EIR DAILY ALERT SERVICE
WEDNESDAY, DECEMBER 16, 2015
Volume 0, Number 0
EIR Daily Alert Service
P.O. Box 17390, Washington, DC 20041-0390
The Breakdown of Wall Street Is Irreversible—Only the FDR Policy Can Prevent a Collapse into Hell
Dec. 15 (EIRNS)—A fourth major New York hedge fund shut down withdrawals today, as the entire junk-bond and high-yield-debt market is exploding. As the rocketing speculative lending into oil and gas and minerals runs into collapsing prices in a slowing economy, several market “experts” (vulture investors) such as Wilbur Ross and Carl Icahn have made statements that they see the junk credit collapse threatening to spread to the much larger investment-grade corporate credit market—possibly bringing down the entire Western financial system.
In any case, the system cannot be saved. Lyndon LaRouche today said that all the money on Wall Street is nominal, speculative paper not worth a nickel, and must be written off in the same way Franklin Roosevelt did upon coming into office in 1933. FDR was then able to put people to work, to return dignity to a population which had been driven nearly to death.
But the situation is far worse today. LaRouche pointed to the thousands, perhaps millions, of middle aged, active people driven out of the workforce, turning to drugs, driving the recent spike in the suicide rates. He pointed to the Italian citizen whose life’s savings were stolen in a bank “bail-in” last week, who was also driven to suicide—“a signal that the vultures have gone too far.”
Obama stands in the way of the only solution to the disaster, which is the implementation of Glass-Steagall, shutting down the “too big to fail” banks, and building a new system. What is lacking is leadership—to remove Obama, implement Glass-Steagall, and restore the U.S. and world economies through great infrastructure projects in league with the BRICS and China’s New Silk Road programs. “It doesn’t take a great number of people,” LaRouche said today, “but a number of great people.”
If the raving fascist Donald Trump, and the Obama puppet Hillary Clinton, were removed as candidates, then the decent candidates and others from both the Democratic and Republican Parties could come together to do the job, now, before the financial system implodes, and before Obama can start his war on Russia and China.
Today, John Kerry, after meeting with Sergey Lavrov and Vladimir Putin in Moscow, announced that the U.S. was no longer demanding that Assad be deposed before a coalition against the terrorists can launched and a transitional process to a new government initiated in Syria. As Putin has repeatedly said, only the Syrian people can decide who should rule in Syria, despite Obama’s criminal regime-change madness. Now John Kerry has broken from that Obama policy—but as long as Obama remains in power, the danger of war simply escalates, while the crash of the financial system comes ever closer—perhaps in the next days.
COLLAPSING WESTERN FINANCIAL SYSTEM
Under Wall Street’s Bubble Collapse, the Economy Keeps Going Down
Dec. 15 (EIRNS)—A fourth hedge fund appeared to be going down today in the junk collapse, as Avenue Capital Group (not Third Avenue Capital, which failed last week)—suddenly lost $1 billion and had to stop withdrawals from one of its larger funds. Avenue Capital Group is significantly larger, with $12 billion in total assets under management, than the hedge and mutual funds which have failed in the past week, and its demise presumably will take longer. According to ZeroHedge, it owns two mutual funds, etc., and it is run by a Bill Clinton personal friend, Marc Lasry.
Various market “experts” (vulture investors) such as Wilbur Ross and Carl Icahn have made statements that they see the junk credit collapse heading “to contagion” into the much larger investment-grade corporate credit market, whose debt values fell sharply from Dec. 10-14, followed by a “general rally” on Dec. 15.
The zero-interest debt bubble on which Wall Street has been feasting for years, continues to erode the real U.S. economy in 2015. More industrial contraction was shown when the Empire State Federal Reserve’s business conditions index for December (in New York and parts of New England) “rose” to −4.6 from −10.7 in November and −11.4 in October. Unfortunately, −4.6 is still a contracting industrial sector in that region. The contraction is now six months long, and with one month’s exception, has lasted throughout 2015. Labor market conditions showed the worst deterioration; the New York Fed’s employment sub-index plunged deep into job loss at −16.2, and the average workweek declined sharply.
The trend of contracting manufacturing across the country is virtually unbroken throughout 2015, with only the West Coast (as shown in surveys by the San Francisco Federal Reserve Bank) a partial exception.
British Monarchy Prepares Legal Assault To Enforce Genocidal ‘Targets’ Agreed On at COP21
Dec. 15 (EIRNS)—Sane governments blocked the adoption of any legally-binding treaty at the Paris COP21 summit, but because they failed to reject and denounce the preposterous lie that human activity and carbon dioxide are pollutants driving climate change, the British Royal Family is moving to use the acceptance of the hoax of anthropogenic climate change embodied in the COP21 accord to impose its genocidal plan by other means.
