Saturday, January 29, 2011

Saudi King Supports Mubarak!!!

If there has ever been a WTF moment in Saudi politics this is it.

News wires are alive with a report that Saudi King Abdullah is publicly endorsing Egyptian dictator Hosni Mubarak whom Egyptian protesters want out of power.

Saudi Arabia’s state news agency reported that King Abdullah bin Abdulaziz al-Saud criticized the protestors (claiming they are instigated by "infiltrators") and strongly backed Mubarak.
The king said protesters were "exploited to spew out their hatred in destruction . . . inciting a malicious sedition” and that outside agitators “infiltrated into the brotherly people of Egypt, to destabilize its security."
"No Arab or Muslim can tolerate any meddling in the security and stability of Arab and Muslim Egypt by those who infiltrated the people in the name of freedom of expression, exploiting it to inject their destructive hatred," King Abdullah was quoted as saying.
"As they condemn this, the Kingdom of Saudi Arabia and its people and government declares it stands with all its resources with the government of Egypt and its people," the Saudi agency added.
In addition, the king reportedly phoned Mubarak early Saturday and "reassured” him about the situation in Egypt.
Who is advising this guy? Is he trying to piss his population off? Doesn't he know that many Saudis are already outraged by his permission to Ben Ali, the deposed Tunisian dictator, to live in Saudi Arabia? Doesn't he know that practically every single person in the "Arab Street" is virulently anti Mubarak?
This is sure to have some repercussions.

Jeddah Protest - Jan 29 2011

It's official, the demonstration in Jeddah is taking place in front of the Municipality in protest of the severe lack of infrastructure, and corruption, that led the city to be inundated this week causing billions of dollars of damages for the second time in two years.

The protest has it's own twitter feed : #JeddahProtests

News reports are saying that at least 50 people have been arrested by the police.

Here is a video of the peaceful demonstration:

Saudi Hiccup?

As riots raged in Cairo on Friday and dominated the news wires around the globe, Saudi Arabia, it appears, may be getting ready to join the list of Arab nations protesting their governments.

In the port of Jeddah relatively heavy rainfall combined with a non-existent drainage system to wreak havoc on the city and its 4 million inhabitants. The city is literally flooded and the torrential, and very rare, rains have caused around $ 1 Billion USD worth of damages.

So far there are 11 dead and over 100 injured as a result. Incredibly, over 11,000 cars were stranded in floodwaters as water levels were reported to be 4 meters (13.2 feet) deep in some areas. Rescue helicopters have ferried almost 500 people to safety!

Oddly enough, and unfortunately for the government, the same scenario happened in 2009!

Back then it was dubbed Saudi's "Katrina Moment". Over 122 people were killed (some estimate it was more like 500) and hundreds injured as the government fell on its face during the response effort.

That led to widespread discontent and a fury of criticism of the local government mainly via, you guessed it...Facebook. The main theme was "Where are the billions in oil revenue going?".

Back in 2009 and according to the CS Monitor:

Mr. Khair, the lawyer, says he intends to file a class action suit against Jeddah's municipality. He does not think any official will be forced to resign, he adds. "In Saudi Arabia, we didn't hear about someone leaving his office."
The attorney says that the Facebook page was a useful alternative because street protests are illegal in the kingdom. The Internet "is the only way. We don't have another way," he says.
The episode has demonstrated "how technology allows people to shout out loud. I have never seen this before in Saudi," says Asaad, the lecturer. Even if people commenting on Facebook "use pseudonyms, it's a start," she adds. "But nowadays, people are using their real names."

Which brings us to today.

A mass blackberry messenger message has gone out in Jeddah calling for a demonstration on Saturday, the 29th. It says:

“On Saturday there will be a demonstration in front of the municipality for Jeddah … gather as many people as you can,” the message ran. “We need brave men and women. We don’t want any more lies … We have to do something.”

