Wednesday, October 05, 2011

The Perfect Storm

Two major economic problems seem to be converging like the perfect storm.
The economic problems facing the EU as a nascent confederation and the economic problems facing the USA.

Pundits believe both problems arose because of greed, corruption, and mismanagement. Greedy bankers, corrupt politicians, lousy managers.

The derivative stuff has been analyzed to death. Regulators either not doing their jobs or looking the other way. Mortgage companies chasing the buck so hard they didn't see they were riding into a barbed wire fence. Heads of companies, and government agencies, who believed Alan Greenspan, remember him, when he said that derivatives were good for the economy.

Greenspan expected the financial market bosses to act like gentlemen. He forgot, they never have. Not in the days of the tycoons like Rockefeller, Gould, and Morgan, not in the days of Morgan Stanley, and Lehman Brothers, and not today.

That tsunami of bad loans brought down banks around the world, in the USA, and in Europe. One of the EU's problems today is the debt some of the European banks suffered in that mortgage pyramid scheme.

Worse, though, is the EU's mistakes. A couple of decades ago Ireland was a wasteland. Tractors were small, cars were old, farms were barren, and farmers poor. The Irish blamed the British, claiming that the Brits kept the price of Irish goods below the poverty line. Then came the EU and the ECB, with money to finance projects, allow farmers to buy and sell Irish goods in Europe at fair market prices.

One farmer was visited by an EU representative. The farmer was poor. But his sheep and their wool, and their meat, were being exported to the EU for good money. The EU guy found a stack of checks on the farmers desk. Checks the farmer didn't know what to do with since he'd never really been paid before, at least not by check, by the Brits. After he began cashing the checks the farmer was no longer poor.

Other businessmen applied for EU loans through banks approved by the ECB, banks recommended by government officials. Okay. That's their job, isn't it? Recommend businesses that will grow and boost the economy? Only that's not exactly what happened. Politicians and government officials got kick-backs for recommending banks, or their cronies, for loans. Loans which were never repaid.

Take the case of enlarging the tiny port in the Greek island of Foligandros, in the Cyclades. Only relatively shallow-water ferry boats can come into port. Actually a broad concrete pier about 50 meters long and ten wide.

Eva, the British-born owner of Eva's coffee shop, at the tiny port, said that the EU had lent money to the Greek government, and that government to a bank, and that bank to a contractor, who was going to expand the port, dig down and make the seabed deep enough to accommodate cruise ships.

Foligandros has no airport. has an area of about 32 square kilometers and Is only 10 km long. Has a population of about a 600 people. And 42 small hotels. Tourism is the main industry. Well, that's not true. Tourism is the only industry. In fact, Foligandros, like Greece really has no other industry.

The Greeks don't make cars, washing machines, or plastic hangers, like Turkey. They don't have high-tech or even low-tech. They have tourism.

Athens, according to observers, is a city that services the tourism industry around the country through accounting firms, banks, travel agencies, the airport, the ports, whatever. The schools, from bottom to top, produce people who will either work in the tourism industry, unless they're academics or soldiers, or leave the country. Or go on strike.

On the islands, the taxi drivers, the bellboys, the kitchen help, the cooks and waitresses and maids come from Albania or Bulgaria. Greeks, observers say, don't do manual labor.

Santorini, about 45-minutes away by ferry, has a population of about 14,000 people. In the summer the population can double in a single day when half-a-dozen cruise ships, each carrying over two thousand people, pull into the deep water ports. Skiffs then unload the passengers for their day of shopping and eating and touring, then bring them back. At nightfall the cruise ships bellow a loud goodbye and sail away.

In Foligandros the planned bigger port never got dredged. The contractor went broke. So what happened to the money? The money the EU gave to the government who lent it to the bank who gave it to the contractor? Gone.

This story, we were told, is common. In Ireland, Greece, and probably other countries. The old boys made money for each other and left the well-meaning EU folks with the check.

One analysts says this is the fledgling EU facing growing pains. Unlike the USA, with a long history of confederation, the EU is a relative infant. Should the EU geniuses figure a way to solve the problem of greedy bankers, businessmen and politicians, the EU may not only last, but become a dynamo.

