01.30.09 Obama administration's relations with China off to rocky start

WASHINGTON, January 30 - China recently surpassed Japan as the US government's largest creditor. Any decision by Beijing to move its money would deal a dizzying new blow to an already tottering American economy. Yet relations between China and the new Obama administration are off to a rocky start. For now, Beijing continues to loan Washington money by buying Treasuries and other US government securities, helping to finance the ever-growing US budget deficit. But there are signs its leaders may be considering trimming these holdings as that country experiences its own economic slowdown. Strains between the two economic powerhouses seem to be growing with the change in administrations.

The latest irritants are a "buy American" provision attached to White House-backed stimulus legislation moving through Congress and criticism of China's currency policies by Vice President Joe Biden and Treasury Secretary Timothy Geithner. Geithner accused Beijing of “manipulating” its currency during his Senate confirmation process. Biden, interviewed Thursday by CNBC, said that the Obama administration would "say to China — which occasionally the last administration was reluctant to do —' You’re a major player on the world scene economically, and you've got to play by the rules that everybody else plays by.' "

Their comments followed a move by Chinese censors to silence part of a live broadcast of Obama's inaugural address when he spoke of the US struggle against communism. And at an economic forum in Switzerland on Wednesday, Chinese Premier Wen Jiabao blamed China's economic woes on US-led Western financial institutions, suggesting "a lack of self-discipline" and "blind pursuit of profit." The pointed words from Geithner and Biden were widely seen as an escalation of old complaints that China artificially depresses the value of its currency to bolster its exports, even though the White House has sought to play down such comments and has denied increasing friction with China.

China has allowed the value of its currency to rise by 21% over the past two years. But American manufacturers complain the Chinese yuan is still significantly undervalued, making Chinese goods cheaper for US consumers and American products more expensive in China. China holds roughly $2 trillion in foreign exchange reserves and surpassed Japan in September as the biggest foreign holder of Treasuries. It also has the largest single-country trade deficit with the United States — totaling $246.5 billion in 2008 through November.

With the Federal Reserve holding short-term interest rates at near zero and suggesting it may start buying longer-term US securities to help drive down home mortgage rates, US government securities are becoming increasingly less attractive to foreign investors. Washington needs a continued flow of loans to help it claw its way out of the worst financial crisis since the early 1980s, perhaps since the Great Depression. Much of this demand is being met by China, Japan, Britain and Arab oil-exporting nations. Of those sources of money, China is not only the biggest lender but perhaps the least predictable. [More>>japantoday.com]

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Editorial note: The current public debt of the US (See treasurydirect.gov) is $10.6 trillion. Interest paid against the debt in 2008 was $451.1 billion. Interest paid (See treasurydirect.gov) so far in fiscal year 2009 (December.-October 2008) is $135.3 billion. Previous interest expenses per year are listed at the treasurydirect.gov link, including: 2007 - $430 billion; 2006 - $405 billion and the years 2005 - 1995 ranging between $318 billion and $361 billion. Essentially, as a percentage of the public debt, in any of these years interest outlays have been about 5% of a year's total debt.

There are several factors that are involved with the financing of the public debt, as this article opines. A diminishing dollar would cause a nation's investments in the US to lose value, and there is thus a trade-off in buying US dollars, treasury certificates, securities, etc. and maintaining a healthy trade. In this time of a world economic collapse more pressure is placed on international central banks to find a safe refuge for their investments. US treasuries were seen as a safe refuge, as all other currencies began to come under pressure, such as the yen, yuan, euro, and pound. As currencies fluctuated international investors sought another refuge and found it in crude oil, driving up the price of oil from $40 per barrel to $145 per barrel (together with OPEC's help) in a span of about 6 months. The sharp rise in the cost of oil in turn drove up the cost of agriculture — fertilizers and transportation — which in turn drove up the cost of food and animal fodder.

Then came the Wall Street / banking crash. As the world economy began to collapse under the weight of the price of fuel and crash of financial institutions, the solution for international central banks has been to borrow (sell treasury certificates) to inject money into the economy. At the same time, because the crisis involved a halt to bank lending, governments have been reducing interest rates to encourage more loans.

At present the reward for buying a central bank's notes is nil. There are better returns on investment than a government's promissory note. To make the notes more attractive a government needs to increase the interest rate payable against a note. But this presents another problem.

Because of the amount of international debt already being held by investors (the US debt is now at $10.6 trillion alone) investors are inclined to buy fewer notes. At the moment a question is being posed, "Are there enough investors out there to buy up the notes being offered?"