Another message also sent via Blackberry urged all government and private sector employees to hold a general strike next week in protest at the authorities’ neglect of the city’s infrastructure.

This is very serious news if it happens. The ruling Saud family's main areas of support are centered around the capitol city, Riyadh. There are long standing historical tensions with the people of the western provice, Hijaz, of which Jeddah is the largest city. Jeddah is also the second largest city in Saudi Arabia overall and is the port of arrival to the more than 2 million Muslims who make the pilgrimage to Mecca every year.

Also, in the eastern province of Saudi Arabia are most of the shunned Shia Muslims of the country. They are regarded as infidels by some hardline Wahhabists and face a glass ceiling when working in public bureaucracies. There have been tensions there also and several protests.

Here is an excellent paper about the ethnic and religious background of Saudi Arabia.

In addition to the religious and social tensions in Saudi, perhaps the economic tensions are the greatest of all. According to a recent report by Booz & Co., unemployment in Saudi Arabia is estimated to be 13-14% in 2008. Additionally, 48% of Saudis between the age of 20-24 are unemployed as well as 31% of Saudis between 25-29.

70% of the population is under the age of 34 and the Median age is 24.9

In other words, the powder is dry...

Here is a video of the clashes between police and Saudi Shia's (keep in mind the source is Iran's Press TV)

Here is a video of the catastrophic floods in Jeddah this week:

Thursday, January 27, 2011

Anonymous Hacker Group Joins Egypt Resistance

The famous hacker group Anonymous has just announced that it is joining the Egyptian resistance and has launched "Operation Egypt".

"Anonymous wants you to offer free access to uncensored media in your entire country," it said in a Facebook posting.
"When you ignore this message, not only will we attack your government websites, we will also make sure that the international media see the horrid reality you impose on your people!" it said.

Here is the video announcement:

US Senate To Reintroduce Internet "Kill Switch" Bill

According to an article in CNET, the US Senate is planning on reintroducing a bill, initially introduced last year by Senators Lieberman(I-Conn.) and Collins (R-Maine), that would allow the US president to take control over privately owned computer systems in the case of a "National Cyber Emergency".

Here's the kicker...that act "shall not be subject to judicial review"

In light of the events in Egypt, where the government has reportedly shutdown internet access ahead of tomorrow's planned mega protest, this should send a chill down the spine of every freedom loving American.

Hopefully this will never come to pass, but the mere presence of this proposed legislation should settle the argument about "that would never happen over here".

More from CNET:

The revised Lieberman-Collins bill, dubbed the Protecting Cyberspace as a National Asset Act, works this way: Homeland Security will "establish and maintain a list of systems or assets that constitute covered critical infrastructure" and that will be subject to emergency decrees. (The term "kill switch" does not appear in the legislation.)

Under the revised legislation, the definition of critical infrastructure has been tightened. DHS is only supposed to place a computer system (including a server, Web site, router, and so on) on the list if it meets three requirements. First, the disruption of the system could cause "severe economic consequences" or worse. Second, that the system "is a component of the national information infrastructure." Third, that the "national information infrastructure is essential to the reliable operation of the system."

At last week's event, Milhorn, the Senate aide, used the example of computers at a nuclear power plant or the Hoover Dam but acknowledged that "the legislation does not foreclose additional requirements, or additional additions to the list."

A company that objects to being subject to the emergency regulations is permitted to appeal to DHS secretary Janet Napolitano. But her decision is final and courts are explicitly prohibited from reviewing it.

President Obama would then have the power to "issue a declaration of a national cyberemergency." What that entails is a little unclear, including whether DHS could pry user information out of Internet companies that it would not normally be entitled to obtain without a court order. One section says they can disclose certain types of noncommunications data if "specifically authorized by law," but a presidential decree may suffice.

"No amount of tightening of what constitutes 'critical infrastructure' will prevent abuse without meaningful judicial review," says Berin Szoka, an analyst at the free-market TechFreedom think tank and editor of The Next Digital Decade book. "Blocking judicial review of this key question essentially says that the rule of law goes out the window if and when a major crisis occurs."

