Monday, October 31, 2011

Spain Joins Ireland, Portugal With A Gun To Its Head, Demanding Concessions

Previously we noted that, just as expected, the weakest PIIGS - Portugal and Ireland - wasted no time to start rumblings about a "suddenly slowing economy" in the aftermath of the Greek bail out which achieved nothing but to delay contagion by 48 hours (we won't bother readers with the blow out in Italian bond yields any more), and to unleash demands by everyone else to get the same concessions, in essence pushing Europe into an even deeper hole, forcing Golum Van Rompuystiltskin to say he was only kidding about the 4-5x EFSF leverage: he really meant 45x. Confirming that the tsunami of demands has been unleashed is today's announcement from the Bank of Spain that not only was Q3 GDP flat (read: negative), but that the deficit target for the year would not be achieved. Google translated from Expansion: "The Bank of Spain says the Spanish economic growth was zero in the third quarter from the previous quarter and warns that there are significant risks that may prevent achieving the deficit target this year. The Bank of Spain said that the information available for the third quarter suggests that the pattern of decline shown in the previous quarter "would have continued in the middle months of the year, in an environment marked by the deepening crisis of sovereign debt euro area." Truly nobody could have seen this coming, yet it is odd how it was casually slipped in broader discussion three short days after the Greek bailout.

The Bank of Spain admitted that absent for that mysterious exporting force (somehow everyone in the world is exporting to someone: just who is importing?) the country would be in a recession:

The report said domestic demand would have experienced a further decline in the third quarter (with a GDP contribution of -0.8 percentage points from April to June period), reflecting the contraction of the components of public spending and the path still down in residential investment, while household consumption and business investment showed little progress.

Instead, "net exports remained a mainstay of the economy and increased its contribution to GDP growth (up 0.8 percentage points) due to the dynamism of exports of goods and tourism.

Yet what is more troubling for the country is that it has indicated it will miss deficit targets for the year: an event which will have implications on both its rating and the treatment of the ECB vis-a-vis the SMP's purchases of its bonds.

The deficit target at risk

"current trends indicate the existence of risk of occurrence of a deviation from the deficit target of 6% of GDP in 2011, as a result of weak tax collection and spending of inertia, mainly in the area of the CCAA, "says the Bank of Spain.

The agency explains that "the magnitude of the deviation is within the margins that can be corrected through proper management of budget implementation in the remainder of exercise."

In any case, "if the budget execution data in the coming months indicate the likelihood of these risks materialize, it would be necessary to adopt additional measures in line with the unconditional nature of the commitment by the Government in meeting the fiscal targets and the close scrutiny to which public finances are subject amid the current sovereign debt crisis ", defends the organization headed by Fernandez Ordonez.

And by additional measures, the country means incite further protest once more cuts are announced, which in turn will lead the country to demand debt cut concessions in order to appeas the "angry mob" in the process getting another rerun of Greece.

The only question we have now is: when will the 4 out of 4, Italy, finally make its anticipated appearance on the concessions-demanding bandwagon and tell Europe to take it or leave it... and but "it", we mean a 25%-50% haircut on its debt.

financial world has collectively woken up

So the financial world has collectively woken up and realized that the latest EU bailout scheme is fraught with problems and loose ends. Amongst the various problems are:

1) The Greek private bondholders are furious that the ECB isn’t taking a haircut on its bonds too.

2) German courts and voters aren’t too pleased with Merkel’s decision to go “all in” on the Euro experiment.

3) The Greek default isn’t nearly large enough to render Greece solvent again

4) The default has set a precedent for the other PIIGS countries to follow

5) The CDS/ derivative issue regarding Greece’s default is not over by any stretch

6) The entire EU banking system remains far too leveraged (26 to 1) and needs another $1.5+ trillion in capital at the minimum.

The markets flew into this deal based on rumors and short-covering and are now waking up to the plain obvious facts that you cannot solve a debt problem with more debt. Also, it might be worth considering just where the EFSF bailout money will be coming from when various EU members can’t even stage successful bond auctions without the ECB stepping in.

Again, the primary issue for the EU is a lack of capital. There is TOO MUCH debt there. And issuing more debt, no matter how cheap, is not going to help. Especially when your strongest member (Germany) sports a REAL debt to GDP above 200% and hasn’t recapitalized its banks.

So the EU will be crumbling in the coming weeks. This was the final hurrah for the EU and the Euro in its current form. On that note, the Euro was rejected at resistance at 142 and has already taken out support at 140.

Once we take out 139, look for this breakdown to pick up steam (pulling stocks with it).

Indeed, the financial world is talking about how this was the biggest move in stocks since 1974. Unfortunately, few remember that after that move in 1974, the markets cratered.

Some thoughts on stocks… isn’t it a little strange that the market fell exactly 20% (the “official” bear market level) before kicking off the biggest ramp job in 30 years? How about the fact that this move came for no real reason other than rumors of another bailout (what are we on #3 for this?).

Can this move really be attributed to Euro choosing to let Greece default (which is what happened in reality)?

Regardless, stocks were deflected from resistance at 1,275 or so. They’re now on their way down again. The market is extremely overbought and susceptible to a fast violent move downwards.

Indeed, the credit markets remain jammed up and are anticipating even more haircuts from Greece. And the rest of the PIIGS will be following suit in the default game.

Ignore stocks, they’re ALWAYS the last to “get it.” The credit markets are jamming up just like they did in 2008. The banking system is flashing all the same signals as well.

So if you have not already taken steps to prepare for systemic failure, you NEED to do so NOW. We're literally at most a few months, and very likely just a few weeks from Europe's banks imploding.

What happened in 2008 was literally just the warm up. The REAL DEAL is coming in the next 14 months. And it’s going to involve corporate, financial, and sovereign defaults.

