a budget of more than $80 million to the centenary of Anzac Day—the hundredth anniversary of the Gallipoli landing in 1915.
Absent from all these events is any critical examination of the actual history and role of Australian imperialism and its military forces over the past century.
Ten months after the fledging Australian imperialist state reviewed its new fleet in Sydney Harbour in 1913, the First World War began. The leader of the Labor Party, Andrew Fisher, infamously declared that Australia would fight for the British Empire to “the last man and the last shilling.” Within days, Australia’s new warships had been dispatched to attack the German colonies in the Pacific, and hunt down German ships in the Indian Ocean.
The Royal Australian Navy subsequently escorted the transport ships that carried the tens of thousands of young Australians, deluded by imperialist propaganda, who were sent to the trenches of Gallipoli and the Western Front. Out of a population of just 4.5 million—of whom 416,000, or 8 percent, joined the military—Australian casualties in World War I were some 60,000 dead and at least 156,000 wounded. For sending a generation of youth to the slaughter, the Australian ruling elite was rewarded by its British patrons with colonial control over New Guinea, New Britain and Bougainville, former German possessions.
Barely 20 years after the “war to end all wars”, the Second World War erupted. Once again, Australian troops, ships and planes were sent off to Europe and North Africa to support British imperialism. After the entry of Japan into the war, the Labor government of Prime Minister John Curtin transferred Australia’s allegiance to the rising power of the United States, as the British Empire began to crumble in Asia. This time, the Australian military served as junior partner to US forces, as they fought to establish American dominance over the region. For much of the Pacific War, Australia served as a critical staging base for the American military.
The new strategic relationship established by Labor with Washington was cemented in 1951 with the signing of the Australia-New Zealand-United States (ANZUS) military alliance. As they had previously done for Britain, after World War II Australian governments sent forces to various conflicts as payment for US patronage. Canberra also hosted American bases and supported US policies in every part of the globe. In return, Washington has assisted the Australian ruling class assert its own imperialist interests in the South Pacific and South East Asia, and more generally on the international arena.
The ongoing role of Australian imperialism as the junior partner of the US was the subject of the less public, but more serious event that coincided with the International Fleet Review. The “RAN Sea Power Conference 2013” began on Monday and featured three days of discussions on geo-political relations and naval issues in “Indo-Pacific Asia” by current and former defence ministers, retired and serving naval commanders and a plethora of strategic analysts. The subtext of the various lectures was the growing US-China rivalry and military tensions.
Less than one year after the patriotic celebrations that attended the launching of the Royal Australian Navy in October 1913, the assassination of an Austrian archduke by a Serbian nationalist in far-away Europe provided the spark that ignited World War I—the most disastrous war, to that point, in the history of mankind. Exactly one hundred years later, flashpoints from the Korean peninsula to the South China Sea, created by the provocative encirclement of China by the US and its allies throughout the region, including Australia, are creating the potential for an even greater global catastrophe.

US-China tensions flare over South China Sea

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Tensions over the South China Sea flared again at the East Asia Summit (EAS) in Brunei yesterday, as US Secretary of State John Kerry sought to exploit maritime disputes to drive a wedge between China and members of the Association of South East Asian Nations (ASEAN). The EAS followed ASEAN talks on Wednesday and a two-day Asia Pacific Economic Co-operation (APEC) summit on Monday and Tuesday.
Kerry, who was standing in for President Obama, insisted that all countries had an interest in the South China Sea to ensure freedom of navigation and the principle of unimpeded lawful commerce. His remarks echo those of his predecessor Hillary Clinton who told an ASEAN summit in 2010 that the US had a “national interest” in ensuring “freedom of navigation.” Clinton’s comments, which provoked an angry reaction from China, marked a direct intervention into what previously was a regional issue.
Over the past three years, the Obama administration has repeatedly used ASEAN forums to push for multilateral discussions between China and South East Asian countries, in opposition to Beijing’s insistence that the disputes be resolved bilaterally. The US actions encouraged the Philippines and Vietnam to take far more aggressive stances toward China, resulting in a series of maritime incidents and a divided ASEAN. For the first time in its existence, ASEAN was unable to issue a joint communiqué for a summit last year, amid bitter exchanges between the Philippines and Cambodia, which has close ties to Beijing.