For their part, Lieberman and Collins say the president already has "nearly unchecked authority" to control Internet companies. A 1934 law (PDF) creating the Federal Communications Commission says that in wartime, or if a "state of public peril or disaster or other national emergency" exists, the president may "authorize the use or control of any...station or device."

In congressional testimony (PDF) last year, DHS Deputy Undersecretary Philip Reitinger stopped short of endorsing the Lieberman-Collins bill. The 1934 law already addresses "presidential emergency authorities, and Congress and the administration should work together to identify any needed adjustments to the act," he said, "as opposed to developing overlapping legislation."

Egypt Boiling Over - Day 3

There are several confirmed riots all over Egypt on this third day of anti-government protests. The police are now using real ammunition in addition to the standard tear gas and water cannons. There are

The confirmed cities where the riots are taking place are: Cairo, Alexandria, As Suways (Suez), Port Said and Sallum (on the border with Libya).

The riots appear to be particularly violent in As Suways, a port city with a population of 500,000 which sits at the entry way to the Suez canal (on the Red Sea), a critical link for global shipping routes. It appears from the videos below that the city is in a state of chaos and there are even reports of tanks having entered the city. Any disruption to the operation of the canal could have a dramatic impact on commodity pricing and availability.

Here is a video of the violence in As Suways during the day (the 27th)

Then in the early evening...

and at night...

Ahead of the mega demonstration planned for tomorrow, Friday which is part of the weekend, which millions of people are expected to turn out for, it looks like the Mubarak regime's situation can be summed up as follows:

Tuesday, January 25, 2011

Egypt Boiling Over - Past Midnight

It is now well past 2 AM in Cairo and tens of thousands of protesters are still gathered in one of Cairo's largest squares, which is appropriately named Liberation Square.

There are confirmed reports of at least two civilians killed, one police officer killed, several hundred wounded and several hundred arrested.

Twitter is alive with reports of police following protesters down side roads and arresting them. Many reports of live ammunition being used along with the tear gas and water cannons we saw before.

Here is a video from Liberation Square in Cairo showing the police firing tear gas:

Here is a video from a demonstration in Alexandria, also at night, where a building sized picture of President Mubarak is set on fire to cheers from the crowd:

Egypt Boiling Over - At Night

Here is another set of videos showing the protests going on well into the night as it is now past midnight in Cairo!

Unconfirmed reports are circulating on Twitter that Egyptian workers at Heathrow have spotted the wife of President Mubarak, Suzan, arriving in London!

Video of a crowd in downtown Cairo chanting "The fall of the regime is what the people want"

Here is a video from the BBC Arabic service showing that the protesters are not affiliated with any political parties and are just regular citizens expressing their frustration and demanding their rights!

The reporter says that most of the protesters have been peaceful despite the tear gas, rubber bullets and water cannons.

Video of the Secretary of the National Democratic Party (Mubarak's party) youth chapter burning his membership card!

Egypt Boiling Over

Warning: Graphic material. Not for the faint of heart.

Here is a an excellent live update stream from the Guardian about the demonstrations taking place all over Egypt today, many of which have turned violent. The government forces are cracking down on the protesters with batons, tear gas and water cannons.

Here are some videos sent to this blog by various Egyptians:

MUST SEE VIDEO: As the police bring in a water cannon (minute 1:23), a brave Egyptian protester stands in front of the truck, all alone, halting its path and gets hit with the full force of the water!!! Inspiring and energizing the crowd!

Reminiscent of the "tank man" in Tienanmen Square!

Video of a badly beaten police officer being carried by protesters who are screaming for an ambulance:

Video of protesters climbing to rip up a large poster of Mubarak!

Video of a crowd chanting "Revolution, Revolution until victory"

Video of a demonstration in the city of Bour Said

Algeria Next?