The very angry first lady Michelle Obama

Michelle’s back, and she’s madder than ever. She was already pretty angry, seemingly unhappy with just about everything. As her husband wrapped up the Democratic nomination in 2008, she let fly her real feelings: “For the first time in my adult lifetime, I’m really proud of my country.” A few months into her job as first lady, her French counterpart asked how she liked the gig: “Don’t ask!” she reportedly spat. “It’s hell. I can’t stand it!”

She even seems to be mad at her silver-tongued husband. When the two were to set off on a luxurious 10-day vacation to Martha’s Vineyard, she left early - four hours early - and flew up alone. And those private vacations. She’s traveled to some of the world’s most plush resorts, taking 42 days off in the past year - that’d be eight weeks of vacay time if she held down a normal job.

Now, she is ready to spew her bilious disgust with America on the campaign trail. A dignified, transcendent first lady? No chance. Michelle is going to break with a hundred years of tradition and play the role of attack dog, heaping derision on her husband’s political opponents like no other first lady before her.

And it’s already begun. Mad Michelle this week popped down to Davis Island, Fla., to hobnob with the very people her husband despises - the 1 percent. At a massive mansion on the bay, filled with the wealthiest of the wealthy, America’s first lady launched into a tirade about “them” - the Republicans.

“Let’s not forget about what it meant when my husband appointed two brilliant Supreme Court justices, and for the first time in history, our daughters - and our sons - watched three women take their seats on our nation’s highest court. But more importantly, let’s not forget the impact their decisions will have on our lives for decades to come - on our privacy and our security, on whether we can speak freely, worship openly and love whomever we choose. That is what’s at stake here,” she said to applause.

Yes, Republicans hope to regain the White House so they can install Supreme Court justices who will trample Americans’ privacy, ignore the nation’s security, crush free speech and persecute the religious.

Oh, and they’re rich and racist to boot. “Will we be a country where opportunity is limited to just the few at the top? Who are we? Or will we give every child a chance to succeed no matter where they’re from, or what they look like or how much money their parents have. Who are we?”

That’s right, rich people (white, of course) certainly don’t want black people to succeed. They want to squelch success based on what people look like, how much money they have. “Are we going to let them succeed?” the first lady yelled. “Nooo!” the rich white people screamed.

Just as her husband’s re-election strategy is inanely simplistic - blame the Republicans for thwarting his brilliant, economy-saving policies - so too is the first lady’s. She will go to the opulent homes of rich people across the country to tell them how rich people are to blame for America’s woes and guilt them into giving millions for her husband’s campaign.

And the Princeton graduate will tell supporters they simply can’t comprehend the significance of what’s occurring today in America.

“It can be hard to see clearly what’s at stake - because these issues are so complicated, and quite frankly, folks are busy and they’re tired. We’re raising families and working full-time jobs, and many helping out in their own communities on top of all that. So many of us just don’t have the time to follow the news and to sort through all the back-and-forth, and to figure out how all of this stuff connects to our daily lives.”

Yes, only Michelle and her husband can truly understand, although she often tells those uninformed people that when the president returns from one of his campaign trips, “He says, ‘You won’t believe what folks are going through.’ ” So maybe she is the only person in America who understands.

So, America’s first lady will travel the country this election season to tell her fellow Americans just how bad it is out there (between lavish vacations, of course). Unlike President Ronald Reagan, who saw morning in America - that great shining city on a hill - Michelle will tell all who will listen that Republicans want to poison the air and water, stifle free speech, oppress the religious. She will offer not an uplifting vision of what her husband’s America could be but only a vapid view of what Republicans’ America would be.

That is the America she lives in, and by campaign’s end, it will be clear that she’s no longer “proud of my country.” Maybe she never really was.

Joseph Curl covered the White House and politics for a decade for The Washington Times. He can be reached at jcurl@washingtontimes.com.

© Copyright 2011 The Washington Times, LLC. Click here for reprint permission.

US fears unilateral Israeli strike on IranWashington concerned Israel will mount military operation against Islamic Republic without coordinating move

Washington concerned Israel will mount military operation against Islamic Republic without coordinating move first, State Department official says. US consequently putting greater pressure on Security Council to impose harsher sanctions on Iran

Alex Fishman

Published: 10.31.11, 10:24 / Israel News

The United States is working on several levels to pressure the UN's Security Council into imposing harsher sanctions on Iran, Yedioth Ahronoth reported Monday.

A senior US State Department official said there is growing fear among Obama administration officials ahead of an IAEA report indicating considerable progress in Tehran's development of its military nuclear program which is set to be published in November.


The US is concerned that the report may trigger Israeli actions against the Islamic Republic which may not necessarily be in line with US interests in the region.

Netanyahu and Barak. Planning attack? (Photo: Ariel Hermoni, Defense Ministry)
Netanyahu and Barak. Planning attack? (Photo: Ariel Hermoni, Defense Ministry)
The official said that Washington's reevaluation of an Israeli strike in Iran is based on various maneuvers Israel has performed in the past few years.

The US administration is now bent on exercising more pressure on Tehran in order to dissuade Israel from this path, the source said.

Washington is therefore pressing China and Russia who are currently opposed to the publication of the IAEA report. The report may cause embarrassment to both countries who are strongly against harsher sanctions on Iran.

According to the US official, it is possible that the report, coupled with the exposure of the US evaluation of Israeli potential to strike Iran, will encourage Russia and China to support the US initiative to aggravate penal measures against Tehran.

Pressing UN

US concern over an Israeli move is so great, the official said, that Washington is working on several levels to pressure the Security Council.

This includes appealing to the Security Council to condemn Iran for its attempt to assassinate the Saudi ambassador to Washington.