The new Chinese leadership of President Xi Jinping and Premier Li Keqiang attempted to defuse the issue by conceding multilateral talks with ASEAN on a joint Code of Conduct in the South China Sea. The two leaders have been on a diplomatic offensive throughout South East Asia: Xi visited Malaysia and Indonesia, as well as attending the APEC summit, and Li will visit Thailand and Vietnam after taking part in the Brunei talks.
Without naming the US, Li pointedly told the East Asian Summit yesterday: “Countries that are not parties to the disputes should not get involved. Freedom of navigation in the South China Sea has never been an issue and will never be one.” A joint statement issued after Li’s meeting with ASEAN leaders declared that all sides would “work towards the conclusion of a Code of Conduct… based on consensus.”
In his remarks to the summit, Kerry deliberately fuelled the on-going dispute between China and the Philippines, tacitly backing the latter’s decision to take its claims to the UN for non-binding arbitration. “All claimants have a responsibility to clarify and align their claims with international law. They can engage in arbitration and other means of peaceful negotiation,” Kerry declared. Beijing has opposed the Philippine legal case, declaring that it would never agree to cooperate with it.
US ally Japan also intervened in the South China Sea conflicts. Right-wing Japanese Prime Minister Shinzo Abe told ASEAN leaders that the maritime disputes should be resolved in accordance with international law and pledged Japan’s continuing cooperation with ASEAN in what he described as a “common problem.”
Since assuming office last December, Abe has ramped up tensions with China over the disputed Senkaku/Diaoyu islands in the East China Sea, boosted the military budget and moved to modify the country’s constitution to allow aggressive military action. Abe has also made a deliberate orientation to strengthening Japan’s ties in South East Asia, at China’s expense, making visits to every country except Cambodia and Laos. His government has pledged to boost the Philippine coast guard with new vessels and, along with the US, is seeking to establish military basing arrangements in the country.
The effort by the US and its allies to inflame tensions over the South China Sea was a rather reckless attempt to counter what the media termed the “charm offensive” by the Chinese leaders, who have emphasised the importance of trade and economic ties, and urged the negotiated resolution of territorial disputes. Xi announced the formation of a $50 billion regional infrastructure bank and signed a raft of investment and currency deals in both Indonesia and Malaysia.
Obama’s decision to cancel his Asian tour, amid the continuing government shutdown in Washington, has only underscored the inability of the US to match China’s economic promises. In talks with Kerry, Premier Li again voiced Chinese concerns about “Washington’s debt ceiling problem,” which raises the danger of a potential US default. While underlining the US economic weakness, Li’s comment also expressed fears in Chinese ruling circles about the impact of a default that would threaten the $1.28 trillion worth of US bonds that China currently holds.
The US government shutdown and possible default has raised questions throughout the region about the Obama administration’s commitment to its “pivot to Asia.” Over the past four years, the US has ramped up a diplomatic offensive and military build-up in Asia aimed at undercutting China’s strategic, political and economic influence.
The nervousness about Washington’s plans is particularly evident among its closest allies, who fear they will be left high and dry. Although assuring reporters that a US default was unlikely, Philippine President Benigno Aquino posed the question: “[If] the world’s biggest economy turns belly-up, how can you actually protect yourself? But I don’t think that will happen.”
In his speech to the East Asian Summit yesterday, Kerry again stressed Washington’s “continued commitment to the region.” He has repeated the same phrase again and again over the past four days, but the message rings hollow to those seeking reassurances. As well as failing to appear at APEC and the East Asian Summit, Obama had to cancel trips to Indonesia—for the third time—Malaysia, where he would have been the first US president to visit since 1966, and the Philippines. In the case of the Philippines, Manila’s disappointment has been compounded by yesterday’s decision by Obama’s stand-in, Kerry, to call off his own trip, ostensibly to avoid a tropical storm.

US Globalized Torture Black Sites

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On October 5, US Delta Force commandos, CIA operatives, and FBI agents abducted Abu Anas al-Liby. Doing so highlights what’s been out-of-control since 9/11.
In the 1980s, al-Liby was one of many CIA-recruited mujahideen fighters. They were used against Afghanistan’s Soviet occupiers.
Ronald Reagan called them “the moral equivalent of our founding fathers.” He characterized Contra killers the same way.