Over the past 60 days, the world watched with bated breath as the people of Tunisia ousted President Ben Ali, their dictator of more than 23 years. The protests were sparked by the self immolation of a young man, Muhammad Bouazizi. Only 26 years old, Bouazizi set himself on fire in front of a local governor's office after failing to find a job. Immediately riots erupted all over the country in exasperation due to high unemployment, rampant corruption and sky-rocketing food prices.

Less than a month later, Ben Ali had fled the country to Saudi Arabia.

The world wondered, could this spread? If so, who's next?

Soon enough riots erupted in Jordan, Morocco, Yemen, Egypt, Algeria, Sudan and even Saudi Arabia.

The commonalities are clear. Fed up with rising food prices, raging unemployment and massive government corruption, the people of these Arab countries are no longer willing to tolerate the status quo. Combine that with years of living in a pressure cooker of no political freedom, no freedom of speech, no freedom to congregate and all the other niceties that come with living under dictatorial regimes and you have a very incendiary, pun not intended, situation.

The rulers of these countries have been attempting to control the situation by putting in place various measure, such as price controls on food, to help appease the people.

It doesn't look like it's working...

The most violent protests have been in Algeria.

A bit of background first. Algeria is a country situated in North Africa along the Mediterranean coast. It had a population of 35 Million and a nominal GDP/capita of $ 4,477 in 2010. Its inhabitants are of Arab or Berber ethnic origin and over half of them can speak French as a second language. Algeria gained independence from France in 1962 after an incredible 1 million plus people gave their lives in resistance to the French occupation*.

Since its independence, Algeria has been plagued with corrupt regimes and semi constant civil war. In the 90's the Algerian civil war claimed another 200,000 lives.

It now looks like things are flaring up again. Already two people have set themselves on fire and there are reports the number is as high as seven.

A peaceful protest turned violent on Saturday, the 22nd of January, as riot police tried to disrupt the march, resulting in 42 injuries. As in Tunisia, they were protesting high unemployment, high food prices, high inflation and a high degree of indifference from the ruling class!

As I'm a big believer in the power of video as a means of communication, here are some assorted videos related to the unrest in Algeria:

Even the famous hacker group Anonymous has gotten in on the action and has issued the following warning to the Algerian government:

To be sure these are troubled times. People can tolerate many things...but hunger isn't one of them.

*This is a conservative estimate.

Saturday, January 22, 2011

Fed Hides Major Accounting Change

(via Economic Policy Journal)

I have always wondered how the Fed, via the MBS purchase program, could take onto its balance sheet $ 1.3 Trillion dollars worth of toxic assets (e.g. worthless paper) that toppled Lehman, Bear, AIG and brought the global economy to its knees without taking massive losses.

Well now we have our answer:

Concerns that the Federal Reserve could suffer losses on its massive bond holdings may have driven the central bank to adopt a little-noticed accounting change with huge implications: it makes insolvency much less likely.
United States Federal Reserve
Tetra Images | Getty Images
United States Federal Reserve

The significant shift was tucked quietly into the Fed's weekly report on its balance sheet and phrased in such technical terms that it was not even reported by financial media when originally announced on Jan. 6.
But the new rules have slowly begun to catch the attention of market analysts. Many are at once surprised that the Fed can set its own guidelines, and also relieved that the remote but dangerous possibility that the world's most powerful central bank might need to ask the U.S. Treasury or its member banks for money is now more likely to be averted.
"Could the Fed go broke? The answer to this question was 'Yes,' but is now 'No,'" said Raymond Stone, managing director at Stone & McCarthy in Princeton, New Jersey. "An accounting methodology change at the central bank will allow the Fed to incur losses, even substantial losses, without eroding its capital."
The change essentially allows the Fed to denote losses by the various regional reserve banks that make up the Fed system as a liability to the Treasury rather than a hit to its capital. It would then simply direct future profits from Fed operations toward that liability.
This enhances transparency by providing clearer, more frequent, snapshots of the central bank's finances, analysts say. The bonus: the number can now turn negative without affecting the central bank's underlying financial condition.
"Any future losses the Fed may incur will now show up as a negative liability as opposed to a reduction in Fed capital, thereby making a negative capital situation technically impossible," said Brian Smedley, a rates strategist at Bank of America-Merrill Lynch and a former New York Fed staffer.
"The timing of the change is not coincidental, as politicians and market participants alike have expressed concerns since the announcement (of a second round of asset buys) about the possibility of Fed 'insolvency' in a scenario where interest rates rise significantly," Smedley and his colleague Priya Misra wrote in a research note.