Last week, it was reported that many Israelis are concerned that Prime Minister Benjamin Netanyahu and Defense Minister Ehud Barak decided on an attack on Iran's nuclear reactors. The US is naturally also concerned over such plans which may send the entire region into a whirlwind.


On Saturday, the New York Times reported that the United States plans to bolster its military presence in the Gulf after the withdrawal of its troops from Iraq.

Citing unnamed officials and diplomats, the newspaper said the repositioning could include new combat forces in Kuwait able to respond to a collapse of security in Iraq or a military confrontation with Iran.

Orly Azoulay and AFP contributed to this report

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Obama Holds Netanyahu at ‘Gunpoint’

Before forming the present government PM Netanyahu stood for the following:

    – no two state solution
    - no Shalit trade as was then being negotiated
    - no construction freeze and
    - no presentation of an Israeli plan for its borders

Since taking office he violated all these supposed red lines. He gave a speech in which he accepted “two states for two peoples”. He made the Shalit trade he previously had opposed. He imposed a 10 month freeze for nothing in return and in many ways imposed a de facto freeze.

And now, it appears he has agreed to present, “comprehensive proposals” for resolving key aspects of conflict within three months.

By agreeing to this and not rejecting the peace process, Israel is accepting negotiations which aim to bridge the gap. Netanyahu has thus crossed another red line.

Netanyahu inherited the Shalit negotiations and once complained that he was dealt a lousy hand( doesn't this sound like Obama) as though he couldn’t have started all over again. Similarly, he is not prepared to start all over again on peace negotiations and is prepared to play with the hand he was dealt. It too is a lousy hand.

By Netanyahu formally agreeing to present such proposals, he confirms that he is following Olmert and Barak. This is something Bibi has repeatedly said he would not do just as he has always said he is against the Shalit deal.

This goes way beyond playing rope-a-dope to buy time. This shows a seriousness about negotiations and an intention to really negotiate along the dictates of Obama and his proxy, the Quartet.

Netanyahu has to ask for more than he expects to get, yet on the other hand, if he asks for too much the Quartet will say he is not serious and penalize him/Israel for it. Not for a moment, do I believe that this was his idea or that he willingly went along.

The article Knesset visitor blasts Obama and Netanyahu advises that MK Eldad accused Prime Minister Benjamin Netanyahu of buckling under intense pressure from President Barack Obama, who wants to prevent any Israeli retaliation against the Palestinian Authority in its bid to win recognition as a state from the United Nations.

    He (Eldad) charged that Obama was holding Netanyahu “at gunpoint” – the gun being the U.S. threat to go back on its promise to veto the Palestinian statehood bid in the UN Security Council.Specifically, Obama has demanded that Netanyahu and Israel’s supporters in the United States pressure Congress to abort two pending resolutions to penalize the Palestinian Authority (PA) if it pursues its bid, Eldad claimed.One would shut off U.S. aid funds to the Palestinians and a second would support Israel’s right to annex the West Bank. The legal justification for such actions, cited by many Israeli officials, would be that the unilateral statehood request would be a direct violation of the 1993 Oslo Accords.

The inescapable conclusion is that Bibi felt he had no choice but to agree with the Quartet’s new Plan in which they proposed that the parties meet for a month and then prepare proposals within the following three months. To my mind the Quartet would not have come out with their plan, at that time, had not Bibi agreed to it.

The Palestinian request for recognition is still with the UNSC and will not be voted on or vetoed until Bibi presents his plan. So Eldad was 100 % correct.

Diplomacy being what it is, the Quartet will do its utmost to get Bibi to better Olmert’s offer. Abbas had offered to allow Israel to keep much less land. Abbas wanted to keep Ariel and much of east Jerusalem including Maaleh Adumin. When Netanyahu formed his government he made it clear that in no way would he match Olmert’s offer. I don’t see how he can avoid it.

When the Kadimah government proposed convergence, there was great opposition to expelling 125,000 Jews. Olmert tried to lessen this number by keeping Ariel and Maaleh Adumin. If he had succeeded, I think as much as 75,000 would have needed to be expelled.

Haaretz published the details of Olmert’s Plan

    Olmert wanted to annex 6.3 percent of the West Bank to Israel, areas that are home to 75 percent of the Jewish population of the territories. His proposal would have also involved evacuation of dozens of settlements in the Jordan Valley, in the eastern Samarian hills and in the Hebron region. In return for the annexation to Israel of Ma’aleh Adumim, the Gush Etzion bloc of settlements, Ariel, Beit Aryeh and settlements adjacent to Jerusalem, Olmert proposed the transfer of territory to the Palestinians equivalent to 5.8 percent of the area of the West Bank as well as a safe-passage route from Hebron to the Gaza Strip via a highway that would remain part of the sovereign territory of Israel but where there would be no Israeli presence.

When his offer, made at the end of his term became public, the Israelis were outraged. It is for this reason that Bibi said he rejected it.

It is clear that Olmert was negotiating swaps. Swaps were first mentioned by the Saudi Government when it presented the Saudi Plan in 2002. The Bush administration insisted that this plan, as amended in the Arab Initiative, be included in the Roadmap. Olmert thus had accepted the idea of swaps even though Res 242 did not mention it or require it.

The Haaretz article indicated that Olmert’s Plan followed up on negotiations in Annapolis, though it was expressed there, that nothing is agreed until everything is agreed. His plan was also discussed with the Bush administration who had agreed to finance the development of the Negev to accommodate the expelled Israelis.

And we must not forget that Res 242 allowed us to keep some of the territories and to have secure borders. Oslo was founded on it. Although Bibi flat out rejected Obama’s framework for negotiations last May, by agreeing to present his plan he is in effect accepting it in deed if not in words. It irritates me to be fighting over inches i.e. whether we give them 97.6% of the land vs 100 %. The negotiations should center on whether we give them Areas A and B representing 40% of the land or perhaps 10 or 20% more. The Obama proposal makes a mockery of Res 242.

