Wednesday, October 31, 2007

Ron Paul, Still Rolling

Ron Paul on the Tonight Show. Keep rolling Doctor Ron:


Kick the man even ten bucks or so. A little can go a long, long way.

And, for a glimpse of the anger that will be sweeping a country near you pretty soon...

Tuesday, October 30, 2007

Iran WarWatch (Part Seventeen)

For this most recent addition to the Iran WarWatch series, I defer to George Friedman of Stratfor. For those of you who want a very complete assessment of the military options on the table for the U.S., this article is well worth your time:

War Plans: United States and Iran
October 30, 2007
By George Friedman
A possible U.S. attack against Iran has been a hot topic in the news for many months now. In some quarters it has become an article of faith that the Bush administration intends to order such an attack before it leaves office. It remains a mystery whether the administration plans an actual attack or whether it is using the threat of attack to try to intimidate Iran -- and thus shape its behavior in Iraq and elsewhere. Unraveling the mystery lies, at least in part, in examining what a U.S. attack would look like, given U.S. goals and resources, as well as in considering the potential Iranian response. Before turning to intentions, it is important to discuss the desired outcomes and capabilities. Unfortunately, those discussions have taken a backseat to speculations about the sheer probability of war...

The Great Flood?

Back in August, we looked to Iraq and the frightening state of a major dam near Mosul.

Things have only deteriorated since then:

Iraqi dam 'at risk of collapse'
from the BBC

The largest dam in Iraq is at risk of an imminent collapse that could unleash a 20m (65ft) wave of water on Mosul, a city of 1.7m people, the US has warned.

In May, the US told Iraqi authorities to make Mosul Dam a national priority, as a catastrophic failure would result in a "significant loss of life". However, a $27m £13m) reconstruction project to help shore up the dam has made little or no progress.

Iraq says it is reducing the risk and insists there is no cause for alarm...

Maybe the Iraqi government is right. Maybe.

Keep an eye on this situation. If we see a devastating flood, you may rest assured that various 4GW groups around the world will learn many lessons from it.

More Worries about the BTC Pipeline

We've been worrying about the integrity of the BTC Pipeline here at Futurejacked, but with a focus on Georgia-Abkhazia-South Ossetia.

John Robb brings up the same topic from the point of view of the PKK:

The PKK's Opportunity to Win Strategically

Current tightness in the oil markets (peak oil?) has presented the PKK, the Kurdish guerrilla group fighting the Turkish government, with an amazing opportunity. It can become responsible for sending oil prices over $100 a barrel and sowing panic in global markets.

How? This objective can be accomplished through a series of attacks on the BTC pipeline that runs from Azerbaijan to the Turkish port of Ceyhan (in a fashion similar to earlier attacks that PKK has made on less substantial pipelines)...

On the surface, all still seems reasonably well on the geopolitical-finance front. But when the collapse comes, it is going to pull much of the world system of trade and energy down into a heap of rubble.

Whether it is the PKK or Abkhazian separtists striking the BTC Pipeline, or a strike on Iran that leads to the closing of the Straits of Hormuz, or a further deterioration of mortgage-backed securities - the kindling is stacked high and dry, a gang of drunken fools is running around with matches, trying to set it all aflame.

Saturday, October 27, 2007

California As Leading Indicator

Check out Mike Shedlock's new post on the slowdown in revenue growth (which will soon become absolute declines).

His focus on California is especially important. Cali has led the U.S. in the housing crisis, is about to lead the country in the upcoming government revenue crisis and will serve as ground zero for the potential unrest by extremist forces looking to build a separatist Aztlan - with tacit support from Mexico (which will need a release valve as revenues decline along with PEMEX's oil revenues).

When this storm breaks - the witches brew of potential 4GW conflict, government paralysis and restricted energy supplies is going to make the collapse down to a sustainable level a very, very rough affair.

Friday, October 26, 2007

The Beauty of YouTube

A year ago Peter Schiff told the truth in a Fox "News" roundtable. Listen to that unprofessional jackass Adkins huff and puff. My favorite is where he interjects "prices are already on their way up..."

Amazing. I'd love it if Fox would reconvene that same group today.

These people will be the ones saying "we could never have anticipated how bad it would get" in the near future as the bubble continues to deflate...

So What Did I Miss?

There was a very interesting talk this morning on the cleanup after the Litvenenko rad-poisoning. I want to get a transcript of the talk, but the implications for disruption are huge - especially on the insurance front (loss of business, fights over clean-up, etc.).

What else have I missed this week? Been too busy to review the news much.

I see the U.S. has imposed sanctions on the IRGC. Prelude to airstrikes? It would see like it, but maybe - just maybe - this is part of a diplomatic full-court press. But since the Washington Post story reports that "Iran Sanctions Are Meant to Prevent War, Bush Aides Say" my reflex is to believe that war is exactly the desired outcome.

The weird Israel-attacks-Syria story continues to bubble along. The Syrians are still acting guilty of a "crime" I would never have believed them so stupid to commit.

And the financial markets are at a cusp, in my opinion. I expected strong action to the upside this week - a blow-off top in the face of bad news. By the end of the year, though, you could be looking at a downhill slide in equity values that could last a generation or more. More on that at a later date, once I finish hunting down more data.

Have a great weekend. I'll try to post from D.C. I do love that city.

