Watching the pot come to a boil

Generational Dynamics: Forecasting America's Destiny
China’s economy slowing, with possible worldwide consequences
It’s beginning to look like 2008 all over again

China’s economy slowing, with possible worldwide consequences

I’ve often written that as bad as America’s economy is, China’s economy is in much more trouble. And now, after a week of extremely bad economic news in U.S. housing, manufacturing, and unemployment, it appears that China’s economy is also showing signs of heading downward, with major consequences for the rest of the world.

Bird's Nest - Beijing Olympics stadium (Xinhua)
Bird’s Nest – Beijing Olympics stadium (Xinhua)

International commodities markets are “starting to look a lot like 2008,” according to Standard & Poors analyst Scott Sprinzen, quoted by Bloomberg.

Recall that China’s overheated economy was sucking up commodities early in 2008. But as the Beijing Olympics games approached in August, China’s economy sank and China’s commodities purchases fell. By the end of the year, trade and transportation had collapsed around the world, and the Baltic Dry Index (a measure of commodities shipping) had fallen an incredibly 95%. As I described it at the time, it was like the science fiction movie, “The Day the Earth Stood Still,” except that it wasn’t science fiction. (See “World wide transportation and trade sink farther into deep freeze.”)

A slowdown in China’s economy would have a similar effect today. Commodities prices could esily fall 25-40%, and might fall as much as 75%, according to Sprinzen.

And a slowdown IS occurring. Two surveys released Wednesday reveal that Chinese manufacturers expanded in May at their slowest pace in nine months, according to the Globe&Mail.

CBS Business News blogger Constantine von Hoffman has provided a list of some of the signs that China’s economy is melting down:

    • We’ve reported on a major drought in China’s heartlands, and it’s taking its toll. Vegetable and rice prices have risen 16-20% in the last month, and prices of crab, shrimp and river fish have also surged up in the past week. As in the U.S., high food prices leave less money for consumers to spend on manufactured goods. MarketWatch
    • The worst power shortage in seven years has caused China to raise electricity prices by about 3%, in an attempt to reduce demand. The drought is one cause of the shortage, while another cause is high costs of coal. Coal-fired power plans generate 80% of China’s electricity. Reuters
    • China’s housing bubble is much worse than America’s ever was, with many ghost cities, and enough commercial real estate to give every man, woman and child in the 1.4 billion population country a 5×5 cubicle, all funded by massive bubble price rises. (See “5-Feb-10 News – China’s nationalism and real estate bubble grow.”) Now real estate prices are falling, and land prices have fallen 20-50% this year alone. This indicates the housing bubble is finally collapsing, with potentially devastating consequences. Market Watch
    • As in the U.S., local and regional governments are heavily in debt, and threatened with bankruptcy. China’s regulators plan to pay off some $400 billion in local government debt, forcing the state-run banks to take some of the losses. Reuters
  • For every yuan that China’s banks have loaned, there are many times more yuan loaned by informal or underground banks, totalling trillions of yuan. This has created a huge credit bubble similar to the credit bubble created by mortgage-backed CDOs a few years ago, and it makes the real estate bubble many times more lethal than it is anyway. FT Blog

America and China, two great civilizations that are almost completely foreign to one another, are now locked together, arm in arm, in a death spiral downward that will leave both countries, and all of their neighbors, completely devastated.

(Comments: For reader comments, questions and discussion, see the 4-Jun-11 News — China’s economy slowing, with possible worldwide consequences thread of the Generational Dynamics forum. Comments may be posted anonymously.) (4-Jun-2011) Permanent Link

4-Jun-11 World View — Yemen’s President Saleh wounded
European officials announce hopes for new bailout for GreeceThis morning’s key headlines from

Yemen’s president Saleh wounded in mortar attack

TV screen during Saleh's radio address (Al-Jazeera)
TV screen during Saleh’s radio address (Al-Jazeera)

As the civil war in Yemen spreads, forces of president Ali Abdullah Saleh are having armed clashes with tribal forces loyal to Sheikh Sadiq al-Ahmar. Around noon, mortar shells hit a mosque in the presidential palace compound where Saleh was praying. At least three guards and several other officials were wounded. Saleh was supposed to give a televised address after the incident, but it kept getting postponed, giving rise to speculation that he’d been killed. Finally, in the evening, he gave a radio address to prove that he was still alive. It’s assumed that al-Ahmar is responsible for the mortar attack, but his office is denying it. The attack came shortly after Saleh’s forces bombed al-Ahmar’s home. Al-Jazeera