The Atlantic Mag recently published a report Is Peace Possible and I reported on it here.

This report, like the Geneva Initiative before it, was clearly intended to narrow the gaps and produce a settlement between the Olmert and the Abbas proposals. This is what Obama and the Quartet envisage for a settlement. It most certainly will be based on the ’67 lines with swaps and will require Israel to get less land than she wants and to give more land than she wants. Amb Daniel Kurtzer was one of the advisers on this project and we all know that he is against the settlements and always has been. I believe that the Obama administration, the Israeli Left including Yossi Beilin probably had input as well.

I question some of the population numbers quoted in the Atlantic article. The 500,000 figure for settlers, quoted in the Atlantic may have been right early in the Kadima government but it no longer is. The Jewish population increases at the rate of 6% per annum in the territories and therefor would be well over 600,000 today, five years later. Recently, MK Ketzela said it was closer to 700,000.

Finally it is not by chance that just this week Abe Foxman and David Harris launched their Pledge of silence to minimize opposition to what is going on.

And I haven’t even mentioned the so called right of return and Jerusalem. Both Olmert and Barak have offered to take in a “token” number of “refugees” (perhaps as many as 100,000) and to share or internationalize Jerusalem.

Rest assured that the Golan is next.

There is no way that the Quartet would allow Bibi to get away with drawing up a plan where we get to keep Area C as our opener as an example and there is no way Bibi is going to do that with the gun to his head.

Freedom Center pamphlets now available on Kindle: Click here.

Missile-battered Israeli towns in first civilian mutiny against IDF

Israel is seeing its first ever crisis of confidence between a large normally docile civilian population and the heads of the armed forces.Mayors and local council heads representing the three quarters of-a-million inhabitants of the southern towns of Beersheba, Ashkelon, Ashdod, Kiryat Gat and Gan Yavneh, announced Sunday night, Oct. 31, that they don't believe the army's claim the missile offensive besetting them since Saturday is over.(It's about time these people reacted to the fact that the gov't is not protecting them. this population is like docile sheep. the israeli gov't is the derelict in protecting its people)

Their schools stayed closed Monday, Oct. 31, in defiance of Home Front Command orders to lift the security restrictions that were imposed Saturday, when eight Israeli towns were pounded by scores of missiles, causing one death, dozens of injuries, substantial damage and the disruption of lives.

After a decade of missile violence from Gaza, the people still living there are saying enough is enough. They are fed up with being told that the military and powers-that-be know best how to handle the terrorism from the Gaza Strip. The missiles start flying whenever it pleases the Gazan Palestinians, a recurring blight which has seriously stunted the region's development.
debkafile's analysts attribute this newfound combativeness to seven causes.

1. Conflicting statements from Prime Minister Binyamin Netanyahu and the army chiefs. Whereas Netanyahu stated Sunday that there is no ceasefire, army officers informed the South that a truce is in force and only needs time to take hold.
2. An Egyptian-brokered ceasefire was announced as going into effect Sunday morning, Oct. 30 at 0600 hours (after more than 35 missiles were fired Saturday). That whole day, the Palestinians continued their attacks which they divided into two stages: Soon after the 0600 deadline, they shot 15 Grads and mortar rounds into Israel and paused. In the evening, other round of 9 Qassam missiles hit Ashkelon regional council and Eshkol district.
3. The Iron Dome batteries, designed by Israel to intercept short-range rockets, failed to stop any Sunday, starting a wave of rumors across the South.
Few heeded the words of ex-security officers turned pundits who explained that even wonder systems have mechanical breakdowns. After the IDF issued a bulletin asserting the Jihad Islami had used "innovative firing technology" – without specifying what it was – many assumed that the Iron Dome had been neutralized – not by the technologically-challenged Palestinian extremists, but by specialist officers sent to Gaza but their masters in Tehran.
4. The brief television appearance of Chief of Staff Lt. Gen. Benny Gantz, answering a question with the words: "We shall do what needs to be done." As he spoke, sirens sounded and missiles and mortar shells exploded in Ashkelon, Sderot and other locations abutting on the Gaza Strip.
5. As Sunday wore on, the lack of clarity over government intentions deepened. The population realized that no substantial military operation was planned and their trouble was there to stay. A new truce deadline was said to be scheduled for 2200 Sunday night. The Palestinians chose that hour to resume their attacks on Ashkelon regional council and Eshkol district.
6. As Monday morning, Oct. 31 dawned with no sign that the radical jihad Islami intended to hold its fire, Home Front Minister Mattan Vilnai aired his first message to the South:

"This round is over," he said. "It was the work of the Jihad Islami alone. Hamas, which as Gaza Strip rulers are responsible, stood aside."

debkafile's military sources: This is a further Netanyahu government step to relieve Hamas of the burdens of responsibility for the violence emanating from its territory.

This anomalous situation arose from an unsatisfactory exchange between Jerusalem and Cairo. Egypt informed Jerusalem it had managed to persuade Jihad Islami to halt its missile offensive but not to stop its fellow radical Palestinian groups in the Gaza from shooting or even withhold the missiles for them to continue their assaults.
The prime minister and defense minister were reluctant to admit to the public that they had placed their reliance for the security of southern Israel on the military rulers of Egypt – and then only with partial success.
7. Community leaders in the south are preparing to take a leaf out of two popular campaigns which managed in recent weeks to shock the Netanyahu government out of its complacence: This week, 19 new bills were put before the Knesset's winter session in response to the demands of the Social Justice movement; and last week, the Israeli soldier Gilad Shalit's release was achieved, partly as a result of popular pressure.