Tuesday, October 23, 2007

Fasten Your Seatbelts

I leave town for a few days and look what happens - the President of Mexico states the obvious, in plain language - and Bloomberg goes out of its way to obfuscate this historic announcement with a crap-laden title:

Weak Mexican Peso Shows Oil Threatens Growth, Surplus
By Valerie Rota and Patrick Harrington, Bloomberg
Oct. 22 (Bloomberg) -- Mexican President Felipe Calderon is delivering a grim message: The largest oil producer in Latin America is running out of crude. "Our oil reserves have been consistently falling,'' and the decline is "severely threatening'' government finances, Calderon told a nationwide television audience in an address last month at the National Palace. That's the same place where seven decades earlier Lazaro Cardenas cemented the anti-American legacy of his presidency by nationalizing the petroleum industry...

It's called Peak Oil. The unrest that is going to follow a collapse in Mexican oil production will be historic in scope and bloody in its resolution.

Monday, October 22, 2007

Sorry...

I am at a conference this week and in D.C. early next, so posting will be spotty.

Keep your eyes on Iran, Kurdistan and Georgia for me. We'll get caught up next week.

Thursday, October 18, 2007

Lost in Translation

I was about half-way through a blog post on how I apparently got it wrong in Syria, Israel and the Mystery Attack - More Lies the Gray Lady has Told Me? and that Syria apparently was in the early stages of building a nuclear reactor, no matter how idiotic that sounded.

I was swayed by a rash of stories such as Israel strike 'targeted Syrian nuclear reactor', which led me to believe that yes, Syria had admitted to having a nuclear facility - apparently in the construction phase. I immediately downgraded my assessment of Assad & Co. to "low moron" and decided that maybe I wasn't being completely lied to by the "Deep Background" folks who have been leaking stories to the press for the last month or so.

Then we get this from the U.N. and I am back to being curious and confused as to what went down on September 6th:

UN blames interpreter's error for erroneous report that Syria has a nuclear facility
from the AP

UNITED NATIONS: The United Nations blamed an interpreter's error for an erroneous report that Syria claimed an Israeli airstrike hit a Syrian nuclear facility, a mistake that made headlines in the Middle East and heightened concerns over Damascus' nuclear ambitions.

Syria denied on Wednesday that one of its representatives told the U.N. General Assembly's committee that deals with disarmament on Tuesday that Israel had attacked a Syrian nuclear facility and added that "such facilities do not exist in Syria."

The state-run Syrian Arab News Agency, SANA, quoting an unnamed Foreign Ministry source, said its representative was misquoted — and after more than seven hours of investigation the United Nations said that was indeed the case...

...According to the corrected text, the Syrian delegate said: "...the (entity) that is ranking number four among the exporters of lethal weapons in the world; that which violates the airspace of sovereign states and carries out military aggression against them, like what happened on Sept. 6 against my country, such entity with all those characteristics and even more, has no right for its representative to go on lying without shame..."

The Syrian representative was replying to a speech to the committee on Monday by Israeli Ambassador Miriam Ziv, deputy director general for strategic affairs in the Foreign Ministry, who accused Syria of continuing to transfer weapons to Hezbollah fighters in Lebanon...

This just seems like such an odd coincidence that we would have a major translation blunder on such an important topic.

The part of me that appreciates a well run psychological warfare campaign can admire the "mistake" as a brilliant piece of work to help reinforce the "Syria has nukes" meme in Western target audiences. It dovetails nicely with the "World War III - Iran" meme being trotted out as well.

Or it could just be another example of incompetence at the U.N., an unfortunate mistranslation that by itself means nothing, but a mistake that could have grave consequences for the Middle East.

Georgia On My Mind

Another turn of the screw in the Caucasus as Georgian forces clash with Abkhazian customs officials:

Abkhazian customs official killed in clash with Georgian border guards
from the AP
TBILISI,Georgia: Georgian and Abkhazian border guards clashed along the boundary dividing Abkhazian-controlled territory from the rest of Georgia, in a gunfight that killed an Abkhazian customs officers, Georgian police said Thursday.

The skirmish Wednesday was the second bout of violence to break out between the two
sides in the past month. Georgia's Interior Ministry said border guards tried to prevent an Abkhazian man from driving what they said was a stolen vehicle into Abkhazia, a region that broke away from Georgian government control in a war in the early 1990s.

An Abkhazian customs official, who the ministry said was waiting to meet the driver of the stolen vehicle, opened fire on the Georgian guards, who then shot back. The Abkhazian customs agent was killed, and the driver of the vehicle arrested, the ministry said.

Abkhazian officials had no immediate comment on the incident.

And Russia has decided to take it up a notch as well:

Russia accuses Georgia of "premeditated murder," citing U.N. report on Abkhazian clash
from the AP

MOSCOW: Russia on Tuesday accused Georgia of premeditated murder, citing a preliminary United Nations report on a clash between Georgian forces and those of the breakaway region of Abkhazia that resulted in the deaths of two Russians.

Tensions between Georgia and Abkhazia have been high since the Sept. 20 incident in mountainous terrain along the line that has separated the two sides since the early 1990s, when Abkhazia broke from Georgian control.

Two Abkhazian fighters were killed and several others wounded, and seven Abkhazians were taken captive by Georgian forces. Georgia later announced that two Russian military officers were also killed, and Abkhazia deployed heavy military hardware to the line.