Syria intensifies attacks on anti-Assad protesters

In probably the worst day of violence in Syria since the anti-government protests began 11 weeks ago, the security forces of president Bashir al-Assad fired live ammunition at tens of thousands of demonstrators who had gathered in Hama, killing 34 people and wounding dozens. Hama is the city where Bashar’s father, Hafez al-Assad, crushed an armed Islamist revolt by killing up to 30,000 people and razing parts of the city to the ground. Reuters

European officials announce hopes for new bailout for Greece

The headline on the story reads, “Greece likely to get aid tranche,” but when you read the actual story, you realize that this is far from true. After a meeting between Eurogroup president Jean-Claude Juncker and Greek Prime Minister George Papandreou, Juncker said that he expects the next tranche to be provided “under strict conditionality,” meaning that private sector investors will have to be included on a “voluntary” basis. It’s thought that this means that private holders of Greek debt would “volunteer” to some kind of debt rollover, in which the investors would purchase new Greek bonds when the existing ones mature. It’s hoped that this “voluntary” plan will not be a technical default, since that would trigger all sorts of problems. However, this solution is being hotly debated, and agreement among the member states is far from certain. Reuters

Boehner replaces Kucinich’s antiwar resolution

Republican House Speaker John Boehner has been scrambling to prevent passage of a resolution, sponsored by Democrat Rep. Dennis Kucinich, to force President Obama to withdraw all US forces from the “humanitarian” mission in Libya. Kucinich’s resolution had supporters in both parties. Boehner got it defeated by replacing it with his own non-binding resolution that merely requires the Obama administration to come back to Congress within 14 days with a strategy for the Libya mission. CS Monitor

Sunday’s Palestinian march to Lebanon-Israel border canceled

Palestinian activists had planned a march Lebanon’s refugees to the border with Israel on Sunday, to mark the anniversary of the 1967 six-day war. The march was canceled because Lebanese authorities declared the shared border a “closed military zone.” Instead, activisits plan strikes across all 12 of Lebanon’s Palestinian refugee camps. AP

(Comments: For reader comments, questions and discussion, see the 4-Jun-11 News — China’s economy slowing, with possible worldwide consequences thread of the Generational Dynamics forum. Comments may be posted anonymously.) (4-Jun-2011) Permanent Link

3-Jun-11 News — Manhattan prosecutor subpoenas Goldman Sachs’ records (Updated 11 am ET)
Greece to unveil new austerity measures

Manhattan prosecutor subpoenas Goldman Sachs’ records

During the last decade, the norm for bankers in Europe and America has been fraud. The main vehicle was the creating and selling of mortgage-backed synthetic securities based on computer models that were provably fraudulent, paying off ratings agencies to give them AAA ratings, and selling them to investors, collecting fat fees.

Ferdinand Pecora, cover of Time Magazine, June 12, 1933
Ferdinand Pecora, cover of Time Magazine, June 12, 1933

In the giddy middle of the last decade, when there was plenty of money sloshing around thanks to the massive credit bubble, anything was OK. Everybody was screwing investors, but who cares? They could just borrow more money. Regulators and prosecutors didn’t care, since they were paying themselves fat salaries anyway.

But now that the credit bubble has burst, and there is less money in the world every day, it’s time to pay the piper, as the saying goes. People are still screwing one another, but now it’s a lot more vicious, as people scramble with one another to get hold of the remaining pools of money. Once again, it’s the bankers who are in the lead, charging 30% interest rates and using the money to pay themselves million dollar bonuses.

The desire for real vengeance is growing. This is a generational change. The Boomers and Gen-Xers who formerly trusted everyone now trust no one. The ones who were screwed now want to screw others. This is the first time that generational change of this type has occurred since the 1930s.

So, on Thursday, Manhattan (New York) District Attorney Cyrus Vance subpoenaed Goldman Sachs, demanding documents relating to the investment bank’s activities leading up to the financial crisis, according to the AP.