Several community leaders warned that the South is now on the march to finally break the devastating cycle of ceasefires imposed and violated at the convenience of the Palestinian aggressors and force the government and army to root out the plague of the Palestinian missiles once and for all.

Sunday, October 30, 2011

Banned Speech at the Hyatt: Pamela Geller, "Truth is the New Hate Speech" Last week, The Hyatt Place hotel canceled a Sugar Land Tea Party event be

http://www.jihadwatch.org/2011/10/banned-speech-at-the-hyatt-pamela-geller-truth-is-the-new-hate-speech-print.html

Last week, The Hyatt Place hotel canceled a Sugar Land Tea Party event because I was scheduled to speak. Hundreds and hundreds of patriots called, wrote, sold their stock, and the Hyatt Place subsequently apologized. Despite having to scramble at the last minute, the industrious Tea party found another venue. The event was held at the Sugar Land Community Center, and the house was packed. Hundreds of freedom lovers came out to hear what the Shariah forbids: the truth. It was an amazing evening.

Watch the speech. Get the truth that the dhimmis fear to tell and the Islamic supremacists fear will be told.

Hamas seems wary of escalation with Israel, despite increased rocket fire

Hamas has an interest in halting the rocket fire due to its increasingly close relationship with Egypt and the fear that fighting will prolong the second phase of the Shalit deal.

By Amos Harel and Avi Issacharoff Tags: Gaza rockets Hamas Islamic Jihad IDF Shin Bet


Let's start with the conspiracy theories: The renewed escalation in the south was not aimed at disrupting the renewal of the social protests. It's highly unlikely that the Islamic Jihad militants who fired a Grad rocket at the Ashdod area Wednesday night took last night's demonstration in Rabin Square into consideration. The Shin Bet security service officials who recommended Saturday afternoon's strike on the Islamic Jihad cell also presumably failed to ask about Daphni Leef's weekend plans. The Shin Bet identified preparations to launch more Katyushas from a training camp in what used to be the settlement of Atzmona, and the Israel Air Force launched a sortie. The result of that strike - five Jihad militants killed, including one relatively high-ranking area official - is what dictated the force of the current escalation.

So far the round that began on Saturday resembles the previous one, which was prompted by the August 18 terror attack near Eilat and lasted a few days. Now, too, neither Israel nor Hamas wants an extended conflict. Hamas has not yet exhausted the show of force that followed the Shalit deal, in which more than 1,000 Palestinian prisoners were freed. For a few months the IDF has complied with the policy of restraint and containment dictated to it from above. Even if they toy with the idea of restoring the deterrence effect vis-a-vis the Gaza Strip, Israel's civilian leaders do not seem eager for a military adventure with vague objectives and an indeterminate conclusion.

Islamic Jihad responded to the killing of its men with massive force, firing more than 20 rockets and mortar shells that injured two Israelis. The IAF focused on the launch teams, but presumably will soon initiate strikes against Hamas and Jihad headquarters and positions as well. Similar cycles in the past lasted less than a week. If Israeli casualties mount, however, the military response will heighten.

The position of Hamas will also affect the chain of events. In the last cycle, in August, Hamas joined the firing relatively late, only after it sensed it was losing the popularity contest against the smaller and more extremist faction. But whenever the organization's leaders fear that things are spinning out of control and that Israel might jeopardize their great Islamic-rule project in Gaza, they stepped on the brakes. This time there will be even more incentives to do so: the increasingly close relationship with Egypt's provisional government and the fear that prolonged fighting would delay the second phase of the Shalit deal, in which an additional 550 Palestinian prisoners are to be released.

Hamas officials were not surprised by Islamic Jihad's firing of the Grad after weeks of relative quiet. Had the lull in the fighting gone on much longer Jihad risked fading from the public eye in Gaza. The organization, and especially its Iranian handlers, have no such intentions. Jihad is now squarely back in the forefront of the rejectionist (muqawama ) camp, to which Hamas has mainly been playing only lip service of late. In order not to be seen as having turned its back completely on the ideology, for the sake of convenience, Hamas must let Islamic Jihad respond to the killing of its members with rockets, but only for a limited period.

Foreign Minister Avigdor Lieberman, who last week called Palestinian President Mahmoud Abbas the main obstacle to peace, said during a visit to Bosnia on Saturday that he hoped the PA, together with the international community, would help end the rocket attacks. Perhaps Lieberman needs to be reminded that the PA has no pull in Gaza nor, in light of his recent remarks, any will to help.

Inert Iron Dome

Saturday's events also raised the issue of the performance of the Iron Dome batteries. During the previous cycles, in April and August, the antimissile system did very well. On Saturday, there was one successful intercept, above Be'er Sheva, but the Katyushas fired at Ashdod and Ashkelon were not shot down. This might be connected to the deployment of the batteries and the radar systems in the areas north of the Strip. Photographs issued by Jihad last night show five rockets being fired simultaneously, and that too might make interception more difficult,

The Palestinians are keeping their "Doomsday weapon" warehoused, for now. The Katyushas being fired have a range of about 40 kilometers, to Be'er Sheva in the east and Gedera in the north, but the militant factions also have rockets capable of hitting Tel Aviv and Herzliya. Either way, last night around one million Israelis found themselves hostage to the decision of the leaders of the military wings of the organizations in the Gaza Strip.

Gaza militants continue to fire rockets at Israel, amid reports of cease-fire

Iron Dome missile defense system successfully intercepts a Grad rocket launched at Ashdod early Sunday; 11 rockets and mortar shells launched into Israel overnight, after man succumbs to shrapnel wounds from day before.