Friday, January 21, 2011

Joe Rogan on The American War Machine

Here is an interesting, and profanity laced, tirade by Joe Rogan on the general state of affairs in the US. Known for his color commentary for the Ultimate Fighting Championship (UFC), here he talks about the left/right political paradigm, war, 9/11 and much more.


Thursday, January 20, 2011

JP Morgan: King of Food Stamps

(via The Economic Collapse)

Ever wonder who is processing the transactions of the record 43.2 million member food stamp program?

Yup, you guessed it. JP Morgan.

You couldn't make this stuff up. So after ruining an economy by placing bets on trillions of dollars of worthless derivatives, forcing the government (people) to bail you out at gunpoint, getting endless amounts of money from the Fed at almost zero interest and front-running said Fed in the Treasury market and making billions in profits for literally nothing, JP Morgan wants to benefit from the growing misery and hunger of the US population?

I actually feel sick. This is a dangerous precedent that aligns corporate interests of profit-making with an increase in poverty among the people.

Below is an excerpt from the Economic Collapse post:

"JP Morgan is the largest processor of food stamp benefits in the United States.  JP Morgan has contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia.  JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan makes.  Yes, you read that correctly.  When the number of Americans on food stamps goes up, JP Morgan makes more money.  In the video posted below, JP Morgan executive Christopher Paton admits that this is "a very important business to JP Morgan" and that it is doing very well.  Considering the fact that the number of Americans on food stamps has exploded from 26 million in 2007 to 43 million today, one can only imagine how much JP Morgan's profits in this area have soared.  But doesn't this give JP Morgan an incentive to keep the number of Americans enrolled in the food stamp program as high as possible?
There are just some things that are a little too "creepy" to be "outsourced" to private corporations.  The JP Morgan executive in the interview below does his best to put a positive spin on all this, but it just seems really unsavory for a big Wall Street bank to be making so much money off of the suffering of tens of millions of Americans...."

More from Economic Collapse:

So if unemployment goes down will this ruin JP Morgan's food stamp business?
Well, apparently not.  In the interview Paton says that 40% of food stamp recipients are currently working, and he seems convinced that there could be further "growth" in that segment.
So is this what America is turning into?
A place where tens of millions of the unemployed and the working poor crawl over to Wal-Mart and the dollar store every month to use the food stamp debit cards provided to them by JP Morgan?
It turns out that JP Morgan also provides child support debit cards in 15 U.S. states and they also provide unemployment insurance benefit debit cards in seven states.
Apparently states have found that they can save millions of dollars by "outsourcing" the provision of these benefits to big financial firms like JP Morgan.
So what happens if you have a problem with your food stamp debit card?
Well, you call up a JP Morgan service center.  When you do this, there is a very good chance that you are going to be helped by a JP Morgan call center employee in India.
That's right - it turns out that JP Morgan is saving money by "outsourcing" food stamp customer service calls to India.
When ABC News asked JP Morgan about this, the company would not tell ABC News which states have customer service calls sent to India and which states have them handled inside the United States....
JP Morgan is the only one today still operating public-assistance call centers overseas. The company refused to say which states had calls routed to India and which ones had calls stay domestically. That decision, the company said, was often left up to the individual states.
JP Morgan has been moving some of these call center jobs back inside the United States due to political pressure, but this whole situation is a really good example of what the "global economy" is doing to middle class Americans.
Just try to imagine the irony - a formerly middle class American that has lost a job to outsourcing calls up to get help with food stamp benefits only to be answered by a call center employee in India.
Welcome to the global economy, eh?