It’s not known whether the demands are for a civil or criminal action, but it’s assumed that the demand is related to civil charges of fraud brought by the SEC a year ago for doing the following:

    • An investor asked Goldman Sachs to put together a portfolio of subprime residential mortgage backed CDOs that the investor could purchase as an investment.
    • The investor asked Goldman Sachs to have a neutral third-party select the CDOs that were to go into the portfolio.
    • Goldman Sachs instead went to a manager (John Paulson) of a hedge fund that was in the business of shorting these CDOs, and who stood to benefit if the portfolio collapsed.
    • Paulson (according to the allegations) selected the weakest CDOs for the portfolio, because he wanted them to collapse so that he could make money.
    • Goldman Sachs told the investor that a neutral third party had selected the CDOs for the portfolio; Goldman Sachs did not tell the investor of Paulson’s involvement. (This is the specific fraud that was alleged. Paulson was not involved in this step, so Paulson was not charged.)
    • The particular Goldman Sachs executive who set up the deal was Fabrice Tourre. The SEC charged Tourre individually with fraud, along with Goldman Sachs.
  • When the CDOs collapsed, the investor lost a billion dollars, and Paulson made a billion dollars.

This deal was consummated in early 2007, just before the time that the global financial crisis began.

It’s now four years later. The U.S. Justice Department has refused to prosecute Goldman Sachs for this deal. You can guess why.

What’s interesting about this situation is that the Manhattan District Attorney is pursuing the case. He won’t be bound by the political considerations of the U.S. Justice Department.

There are three possible criminal charges that can be brought against Goldman Sachs, according to Fox Business News:

    • Securities fraud for not disclosing to clients that Goldman was shorting securities the firm was also touting.
    • Illegal market manipulation in an effort to artificially depress the prices of securities Goldman wanted to buy.
  • Obstruction charges against Goldman CEO Lloyd Blankfein for possibly lying to Congress during hearings of the Senate Subcommittee on Investigations, chaired by Democrat Carl Levin in April 2010.

We’re now in a generational period similar to the 1930s. At that time, the Senate investigate bank fraud. But since the Republicans and Democrats could never have prosecuted anyone, they brought in a politically independent lawyer, Ferdinand Pecora, to question the bankers.

It was less than a month ago, that billionaire Raj Rajaratnam was convicted by a jury of insider trading. (See “12-May-11 News — Raj Rajaratnam conviction raises hopes of Pecora Commission revival.”)

Let us hope that we’re going to see an increasing number of these criminal charges and convictions. If history is going to repeat the 1930s financial crisis, then let’s hope history repeats the 1930s in a different way as well, by sending these bankers who committed fraud to jail.

Greece to unveil new austerity measures

Eurogroup chairman Jean-Claude Juncker
Eurogroup chairman Jean-Claude Juncker

One of the reasons that the Germans and other Europeans are furious with the Greeks is that the Greek government repeatedly lied and committed fraud in order to get into the eurozone, by selling fraudulent securities created by Goldman Sachs, and then hiding the transactions from the EU. Now Greece has to beg for bailout money. On Friday, Prime Minister George Papandreou is to present Greece’s midterm fiscal plan and its privatization program to the head of the Eurogroup, Jean-Claude Juncker. It’s expected that the EU and IMF will bail Greece out again because Greece, like Goldman Sachs, is too big to fail. Kathimerini

Update: Economists baffled by Friday’s jobs reports

May Unemployment Report (WaPost)
May Unemployment Report (WaPost)

Economists were literally stammering in confusion on TV on Friday morning in reaction to the Labor Dept.’s devastatingly bad jobs report for May. This is MUCH, much worse than even pessimistic mainstream economists predicted, and it comes after a week of equally bad housing and manufacturing data. One anchor asked the economist why the economy was “hitting a brick wall,” and she had no idea.

As I’ve said many times, mainstream economists did not predict and can’t explain the tech bubble of the 1990s, the global real estate and credit bubbles of the 2000s, the financial crisis that began in 2007, or where we are today, and they don’t have the VAGUEST idea where we’ll be next year.

This is a generational issue. Economists are using macroeconomic models from the 1970s and 1980s, when the Great Depression generations were still in charge. You’d have to be a complete moron to use those models today, but that’s what mainstream economists do, and that’s why they’re wrong every time, and why they’re completely baffled every time. It’s really remarkable to watch this going on.