The Reagan administration introduced the convention and practice of running its government on borrowed money and drove up the US debt from $.5 trillion to about $2.6 trillion. Bush I drove the debt up from there to $4 trillion. Clinton retarded the growth of the debt through a "no more borrowing and paydown the debt" discipline, but interest alone accumulated against the debt to the extent that it was $5.5 trillion when President George W. Bush (Bush II) took office. Bush II stopped the "no more borrowing" program, squandering even a $700 billion surplus from the Clinton administration — intended to pay down the debt — and drove the public debt up from $5.5 trillion to its present state of $10.6 trillion. He squandered not only an opportunity to save for a rainy day but also the perceived solvency of the US. (See chart on US Debt in the sidebanner of this page)

The argument for borrowing to run the government (called Reaganomics; another form of "deficit spending") was that one could safely borrow using a criteria of indebtedness in relation to the Gross Domestic Product (GDP). The precept applied was the same as the bankers used in financing real estate, thinking that the practice of variable rate loans was safe since house values always increased. When real estate values began to crash (the Fed raised prime rates, probably to sell bonds, causing mortgage rates to increase; the increases then caused mortgage defaults when home values fell below mortgage values.) the assets of the financial institutions carrying the loans also crashed.

A similar threat exists with the US GDP. As the US GDP declines the ratio of debt to GDP worsens, making the investment in notes more risky. The higher the risk the less the borrowing.

Interest on the public debt — as in the case of credit cards — can multiply the original cost of a loan to the point that a borrower may be unable to make the interest payments owed on a loan (as in the mortgage meltdown). At the least, interest on a loan can eat up expenditures otherwise needed: for defense, education, food, etc.

The public debt is a long-term loan, and thus interest rates to finance the debt will vary over time. But we can use the historic rate of 5% as a reasonable deduction on what portion of our taxes will have to be expended just to service the interest accumulating in 2009 against the current debt of $10.6 trillion. The cost to service the debt is now about $530 billion. That is to say the current interest in fiscal year 2009 of $135.3 billion will become about $530 billion before the year is out. This does not take into consideration the additional funds being borrowed by the Obama administration of $800 billion (Interest on this amount alone, at 5% estimated, would be $40 billion).

Now comes the cold part of this discussion: Creditors always get paid first. The money you hope on for education, defense, food, etc., will be reduced to pay the creditors, including China, Japan, the EU and OPEC countries. Bush's 2008 defense budget, to fight his wars, was about $700 billion. The world now pretty much in shambles, more insecure than ever, makes a troubling enterprise for Obama to defend.

Mel Copeland

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01.30.09 US economy falls at 3.8 percent rate at year's end

January 30 - Two-Year Recession Deepens; Quickest Economic Contraction in Quarter-Century. Households and businesses slashed spending during the last three months of 2008, causing the quickest economic contraction in a quarter-century and deepening a recession entering its second year. New data from the Commerce Department released this morning show the US economy shrank at a 3.8 percent seasonally adjusted annual rate from October through December, compared with the previous three months. The number is an initial estimate that might change as more information is collected.

It was the steepest quarterly contraction since early 1982 — when the country was mired in a deep downturn — and shows how a global credit crunch, a weak US real estate market and a decline in consumer spending have combined to undercut economic growth. The 3.8 percent decline in gross domestic product from October through December compares with a 0.5 percent decline in the previous three months, and modest growth for the first half of the year. For all of 2008, gross domestic product — a broad measure of the goods and services produced by the economy — rose 1.3 percent, compared with 2 percent the year before. [More>>washingtonpost.com; See related story,

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01.30.09 Economic crisis savages Japanese companies

TOKYO (AFP) January 30 - Massive losses and cutbacks struck top Japanese companies on Friday, with electronics giant NEC alone shedding 20,000 jobs, as dire forecasts poured in from firms worldwide. Japan announced a triple slump in key economic data, with industrial output, consumer spending and employment all sharply down, and said there was no end in sight to the bad news. The data echoed gloomy reports on the health of the economy in the United States, where President Barack Obama took aim at what he called the "shameful" bonuses given to Wall Street bankers during the financial crisis. December's 9.6 per cent drop in industrial output from the previous month was the steepest such decline on record, raising fears Japan's economy suffered its biggest contraction in decades in the fourth quarter of 2008. [More>>news.com.au]

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01.30.09 Deputy PM: Russia to have nearly zero growth in 2009

MOSCOW, January 30 - Russia's economic growth would be close to zero in 2009 due to the global financial crisis, Russian Deputy Prime Minister and Finance Minister Alexei Kudrin said Friday. "Our economic growth will most likely be close to zero, and the situation to a great extent will depend on our own measures," Kudrin was quoted by the Itar-Tass news agency as saying in the State Duma, the lower house of parliament. Russia's budgetary revenues in 2009 could decline from 10.9 trillion rubles (321 billion US dollars) to 6.5 trillion (191.5 billion US dollars) amid the financial meltdown, Kudrin said. Igor Shuvalov, Russia's first deputy prime minister, said Friday in the State Duma that the country's economic situation will be "fairly harsh" in 2009. [More>>xinhuanet.com]

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01.30.09 North Korea scraps accords with south

January 30 - North Korea announced yesterday it is scrapping all political and military agreements with South Korea, accusing the Seoul government of pushing relations to the brink of war. The Committee for the Peaceful Reunification of Korea said all agreements on ending confrontation would be nullified, including one covering their West Sea border — the scene of bloody naval clashes in 1999 and 2002. South Korea expressed regret and pledged "firm counteraction" against any violation of the sea border. The Unification Ministry called on the North to stop raising tension and return to dialogue.