Wednesday, January 19, 2011

4130 US Government Economists Got It Wrong

The book The Economist's Oath: On the Need for and Content of Professional Economic Ethics, by George F. DeMartino.  contains an intriguing chart on page 24 about where economists (as defined by title, not Ph.d.) work in the federal government, not counting the Federal Reserve System.
1. Department of Labor, 1262 economists, 30.5 percent of the total, 1208 of those are at the Bureau of Labor Statistics.
2. Agriculture, 533 economists
3. Treasury, 473
4. Commerce, 462
5. Defense, 225
6. Energy, 168
7. EPA, 163 (is that enough?)
8. HHS, 137
9. Transportation, 88
10. Interior, 86
11. FTC, 74
12. HUD, 62
13. Justice, 61
14. FDIC, 61 (do bank examiners produce the real value there?)
15. All others, 275.  The total is 4130 economists in the Federal government, as of 2008, and I believe those numbers are not counting consultants.
So basically 4130, whose salaries probably cost north of $ 300 Million annually, couldn't see the housing bubble and the economic collapse it sparked coming? Not a very good return on investment.
Especially when you have people like Peter Schiff going on CNBC and explaining exactly how and why it will happen.
What a shame.
Here's a collage of Peter Schiff predicting the collapse:

I really admire the logical, coherent and CLEAR nature of Schiff's arguments. This isn't a case of someone calling a top or bottom in a market and catching a lucky break, as many do. It's a macroeconomic call based on sound analysis.

If only the US government had more Peter Schiffs...

Monday, January 17, 2011

David Rockefeller Gets Welcomed In Chile

(via Cryptogon)

Well at least the Chileans know how to roll out the welcome mat :)

The video below shows an irate Chilean telling David Rockefeller and his friend Augustin Edwards Eastman that they are not welcome in Chile, nor is their "New World Order"

Upon reading the wikipedia page on Mr. Eastman, we find this interesting nugget:

He is accused of involvement in promoting the coup against President Salvador Allende , accredited to the fact that Mercury , along with other Chilean media, was funded by the CIA with the consent of Henry Kissinger with order to destabilize the Allende government. It is also alleged to have imposed on their means to an editorial that justified, or at least silent, the human rights abuses committed during the dictatorship of Augusto Pinochet . In fact, it was not until long after the publication of the Rettig Report "in 1991 , the El Mercurio abandoned the use of the adjective " alleged disappeared "to refer to victims of human rights violations. In an interview year 2000 , Edwards defended himself against the accusation saying: "I sincerely believe that we always strive to report what happened. But there were serious limitations that could overcome any means " . On August 12th of 2009 , a Chilean newspaper released declassified CIA files. correspond to a translation of a collection of information regarding operations Coihueco , code name the murder of Tucapel Jimenez , Valkyrie , codename for the assassination of former President Eduardo Frei and Condor 2, code name for the murder of chemist Eugenio Berrios , who recorded entries for 1984, 1986 and 1999.The English original was sent to Washington DC , under the classification Secret-3290, while the annotation Eyes Only means that it is a read-only document, indicative of its secrecy. 8The report adds that Pinochet personally ordered planning, development and implementation of operations Coihueco Valkyrie and the then largest Valdés Arturo Silva . Furthermore, argues that the two procedures are used to serving and retired Army, which was transferred, in the words of the document, the private security of Agustín Edwards Eastman and Agustín Edwards del Río , "collaborators and informants of this dependency since 1968. " Adds that was used as links to Arturo Silva Valdés, Nelson Hernandez Franco, Marcelo Sandoval, Nelson Roman, Erika Silva and Eduardo Martínez Wogner.