The only macroeconomic models that have any hope of being correct would have to be based on 1930s data, because that’s the generational era we’ve returned to. We are still headed for a full-scale worldwide stock market panic and crash, below Dow 3000. This could happen next week, next month, or next year, but it’s coming with certainty. And if the economy continues to “hit a brick wall,” then it may happen soon. Washington Post

(Comments: For reader comments, questions and discussion, see the 3-Jun-11 News — Manhattan prosecutor subpoenas Goldman Sachs’ records thread of the Generational Dynamics forum. Comments may be posted anonymously.) (3-Jun-2011) Permanent Link

3-Jun-11 World View — Palestinian ‘Right of Return’ dominant issue
Moody’s threatens to put U.S. government’s rating under reviewThis morning’s key headlines from

Palestinian ‘Right of Return’ becomes a dominant issue in Mideast

Protesters breaking through border fence on May 15 (Reuters)
Protesters breaking through border fence on May 15 (Reuters)

Palestinians activists are planning a repeat of the May 15 action where thousands of unarmed Palestinian refugees and their descendants came into Israel across three borders, from Lebanon, Syria and Gaza. Three of the demonstrators were killed. (See “16-May-11 News — Israeli army fires on unarmed protesters crossing three borders.”) The new action is planned for Sunday, June 6, commemorating “Naksa,” the Arab loss in the 1967 six-day war. The Israel Defense Forces (IDF) were completely unprepared for the May 15 action, but they will be prepared for Sunday’s action. Jerusalem Post

Israel has warned Syria and Lebanon against permitting any Naksa-related protests near the Israeli border. The Lebanese Army has declared the area around Lebanon’s border with Israel a closed military zone, “to stop any escalation at the Lebanese border with Israel that could take place on Naksa Day.” Haaretz

Tensions continue to build between the Palestinian refugees and Israel. An article published by the Palestinian Authority refers to the Palestinian refugees as the new “Palestinian nuclear weapon.” This weapon, according to the article, was the brave young people loyal to their ancestral homeland who do not fear risking their lives to actualize their rights to a state, freedom, and independence – a weapon he described as more powerful than Israel’s entire arsenal. Memri

Jordan’s prime minister Ma’rouf Al-Bakhit declared that Jordan would not consent to the establishment of a Palestinian state that did not include a guarantee for the right of return. Memri

Hamas fumes as Egypt cuts Rafah crossings to 400 a day

Hamas cheered Egypt’s decision last week to permanently open the Rafah border crossing between Gaza and Egypt. But now relations between Hamas and Egypt are strained again, as the Egyptians have decided to limit the number of Palestinian travelers to between 350 and 400 each day. Hamas also accused the Palestinian Authority of asking the Egyptians to impose the limits. Jerusalem Post

Moody’s threatens to put U.S. government’s rating under review

Depending on the results of the negotiations in Congress to raise the statutory debt limit, Moody’s Investors Service threatened to place the US government’s rating under review for possible downgrade. Reuters

E. coli outbreak linked to aggressive new strain

An E. coli outbreak is ravaging Europe and other parts of Europe. There have been thousands of infections, and a few deaths. The aggressive intestinal bacteria is a mutant form that scientists have never seen before. Spiegel

Big explosions rock Sanaa, as Yemen tribal clashes spread

Huge explosions are shaking Yemen’s capital Sanaa. Cannons and tanks are shelling positions of tribal fighters, especially those of Sadeq Al-Ahmer, the sheikh of Hashid. Yemen Post

Japan’s Prime Minister Naoto Kan survives no-confidence vote

Japan’s Prime Minister Naoto Kan made a deal with lawmakers in his own party, including a promise to resign as soon as the March 11 Fukushima nuclear disaster has been stabilized, and survived a vote of no confidence. Yomiuri

Italy celebrates the 150th anniversary of unity

Acrobatic squad flies past ancient Colosseum during June 2 anniversary of Italy's unification
Acrobatic squad flies past ancient Colosseum during June 2 anniversary of Italy’s unification

U.S. Vice President Joe Biden is among politicians from 80 countries in Rome, celebrating 150 years of Italy as a united nation. AP

North Korea says it’s the 2nd happiest country on earth

According to North Korea’s “global happiness index,” North Korea is the second happiest country in the world. The happiest country in the world, according to the index, is China. Chosun

(Comments: For reader comments, questions and discussion, see the 3-Jun-11 News — Manhattan prosecutor subpoenas Goldman Sachs’ records thread of the Generational Dynamics forum. Comments may be posted anonymously.) (3-Jun-2011) Permanent Link

2-Jun-11 News — Fighting continues in Libya, amid chaotic international politics
Defense Secretary Robert Gates disagreed with Obama on Libya

Fighting continues in Libya, amid chaotic international politics

The “siege of Misrata” that lasted for weeks appears to have ended, at least for now, after Gaddafi’s forces were forced to withdraw, according to AP.