The Defense Ministry said the military has enhanced alert on the West Sea though no unusual signs were spotted along the border. The Navy has reportedly deployed a 4,500-ton destroyer and ordered forces there to be fully prepared against any North Korean provocation. Analysts believe the latest in a series of verbal attacks is aimed to ensure it remains a diplomatic priority for US President Barack Obama. It also seeks to pressure conservative South Korean President Lee Myung-bak and to drum up political support at home, they said. [More>>koreaherald.co.kr]

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01.30.09 US envoy warns of setbacks ahead in Mideast talks

JERUSALEM (Reuters) January 30 - US President Barack Obama's Middle East envoy said on Friday that the new administration's push for Israeli-Palestinian peace after the war in the Gaza Strip faced big hurdles and he warned of setbacks ahead. The sombre assessment by former US Senator George Mitchell followed two days of talks with Israeli and Palestinian leaders on shoring up a shaky ceasefire that ended Israel's 22-day offensive against Gaza's Hamas Islamists rulers.

In the talks, Israel has balked at fully reopening Gaza's border crossings to allow reconstruction. Washington supports Palestinian President Mahmoud Abbas in his power struggle with Iranian-backed Hamas for control of the passages, Gaza's gateway to the outside world and a major political and economic prize. Mitchell said consolidating the truce and "immediately" addressing the humanitarian needs of Gaza's 1.5 million residents were the US administration's top priorities. "Then we must move forward," he added, citing Obama's commitment to "aggressively" seek a peace deal. US-backed talks between Israel and the Palestinians stalled last year in discord over Jewish settlement expansion and the future of Jerusalem. Diplomats said reviving them after the war in Gaza would be very difficult and would take time. [More>>thestar.com.my; See related stories:

khaleejtimes.com (AFP) January 30, "Turkey;s Mideast ambitions at risk after PM outburst" : ANKARA - Turkish Prime Minister Recep Tayyip Erdogan's spat with Israeli President Shimon Peres in Davos has dealt a blow to Ankara's ambitions to become a powerbroker in the Middle East, analysts said Friday. “The incident is a breaking point. It will seriously harm Turkey's mediation role (in the Middle East) and may change the West's perception of Turkey,” said Arif Keskin, a senior analyst at the Ankara-based Eurasia Studies Centre. Erdogan, whose political career began in the ranks of a now-banned Islamist party, stormed out of a heated debate over the Gaza conflict at the World Economic Forum on Thursday after clashing with Peres. Before walking off, he said Israel committed "barbarian" acts in the Gaza Strip, lashed out at the audience for applauding Peres’ emotional defence of the war and vowed he would never return to Davos...

jpost.com, January 30, "Peres: Erdogan spat 'nothing personal' " :Despite his public spat with Recep Tayyip Erdogan at the World Economic Forum over the Gaza fighting, President Shimon Peres said Friday that his relationship with the Turkish prime minister had always been good and remained so. Speaking to reporters in Davos, Peres said Turkey was an ally and an important country, both in the Middle East and the World. Peres said he spoke to Erdogan after the row in which the Turkish prime minister stormed off the stage...

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01.30.09 Iraq vigilant after election candidates shot dead

BAGHDAD, January 30 - Iraq on Friday prepared for its first election since 2005 with security forces on high alert after gunmen killed candidates and campaign workers, raising fears of new violence ahead of polling day. Reports of attempts to buy votes and fears about fraud threaten to cast a shadow over an otherwise vibrant campaign that will test the country's growing security. It was difficult to quantify how widespread the attempts have been to garner votes with gifts, but the issue has become a talking point among Iraqis before Saturday's regional vote.

The run-up to Saturday's poll had been relatively free of violence but the shooting of election contenders in Baghdad and in the cities of Baquba and Mosul, north of the capital, on Thursday night exposed the threat that such attacks could throw voting day into chaos. The elections are seen as a key test of Iraq's steadily improving stability, as US President Barack Obama looks to redeploy American troops to Afghanistan. [More>>alarabiya.net]

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01.30.09 Thousands rally over Muslim persecution in India

NEW DELHI, January 30 - Protestors say Muslim youths being unjustly targeted. At least two thousand people rallied in New Delhi on Thursday to protest the killing and imprisonment of Muslims, saying innocent members of the community became targets after bomb attacks in India in recent years. Many demonstrators holding banners like "Give us security, not tears and blood" arrived by train from Azamgarh district in the neighboring Uttar Pradesh state, where the protesters said many Muslim youths have been arrested on scant evidence. [More>>alarabiya.net]

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01.30.09 Urgent action needed as Zimbabwe cholera hits 60,000: WHO

GENEVA (AFP) January 30 - The World Health Organization on Friday called for drastic national and international action to tackle Zimbabwe's cholera outbreak, after the number of victims soared past the worst case threshold of 60,000. The death toll in the outbreak since August 2008 reached 3,161, out of 60,401 recorded cases, according to the WHO's most recent update released here on Friday. Eric Laroche, a WHO assistant director-general, said the WHO and other international and local partners were supporting Zimbabwe's health ministry in tackling the disease. "But unless drastic action is taken by all players in this crisis, more Zimbabweans will succumb to the outbreak, and other countries in the southern African region will face the continued threat of spill over epidemics," he added in a statement. [More>>timesofindia.indiatimes.com]