Georgian authorities said the clash took place when Abkhaz gunmen attacked workers building a road to link the Kodori Gorge with Georgian-controlled areas. The upper part of the Kodori Gorge is the only part of Abkhazia controlled by Georgian forces.

But Abkhazia claimed Georgian special forces entered a training camp on its territory...

Nothing new, but sparks continue to fly near this powderkeg. (Click here to bring up earlier stories on the Georgia issue).

More Rumblings on the Horizon

The slow-motion credit crisis just got uglier:

Cheyne Finance SIV Won't Pay Debt as It Falls Due
By Sebastian Boyd and Neil Unmack

Oct. 17 (Bloomberg) -- Cheyne Finance Plc, the structured investment vehicle managed by hedge fund Cheyne Capital Management Ltd., will stop paying its debts, a receiver from Deloitte & Touche LLP said.

Deloitte is negotiating a refinancing of the SIV or a sale of its assets, according to an e-mailed statement today. Cheyne Finance's debt with different maturities will now be pooled together, rather than shorter term debt being repaid sooner, Neville Kahn, a receiver from Deloitte said today in a telephone interview.

"It doesn't mean we have to go out and fire-sell any assets, quite the opposite in fact,'' Kahn said. "The paper that falls due today or tomorrow won't be paid as it falls due..."

I love that last little quote from Messr. Kahn. All it means is that Cheyne doesn't have to dump "assets" at fire sale prices yet. That day is coming, though.

SIV's have been the off-balance-sheet workhorses for many big banks, providing a strong revenue stream and, in theory, little risk.

Wrong.

By itself, this insolvency event is not a major threat to the banking system. But, this is just the beginning. I still think they can keep things held together through the end of November, but financial services workers need to get concerned about their jobs as their industry gets hammered from the cratering real estate sector.

I wonder what use those MBAs and Project Management certificates will be put to if we see massive layoffs in banking and finance? There will be a lot of bright minds out there with anger in their hearts and time on their hands...

Monday, October 15, 2007

Turn Out the Lights, The Party's Over

Well, it's official. Financial Armageddon has kicked off in the United States:

First U.S. baby boomer applies for Social Security
by Donna Smith, Reuters

WASHINGTON, Oct 15 (Reuters) - Retired school teacher Kathleen Casey-Kirschling on Monday became the first ripple in a "silver tsunami" of retiring baby boomers applying for pension benefits that threatens to overwhelm U.S. government finances.

Casey-Kirschling was born one second after midnight on Jan. 1, 1946, and will receive her first Social Security check in February 2008 as the first wave of baby boomers turns 62 next year and becomes eligible for early retirement benefits.Social Security Commissioner Michael Astrue said the agency is bracing for some 80 million Americans to apply for retirement benefits over the next two decades.

And my country is utterly unprepared for the consequences. The Baby Boomers have reaped the plenty of centuries of hard work. They have left us who come behind a crumbling national infrastructure, petroleum and natural gas reserves depleted, wars in Iraq and Afghanistan, an educational system that churns out morons and a nation bankrupt.

Thanks.

Monitoring the MENDing of India

In MENDing India, we took a brief look at the rising activity of globalguerrillas in India's northeast. At the site India's Naxalite Rage, Shlok Vaidya analyzes the far-flung implications of a shifting Indian security environment with a focus on the globally-connected Naxalite insurgency.

Naxalite Propaganda Poster in Kolkata

I suggest checking it on a routine basis. Hat tip to John Robb for pointing me to the site.

Syria, Israel and the Mystery Attack - More Lies the Gray Lady has Told Me?

I've held off on blogging about the September 6 airstrike by Israel on a Syrian facility. I kept expecting details to emerge that would clarify the situation.

First, we got these initial reports that the IAF had attacked a stash of "nuclear material" in Syria. Then, maybe it was a shipment of SCUD missiles that was destroyed. Then, Israel claimed they inserted some special forces types and snatched up some "nuclear material" to prove to the world (or at least Washington) that there really was something radioactive there - except now maybe it was "dirty bomb" ingredients or some such other nastiness.

Now, we are being told by mysterious Deep Background folks via the ever-accurate New York Times, that the Israelis hit a super-secret nuclear reactor that the Syrians were building.

Israel Struck Syrian Nuclear Project, Analysts Say
by David E. Sanger and Mark Mazzetti

WASHINGTON, Oct. 13 — Israel’s air attack on Syria last month was directed against a site that Israeli and American intelligence analysts judged was a partly constructed nuclear reactor, apparently modeled on one North Korea has used to create its stockpile of nuclear weapons fuel, according to American and foreign officials with access to the intelligence reports.

The description of the target addresses one of the central mysteries surrounding the Sept. 6 attack, and suggests that Israel carried out the raid to demonstrate its determination to snuff out even a nascent nuclear project in a neighboring state. The Bush administration was divided at the time about the wisdom of Israel’s strike, American officials said, and some senior policy makers still regard the attack as premature...

Let me be the first to admit that I have no idea what Israel attacked on September 6, 2007.

With that said, there is no way I am going to believe (without a lot - and I mean a lot - of proof) that the Syrians were in the process of building a nuclear reactor of the Yongbyon design. The implication of the story was that Syrian was going to build a nuclear reactor, run it and create plutonium via U-238 capturing a neutron and decaying up to Pu-239 in the fuel rods. If you continue to follow this "logic" the Syrians were then going to remove the fuel rods and process them in a heavily shielded facility using nasty acids and harsh chemicals to break down the fuel and then separate out the Pu-239 for use in a bomb (we won't even discuss the challenges of plutonium metallurgy).