Of course, with the USA as an example, keeping greed and corruption under control is no mean trick. Where were the regulators when the toxic derivatives were flourishing? Or to a lesser extent, when Madoff was ripping off his own people? Did these officials, entrusted with a watchdog role, fall asleep and let the burglars in, or were they paid to take a walk around the block while the house was stripped bare?

Some folks are saying that not every country is ready for democracy, for an EU. Greeks are striking in the streets. One man identified himself as a good tax-paying citizen, a firm member of the middle-class. He was striking because he thought the EU had no business telling him how much tax he had to pay. That was an internal Greek matter. He seems to stick his head in the sand when it comes to admitting that the Greeks borrowed the money and have to pay back the EU lenders.

Will the Greek attitude prevail? Will the hand out for more continue? Will the high unemployment continue? Will the Albanians and Bulgarians keep making money while the Greeks take unemployment checks?

The problems are in the city, Greeks told visitors. The wealthiest people are in the Islands. There is no poverty in the hinterlands, just in the cities. The traditional farms still provide a basic living. The tourist industry makes those involved wealthy. Those involved in services in the cities are the ones suffering, now.

And in some ways that is the same problem in the USA. If a country relies on one industry for income, pundits say, that is a recipe for disaster. In Greece there is not enough money from tourism to support the folks in Athens. In the USA most of the major manufacturing jobs have been outsourced to China, Turkey, and Mexico.

What this means, says one observer, is that both the USA, and those counties in the EU facing problems, have to go back to basics. Create jobs in more creative ways. Open factories. Stress buying local goods. Create an economy that beats with a healthy heart not one supporting a fat lazy body with clogged arteries.

If the EU and the USA don't get in shape, flush out the fat cats who are draining the system by reaping in cash through outsourcing but taking jobs away from those in their own county, corrupt officials knowingly giving out bad loans, okaying phony construction deals, looking the other way when 'derivative' schemes pop up, then the perfect storm may well form, wiping out society as we know it.

Thursday, August 18, 2011

Attacks near Eilat, Aug 18, 2011

Israeli news analysts deduce this:
It wasn't Hamas who has no interest in heating up the border.
A radical Al Qaida-type group that left Gaza, hired Bedoin, crossed Sinai reached the unfenced border
near Eilat, between Mitzpe Ramon and Eilat on a back road near the Great Crater. Opened fire on a private car driven by an Israeli guy with his kids in the back. He hit the gas. Said he saw Egyptian soldiers along the roadside, wondered who they were and what they were doing. The border was only a few yards away. Then the Egyptians opened fire. He hit the gas and took off. No one injured. The Egged bus mostly carrying soldiers from the nearby base on their way to Eilat to catch a bus home for the weekend was then hit. The bus driver also hit the gas. 7 people injured. An army jeep appeared on the scene, and was ambushed with a road-side bomb. Four soldiers killed.Another bus was attacked with an RPG grenade launcher.. Seven Israelis killed all together, nearly forty injured. The army engaged the first group of terrorists that attacked the car and bus, three terrorists killed. One by a suicide bomb. Killed a soldier nearby.

News reports that up to 15 terrorists are still roaming around. The roads to Eilat are closed to prevent more roadside bombs and attacks are expected on that stretch. Fighting between the Israeli army and any terrorists they find is still ongoing, according to reports on the TV just now.

Is this a precursor of what might happen after the September vote?

No fence along the once quiet Sinai/Egyptian/Israeli border that up until now only had Sudanese sneaking into Israel to work, or Bedoin smuggling drugs. The Egyptian uprising resulted in the Egptian security services, according to reports, losing touch with the Bedoin tribal chiefs. The Egyptians have essentially lost control of the Sinai. The Israeli army was supposed to have been covering this open border. The army had been quarreling with the Border Patrol over who was in charge. This sort of attack is a result of that squabble since protecting the border fell between the cracks of a bureaucratic argument.