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01.30.09 Jakarta: City mosques reject Islamic formalization

JAKARTA, January 30 - Most managers of mosques in Jakarta embrace a moderate brand of Islam and support the unitary state of Indonesia, a survey released Thursday reveals. Only a few wish for Indonesia to become an Islamic state, it added. The survey was conducted by the Center for the Study of Religion and Culture (CSRC) at Jakarta's Syarif Hidayatullah State Islamic University between November 2008 and January 2009. It surveyed 250 takmir masjid (mosque managers) in Jakarta. “Some 88.8 percent of the respondents approve of Pancasila [state ideology] and [view] the 1945 Constitution as the best model for Indonesia. As many as 78.4 percent agree that democracy is the best system of governance for Indonesia,” CSRC research coordinator Ridwan Al Makassary told a press conference. [More>>thejakartapost.com]

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01.30.09 Rising acidity threatens oceans

January 30 - The oceans have long buffered the effects of climate change by absorbing a substantial portion of the greenhouse gas carbon dioxide. But this benefit has a catch: as the gas dissolves, it makes seawater more acidic. Now an international panel of marine scientists says this acidity is accelerating so fast it threatens the survival of coral reefs, shellfish and the marine food web generally. The panel, comprising 155 scientists from 26 countries and organized by the United Nations and other international groups, is not the first to point to growing ocean acidity as an environmental threat, but its blunt language and international credentials give its assessment unusual force. It called for "urgent action" to sharply reduce emissions of carbon dioxide. [More>>nytimes.com]

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01.29.09 Jobless claims for Americans hit record

WASHINGTON (AP) January 29 - Nearly 6.5 Million Drawing Unemployment Benefits As Corporate Layoffs Continue. The number of people receiving unemployment benefits has reached an all-time record, the government said Thursday, as layoffs spread throughout the economy. The Labor Department reported that the number of Americans continuing to claim unemployment insurance for the week ending Jan. 17 was a seasonally adjusted 4.78 million, the highest on records dating back to 1967. A department analyst said that as a proportion of the work force, the tally of unemployment recipients is the highest since August 1983. The total released by the department doesn't include about 1.7 million people receiving benefits under an extended unemployment compensation program authorized by Congress last summer. That means the total number of recipients is actually closer to 6.5 million people...Companies have announced more than 125,000 layoffs in January, according to an Associated Press tally. [Full story>>cbsnews.com]

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01.29.09 Huge turnout for 'Black Thursday' of strikes

January 29 - French workers staged a one-day strike and took to the streets on Thursday to protest the government's handling of the economic crisis, causing major disruptions to public transportation and education. President Nicolas Sarkozy once joked that French workers went on strike so often “no one even noticed.” He’s not saying that any more. On Thursday, France entered a state of virtual paralysis as over 1.4 million people went on strike and joined mass demonstrations throughout France, the French CGT trade union said. In Paris, 300.000 workers and students marched through the capital, according to the union, compared to 65.000 according to the police.

Reporting from the protests in Paris, FRANCE 24’s Nadia Chabit says that bankers or private sector nurses took to the streets to condemn the French president’s handling of the economic crisis. "The private sector is also involved this time, and normally trade unions find it hard to rally this sector," she says. "When eight unions, representing many different professional fields, go on strike, it means something," said Ian Brossat, President of the Paris Council’s communist group, in FRANCE 24’s Debate. "The relevant question is: why does a large segment of the population support the strikes?" Polls show that 69% of the French understand the protesters' discontent. [More>>france24.com]

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01.29.09 UK: Annual house prices plunge 16.6 percent

LONDON, January 29 - The average price of a house is 16.6 per cent lower than this time last year after a further 1.3 per cent fall in January, according to figures published today by Britain's biggest building society. The January fall recorded by the Nationwide is lower than the 2.5 per cent slump in value seen last month, but is still well ahead of the fall of 0.4 per cent reported in November...The latest decline, which will push more homeowners into negative equity, which is where the value of a house falls below the level of mortgage debt, leaves the average price of a typical house at £150,501, down from £153,048 in December. Mr. Gahbauer said that the number of house sales had remained poor in recent months, with mortgage approvals falling to a record low of 27,000 in November, and partial figures for December suggesting only a small improvement since then. [Full story>>timesonline.co.uk]

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01.29.09 OPEC pledges to push oil above $50

January 29 - OPEC members need an oil price above $50 a barrel to make exports worthwhile, the head of the cartel said today, adding that more production cuts were possible this year. "We are not happy with $40 even $50 a barrel," Abdalla Salem El-Badri, OPEC Secretary-General, told a panel discussing energy security at the World Economic Forum in Davos. Even $50 did not guarantee a "decent income for our countries," he said, adding: "I hope that the price will pick up ... a $50 price will not permit us to invest." Asked about further cuts by the cartel, he said: "If we still have some downward problems [on prices], OPEC will not hesitate to take some quantity out of the market. We cannot tell at this time before our next meeting on March 15." [More>>timesonline.co.uk]

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01.29.09 Four killed, 31 suspects arrested in Swat