Bin Laden, al-Liby, and many other Al Qaeda fighters were used strategically as both allies and enemies. Most recently, al-Liby was an anti-Gaddafi “freedom fighter.”
In 2000, he was indicted for his alleged role in bombing US Kenyan and Tanzanian embassies in 1998.
He was one of the FBI’s most wanted. He had a $5 million bounty on his head. Washington abducted him lawlessly. It did so on Libyan territory.
US policy is out-of-control. Obama authorizes whatever he wants anywhere worldwide. Rogue leaders operate that way.
On October 8, AP headlined ”Did Obama Swap ‘Black’ Detention sites for ships?”
He ordered alleged “terrorists (interrogated) for as long as it takes aboard US naval vessels.” Al-Libi is held on the USS San Antonio. It’s an amphibious warship.
Throughout his tenure, Obama continued the worst of odious Bush administration practices. The Clinton administration began them. Guilt or innocence doesn’t matter. Suspects are lawlessly abducted.
They’re denied all rights. They’re held secretly at US black sites. Confessions are extracted through torture. Detainees say anything to stop pain.
Guantanamo is the tip of the iceberg. Dozens of US torture prisons operate globally. Afghanistan, Egypt, Ethiopia, Jordan, Kenya, Libya, Saudi Arabia, Turkey and many other complicit US allies host them.
They permit indefinite detention, interrogations, torture and other forms of abuse.
They assist in capturing and transporting detainees. They allow use of their domestic airspace. They provide intelligence information.
America is by far the world’s leading human rights abuser. No nation in history matches its ruthlessness. It’s out-of-control. It’s unaccountable. It’s waging war on humanity. It’s doing it globally.
Reprieve is UK-based. It promotes rule of law accountability. It works to “secure each person’s right to a fair trial.” It tries to “save lives.”
In June 2008, it said America “may have used as many as 17 ships as floating prisons.”
“About 26,000 people are being (lawlessly) held by the US in secret prisons – a figure that includes land-based detention centers.”
“(I)nformation suggests up to 80,000 have been ‘through the system’ since 2001.”
So have thousands more under Obama.
Former Pentagon spokesman Navy Commander Jeffrey Gordon lied earlier, saying:
“We do not operate detention facilities on board Navy ships.” They’re in “Iraq, Afghanistan and Guantanamo Bay.”
They’re in at least 54 complicit countries. According to Reprieve:
“Prison ships have been used by the US to hold terror suspects illegally since the days of President Clinton.”
“US government sources have confirmed that both the USS Bataan and the USS Peleliu have been used to hold prisoners.”
“Reprieve investigations suggest that a further 15 ships have been used to hold prisoners beyond the rule of law since 2001.”
They’re “interrogated aboard the vessels and then rendered to other, often undisclosed, locations.”
Reprieve legal director Clive Stafford later said:
“(W)e’ve identified thirty-two prison ships, sort of prison hulks you used to read about in Victorian England, which have been converted to hold prisoners, and we’ve got pictures of them in Lisbon Harbor, for example.”
“And these are holding prisoners around the world, as well. And there’s a bunch of proxy prisons – (in) Morocco, Egypt, Jordan and other countries – where this stuff is going on.”
“And this is a huge concern, because the world focus is on Guantanamo Bay, which really is a diversionary tactic in the whole war of terror or war on terror, whatever you’d like to call it.”
“And actually, most of these people who have been severed from their legal rights are in these other secret prisons around the world.”
According to a former detainee:
“One of my fellow prisoners in Guantanamo was at sea on an American ship before coming to Guantanamo.”
“He was in the cage next to me. He told me that there were about 50 other prisoners on the ship.”
“They were all closed off in the bottom of the ship. The prisoner commented to me that it was like something you see on TV.”
“The people held on the ship were beaten even more severely than in Guantanamo.”
Reprieve calls the USS Bataan one of America’s “most infamous ‘floating prisons.’ ”
John Walker Lindh was sent there. So was Australian David Hicks. Lindh was maliciously called the “American Taliban.”
Hicks was sold to US forces for bounty. Both men were lawlessly held. They were brutally tortured. Thousands of others have been treated the same way.
Obama promised to end lawless Bush administration practices. They continue out-of-control.