Analysts now wonder how the Israeli army will strike back, pointing out that once Israel withdrew from Gaza, and the recent lifting of the prohibition of Palestinians entering the Sinai from Gaza, and attack like this was inevitable. The analysts say that a fierce response by Israel against Gaza will not be positive. Only pinpointed attacks against known enemies will work. That and finally building the fence separating Egypt from Israel, a fence that until recently wasn't needed since Egypt and Israel had a peaceful relationship.

Sunday, May 15, 2011

The Chabad Rebbe & The German Officer

"The Chabad Rebbe & The German Officer" a 56-minute documentary film about the rescue of Yosef Yitzchak Schneerson, the 6th Lubavitch Rebbe, from war-torn Poland in 1939 by a half-Jewish German spy named Maj. Ernst Bloch working under direct orders of the head of Admiral Wilhelm Canaris, head of the Abwehr, German Military Intelligence, aired on the Israel Broadcasting Authority's Channel 1 on May 1, 2011 at 21:45 to good reviews and good ratings.

However, the film was immediately recorded by interested viewers and dedicated pirates, on their Tivo machines and even broadcast by Erutz 7, the Modern Orthodox Settler website and webcast organization run out of Beit El in the West Bank. Erutz 7 left the film on their website for anyone who wanted to stream or download until the IBA told them to take it down.

Another pirate uploaded the film to a and put up links to a variety of websites. This guy apparently thrives on uploading all sorts of films just for the fun of it. He is not alone. Other pirates crow their accomplishments on the web, for no other reason apparently than to see their name on the web.

After the broadcast we received phone calls from respectable and well-meaning Chabadniks asking if they could put the film up on their websites. We were told the film was no less than a "Kiddush HaShem." A Holy Act. Why? Because it told of the "Nes (miracle)" of the Rebbe's rescue. Their reasoning was that Chabaniks didn't watch TV and only visited certain approved websites. The Israel Broadcasting Authority turned down their request, hoping to somehow make some money back on their investment.

After several days of searching for pirated copies, it was clear that the desire of not so respectable Chabaniks and others interested in the story, weren't going to let the opportunity to see the film pass them by. Pirated copies of the film appeared like wild flowers after a heavy rain.

The IBA and the producers of the film didn't see this film as a holy work. The Chabad organization's JEM (Jewish Educational Media) was singularly uncooperative in the production of the film. The Producer's hoped that should Chabad like the film they'd
order copies, or put the film in their 3,000 Chabad houses, so some of the investment in making the film over a four-year period could be recouped. But as one cynic pointed out, 'Why buy the cow when the milk is free?'

As of now the film has been viewed or downloaded thousands of times, not counting the hundreds of thousands of viewers who watched on TV during the premiere broadcast.
The morality of some Chabadniks downloading the film without permission is not in question. The internet has become a free-for-all where nothing can be sold that can be copied for free. The issue that has plagued Hollywood studios and the music industry has come home to haunt the producers of this film.

Now the issue is, leave the pirated films on-line or spend hours each day to ferret the pirated copies out from every crevice they're hiding in and have them removed?

Whatever the outcome the film has found an audience for this unusual story.

הרבי והקצין הגרמני

Available in Hebrew by pirates at the website near you.

Wednesday, March 23, 2011

Gaza Isn't Panama

On Wednesday, March 23, at least one woman was killed and over 30 injured, two seriously when a 2 kg pipe bomb hidden in a backpack placed beside a public telephone detonated, at about 15:00, near the number 74 bus stop. The bomb was placed between Jerusalem's Benyenai Hauma national convention center and Jerusalem's Central bus station adjacent to the new train station, still under construction, on the road leading out towards Tel Aviv. This was the first time since 2004 that a bomb exploded in Jerusalem.

The explosion took place in front of a kiosk that fifteen years ago was the site of an explosion of a number 18 bus. In Wednesday's explosion four people waiting for buses were seriously injured, one elderly woman was in critical condition. Others were moderately or lightly injured, all were evacuated to local hospitals.