SWAT, Pakistan, January 29 - Security forces and police claimed to have arrested 31 suspects during search operation from Swat on Thursday — while four persons, including a minor boy, were killed in different acts of violence in the volatile valley. According to reports, a minor boy was killed in crossfire in Kabal, while two more persons were gunned down in Matta. In another violent incident, one person was killed and three others wounded after a missile fired from some unknown location landed at a house in Mangor area of Mangora. Besides, a missile attack was carried out at DIG office in Saidu Sharif. However, no loss of life was reported. Meanwhile, undeclared curfew was imposed in Kanju after some unknown miscreants attacked security forces' convoys with remote-control bombs. [>thenews.com.pk; See related story:

khaleejtimes.com, January 29, "Pakistan busts 'high profile terror network: police' " : ISLAMABAD - Pakistani police said Thursday they had arrested a nine-member gang of high-profile militants linked to al-Qaeda and the Taliban, and wanted in connection with a string of major suicide attacks. (the extent of the sketchy information reported)

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01.29.09 IDF wounds Gaza militant behind deadly attack on soldiers

January 29 - The Israel Air Force on Thursday attacked a Palestinian militant in the southern Gaza Strip who was apparently behind a deadly attack on an Israel Defense Forces convoy earlier this week. The IDF identified the targeted militant as Mohammed Uda-Samidi and said he was involved in rigging the roadside bomb which killed an Israeli tracker and wounded three others on Tuesday. Uda-Samidi and seven children passersby were wounded during the attack on the southern Gaza town of Khan Yunis, Palestinian medical officials said.

This was fifth Israeli air strike since a shaky cease-fire went into effect nearly two weeks ago, ending Israel's 22-day offensive on the coastal enclave. Despite the truce, Israel and the Gazans have been trading fire all week. Palestinian militants in Gaza fired a Qassam rocket at southern Israel earlier Thursday morning. The rocket exploded in the Sha'ar Hanegev Regional Council area, causing no casualties or damage. [More>>haaretz.com]

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01.29.09 Angry sounds from the mosques

BEIRUT, Lebanon, January 29 - The sound that blasts from the loudspeakers in the mosque near my office in Beirut is causing the windowpanes to shudder. It is noon on Friday, and the local muezzin is leading the faithful in prayer. The mosque is crowded with believers spilling over to the sidewalk. Today, the muezzin is more upset than usual, and he has been very upset of late. He is admonishing Arab leaders for failing to stop the violence in Gaza, for failing to confront Israel and the United States, for failing to come to the assistance of Hamas and the Palestinians. Arab leaders are traitors to the ummah (Arab world), he tells the crowd quoting from the Koran to make his point clear.

..Recently on a morning political show on Hezbollah's Al-Manar TV, a respected Shia scholar told his hosts that it was about time Arabs start discussing what the Middle East will look like without Israel. "I am not saying that this is going to happen tomorrow or after tomorrow," he said. "But there is reason to think that we will not have a Jewish state in the region in the not too distant future."

...the appeal that Islamic organizations have among Palestinians, and Arab militants. This is likely to grow rather than diminish in the years to come and it is naïve to expect that the impoverished Palestinian and Arab populations surrounding Israel will choose to confront Israel as secular and liberal democratic when the West supports, arms, and, in the case of the United States, finances a Jewish state in the Middle East, albeit dressed in the garb of modernity.

Those who want to support a religious state must be ready to fight a religious war. The muezzin in the mosque nearby has learned that lesson, and his crowd grows larger every week. [Full story>>metimes.com; See related story:

jpost.com, January 29, "Nasrallah vows revenge for Mughniyeh" : Hizbullah leader Hassan Nasrallah warned on Thursday that his group will indeed avenge the death of Imad Mughniyeh, despite reports on Wednesday that Israel thwarted a major a Hizbullah-backed terror attack in Europe recently. "The reaction to Mughniyeh's assassination, which will aim to teach the murderers a lesson, is a necessary thing," Nasrallah said. "However, regarding the question of when the revenge will come and what it will be," the Hizbullah leader continued, "don't expect us to answer that."

Nasrallah promised that even with future attacks against Israel, Hizbullah would always retain the right to avenge the death of Mughniyeh. "There will never be a day when revenge is behind us," Nasrallah said. "It will always be ahead of us." The most recent threat comes just two weeks before the first anniversary of Mughniyeh's death. In February 2008, Hizbullah's terror chief was killed when his car exploded in Damascus. Despite Israeli denials that it was connected to the assassination, Syrian intelligence and Hizbullah maintain that the bombing was a Mossad operation. On Wednesday, Channel 2 reported that Israeli intelligence agencies recently succeeded in thwarting a major Hizbullah terror attack against an Israeli target in Europe...