By Avi Issacharoff, Anshel Pfeffer, Yanir Yagna and The Associated Press Tags: Gaza Hamas IDF


Gazan militants continued to launch rockets into Israel early Sunday morning, despite a report on Ma’an News Agency claiming that an Egyptian-mediated cease-fire would take effect at 3:00 A.M. A total of 31 rockets have been fired from Gaza since the beginning of the weekend.

Three rockets exploded near the southern Israel city of Ashdod on Sunday morning, and another landed to its east. No casualties or serious damage were reported. The Iron Dome missile defense system successfully intercepted a Grad rocket launched at Ashdod early Sunday.

Overnight, 11 rockets and mortar shells were launched into Israel. Most schools within cities of firing distance from Gaza canceled classes on Sunday.

What do you think about the recent escalation in southern Israel? Visit Haaretz.com on Facebook and share your views.

Ashdod Grad rockets – 29.10.11

A car engulfed by flames after a Grad rocket fired from the Gaza Strip exploded in Ashdod, Oct. 29, 2011.

Photo by: Eliyahu Hershkowitz

Egyptian officials said on Sunday that efforts to persuade Palestinian militants in Gaza to hold their rocket fire on Israel have failed.

The officials said they tried to arrange a cease-fire set at 3. A.M. Sunday, but did not win agreement from factions responsible for the rocket attacks. They spoke on condition of anonymity because they were not authorized to discuss the mediation efforts.

Southern District Commander Yossi Pariente said on Sunday that the police has been put on high alert in the area. All police officers' vacations were cancelled and additional police have been brought in from other districts.

Classes were cancelled in most southern cities and Ben-University, Sapir College and Achva Academic College will not be starting the academic year on time due to the security situation.

Some 20 rockets and mortar shells were fired from Gaza into southern Israel on Saturday, with rockets launched at Ashdod, Ashkelon, Gan Yavne, and around Be'er Sheva.

One man was seriously wounded in Ashkelon and eventually died of his wounds. Another man was moderately wounded in the Ashdod rocket strike and three others were lightly hurt. Moreover, 17 trauma victims were reported.

Moshe Ami, a 56-year-old man from Ashkelon, was fatally wounded on Saturday by shrapnel as he got out of his car to seek shelter from a rocket launched at the south Israel city. Magen David Adom paramedics took him to the hospital with serious stomach wounds, where his situation deteriorated and a doctor pronounced him dead.

Prime Minister Benjamin Netanyahu called the mayors of Ashdod, Ashkelon and Be’er Sheva on Saturday night to show his support as rockets continued to fall. “The IDF’s harsh reaction (to the attacks on Israel), that have already hit three launch squads, will be even more severe if needed,” the prime minister assured them.

The Israel Defense Forces Spokesperson’s Office confirmed that the Israel Air Force hit six targets in the Gaza Strip late Saturday night. A tunnel in the northern part of the strip was attacked, as were three dispatch position and two centers of militant activity in the southern part of Gaza.

“The IDF will not hesitate to act with determination and force against anyone who perpetrates terror against the citizens in Israel, until quiet returns to the region,” the Spokesperson’s Office said in a statement, adding that it places the onus of blame for the attacks on Hamas.

The rocket barrage followed an IDF strike on the Gaza Strip which resulted in the deaths of five Islamic Jihad militants.

As a result of the escalation, classes were canceled in Ashdod, Ashkelon and other towns in the 40-kilometer range from Gaza. Ben Gurion University in Be'er Sheva also called off classes, which were due to begin on Sunday.

Palestinian’s terror rocket nightmare originated in Libya:

Palestinian’s terror rocket nightmare originated in Libya: Missile launchers smuggled into Gaza now targeting Jewish communities.

image

By Aaron Klein

A missile launcher capable of firing up to five projectiles at once was recently smuggled into the Gaza Strip and originated in Libya, according to sources in the Islamic Jihad terrorist organization speaking to KleinOnline.

Earlier today, Islamic Jihad released a video of what it claimed was the launcher actually firing five missiles. If confirmed, this would mark the first time such a device was used in the Gaza Strip.

Abu Mussaab, a senior member of Islamic Jihad’s Al-Quds military wing, told KleinOnline such launchers were recently smuggled into Gaza.

“This is not the only surprise,” added Mussab.

He promised an improved missile and rocket arsenal to be used against Israel “in the very near future.”

Mossaab hinted the launcher originated in Libya.

Other Islamic Jihad sources told KleinOnline the launcher indeed originated in Libya.

Today, some 20 rockets and mortar shells were fired from Gaza into southern Israel, killing one man and wounding four others.

The news media largely reported the rocket barrage came after the Israel Defense Forces carried out strikes in the Gaza Strip, killing five Islamic Jihad members.

The IDF strikes, however, targeted Islamic Jihad cells preparing to fire rockets into Israel, the IDF spokesperson’s unit told KleinOnline.

Israeli airstrikes targeted a terrorist squad in the northern Gaza strip preparing to launch rockets at Israeli communities as well as two armed rocket launchers in the southern Gaza Strip.

Israel Air Force aircraft also attacked a cell of terrorists preparing to fire long-range rockets from the southern Gaza Strip. The IDF said the same cell was responsible for the rockets fired at the Be’er Tuvia Regional Council last Wednesday.

Saturday, October 29, 2011

Europe at war 2018

German troops storm Greece. Putin's tanks crush Latvia. France humbles the British Army. Unlikely, yes, but as Angela Merkel says euro meltdown could endanger peace, a historian's imagination runs riot...

By Dominic Sandbrook


The date is October 29, 2018, and Britain faces its darkest hour. On the battlefields of Europe, our Armed Forces have been humiliated.

In makeshift prison camps on the continent, thousands of our young men and women sit forlornly, testament to the collapse of our ambitions.

From the killing grounds of Belgium to the scarred streets of Athens, a continent continues to bleed. And, in the east, the Russian bear inexorably tightens its grip, an old empire rising from the wreckage of the European dream.