That, my friends, is asking a lot. You have to think that the Syrian military, technical and intel services have been heavily penetrated by Mossad. Would they really think they could somehow build a complex facility that requires some very specialized materials and do it without getting slapped down by Israel? The IAF blew out the windows of Assad's palace during the Summer War of 2006. It's not like Syria isn't aware of their vulnerability.

Now, I admit that the longer this story lingers, the more it stinks - both for the Syrians and the Israelis. If there really was nothing there, then President Assad should load up a bunch of planes and bring in technical experts from the IAEA to inspect the site with no restrictions. But trying to sell me this crap that Syria is attempting to go nuclear is not going to work.

The Technical Hurdles

First, the technical aspects:


  1. Building a reactor like the one at Yongbyon requires a facility that, in general would be within Syrian capabilities to build - much like a light manufacturing plant. But, this reactor design is graphite-moderated. No big deal, you say - graphite is not an uncommon material. Sort of correct - graphite usually is found with boron laced throughout it. This impurity is significant. Boron is a neutron "poison" - it gobbles up neutrons that would otherwise be used to fission uranium. This is very significant (it's one of the major factors that kept the Nazis from being able to generate plutonium during WWII) and requires significant resources to purify.
  2. Okay, so somehow the Syrians have built their reactor and acquired nuclear-grade graphite as a moderator. Now they have to fuel it. This type of reactor can run on natural uranium for fuel. But you have to make the fuel elements. This is not a trivial task. They Syrians aren't going to get fuel rods from North Korea or from Iran - the shipment would be blown from the water the second it left the dock. Fuel rods are big items that must be manufactured to very high tolerances. Seems highly unlikely.
  3. But, let's pretend that Syria has accomplished this - a fueled reactor that has gone critical and been running for a year or so, undetected in one of the most scrutinized portions of the world. Now they have to remove the fuel rods and process them in a heavily-shielded plant in a method that requires massive amounts of acids and harsh chemicals.
  4. Then you have to process the Pu-239 you've separated out and properly work the metal into a bomb. I won't discuss plutonium metallurgy, but let's just say it isn't simple.
  5. Oh yeah, and you have to do this all undetected by the United States and Israel.

It could never happen. Period. It makes no sense at all to even try it. This requires deep technical expertise in chemistry, nuclear physics, metallurgy, plant management, counterintelligence, civil engineering, mechanical engineering and a host of skilled trades workers. Syria doesn't have the manpower to pull it off and even if they did, Israel would know about it from Day One.

Something Reeks

This stinks of a setup. Someone is setting Syria up to be attacked or blockaded or neutralized as a force - probably in a run-up to an attack on, or major diplomatic knee-capping of, Iran. Not that I exactly mind it, but trying to play me for a chump by lying through the media pisses me off.

You may read next that the U.S. will release the "nuclear material" gathered by Israel for inspection. It may even seem to be reactor-based stuff. But will the Isrealis allow anyone to go to Dimona and compare samples with the stuff produced by the Isralie bomb program? I highly doubt it.

The Agricultural Angle

There are several other issues with this story. Syria has long had a well-known operation to test the separation of Uranium from phosphate deposits in their country. This has been under IAEA auspices. It makes sense - reduce the uranium content in phosphates you may later use as fertilizer and see if you can separate it out in a commercially viable manner.

Early stories on this mystery seemed to emphasize that Syria had "dirty bomb" ingredients ready to be loaded on SCUDs and fired on Israel. Well, let's say the Israelis did hit the uranium extraction facility. Some of the "nuclear material" they might have gathered would have included radium - a potent gamma-emitter - a natural byproduct of uranium decay. In a phosphate extraction operation, you might see radium accumulated in reasonably high quanitities. Is radium a good "dirty bomb" or "Radiological Dispersion Device" active ingredient? Not unless it is in very large amounts - but it might make a good story to sell to the media. If your special forces guys come back with some lead-lined containers with a few grams of something that makes geiger counters chatter, it would make for some great television.

Which makes me think someone is running a very strong disinfo/psy-ops campaign against the Syrians

Psy-Op Fingerprints? Or Am I Just Seeing Things?

This morning, Google News gave me 349 hits on "syria reactor israel" - an amazing feat of spreading the "Syrian Nuclear Reactor" meme in the global mediastream. By the time you read this, that number will surely be larger.

If you are trying to infect the minds of people across the globe who follow the news with the "Nuclear Syria Threat" meme, I'd say that recent stories would help it thrive:

  1. The Osirak Meme - brings up impressions of nuclear Iraq and Madame Rice's "mushroom cloud" smoking gun performance.
  2. Hot Buttons - a story out of Ha'aretz used the phrase "plutonium enrichment." Scientifically, that is a meaningless statement. You don't enrich plutonium. Would a top-notch paper like Ha'aretz allow such an obvious fiction to pass through the fact-checkers and editors on a story that is obviously important to Israel? Or did some psy-ops wonk think it would be worth a try to combine two hot buttons words: "enrichment" (heavy negative triggers due to constant associations with Iran's uranium enrichment program) and "plutonium" and get Ha'aretz to test-drive it? Hmmmmm.
  3. The confusion meme. Secrecy. Stories that contradict common sense. Vague warnings from "deep background" sources. All this leads to confusion and can lead to fear in some readers. A constant drumbeat in the background. The readers will want a cathartic release from this uncertainty. A bombing campaign might just do the trick.