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01.29.09 US and UK navies seize 20 tones of narcotics

MANAMA, Bahrain, January 29 - More than 20 tones of narcotics with an estimated street value of more than $100 million (Dh367 million) have been seized by the US Navy and British Navy warships over the last three months. The figure announced on Monday takes the total quantity of narcotics seized by the US and British maritime forces to more than 53 tones during 2008, the US Navy said in a statement sent to Gulf News. According to the US Navy, the drugs seized "could have helped to fund the insurgency fighting coalition forces in Afghanistan as well as contribute to instability in the region." [More>>gulfnews.com]

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01.29.09 Somali pirates seize German gas tanker

NAIROBI, Kenya (AFP) January 29 - Somali pirates have hijacked a German gas tanker with 13 crew in the Gulf of Aden, a Kenyan maritime official said...The MV Longchamp, with a crew of 12 Filipinos and one Indonesian, was transporting liquefied petroleum gas "from Europe to the Far East,'' Mwangura said, without giving exact locations. The pirates took control of the Bahamas-flagged vessel and headed for the Somali coast, he said...The seizure brings to 16 the number of ships currently in the hands of pirates. [Full story>>news.com.au; See also

alarabiya.net, January 29, "Nine countries sign deal to fight Somali piracy" : Nine countries from the region most affected by Somali piracy on Thursday signed a deal enhancing cooperation in the fight against piracy in the Indian Ocean and Gulf of Aden, as pirates hijacked a German-owned tanker carrying liquefied petroleum gas despite being under navy escort...The nine signatories are Djibouti, Ethiopia, Kenya, Madagascar, the Maldives, the Seychelles, Somalia, Tanzania and Yemen...The code of conduct says coastal states should make the necessary changes in their legislations to facilitate the arrest and prosecution of piracy suspects..."..There is a principle that each ship pursuing a pirate has to ask for the permission of the concerned state to enter its waters. We have decided to stay on this principle," Sekimizu explained...

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01.28.09 World growth 'worst for 60 years'

January 28 - World economic growth is set to fall to just 0.5% this year, its lowest rate since World War II, warns the International Monetary Fund (IMF). In October, the IMF had predicted world output would increase by 2.2% in 2009. It now projects the UK, which recently entered recession, will see its economy shrink by 2.8% next year, the worst contraction among advanced nations. The IMF says financial markets remain under stress and the global economy has taken a "sharp turn for the worse."...Meanwhile, it predicts that the eurozone economy is poised to shrink by 2.0% in 2009 and the US economy by 1.6%. [Full story>>bbc.co.uk]

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01.28.09 Boeing to axe thousands of jobs

January 28 - Boeing is to cut 10,000 jobs this year in response to the economic crisis. The firm is one of the largest aerospace manufacturers in the world. In the last three months of 2008, it made a loss of £39m (56 million US dollars), partly because of a strike by its machinist union. Its 27,000 machinists — 16% of Boeing's workforce — walked out on September 6 and did not return for 58 days. The company was also hit by a costly redesign of its 747 freighter aircraft.

Boeing was also out-performed by its European rival Airbus in 2008. The plane manufacturer is the latest to be hit by global economic slowdown, and follows job-loss announcements from engineering giant GKN and home shopping firm Shop Direct. US President Barack Obama today said the economic slump could be overcome if everyone "chips in so we can climb our way out of the crisis, executives and factory floor workers." [More>>news.sky.com; See also cbsnews.com]

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01.28.09 UK: Ailing car firms must go green to get help

January 28 - Lord Mandelson faced charges of producing too little and acting too late as he set out a £2.4bn rescue package for Britain's beleaguered car industry. The Business Secretary linked the cash — which was far less than the £13bn demanded by the unions — to manufacturers developing green technology. Lord Mandelson insisted he was not offering a "bailout" for the motor industry, which employs nearly one million people from the shopfloor to showroom. He argued that the investment would help car companies become "greener, more innovative and more productive." Car sales have collapsed by a half since the recession began to bite and several car-makers have been forced to cut workers' hours in an attempt to avoid redundancies. [More>>independent.co.uk]

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01.28.09 Obama must apologize for crimes against Iran: Ahmadinejad

TEHRAN, January 28 - Iranian President Mahmoud Ahmadinejad demanded on Wednesday that President Barack Obama apologies for past US "crimes" against the Islamic republic, after the new US leader extended a hand of diplomacy to Tehran. Iranian leader also called on Washington to withdraw its troops from across the world as a proof of Obama's promised policy of change. "You were standing against the Iranian people in the past 60 years," Ahmadinejad said in an address in the western region of Khermenshah that was broadcast on state television. "Those who speak of change must apologies to the Iranian people and try to repair their past bad acts and the crimes they committed against Iran," he said, suggesting it could be a condition for any talks between the arch foes.