Prince Charles himself revealed one such initiative on the eve of the COP21 summit. At the Commonwealth Heads of Government Meeting (CHOGM) in Malta on Nov. 27, he announced the so-called “Commonwealth Climate and Law Initiative” (CCLI) as a new means to impose what the Queen’s own Hans Joachim “John” Schellnhuber cheerfully calls the “induced implosion of the carbon economy.”
The CCLI’s mandate is “to publicize and develop laws,” for starters in Britain, Australia, South Africa, and Canada, under which companies and their directors can be sued for violating restrictions on carbon emissions, opposing the climate-change hoax, failing to report how their financial returns will be hit by environmental costs, etc. Oxford University’s Smith School of Enterprise and the Environment (SSEE), one of three agencies forming the CCLI, elaborated these plans:
“Company directors and pension fund trustees, could be held liable for i) contributing to anthropogenic climate change, ii) not reasonably managing the risks associated with climate change, and/or iii) misleading investors about the business risks of climate change or failing to comply with legal reporting requirements.”
Jessica Fries, executive chairman of Prince Charles’s Accounting for Sustainability project, is cited by SSEE threatening pension funds in particular: “Climate change poses significant risks for pension funds and companies…. Trustees and company directors need to ensure that they respond appropriately. A proper understanding of the legal and fiduciary responsibilities is key.”
“Accounting for Sustainability,” founded and headed by Prince Charles, leads and is financing the CCLI; Oxford’s SSEE is in charge of profiling for the legal suits and strategies; the lawyers of “ClientEarth” (an environmentalist hit squad created by the British rock band, Coldplay) are to prosecute.
New York State’s scandalous prosecution in November of Peabody Energy and Exxon on similar grounds, is being cited as exemplary of the kinds of actions to come. But Prince Charles’s CCLI creates a centralized, international apparatus, under the British Crown directly, to financially bankrupt companies and jail company directors who refuse to go back to the Stone Age.
The Monarchy’s genocidal scheme only functions if its imperial financial system—Wall Street and the City of London—are allowed to exist. Glenn Greenwald’s The Intercept online publication reported on Dec. 9 how in recent months the giant speculative banks (BNP Paribas, Crédit Agricole, ING Bank, Morgan Stanley, Wells Fargo, Citigroup, Bank of America, etc.) have pledged to cut off funding for coal power plants, coal mines, and companies involved in coal.
A report by Moody’s rating service at the end of November makes clear it is not just coal, but industry itself that is to be wiped out. The industrial sectors identified by Moody’s which will be “materially impacted by environmental risks over the next five years,” also include “companies involved with car making, mining, steel, commodity chemicals, building materials and independent oil and gas explorers.”
EU Commission Presents Proposal To Turn Frontex Border Control into a Supranational Police
Dec. 15 (EIRNS)—The EU Commission today presented a proposal to turn Frontex, the EU body set up to control the borders, into a supranational police force. It was presented to the European Parliament in Strasbourg. The Commission proposes to create a new agency, which would be supranational and have its own budget. Whereas Frontex still depends on the official request of an EU member government to intervene on border problems, the new agency would be authorized to intervene without, and even against, such a national request. It could only be prevented from doing so by a qualified-majority decision of the member governments. This would be another big transfer of national sovereignty to Brussels.
U.S. POLITICAL AND ECONOMIC
Kerry to Lavrov and Putin: Assad Can Stay
Dec. 15 (EIRNS)—“The United States and our partners are not seeking so-called regime change,” Secretary of State John Kerry told reporters in the Russian capital after meeting Russian President Vladimir Putin and Foreign Minister Sergey Lavrov. He announced that the meeting of the Vienna Group tentatively scheduled for New York on Friday, Dec. 18 would go forward.
Kerry reiterated that the U.S. does not think President Bashar al-Assad can bring peace to Syria, but that the focus now is “not on our differences about what can or cannot be done immediately about Assad,” but on reaching a peace agreement in which “Syrians will be making decisions for the future of Syria.”
This has been Putin’s policy all along—that Syrians, not foreign interests, must decide on the Syrian government. That concept was agreed to in Vienna, but Obama nonetheless continued ranting that “Assad must go.”
Kerry went further, and said that Syrian opposition’s demand that Assad must leave as soon as peace talks begin is a “non-starting position, obviously.”
There are still problems to resolve, such as which rebel groups in Syria should be allowed to participate in the transition process, and which should be deemed terrorists. Jordan is working on finalizing such a list.
Russian Foreign Minister Sergey Lavrov, speaking to the press with Kerry after the meeting with Putin, hailed what he described as a “big negotiating day,” saying the sides advanced efforts to define what a Syrian transition process might look like.