According to Channel 2 police reporter Moshe Nussbaum, the small size of the bomb seems to indicate that no large Palestinian organization was responsible for the blast, rather a home-grown group centered in one of the Arab villages, towns or even Arab neighborhoods in E. Jerusalem. None of the passengers on the Har Nof bound number 74 bus were injured in the blast. Police Chief Dudi Cohen said he didn't expect a new wave of terror in Jerusalem. Cohen also said there was no prior warning of the attack. He said he didn't see any link between this bomb and one that was discovered at a bus stop in Jerusalem's Gilo neighborhood a few weeks ago.

Israel has been undergoing an increasing cycle of violence. More than 70 rockets have been fired from Gaza over the last week, including two long-range Grad rockets that fell in Beer Sheva at about 05:15 this morning injuring one man who stood at his window after the early-warning siren sounded and was injured by shrapnel and glass when the rocket fell just outside his house. That blast followed an earlier rocket that fell in the coastal town of Ashdod.

Between the rockets falling in Ashdod and Beer Sheva, seven other rockets fell in open areas of Southern Israel. Hamas sources blame Israel for the uptick in violence after a fringe Palestinian group fired a number of salvos into Israel from Gaza and Israel responded by attacking Hamas operatives in their cars and from buildings where rockets were being launched.

In one IDF artillery attack aimed at Palestinian militants, Palestinian officials say three teens and their uncle were mistakenly killed and thirteen others injured as they played soccer in their back yard in the Gaza Strip. According to the Haaretz newspaper's on-line addition, one of the injured children in the home was brought to an Israeli hospital for treatment.

Hamas claims that Israel overreacted by attacking the men instead of empty smuggling tunnels or vacant ammunition factories. Hamas was bound to respond with increased firepower. Israel claims the IDF mortar strike was launched in response to repeated rocket fire towards Israel. Following the Grad attacks on Beer Sheva several Knesset members called on a Iron Fist 2, referring to Israel's invasion of Gaza Dec 27, 2008.

According to Minister Eli Ishai of the right-wing ultra-Orthodox Shas party, the bombing at the #74 bus stop was just one example of the increase in terrorist activity. He mentioned the murder of the Fogel family in the West Bank family of Itamar last week when a mother, father and three children, one four months old, were murdered by knife wielding terrorists.

Ishai echoed the calls of other knesset members for an attack on Hamas forces in Gaza. The Palestinian Prime Minister Salam Fayyad condemned the bombing calling it an act of terror. But he also called for international protection of civilians in the Gaza strip. Israel's PM Netanyahu expressed regret for the Gaza civilians killed in the IDF strike, saying the IDF has opened an investigation into the incident. Ishai also said that Hamas was using civilians as human shields.

Hamas spokesman Ismail Radwan told the Associated Press that "Israel is escalating against our people and the whole world should show their responsibility to stop this escalation." Israel's IDF spokeswoman Lt. Col Leibovich said Israel didn't intend to raise the level of tension and hoped neither did Hamas. She added that Israel never operates when civilians are identified.

Yossi Melman, writing in Haaretz, criticized the government for not deploying the expensive Iron Dome anti-missile system to defend against the Grad rockets. The Grad, wrote Melman, was in the air for nearly two-minutes from the time it was fired from Gaza until it landed in Beer Sheva. The Iron Dome can be fired takes only 25-seconds
to intercept a missile.

Melman says there are three possible reasons the multi-billion dollar system, unused, locked up in an Israeli air force base, is not deployed. One, that Israel's Defense Minister Ehud Barak doesn't want it deployed for his own reasons. Two, that the system doesn't work well and once that fact is known sale of the system to foreign countries would be difficult, and three, that the system doesn't work at all and the parties involved are trying to cover that up. Whatever the reason, Beer Sheva, Ashkelon, Ashdod and even Tel Aviv are now targets of Hamas rockets.

Some observers say that the turmoil in the Middle East, from Syria to Libya, is contributing to the upheaval in Gaza and the West Bank. One commentator said that when the USA evacuated their forces from Panama, the Panamanians turned the huge US army base into the University of Panama. In contrast, when Israel evacuated the Gaza Strip the buildings left behind were used as launching pads for rockets attacking Israel.