Tripoli Street, Misrata, Libya, view from a snipers' nest (AP)
Tripoli Street, Misrata, Libya, view from a snipers’ nest (AP)

The epicenter of the siege had been Tripoli Street in downtown Misrata, Libya. It’s now safe to down the street, as shown in the above picture, but during the siege Gaddafi’s snipers killed civilians and bombed out buildings.

In the meantime, there’s still no discernible objective for the “humanitarian” mission. The fighting in Libya, that President Obama promised would over within “days, not weeks,” is far from over, after several months. The Nato “humanitarian” air war in Libya had been scheduled to expire on June 27.

But on Wednesday, Nato announced that it would extend the campaign for another three months, according to the Telegraph. According to a Nato official in Brussels:

“This decision sends a clear message to the Gaddafi regime. We are determined to continue our operation to protect the people of Libya. We will sustain our efforts to fulfil the United Nations mandate [to defend civilians from Gaddafi’s forces]. We will keep up the pressure to see it through.”

Is this for real? The only “clear message” that’s being sent is that there is no clear message. It’s just more of the same.

And the politicals game-playing in Washington is only going to increase. on Wednesday, GOP leaders in the House of Representatives postponed a floor vote on a resolution by left-wing Rep. Dennis Kucinich that “directs the president to remove the United States armed forces from Libya” within 15 days.

The vote was postponed because House Speaker John Boehner “is concerned that if this were to come to the floor now, it would pass,” according to an aide quoted by Politico, since there are enough Republicans and Democrats opposed to the Libya war.

Libya and Niger (BBC)
Libya and Niger (BBC)

The war effort in Libya has been a mess since it started. First the US was leading the way. Then the US was going to turn the whole thing over to Nato. I understand that some 25% of the no-fly zone air flights are still American forces.

And the political situation at the international level is just as chaotic. Jacob Zuma, the jocular president of South Africa, went to spend a couple of days with this friend, Muammar Gaddafi, with the objective of negotiating a truce. To the surprise of no one (except perhaps Zuma), Zuma’s proposes were thoroughly rejected by BOTH Gaddafi and the rebels, according to AP.

Russia has been doing all it can to add to the political chaos. As we’ve reported several times, Russia’s objective has actually been promote a stalemate in Libya, so that Nato’s forces are tied down, giving Russia’s forces free hand to take on other projects in Central Asia. The Russians are demanding that all actions taken by Nato be approved by the U.N. Security Council, where Russia has a veto, giving Russian an effective veto over all Nato operations. The Russians feel free to pursue military operations without bothering to get a Security Council resolution.

An editorial in Lebanon’s Daily Star begins as follows:

Show No Mercy “Despite numerous setbacks to his disgraced regime, Moammar Gadhafi continued Tuesday to display his trademark obliviousness toward reality, and with his people’s suffering unabated, it is time for the international community to take decisive action to get this criminal out of office – and Libya – as soon as possible.”

It’s pretty clear now that this is not going to happen.

There’s no clear objective on the part of Nato, but Gaddafi’s forces are following their own clear objective that they stated right at the beginning: They’re going to fight until the last bullet.

Car bomb explodes outside Benghazi hotel

A car bomb exploded outside an international hotel in Benghazi, Libya, destroying four cars, but causing only one injury. Tripoli Post

Libyan migrants flood into Niger

Truck carrying migrants fleeing Libya for Niger (BBC)
Truck carrying migrants fleeing Libya for Niger (BBC)

Niger’s city of Agadez has been transformed from a bustling trade hub in the middle of the Sahara desert into a refugee centre for the thousands of African migrants fleeing the violence in Libya. Some 65,000 migrants have made the dangerous trip to Agadez since the beginning of May. BBC

Defense Secretary Robert Gates disagreed with Obama on Libya

U.S. Defense Secretary Robert Gates said his biggest disagreement with President Barack Obama was over the decision to intervene in Libya, which he strongly opposed. “[One disagreement] in two-and-a-half years isn’t bad,” he said.