Kerry also referred to Ukraine with a very different tone than Obama, who hysterically describes Russia as isolated and collapsing economically due to his sanctions policy—which has harmed Western Europe more than Russia. Kerry said, “We don’t seek to isolate Russia as a matter of policy, no,” and that the moves toward peace in Ukraine can lead to the sanctions being removed.
White House Issues ‘Strategy’ for ‘Sustainable Water Future’—Don’t Use It
Dec. 15 (EIRNS)—With green, bureaucratic jargon, the White House today announced a “strategy” “to considerably reduce water usage” by 33%. “This,” it is claimed, “would bring us closer in line with other industrialized nations, and could reduce the nation’s total CO2 emissions by about 1.5% annually.”
To do this, the “Public-Private Innovation Strategy To Build a Sustainable Water Future” relies mainly on unspecified new technologies that can provide “water efficiency solutions.”
An accompanying report notes, as argument, that over the past 50 years, water-use efficiency has increased in the cotton industry, for example, by 75%.
The strategy makes passing mention of “non-traditional” sources of water, such as desalination technologies for brackish and salt water. No mention is made, however, of the nuclear technologies that could make desalination abundant and cheap.
The strategy also supports privatization of water, with its contention that “Robust, inter-connected infrastructure and functional market institutions, like water banks, can increase the resilience of water supplies and enable and drive additional investment in conservation technologies.”
And all this is to be done in a “low-carbon, climate-resilient future” in which “drought conditions persist.” So the White House is hosting a Roundtable on Water Innovation that “will provide an opportunity for leaders from industry, academia, and Federal, State, and local governments to discuss how an aggressive innovation agenda can help America meet the challenge of a constrained water supply and increase the resilience of our businesses and communities in regions that will be affected by increasingly severe and lengthy droughts.”
Hillary Clinton, once again showing herself to be an Obama puppet, has called for the same “Don’t use it” approach to the water crisis—rather than using technologies to provide more water, we must cut water usage and accept the genocidal consequences.
STRATEGIC WAR DANGER
Stars & Stripes Reports Free Syrian Army (FSA) Is Falling Apart
Dec. 15 (EIRNS)—A lengthy Dec. 13 article in Stars & Stripes, based in part on interviews with fighters and supporters, reports that the Free Syrian Army is falling apart, due to low morale, desertions, and distrust of its leaders by the rank and file.
According to the report, many fighters have already abandoned the FSA, either by going to Jordan or by joining another of the hardline groups, such as Jabhat Al Nusra. One fighter, Jaseen Salabeh, told Stars & Stripes that some are even turning to cooperation with the Assad government. “After all, Bashar isn’t all that bad,” Salabeh said. Another factor, according to another FSA member, is that different factions of the FSA have different foreign backers with different agendas, creating “total disunity.”
The other direction for FSA factions to go is, of course, towards Russia. The head of FSA intelligence, Brig. Gen. Hussam Awak, indicated to Sputnik yesterday that he was willing to work with Russia against ISIS, as EIR Daily Alert reported.
NATO Is Engaged in Nuclear Escalation against Russia
Dec. 15 (EIRNS)—Hans Kristensen of the Federation of American Scientists wrote last week on his Strategy Security blog, that Polish Deputy Defense Minister Tomasz Szatkowski’s statement on Dec. 4 that Poland was looking to join NATO’s nuclear sharing agreement, by which U.S. nuclear weapons could be placed on Polish soil, wasn’t just a misstatement, as it was treated, but rather “reflects deepening discussions within NATO about how the alliance should adjust its nuclear posture in Europe in response to Russia’s recent military operations and statements.” Other elements of this trend include statements by U.K. officials that NATO is considering resuming its nuclear escalation exercises to counter Russia, such as Operation Polar Growl, carried out in April, during which four U.S. B-52 bombers took off from their base in Louisiana and flew over the North Pole to the North Sea. While not loaded, the four bombers “were equipped to carry a total of 80 air-launched cruise missiles with a total explosive power equivalent to 1,000 Hiroshima bombs—a subtle warning to Putin not seen since the Cold War.”
“NATO is starting to adjust its nuclear posture in Europe in ways that seem similar (but far from identical) to the Cold War playbook: increased reliance on U.S. nuclear forces, adjustment of strategy and planning, more exercises, and rotational deployments of nuclear-capable forces,” Kristensen writes.
Saudis Claim To Have Formed a Muslim Anti-Terror Coalition
Dec. 15 (EIRNS)—The Saudis announced yesterday that they have formed a 35-state Islamic coalition against terrorism. The military headquarters for this coalition will be in Riyadh. It will be run by Deputy Crown Prince and Minister of Defense Prince Mohammed Bin Salman, who said that the coalition will “[T]arget all terrorist organizations in the Islamic world.”