The crisis had been 'made in London', Sarkozy told French television in August 2016

The crisis had been 'made in London', Sarkozy told French television in August 2016. By 2017, Britain's land forces were down to just 75,000

Yesterday, after a run of military defeats unequalled in our history, the Prime Minister offered his resignation. There is talk of a National Government, but no one has any illusions of another Churchill waiting in the wings.

In suburban streets across Britain, old men and callow teenagers are digging defensive positions in the cold autumn air. But with equipment scarce and ammunition non-existent, the Home Guard would barely last a week.

And all the time, across the Channel, enemy forces make their final preparations for the inevitable invasion. Some talk of surrender; no one speaks of victory. Less than ten years ago, millions still believed in a peaceful, united Europe. How did it come to this?

When future historians look back on our humiliation, they will surely judge that the turning point was the last week in October 2011.

Putin
French President Nicolas Sarkozy

An imagined future: In March 2016, Vladimir Putin's (left) army occupied Lithuania, Belarus and Moldova. Nicolas Sarkozy (right) sends 15,000 French troops to Italy

Largely forgotten today, the main event was yet another interminable European summit in Brussels — the 14th attempt to ‘save the euro’ in just 20 months.

Hoping to secure German support for a massive one trillion euro rescue package, Chancellor Angela Merkel gave her parliamentarians a chillingly prescient warning.

‘No one should believe that another half century of peace in Europe is a given — it’s not,’ she said.

‘So I say again: if the euro collapses, Europe collapses. That can’t happen.’

At the time, many observers scoffed that she was being absurdly melodramatic. But, seven years on, no one is laughing.

What Mrs Merkel had grasped — and what many European leaders refused to recognise — was that the Continent was threatened by a toxic combination of spiralling debt, economic recession, surging anarchism and a pervasive collapse of confidence in capitalism itself.

'No one should believe that another half century of peace in Europe is a given - it's not,' said Angela Merkel

'No one should believe that another half century of peace in Europe is a given - it's not,' said Angela Merkel

That week, even St Paul’s Cathedral in London — whose survival had been a memorable symbol of British defiance during the last European war — was shut down by anti-capitalist protesters.

At the time it seemed a tiny, even trivial incident. But it was merely a taste of what was coming.

For by February 2012, it was terrifyingly obvious that the latest eurozone package had failed. In Greece, protests against the government’s austerity measures had turned into daily running battles, while much of Western Europe had now sunk back into recession.

A month later, after an angry mob had invaded the Greek parliament itself, Greece announced it was withdrawing from the euro. Almost overnight, the European markets were hit by the biggest losses in financial history.

As law and order collapsed on the streets of Athens, France and Germany sent in 5,000 ‘peacekeepers’ to restore calm. But when they came under attack from petrol-bomb throwing demonstrators, it was clear that more drastic action might be needed.

Meanwhile, the Greek collapse was sending shockwaves across Europe.

With the markets turning their attention to Italy, and Silvio Berlusconi’s beleaguered government struggling to maintain order, Europe’s fifth largest economy was suddenly at risk.

In the summer of 2012, massive anti-capitalist demonstrations in major Italian cities turned into outright rebellion. And when Berlusconi sent in the army to maintain order, the first bombs began exploding in the banks of Rome, Milan and Turin.

Anti-capitalism had caught the imagination of a generation. And the bomb alert at the Bank of England —when the entire City had to be evacuated after warnings from the so-called ‘Guy Fawkes Anti-Cuts Collective’ — was merely the first of many.

.

In July 2012, three people were killed by a bank bomb in Frankfurt. A month later, 15 people were killed in Dublin. And in September, in tragic events that will never be forgotten, 36 people were killed by explosions across the City of London.

By now demonstrations and riots were fixtures on the evening news. And as Germany and France struggled to keep the eurozone alive, there were the first signs of a disturbing new authoritarianism.

In Italy, where the Berlusconi government had declared a permanent state of emergency, some cities had degenerated into virtual civil war.

And when Berlusconi formally requested assistance from his European partners, the French president Nicolas Sarkozy — who had narrowly won re-election earlier that year — was only too keen to flex his muscles.

By the end of 2012, there were an estimated 15,000 French troops on the streets of northern Italy — as well as a further 14,000 ‘European peacekeepers’ in Athens and Thessaloniki. Slowly but surely, the continent was sliding towards armed confrontation.

In Greece, protests against the government's austerity measures had turned into daily running battles

In Greece, protests against the government's austerity measures had turned into daily running battles

By the following year, a peaceful settlement to the implosion of the European Union seemed increasingly unlikely.

The last major Brussels summit, in March 2013, broke up acrimoniously when many smaller European nations refused to accept Germany’s demands for greater fiscal austerity and economic integration.
With alarming speed, the threads of peaceful unity were unravelling.

With the European economy heading into depression, nationalist movements were gaining support across the Continent. Skinheads were on the march; in cities from Madrid to Budapest, foreigners and immigrants were the victims of violent abuse.

'Europe's crisis is Russia's opportunity,' Putin announced.
'The days of humiliation are over; our empire will be restored.'


At another time, the terrible Spanish riots in the spring of 2014, when 63 people were killed in a shocking outbreak of arson and looting, would have dominated the headlines.

But most people’s attention was focused further east. No country had been hit harder by the financial crisis than little Latvia, which by 2014 had an unemployment rate of more than 35  per cent. And with almost one in three of its citizens being ethnic Russians, economic frustration soon turned into nationalist confrontation.

On August 12, 2015, after days of fighting on the streets of Riga, the Russian army rumbled across the border. The Russians had come to ‘restore order’, Vladimir Putin assured the world.

But his statement to the Russian people told a different story.