Conclusion?

I'll say again, I have no idea what went down in Syria on September 6, 2007. The official stories being leaked out stink to high heaven. The Syrians aren't acting innocent, though.

The nuclear stories don't ring true from a vareity of technical aspects, but as a tactic in a disinfo/dirty-tricks war, the stories seem to be reasonably effective.

The Iranian leadership needs to be shaking in their boots. If Syria is neutralized via attacks or the ouster of Assad, they will be all alone in the world. I personally think that such an attack is not in the long-term interests of the U.S., but you may rest assured the folks in Washington D.C. don't agree with me.

The Iranians may soon be facing a Bush 43 White House that has nothing to lose without the one state ally who could cause problems for Israel.

Sunday, October 14, 2007

Rocking in the Caucasus

In A New 4GW Theater on the Horizon? we reviewed a variety of factors that pointed towards the potential for a Russian incursion into Georgia in support of a couple the "breakaway republics" of South Ossetia and Abkhazia.

The story has been flying below the radar in the Western media, at least until this weekend, when Mother Russia kicked things up a notch:

Russia wants Georgians punished for clash
By Edith Honan for Reuters

UNITED NATIONS (Reuters) - Georgian security forces who fired on separatist fighters during a clash last month in the breakaway province of Abkhazia should be punished, Russia's United Nations envoy said on Thursday.

"We demand that the organizers and persecutors of this criminal act be punished and that the Abkhazian soldiers who were captured be released," Ambassador Vitaly Churkin told a U.N. news conference.

Russia has said Georgian forces attacked a training exercise to stoke tensions between Moscow and the former Soviet republic.

A preliminary report by the U.N. Observer Mission in Georgia said that the September 20 incident occurred 300 meters (yards) inside Abkhaz-controlled territory, which is consistent with Churkin's version of events...

While the Bear was rattling the saber, the Georgians were rattling ear drums:

'Boney M' on Georgia's frontline
from the BBC

Georgia has hired a member of 1970s pop group Boney M, famous for songs like Daddy Cool and Rasputin, in its fight for control of breakaway South Ossetia.

Marcia Barrett played a concert in a small frontline village not far from the rebel capital Tskhinvali.

Thousands of people came in cars, buses, trucks and on foot through a mountain pass skirting separatist territory to hear her sing.

The rebels have close ties with Russia and are trying to secede from Georgia. Georgian President Mikhail Saakashvili told the BBC he hoped the music would persuade people to lay down their arms.

"We hope that we'll lure out people from their trenches, force them to drop [their] Kalashnikovs, come here and dance with the others and understand that nothing is as nice as peace, nothing is as nice as reconciliation," Mr Saakashvili said.

"This place was only famous for killings, violence, crime past and present. And now it's like adding some new thing, it's looking much more colourful, much less violent, just normal, and being normal is such a novelty here," he added...

Russia's demand isn't quite up to Balkan Ultimatum standards, but it is turning up the heat nonetheless.

Georgia looks like they have some vague (or not so vague - who knows what else is in going on behind the scenes) notion of a multi-pronged propaganda campaign as well - probably so they can put out YouTube clips or pics of the peaceful, small country of Georgia who just wanted to have rock concerts and live in peace until Russia came storming south. Or something like that.

This small section of the world will become radically important should Russia mount a punitive expedition. Any disruption of the BTC pipeline in a world of tight petroleum supplies would cause a significant oil shock. And one can assume that the Georgians have a variety of 4GW plans in place that probably include Russian petroleum and natural gas infrastructure.

Let's hope the war of words continues. Or maybe it will turn into a battle of the bands.

Open war is in no one's interest.

Friday, October 12, 2007

Iran WarWatch (Part Sixteen)

Jeff Vail paints a scenario for an attack on Iran by pretending to look back in hindsight after an attack has occurred. Interesting way of integrating recent events into the constant drumbeat of Iran war talk:

The Iranian Gambit Opening
...Trying to invade and hold Iran is a fool's errand. OK, so was bombing Iran, but it seems that the we didn't understand that at the time. Rather, we opted for a strategy of bombing key sites, and holding and occupying a few other key areas (Khuzestan, Bandar-e-Abbas, etc.), without attempting to occupy the entire country. In order to do that, we needed to address a force problem: all of our ground forces were tied up on the ground in Iraq. Specifically, the US Marines, the force most capable of larger expeditionary actions, was spread thin in a counter insurgency and peacekeeping role. We needed to make a significant chunk of Marine Corps manpower available for use against Iran...

Israel, You've Been Googled

Hat tip to Arms Control Wonk for this one. If you don't already have it, load Google Earth on your box and search for 'Negev Nuclear Research Center'. You'll get a satellite view of one of the most secret and secure installations on the planet.

The San Francisco Chronicle has more on this story.

The spread of surveillance technology continues its double-edged work as governments are now getting pissed off that people are watching them, just as those same governments implement more and more pervasive efforts to watch their citizens night and day.

Technology and the Coming Radicalism

If the U.S. does enter a significant downturn in mood (or, more accurately, continues the trend that is just beginning) expect sites like YouTube to be leveraged by an angry population who will feel screwed by "the Man" (and in many cases, have a strong basis for that feeling). Here's an example of a way to spread the "corporations are looting America" meme AND get bonus points on the anti-immigrant scale as well:



Absolutely amazing. When the job losses really start to kick in from the collapse in the real estate sector, imagine just how angry videos like that are going to make those tens of thousands of unemployed men out there. Socionomics tells us this will not end well at all...