He added: “I think one of the reasons it’s probably time for me to leave is that sometimes too much experience can get in the way, and you can get too cautious. It may … be making me more cautious that I ought to be.” From the point of view of Generational Dynamics, that would indeed be a major difference between Gen-Xers and the Silent Generation. Politico

(Comments: For reader comments, questions and discussion, see the 2-Jun-11 News — Fighting continues in Libya, amid chaotic international politics thread of the Generational Dynamics forum. Comments may be posted anonymously.) (2-Jun-2011) Permanent Link

2-Jun-11 World View — Europeans close to deal on Greece
Bad economic data hits stock marketThis morning’s key headlines from

Europeans close to a deal to give 12 billion euros to Greece

Athens protests in front of the Greek Parliament (AFP)
Athens protests in front of the Greek Parliament (AFP)

On Thursday, European officials will present a deal to release 12 billion euros to Greece on June 29. That’s the date of the next scheduled tranche or installment of the 110 billion euro bailout worked out a year ago. The International Monetary Fund (IMF) had been indicating a refusal to pay its share of the tranche, because Greece had failed to meet any of its committed austerity objectives in the past year. Of particular importance was the commitment to lower Greece’s debt sufficiently so that Greece could reenter the international bond markets next year, something that now seems impossible. The deal is not completely closed, however. It has to be approved unanimously by the eurozone’s finance ministers, who have a meeting scheduled on June 20. Irish Times

Moody’s Investor Service reduced Greece’s credit rating again, by three notches, deep into junk territory, making it clear that that Greece would not stabilize its financial situation without defaulting. Reuters

A vigilante computer hacker group called “Anonymous” declared Wednesday that it’s targeting the IMF website with a distributed denial of service (DDoS) attack, as punishment for forcing Greece to perform austerity measures in return for its 110 billion euro bailout. In a DDoS attack, thousands of computers simultaneously access the web site, so that it becomes unresponsive. “Anonymous” is the same group that called for DDoS attacks against Visa and Mastercard, after they withdrew services from Wikileaks. Anonymous has also targetd the Italian government, Iran and Egypt. AFP

Bad economic data hits stock market

A slew of disappointing economic reports is leading to worries that we’re not going to have that “V-shaped recovery” after all. GM auto sales for May were down 1.2%, when experts had predicted they would be up 1.5%. Unemployment and manufacturing indicators were poor as well. If you put together news like this with the rapidly deteriorating financial situation in Europe and political situation in the Mideast, as well as the possibility that China’s huge real estate bubble might finally burst, then there’s definitely a feeling that history is speeding up toward something. Wall Street stocks fell over 2% on Wednesday. LATimes

Bahrain lifts martial law, but brutalizes protesters anyway

Bahrain supposedly lifted the state of martial law on Wednesday, but it’s had no effect on the actions of the security forces. Tanks and soldiers withdrew form the center of Manama, the capital city, but numerous police checkpoints remained around the city. Security forces used batons and tear gas to disperse any protests. Al-Jazeera

Syria calls for investigation of mutilated 13-year-old boy

In an effort to manage the international criticism of the killing of Hamza Hamza al-Khateeb (see “1-Jun-11 News — Mutilated teenage boy becomes symbol for Syria’s revolution”), the government of Bashar al-Assad has vowed to investigate the incident. The government also promised amnesty for protesters. However, neither of these promises is considered credible by the protesters. The alleged mutilation of Hazma by Assad’s security forces has galvanized the protesters, and triggered international condemnation of Assad. Globe and Mail

Japan’s Prime Minister Naoto Kan faces no-confidence motion

Facing defectors from his own party, the Democratic Party of Japan (DPJ), prime minister Naoto Kan will face a no-confidence vote on Thursday afternoon. Japan has had a parade of prime ministers in the last five years, as each one has been felled by a vote of no confidence. The principal themes have previously been a generational conflict between the aging war survivor generation and the nationalistic post-war generations, with issues arising out of the use of Korean and Chinese “comfort women” by Japan’s armed forces during World War II. However, this time the problems appear to be different, and the main issue is competency in handling the Fukushima nuclear disaster. Japan Times