Given the Saudi role over the past few decades in creating extremist movements, one might reasonably have doubts about what it is, exactly, the Saudis intend to do with this coalition, which notably excludes Iran, Iraq, and Syria.
“Not only Sunni but some Shi’a nations have been invited into this coalition, such as Yemen, Lebanon, and Bahrain,” wrote Konstantin Kosachev, the Chairman of the Russian Federation Council’s International Relations Committee on his Facebook page. “But it still lacks Iraq and Iran, and without them, we anyway cannot say that this coalition is feasible and effective.” Kosachev suggests that the coalition might work if its members were to set aside their political differences. “A lot depends on these nations’ readiness and ability to act together for a publicly declared purpose, instead of overthrowing separated ‘hostile’ regimes,” Kosachev wrote.
NEW WORLD ECONOMIC ORDER
Russia Declares that Sovereignty Trumps Imperial Courts
Dec. 15 (EIRNS)—Russian President Vladimir Putin today signed a new law, which states that Russia’s Constitutional Court will review the decisions of any intergovernmental body based on an international treaty, and determine whether or not its decision is legal under the Russian Constitution. The Russian broadcaster RT reports that the Constitutional Court can, upon review, “allow the decision to be executed in Russia, in full or in part, or ban its execution, also in full or in part.”
In late 2013, the Russian Constitutional Court ruled that it had the right, but not an obligation, to decide on the execution of rulings by the European Court of Human Rights (ECHR), which was then hearing a case brought by Western financial oligarchs on behalf of the former owners of Yukos Oil of Khodorkovsky, which had been declared bankrupt in 2006. The ECHR subsequently ordered Russia to pay $2 billion to Yukos shareholders. The Permanent Court of Arbitration also ruled in 2007 that Russia must pay Yukos shareholders $50 billion in damages. Such imperial actions can now be officially dismissed by the Russian Constitutional Court—and certainly will be.
SCO Prime Ministers Meeting Calls for Cooperation in Security, Production Capacity, and Connectivity
Dec. 15 (EIRNS)—While the trans-Atlantic nations are collapsing financially and economically, the Dec. 14-15 Shanghai Cooperation Organization (SCO) Prime Ministers meeting at Zhengzhou, China ended today with the Prime Ministers affirming their support for China’s Silk Road Economic Belt plan, and issuing a statement on regional economic cooperation, Xinhua reported. They expect the implementation of the initiative will promote gradual sustainable economic growth and support peace and stability in the region.
Presiding over the summit, Chinese Premier Li Keqiang proposed in his address to establish six platforms for cooperation among the member-nations, in areas including security, production capacity, and connectivity. The other three platforms he mentioned are financial cooperation, regional trade cooperation, and cooperation on social affairs and improving people’s lives. “China intends to replicate its industrial capacity cooperation with Kazakhstan with other SCO countries, and forge internationally competitive industrial cooperation chains,” Premier Li said.
Russian Prime Minister Dmitry Medvedev told the SCO, “Transport infrastructure is a key condition for the development of large business projects.” He also proposed widening the cooperation ambit of the bloc to the Association of Southeast Asian Nations (ASEAN) and the Eurasian Economic Union (EAEU), according to the BRICS Post.
The leaders also agreed to develop an international transportation corridor of roads and railways. China has proposed a Eurasian connectivity to raise the efficiency of China-Europe freight trains. Commenting on the outcome of the summit, Gao Fei of China Foreign Affairs University told Xinhua, “The SCO members, seated in the core area of the ancient Silk Road, face great opportunities for cooperation with the implementation of China’s Belt and Road Initiative underway.”
China, U.A.E. Set Up $10 Billion Joint Investment Fund
Dec. 15 (EIRNS)—An agreement was signed on Monday during a visit to China by Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, to create a joint $10 billion fund for infrastructure development in the Gulf states and elsewhere, according to a news release from the U.A.E. government.
The U.A.E. is a major market for Chinese products in the region and home to some 200,000 Chinese people, reports China Daily. The U.A.E. hopes to capitalize on China’s strategic goals by acting as a logistics hub for Chinese trade with Europe, the Middle East, and Africa, the release said.
The fund will focus on direct equity investments, mainly in China and the U.A.E., according to U.A.E. Minister of State Sultan Ahmed Al Jaber. “It will target strategic sectors such as conventional and renewable energy, infrastructure, technology and advanced manufacturing, but will also look at alternative investments, including in emerging markets,” he said. Mubadala Development has been at the core of Abu Dhabi’s efforts to diversify the local economy away from energy.