Hat tip to Mish for this YouTube clip.

Thursday, October 11, 2007

Remain Calm, All Is Well (Part Eighteen)

Okay, still very busy, but I want to throw a few things on the board for you to chew on.

The Economic Situation
First, I strongly recommend that you take a few minutes and read this excerpt from Robert Prechter's book Conquer the Crash. This chapter deals with the ability, or lack thereof, of the Federal Reserve to deal with a major credit crisis. Please read it if you have any interest or concern in the banking or financial sectors. It gives a very different take on the Fed than you are likely to read anywhere else.

You may very well be able to remain calm for another month or so. My (amateur) reading of the DJIA chart indicates a nice run-up is left in the system, probably to at least 14,500 and maybe to as high as 16,000 in some frenzied blow-off. I say you "may" be able to remain calm because if you are part of the Real Estate Investment Complex (agent, title office worker, builder, construction worker, etc.) then you are facing an ugly winter. Prepare now.

As a matter of fact all of you should be updating your Gambler's Analysis on your financial and security situation right now. I think we'll make it to Thanksgiving before needing to worry about a big drop in mood and markets, but this is not trading advice, just speculation.

Security Situation
The Turks look like they may make a few incursions into Kurdistan to beat down the PKK. If handled properly, it shouldn't destabilize things too badly (from a macro point of view - if I were a Kurd living in the border region, I'd have a much different perspective).

The potential Georgia vs. Russia tussle looks to be calming down, though the rhetoric is still flying.

Iraq looks to be moving along in this new vector caused by U.S. forces tacitly agreeing to the feudalization of "Iraq" by supporting various Sunni militias and tribes in their fight against Al Qaeda and Shiite militias. This is the death knell of the Iraqi state, in my opinion, but it does damp down the violence against U.S. forces for the moment.

As for Iran, who the hell knows what will happen there. I am back to suspecting that, once a final agreement is reached with North Korea over their nuclear program that the full court press will be applied to Iran, but will it lead to open war? I am doubtful. Or maybe I am deluding myself. Keep on eye on it, but at the moment, the pot is simmering, not boiling.

In the U.S. mainland, no major issues at the moment. The long-term threat of an Aztlan movement continues to grow as do the threats posed by gangs, but these issues are quite contained - for the moment.

Fabius Maximus on Kilcullen
There is much I want to say about the article "Kilcullen explains all you need to know about the Iraq War, Part VII of a series about America’s new Long War" by Fabius Maximus. If you have not already, I suggest you read the article and strongly suggest you read Kilcullen's works cited as well. Kilcullen is a very bright man and is well worth your time. I will focus on one point from the article that I consider critical and return to other themes in the future.

One thing I noticed in the run-up to the invasion of Iraq was that when I tried to discuss the issues of "terrorism" and the upcoming attack by referencing the possible perceptions of Iraqis or Arabs or Muslims in general, I got that "what are you, some Al Qaeda-loving Hippie" response. I can understand the reaction. The psy-ops folks who were spinning the war had done an outstanding job. Spitting into the wind would only make a mess of myself and do little good.

My view was that we should be approaching this with at least as much intensity as a football team approaches an upcoming game. Gunther Cunningham, Defensive Coordinator for the Kansas City Chiefs is going to have his men examine game film of an opponent for hours and hours on end, trying to get in their opponents heads and figure out their schemes, their key players, etc. Going into the war, such basic approaches to conflict were thrown out the door, replaced by a three-word mantra - "Shock and Awe". Propaganda flowed, which is to be expected, but that propaganda infected the thinking of the beltway geniuses who set the war in motion. Referring to the downsides of an occupation, talking about the view of the "Arab Street", analysis of the Shiite situation and the fact that most leaders were going to be heavily influenced by Iran - all these things and many more were ignored, because to question the judgment of the planners was to provide aid and comfort to the enemy.

You wouldn't plan a football game this way, but planning and fighting a war without reference to enemy motivations was the only allowable option? Amazing.

With that in mind, this quote stuck in my mind when I read the article: "A trained anthropologist, Kilcullen starts with this: “Everyone sees Iraq differently, depending on when they served there, what they did, and where they worked.” Applying that insight to his slides, how would the people of Iraq react were they translated and broadcast in Iraq – and to a wider Islamic audience via al Jazeera?" (emphasis mine)

If we, the U.S., want to have any hopes of keeping the nation-state system of governance alive and kicking as the primary method of organizing societies, we are going to have to figure out how to sell it properly to the various populations we want to impose this system upon. Kilcullen does an outstanding job of discussing many of the hard power and political issues, but the marketing (for lack of a better concept) of these efforts has been woefully inadequate.

Personally, I believe that technology has guaranteed that devolution is the future of most current nation-states. The types of economic activities that drive communities, the coming generational storm that will wreck the finances of most Welfare States, etc. is changing the bias from favoring nation-states to favoring breakdown. In that environment you have to work smarter. You have to understand the mind of those you wish to influence and you have to act properly to build your intel and combat forces to work within that context. Otherwise, you get what we are seeing now - defaulting to the support of warlords and tribes. The United States, which should be the main proponent of building strong nation-states is now actively working to turn "Iraq" into a feudalized gaggle of 4GW entities festering within lines on a map that are becoming increasingly meaningless.