Iran’s parliament votes to sue Mahmoud Ahmadinejad

The deeply bitter clash between Iran’s president Mahmoud Ahmadinejad and the supreme leader Ayatollah Ali Khamenei became even more bitter on Wednesday when the Iran’s parliament voted 165-1 to sue Ahmadinejad for firing Iran’s oil minister and naming himself as the replacement. From the point of view of Generational Dynamics, Iran is in a generational Awakening era, and is following a path similar to the political chaos in America in the 1960s, following the Summer of Love in 1967, and the decision of Lyndon Johnson not to run for reelection in 1968. Telegraph

(Comments: For reader comments, questions and discussion, see the 2-Jun-11 News — Fighting continues in Libya, amid chaotic international politics thread of the Generational Dynamics forum. Comments may be posted anonymously.) (2-Jun-2011) Permanent Link

1-Jun-11 News — Mutilated teenage boy becomes symbol for Syria’s revolution
Hillary Clinton says this signals ‘total collapse’ of Syrian regime

Mutilated teenage boy becomes symbol for Syria’s revolution

A video showing Syrian security services torturing and killing a 13-year-boy named Hamza al-Khatib has galvanized the opposition and has become a symbol for Syria’s revolution, according to the Guardian.

Protester holding up a picture of Hamza al-Khatib during his funeral (Guardian/AFP)
Protester holding up a picture of Hamza al-Khatib during his funeral (Guardian/AFP)

Hamza was picked up by security forces on 29 April. On May 27, his badly mutilated corpse was returned to his family, who were warned to keep silent. But instead of staying secret, the tortured and swollen body is appearing on a Youtube video. (Warning: This video is grossly sickening.)

U.S. Secretary of State Hillary Clinton’s statement, quoted by Reuters, reflects an increasingly harsh position towards Syrian president Bashar al-Assad:

“I think what [Hamza’s death] symbolizes for many Syrians is the total collapse of any effort by the Syrian government to work with and listen to their own people.Every day that goes by the position of the government becomes less tenable and the demands of the Syrian people for change only grow stronger.

President Assad has a choice, and every day that goes by the choice is made by default. He has not called an end to the violence against his own people, and he has not engaged seriously in any kind of reform efforts.”

Neda Agha-Soltan - Killed during 2009 Iran uprisings
Neda Agha-Soltan – Killed during 2009 Iran uprisings

During the Iran uprisings in 2009, a pretty, young girl named Neda Agha-Soltan was shot dead in the streets by security forces, and the entire incident was captured in a graphic youtube video. Neda became an international symbol of Iran’s opposition, and opposition forces in Syria hope that Hamza’s mutiliation and death will accomplish the same thing for them.

(Comments: For reader comments, questions and discussion, see the 1-Jun-11 News — Mutilated teenage boy becomes symbol for Syria’s revolution thread of the Generational Dynamics forum. Comments may be posted anonymously.) (1-Jun-2011) Permanent Link

1-Jun-11 World View — Ratko Mladic visits his daughter’s grave
Israel faces new aid flotilla from Turkey to GazaThis morning’s key headlines from

Ratko Mladic visits his daughter’s grave

Ratko Mladic in court last week
Ratko Mladic in court last week

Ratko Mladic was extradited to the UN war crimes tribunal in The Hague on Tuesday, to face charges of genocide and war crimes, after a court rejected his legal challenge. However, he was permitted to make a brief side trip to visit his daughter’s grave. His daughter committed suicide in 1994 with her father’s prized regimental honors pistol when she learned of the atrocities that her father was committing at that time in the Bosnian war. Telegraph

Israel faces new aid flotilla from Turkey to Gaza

A major new confrontation is developing at the end of June, when a new aid flotilla will be leaving Turkey for Gaza. Israel says that it will continue to use the military to enforce its economic embargo of Gaza. This is near the first anniversary of last year’s flotilla, when clashes between the flotilla and Israel’s army resulted in nine deaths. VOA

Iran ‘breaches international protocol’ by blocking Merkel’s overflight

A routine plane trip by German Chancellor Angela Merkel to Afghanistan was forced to circle over Turkey for two hours on Tuesday morning, when Iran refused to give the plane permission to enter Iranian air space. German Foreign Minister Guido Westerwelle summoned the Iranian ambassador in Berlin and made clear to him that “such a breach of international protocol against Germany would absolutely not be accepted.” Spiegel