In an interview on Monday with Al-Arabiya television, Obama promised to lay down a framework for his policy towards Iran, whose leaders have long regarded the United States as the "Great Satan." "As I said in my inauguration speech, if countries like Iran are willing to unclench their fist, they will find an extended hand from us," Obama said. "It is very important for us to make sure that we are using all the tools of US power, including diplomacy, in our relationship with Iran." [More>>thenews.com.pk]

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01.28.09 Egypt FM: Hezbollah, Hamas and Iran cooperate to provoke conflict

January 28 - Egypt aired its grievances against Iran, the Palestinian Islamist movement Hamas and the Lebanese Shi'ite group Hezbollah, saying they worked together in the fighting over Gaza to provoke conflict in the Middle East. "[They tried] to turn the region to confrontation in the interest of Iran, which is trying to use its cards to escape Western pressure...on the nuclear file," Egypt's Foreign Minister Ahmed Aboul Gheit said in an interview with Orbit satellite channel, broadcast on Wednesday. Aboul Gheit also said that Egypt undermined Qatar's attempts to arrange a formal Arab summit on Gaza earlier this month, arguing that it would have damaged "joint Arab action." ...Diplomats say Egypt resents the Qatari challenge to its traditional role as leading Arab mediator and dislikes the influence of the satellite television channel Al Jazeera, which is based in Doha and is owned by the Qatari government. [Full story>>haaretz.com]

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01.28.09 Israeli jets bomb Gaza tunnels as US envoy due

GAZA, January 28 - Israeli warplanes bombed Wednesday tunnels under the border between the Gaza Strip and Egypt that are used by fighters to smuggle weapons, the army and witnesses said. The attack came hours before a US peace envoy was due to arrive in the Jewish state. The army said that the strike on the "Hamas tunnels" came in response to the attack along the Gaza border on Tuesday where one Israeli soldier was killed and three others were wounded.

An air strike shortly afterwards killed one Palestinian on a motorcycle whom a spokesman identified as the planner of the roadside bomb attack. "The Israel Defense Forces (army) sees Hamas as accountable for preserving the peace in Israel's southern villages and will respond harshly to any attempt of undermining it," it said in a statement. Residents of the Gaza town of Rafah and Hamas security officials said some people began to flee their homes in panic as the aircraft struck three times before dawn. There was no initial word of casualties. [More>>alarabiya.net]

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01.28.09 'Jerusalem division will lead to Iran base'

January 28 - An Israeli withdrawal from east Jerusalem will lead to the creation of an Iranian terror base in the city, Likud leader Binyamin Netanyahu said Wednesday. "If we leave sections of Jerusalem, Hamas will enter and set up an Iranian-backed terror center," Netanayhu said in an address at the sixth annual Jerusalem Conference. He added that one had to be "totally blind" to assume that a division of Jerusalem as part of a peace agreement with the Palestinians will lead to stability in the city.

Netanyahu, who is the front-runner in next month's elections, said that any Israeli withdrawal from parts of the city would only serve to bring terror to the heart of Jewish neighborhoods of Jerusalem. "Anybody who yearns for the peace of Jerusalem will support Israeli sovereignty over all the city," he said. "As the English saying goes, if it ain't broke don't fix it," Netanyahu concluded. Palestinians claim all of east Jerusalem — as well as the city's holy sites — for the capital of their future state. More than 250,000 Arabs live in Jerusalem. Prime Minister Ehud Olmert has voiced readiness to cede [the] Arab section of east Jerusalem to the Palestinians, while control over the holy sites — dubbed "the holy basin" — would be shared under an international body. [>jpost.com]

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Editorial note: "Solution in original documents creating Israel." It may be that a solution bringing peace in Jerusalem and thus to Israel (and the world) can be found in the original documents that involve the creation of the state of Israel in 1948. A reasonable step forward for all sides concerned ought to begin with examination of the original documents, to see if they contained conditions that would lead to peace. One condition that seems to fit with criteria of "sharing control over the holy sites with an international body" would be the "Corpus Separatum of Jerusalem."

As relating to the criteria of "the holy basin" all of Jerusalem is a holy site, assuming criteria described by Isaiah applies. (We reference the Biblical view, since it is a foundation of Israel's Declaration of Independence and a document that the Koran repeatedly claims to confirm — Hence, the Bible is not an unreasonable foundation to apply in defining that part of Jerusalem that is holy. Related Biblical and international covenants are discussed in our work, "Philistia triumph thou because of me" (1993).)

Isaiah 56.6.Also the sons of the stranger, that join themselves to the LORD, to serve him, and to love the name of the LORD, to be his servants, every one that keepeth the sabbath from polluting it, and taketh hold of my covenant.;
56.7 Even them will I bring to my holy mountain, and make them joyful in my house of prayer...for mine house shall be called an house of prayer for all people.

4.3 And it shall come to pass, that he that is left in Zion, and he that remaineth in Jerusalem, shall be called holy, even every one that is written among the living in Jerusalem."

We quote from Maravot News 5.10.08, editorial note to article 5.08.08 British PM: Israel's creation one of the 20th century's 'greatest achievements':

With the breakup of the Ottoman Empire, after WW I, Middle Eastern states, including Iraq, Syria, Saudi Arabia and Jordan, including a territory called Transjordan, now known as the West Bank, were created. Wikipedia.org describes how these states were formed: "...The dissolution brought the creation of the modern Arab world and Republic of Turkey. The League of Nations granted France mandates over Syria and Lebanon and granted the United Kingdom mandates over Mesopotamia and Palestine (which comprised two autonomous regions: Palestine and Transjordan). Parts of the Ottoman Empire on the Arabian Peninsula became parts of what are today Saudi Arabia and Yemen."