The fact that this aspect was not covered in depth by one of the brightest minds involved in the "Iraq" conflict speaks volumes. Kudos to Fabius Maximus for striking right to the heart of it.

Monday, October 8, 2007

Delayed For A Bit...

Posting will be spotty in the coming days. I'm geeking out on a big project at work. Later this week, I will be touching on the financial situation and trying to figure out a few more ties historically between land busts and political turmoil, plus I have a few thoughts on a recent post over at DNI by Fabius Maximus.

Have a great week and keep an eye on the continuing hiccups in Hedge Fund Land - we aren't out of the woods yet.

Friday, October 5, 2007

The System Continues to Eat Itself

We've reviewed past cases (here, here, here, here and here) where "the System" as embodied by concerned citizens, Law Enforcement or an intel service begins believing the propaganda about "terrorism" (as opposed to focusing on the very real threats) and begins seeing Osama and his minions everywhere, disrupting economic and social life to one degree or another.

Here's another factoid that will grace the pages of some future 4GW handbook for monkeywrenchers, gangs and insurgents:

Burning chilli sparks terror fear
from the BBC

Firefighters wearing protective breathing apparatus were called to D'Arblay Street, Soho, after reports of noxious smoke filling the air.

Police closed off three roads and evacuated homes following the alert. Specialist crews broke down the door to the Thai Cottage restaurant at 1900 BST on Monday where they discovered the source - a 9lb pot of chillies.

The restaurant had been preparing Nam Prik Pao, a red-hot Thai dip which uses extra-hot chillies which are deliberately burnt.

But the smell prompted several members of the public to call the emergency services...

I wonder what the Return on Disruption (cost to execute the activity versus the cost to respond to it) was for this activity? It was unintentional and completely innocent and it tied up all sorts of skilled emergency personnel for hours (actually days, counting all the paperwork and meetings that will result from it).

Every stupid mistake erodes the credibility of nation-state institutions another notch. This will end badly in many Westernized, highly-politicized nations. As we discussed in Catastrophic Abundance - thousands of tiny wounds eventually will cause a major failure of a system, whether it be an automobile, a community or a country.

When the reliability, competence and objectivity of nation-state bureaucracies is replaced by incompetence, corruption and over-reaction to low-threat scenarios, the citizens of that nation-state will find other means to fill in the security gap.

Thursday, October 4, 2007

Socionomics and Secession

Both Zenpundit and George Ure spotted a story about a recent meeting of modern Secessionists, a screaming socionomic alarm bell:

Secessionists meeting in Tennessee
by Bill Poovey, AP

CHATTANOOGA, Tenn. - In an unlikely marriage of desire to secede from the United States, two advocacy groups from opposite political traditions — New England and the South — are sitting down to talk.

Tired of foreign wars and what they consider right-wing courts, the Middlebury Institute wants liberal states like Vermont to be able to secede peacefully.

That sounds just fine to the League of the South, a conservative group that refuses to give up on Southern independence. "We believe that an independent South, or Hawaii, Alaska, or Vermont would be better able to serve the interest of everybody, regardless of race or ethnicity," said Michael Hill of Killen, Ala., president of the League of the South...

What initially intrigued me was the timing of the announcement.

One of the many gauges used by socioniomics are equity market indices. With the DJIA at all time nominal highs, you would expect such (currently) fringe ideas like secession to get zero traction and zero press coverage since secession is correlated with increasing negative social mood.

Then I read the most recent Elliott Wave Financial Forecast, and much of it clicked into place.

The key word is nominal all-time highs in the U.S. stock markets. But, as we saw in our review of Argentina's collapse (here and here), taking a stock market index and using it out of context can be misleading. Argentina's stock market experiened and boomlet while the national economy was collapsing and rioters filled the streets. This boomlet was in response to folks fleeing the banking system into one remaining corner of liquidity in the financial sector AND the market was priced in Argentine pesos - a currency that underwent a devaluation against both gold and the U.S. dollar.

Let's take a look at the U.S. DJIA shown as a ratio of dollars to gold, from page 9 of the October 2007 issue of the Elliott Wave Financial Forecast:



The chart spells it out pretty clearly - in terms of gold (a generally recognized store of value, something dollars used to be recognized for as well) the markets, and thus mood, are bouncing along at the lowest point in the early days of this century.

We'll need to follow this trend, but, if that chart worsens even as the DJIA continues to spike towards new highs, then be aware that the socioniomic trends will continue to turn ugly (violence, political unrest, economic chaos). Think about this and how to fit it into your personal plans.

The DJIA, while a great socionomic indicator, does need to be treated with care as a signaling device in these uncertain times.

I won't be brushing up Dixie any time soon, but this is certainly a trend to watch very, very carefully.

Wednesday, October 3, 2007

Patterns of 4GW Entity Growth

John Robb recently touched on what Law Enforcement has been calling ‘hybrid gangs’ – groups that are “…characterized by members of different racial/ethnic groups participating in a single gang, individuals participating in multiple gangs, unclear rules or codes of conduct, symbolic associations with more than one well established gang (e.g., use of colors and graffiti from different gangs), cooperation of rival gangs in criminal activity, and frequent mergers of small gangs…” – and I want to review this concept, as I think it illustrates a crack in the wall of the nation-state that will erode into a full-blown breach in the coming years.