Cyber combat is an act of war

The Pentagon has concluded that computer sabotage coming from another country can constitute an act of war, a finding that for the first time opens the door for the U.S. to respond using traditional military force. Wall Street Journal (Access)

(Comments: For reader comments, questions and discussion, see the 1-Jun-11 News — Mutilated teenage boy becomes symbol for Syria’s revolution thread of the Generational Dynamics forum. Comments may be posted anonymously.) (1-Jun-2011) Permanent Link

31-May-11 News — Yemen’s president hangs on to power as clashes spread to other towns
Violence escalates cross Yemen

Yemen’s president hangs on to power as clashes spread to other towns

Dozens of people have been killed across Yemen on Monday. Previously, fighting had been largely confined to the capital city, Sanaa, but in the last few days, violence has spread to a number of other cities as well, indicating the possibility of a situation spiraling out of control.

Yemen's President Ali Abdullah Saleh (Al-Arabiya)
Yemen’s President Ali Abdullah Saleh (Al-Arabiya)

The peaceful demonstrations began in Sanaa in February, with protesters demanding that President Ali Abdullah Saleh step down, after 33 years ofrule. The demonstrators were following the pattern of the uprisings in Tunisia and Egypt.

Saleh’s security forces began using live ammunition and teargas on the peaceful protests in March, and the use of violence has been increasing ever since. Once the killings mounted, the powerful al-Hashid tribe, headed by a former Saleh ally Sheikh Sadeq al-Ahmar, turned against Saleh and joined the protesters.

Yemen violence escalating


Several escalations have occurred within the last week. Saleh’s forces have begun using bombers to attack Hashid positions, according to Al-Jazeera. A group of 300 militants, led by Al-Qaeda on the Arabian Peninsula (AQAP) attacked and devastated the town of Zinjibar on Saturday. On Monday, Saleh’s forces bombed the militants in Zinjibar, and ground forces fired on peaceful protesters in the city of Taiz for the first time.

Some of the military began to defect when the army started firing on unarmed protesters, but they’ve mostly been loyal to Saleh until recently. However, the militant takeover of Zinjibar has caused a group of dissident generals to defect, accusing Saleh of surrendering to the “armed terrorist group.”

Analysts who cover Yemen have been expressing different views on what’s coming next. According to a BBC analyst in Sanaa,

“To some extent, the protests have been hijacked, not only by tribalists, but by military defectors and political Islamists. Yet amazingly, given the combined efforts of all these parties, the people in the squares are still trying to remain independent.”

An analysis by Al-Arabiya says that Yemen is “rapidly descending into chaos and anarchy”#>:

“Deep divisions among his opponents are likely to ensure that Mr. Saleh’s ruling General People’s Congress (GPC) will retain power whether or not the president is around to lead it. GPC’s positioning is also enhanced by divisions within the armed forces with key units commanded by members of the president’s family loyal to the president. The split in the military has moreover deprived Yemen of a powerful institution that like in the case of ousted Egyptian President Hosni Mubarak could tell Mr. Saleh authoritatively that it is time to go.As a result, Mr. Saleh is showing no inclination to leave office before his term ends in 2013. He has several times backed out of a deal negotiated by the Saudi-led Gulf Cooperation Council (GCC) that would have eased him out of office in exchange for immunity against prosecution.

Yemen is meanwhile rapidly descending into chaos and anarchy as a result of Mr. Saleh’s tenacity. It is a situation that the president believes works in his favor whether or not he retains power. It strengthens his claim that only he can prevent Yemen from disintegrating and Al Qaeda’s Yemeni affiliate, Al Qaeda in the Arabian Gulf (AQAP), from taking over parts of the country.

It also deepens the divisions in the country and among the opposition which enhances the GPC’s ability to hold on to power if and when he is gone.”

Yemen has been an important strategic ally of the United States in the fight against terrorism. But it’s also become the headquarters of Al-Qaeda on the Arabian Peninsula, the most dangerous al-Qaeda spinoff in the world right now. A civil war in Yemen would have dangerous consequences for the world. The offensive is being taken as a result of demands by the Obama administration, but some analysts say that the operation would subject the army to even more public criticism in a country where anti-US feeling runs deep.

(Comments: For reader comments, questions and discussion, see the 31-May-11 News — Yemen’s president hangs on to power as clashes spread to other towns thread of the Generational Dynamics forum. Comments may be posted anonymously.) (31-May-2011) Permanent Link

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