America’s war on terror authorizes anything goes. On September 18, 2001, Congress passed a joint House-Senate Authorization for Use of Military Force (AUMF) for “the use of United States Armed Forces against those responsible for the recent attacks launched against the United States.”
On October 26, Patriot Act lawlessness followed. On November 13, Military Order Number 1 authorized the president to capture, kidnap or otherwise arrest non-citizens anywhere in the world for any reason.
US citizens are now vulnerable. Anyone can be arrested or abducted. They can be held indefinitely without charge, evidence, due process, trial, or other judicial fairness protections.
Torture is official US policy. Bush established it. On September 17, 2001, he signed a secret finding.
It authorized the CIA to “Capture, Kill, or Interrogate Al-Queda Leaders.”
It mandated establishing secret global facilities to detain and interrogate them. Doing so without guidelines on proper treatment was OK’d.
Detainees were declared “unlawful enemy combatants.” Obama calls them “unprivileged enemy belligerents.”
He authorized their murder or capture and indefinite detention. Torture remains official US policy. The worst of Bush administration practices continue.
International, constitutional and US statute laws no longer apply. Diktat power replaced them. Today’s America reflects out-of-control lawlessness.
In 2007, the Center for Constitutional Rights (CCR) published a report titled “Off the Record: US Responsibility for Enforced Disappearances in the ‘War on Terror.’ ”
It discussed ghost detainees held in secret black sites. It revealed how America lawlessly uses “proxy detention.”
It demonstrates that “far from targeting the ‘worst of the worst,’ the system sweeps up low-level detainees and even involves the detention of the wives and children of the ‘disappeared.’ ”
Doing so violates core rule of law principles. CCR documented torture and other cruel, inhuman and degrading treatment. Obama continues the worst of Bush administration policies.
Separately, CCR discussed ghost detainees and black sites. Forced disappearance victims became “ghosts.”
“Black sites” are secret US prisons operating globally – on land and at sea.
“What is ‘enforced disappearance,’ ” asked CCR? “Is it legal?”
The practice violates “numerous treaties binding on the United States” It spurns “international humanitarian law.”
It occurs when Washington “arrests, detains or abducts a person (without) acknowledg(ing) (having done so) or the location” where targeted individuals are detained.
Doing so denies them core legal protections. It’s official US policy. American citizens are vulnerable. No one anywhere is safe.
“What are conditions like in the ‘black sites,’ ” asked CCR?
CIA officials admit using so-called “enhanced interrogation (or ‘alternative interrogation’) techniques.”
Doing so constitutes the worst kind of cruel, inhumane and degrading treatment. Nothing too brutal is out of bounds. Virtually everything is OK.
Former detainees reveal horrific torture they experienced. They were fortunate to survive and be able to explain.
“What do CIA secret prisons have to do with other US detentions?”
Washington operates global black sites. It does so separately or jointly with host countries. It transfers some detainees to foreign-controlled facilities.
“In all cases, (they’re) deprived of any substantive protection of their rights, and reports of torture and abuse are common.”
“Who is held in CIA secret detention?”
Numerous individuals from many countries are targeted. Many were sold for bounty. Some were held because of mistaken identity. The great majority of victims committed no crimes.
Guilt or innocence doesn’t matter. Once abducted, all rights are lost. Boys young as seven were abducted.
“What should be done?”
Lawless abductions, secret detentions, torture and other forms of abuse violate core international, constitutional and US statute law provisions.
America remains unaccountable. So are complicit countries. CCR and other human rights organizations demand these practices cease. Obama pays them no heed.
“What is CCR doing about ghost detention?”
It filed lawsuits demanding release of information. It did so under the Freedom of Information Act (FOIA).
It wants the shroud of secrecy removed. It largely remains. What’s known about Guantanamo diverts from full disclosure about America’s global black sites.
They hold the vast majority of US ghost detainees. They do so lawlessly. Globalized torture is official US policy. So are worldwide secret prisons.
Obama continues the worst Bush administration practices. He added more of his own. He governs by diktat authority. What he says goes.
He operates as judge, jury and executioner. He authorizes cruel, inhumane and degrading treatment. He does so at home and abroad. It continues unabated. Millions are grievously harmed globally.
Rogue leaders govern this way. He’s Caligula writ large. He’s America’s worst ever. He threatens humanity’s survival. It may not survive on his watch.