Hybrid Gangs

First, it is my opinion that the hybrid gang concept is more a temporary platform, along the lines of Robb’s Bazaar concept. When it comes to primary loyalties, it is my opinion (and I could be – and hope I am – wrong here) that things like ethnicity and family ties will trump any minimal-to-moderate advantages provided by a hybrid platform, where multiple “tribes” learn to cooperate and reap benefits from it. The platform will work for short time scales, in order to reap immediate benefits, but it will, in a world devolving towards primary loyalties at a rapid pace, often serve only as a formalized truce, where various gangs or tribes can find ways to cooperate for their mutual benefit. But since the nature of most criminal enterprises winds up killing the golden goose – by crushing business development and trade – the context will rarely remains stable enough for such hybrid platforms to become self-sustaining. Ironically, Law Enforcement might actually be helping these platforms to grow, by keeping the violence and crime damped down enough whereby these groups are forced to cooperate to survive.

The data point provided in Robb’s post has a telling quote, though, that strikes at the heart of the matter:


In Kansas, Wichita Police Det. Loren Johnson said some experts would be very surprised by some of the behavior patterns they see in their hybrid gangs. Rival gangs co-exist peacefully on the same block, which police say is better for their crime business. There’s no loyalty beyond money, Johnson added.

This appears to be the hallmark of a transition period (albeit one that could last many, many years). Groups and gangs are building up membership. In the hybrid case, we have ambitious gang leaders trying out new forms of organization in the bazaar. Some will work better than others, but considering the membership – individuals looking for purpose in their lives and money in their pockets, taking the mental leap to a multi-ethnic or multi-tribal system will not be easy for many of them. The resulting infighting and splinter groups that will emerge will, in time, shatter these hybrid platforms.

Leadership Challenges

That said, those remarkable few individuals or small groups with the management skills, charisma, luck and intelligence to forge temporary platforms for one-off criminal jobs or short-term crime waves will probably be able to reap vast financial benefits from a hybrid platform. The 4GW leaders that can forge a reliable crew made up of hackers, triggermen, drivers, moles inside government bureaucracies (for inside info, forged identifications, etc.) and a team of finance quants to launder the money will reap vast rewards as long as they are nimble enough to navigate the failing nation-state system of Law Enforcement.

It is the health of Law Enforcement and Judicial systems that will, in my opinion, drive the speed at which 4GW entities will penetrate the nation-state and feed off of the tax revenue via corruption, sweetheart deals and outright theft.

One thought – very high salaries for judges, in exchange for yearly audits of every judge’s (and his or her family’s) finances combined with extensive reviews of decisions. Good judges are left in place and benefit from consistent rulings, bad judges get tossed aside. Law Enforcement could be treated similarly, but it would also probably require the decriminalization of many activities (drugs, prostitution, etc.) so the cops can focus on more pressing issues of murder, violent crimes and theft.

But, then, we are back to the ancient conundrum – who will watch the watchers? A single generation of fools would wreck the entire system. Of course, the same could be said for any social system ever devised…

What To Watch For

Hybrid Gangs might evolve some non-pathological forms, especially if we see a downturn in social cohesion and mood. Local groups will respond to increased violence and uncertainty with various forms of vigilantism. A sort of hybrid gang might be the Chamber of Commerce, the Optimists and a local Gun Club, who create an informal group to monitor their community and act when Law Enforcement might be impotent due to corruption. Of course, the unintended consequences of those activities would be a further erosion of the state’s influence…

The long reach of 4GW entities will not necessarily make the biggest splash in Iraq or potentially in Georgia – but it will be felt most strongly in currently wealthy Western countries, where the opportunity to quietly hijack government structures for personal ends is all around us, every day, at every level of government that we encounter. We could wake up one day and be living on a Mob movie set, with a thousand mafias, large and small, blooming like a thick algae in the pond of our civilization.

Monday, October 1, 2007

MENDing India

Looks like globalguerrilla tactics and memes have infected India:

Bombs kill 5, wound dozens, and rupture gas pipeline in northeast India

GAUHATI, India: Suspected separatist rebels set off three bombs in India's northeast, killing five people, wounding dozens more and setting ablaze a natural gas pipeline, officials said Monday.

The blasts, which went off late Sunday, were blamed on the United Liberation Front of Asom, a separatist group that has been fighting for an independent homeland in the area for nearly two decades...

..."The damage looks serious and natural gas supplies in the area could be disrupted for an unspecified period," Sharma said...

As we saw in MENDing Mexico, 4GW entities are flocking to petroleum and natural gas infrastructure like flies to a rotting carcass.

How long with the old Industrial Era pipeline networks be able to hold up? What will replace them, if anything, in delivering fuel and energy supplies across long distances?

A Few More Good Sites

I've added a few more sites over on the Blogroll.

Under "Random and Useful" we have:

Zenpundit - A newsmagazine and journal of scholarly opinion. Click here to read Zenpundit describe the site for us latecomers. Well worth your time if you are interested in current events, 4GW and the crazy mix of politics, economics and violence that make up the reality behind the news.

The International Atomic Energy Agency - I would love to work for them some day...

And under "Finance, Economics and the Great Bear Market" I've added:

Calculated Risk - THE site for those that like their credit and mortgage analysis detailed and in-depth. This is a great place to check in as the Credit Crunch quietly unfolds in the banking and mortgage sectors.

Winter Watch - Another great site for financial opinion.