The creation of Saudi Arabia involved a bargain that realigned the tribal authority of the region, including the transfer of the Hijaz, formerly controlled by the Sherifs of Mecca and heirs of Mohammed, to the Saudis. This arrangement then set the rulers of Mecca as regents over Iraq, Syria and Jordan in exchange for the transfer of the Hijaz to the Saudis. The King of the Hashemite Kingdom of Jordan is a surviving regent from the League of Nations' arrangement. Their ancestry through the Sherifs of Mecca trace back to Fatima, the daughter of the prophet Mohammed. Other modern descendents of Mohammed are: the Tabaristan Sherifs, the Imams of the Yemen, the Sherifs of Sus, the Filali and the Bani Sa'ad Sherifs of Morocco, Bani Ukhaidhr of Mecca, who was set up as the king of Iraq and subsequently deposed, and the Humdites and Idrisids of North Africa. Among the families originally serving Mecca were the Qoraish (now called Hashemites). The leader of the Qoraish was Zaid, also called Qossay al Mujamma, who had a grandson named Amr-Hashim, and his grandson was Abdullah, father of Mohammed.

On November 2, 1917, the Balfour Declaration, reflecting the view of the British Cabinet, was issued and later incorporated into the the Sèvres peace treaty with Turkey and the Mandate for Palestine. The declaration stated: "...that the British government "view with favour" the establishment in Palestine of "a national home for the Jewish people" on the conditions that "nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine" or "the rights and political status enjoyed by Jews in any other country." The creation of a national home for the Jewish people was realized through the UN Resolution of November 29, 1947, "The partition of Palestine." The resolution provided for not only the creation of the state of Israel but also the state of Palestine and another territory, "The Corpus Separatum of Jerusalem." The terms of the resolution required that each of the two states, Israel and Palestine, submit to the UN, for approval, their "Declarations of Independence." Israel submitted its "Declaration of Independence " May 14, 1948. The Palestinian declaration of independence has not yet been produced. Israel's declaration reflects some interesting terms that pledge to protect the rights of all people living in Israel:

(Declaration of the establishment of the state of Israel," 1.13) The State of Israel..will foster the development of the country for the benefit of all inhabitants; it will be based on freedom, justice and peace as envisaged by the prophets of Israel; it will endure complete equality of social and political rights to all its inhabitants irrespective of religion, race or sex; it will guarantee freedom of religion, conscience, language, education and culture; it will safeguard the Holy Places of all religions; and it will be faithful to the principles of the Charter of the United Nations."

The Corpus Separatum of Jerusalem formed perhaps the most interesting part of the UN resolution of 1948, since it set aside a territory stretching from Jerusalem to the Mediterranean Sea that would be governed by the United Nations. The present impasse between the Palestinians and Israel in forming a Palestinian state fulfilling the plans of the UN resolution, "Partition of Palestine," could perhaps be resolved by applying Israel's Declaration of Independence and revisiting the Corpus Separatum of Jerusalem.

Much of this discussion, including a map showing the territories of the UN resolution, is provided in greater detail in a work, "Philistia triumph thou because of me" (1993).

Mel Copeland

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01.28.09 Early voting in Iraq is mostly smooth

BAGHDAD, January 28 - Thousands of soldiers, police officers, hospital patients and prisoners cast ballots on Wednesday as part of early voting in Iraq's provincial elections. At least one act of violence accompanied the voting. Two police officers guarding a polling center south of Kirkuk were killed by gunmen who fired at them from a passing car, according to an official from the Ministry of Interior who spoke on condition of anonymity. The gunmen escaped, the official said. Overall, however, the voting appeared to go smoothly, Iraqi election officials said. [More>>nytimes.com]

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01.28.09 China will project military around the world: analysts

January 28 - China is likely to begin deploying its military increasingly further from its borders, analysts at a top think tank said on Tuesday. The Asian power is also unlikely to constrain its defense budget because of an economic downturn that has left the World Bank forecasting the slowest pace of growth in China since 1990, the AFP reported, quoting analysts at the International Institute for Strategic Studies. Noting that China began using a naval convoy in the Gulf of Aden to protect the country's shipping from Somali pirates, IISS director of transnational threats and political risk Nigel Inkster said he expected "to see further such international contributions." "We are probably close to the end if not already at the end of what one now calls the Deng Xiaoping doctrine of lying low," he told reporters at a press conference, referring to the man who led China from 1978 to 1997. [More>>koreaherald.co.kr]

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01.28.09 NATO welcomes possible suspension of Russian missile plans

BRUSSELS (RIA Novosti) January 28 - NATO would consider the suspension of Russian plans to deploy Iskander missile systems near Poland a "good step," a NATO spokesman said on Wednesday. Some media sources earlier cited a Russian high-ranking military source as saying that the Defense Ministry had so far taken no practical measures to deploy Iskander missiles in its Kaliningrad exclave. "The earlier Russian announcement that they were going to deploy missiles into Kaliningrad and point them at NATO allies was unwelcome. If that decision has now been rescinded, it is a good step," NATO spokesman James Appathurai said. [More>>en.rian.ru; See also bbc.co.uk, January 28, "Russia 'halts missile deployment.' "

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01.28.09 Times Co. results reflect ad slump

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01.26.09 EU nations increase sanctions against Zimbabwe