‘Europe’s crisis is Russia’s opportunity,’ Putin announced. ‘The days of humiliation are over; our empire will be restored.’

Once, the West would have come to Latvia’s aid. It was, after all, a member of both the European Union and of Nato — though the new American isolationism meant that Nato membership was effectively worthless.

But since French troops were already committed to Greece and Italy, Paris refused to intervene.

Apocalyptic: Fear and suffering emerge from the wreckage of the European dream

Apocalyptic: Fear and suffering emerge from the wreckage of the European dream

And in London, the new Prime Minister, Ed Miliband, assured the nation that he would never commit British troops to help ‘a faraway country of which we know nothing’.

In Moscow, the message was clear. Six months later, Russian ‘peacekeepers’ crossed the border into Estonia, and in March 2016, Putin’s army occupied Lithuania, Belarus and Moldova.

When Brussels complained, the Kremlin pointed out that European peacekeepers were already on the streets of Athens, Rome and Madrid. Why, Putin asked, should the rules be any different in the east?

And, indeed, he had a point. Even in Paris, there was chilling evidence of a slide towards ruthless suppression of civil dissent — justified as a short-term measure to check the rise of anti-capitalist terrorism.

Aided by Spanish and Italian auxiliaries, backed by German money and quietly supported by neo-imperialist Russia, the French army has encircled our expeditionary force on the other side of the Channel and cut it
to shreds.


That summer, Sarkozy amended the French constitution so that he could seek a third term, claiming that stability mattered more than legal niceties. Now more than ever he seemed to see himself as the reincarnation of Napoleon Bonaparte, ostentatiously tucking his hand into his military-style greatcoat.

Back in October 2011, he had told David Cameron to ‘shut up’, claiming that Europe had ‘had enough’ of British advice. Now he seemed to have tipped over into outright Anglophobia.

The crisis had been ‘made in London’, Sarkozy told French television in August 2016.

‘But Britain’s day is done. The future lies in a Russian east and a European — that is to say, French — west.’

For some British newspapers, his words were proof of an unspoken alliance between Moscow and Paris, sweetened with Russian oil and gas money. And, by now, Napoleonic ambitions seemed to have gone to the French president’s head.

Five days before Christmas 2016, Sarkozy told a cheering crowd in Vichy that ‘all European Union members must fully embrace our project and join the euro, or they will pay the price’.

In Britain, his remarks provoked a storm of outrage. Many insiders suggested that left to his own devices, Ed Miliband would have been more than happy to join the euro.

But, by now, the weak Prime Minister was almost completely ruled by his overweening Chancellor, Ed Balls, who insisted that Britain simply could not afford to join a patently unfair Franco-German currency.

As France tightened the pressure, with French farmers ritually burning British imports outside the Channel ports, Miliband cracked, handing in his resignation and scuttling off to take up a teaching post at Harvard.

Progress undone: The battles of 2015 take us back to the Second World War 70 years ago, when 60million people were killed

Progress undone: The battles of 2015 take us back to the Second World War 70 years ago, when 60million people were killed

In a desperate attempt to reinvigorate Labour’s popularity, Ed Balls announced that he was opening talks on British secession from the European Union — even though France and Germany insisted that they would block this ‘illegal nationalist piracy’. But now events across the Channel took a bloody and decisive twist.

For years, Belgium had been crippled by antagonism between Dutch-speaking Flemings and French-speaking Walloons.

The country had not even had a proper government since the summer of 2010, being run first by a caretaker coalition and then, from 2014, by the European Union itself. But in the summer of 2017 inter-community rioting in the centre of Brussels became terrifyingly brutal.

From Wallonia, there came reports of Dutch speakers being beaten and intimidated out of their homes. On August 1, Sarkozy sent in French paratroopers.

‘Brussels is the very heart of Europe,’ he said. ‘Which is to say, it is properly part of France.’

In the summer of 2012, massive anti-capitalist demonstrations in major Italian cities turned into outright rebellion. And when Berlusconi sent in the army to maintain order, the first bombs began exploding in the banks of Rome, Milan and Turin.

For Britain, this was the final provocation. All parties agreed that, thanks to Britain’s long-standing pledge to defend Belgian independence, we had no choice but to dispatch peacekeepers of our own.

The events of the next few months make sorry reading. Even in 2011, Britain had only 101,000 regular soldiers to France’s 123,000, but years of swingeing spending cuts had taken their toll.

By 2017, Britain’s land forces were down to just 75,000. And when fighting broke out between French and British peacekeepers in the outskirts of Ghent, no one seriously doubted that the French would win.

So it is that, a year later, we find ourselves at our lowest ebb. Aided by Spanish and Italian auxiliaries, backed by German money and quietly supported by neo-imperialist Russia, the French army has encircled our expeditionary force on the other side of the Channel and cut it to shreds.

The Americans have deserted us, while every week brings fresh anti-war and anti-capitalist riots in our cities. The shelves are increasingly empty; national morale has hit rock bottom.

In Scotland, polls show that more than 70  per cent want independence; in Northern Ireland, the bombs of the Real IRA explode almost daily.

Last week, addressing a vast crowd in French-occupied Brussels, Nicolas Sarkozy declared that it was ‘time to extinguish the stain of Waterloo’.

‘Britain has always been part of Europe — even if they have refused to recognise it,’ he said.

‘It is time to welcome them into our family — by force, if necessary.’

A few diehards talk of fighting in the last ditch. But no one seriously believes that Britain can hold out for long.

The Union flag hangs tattered and forlorn; our days of glory are long gone. And, in Brussels, our new masters are preparing for victory.

Even now, the transformation in our fortunes seems almost incredible.

Seven years ago, Angela Merkel’s talk of the threat to peace seemed implausible, even absurd.

What a tragedy that we did not listen when we still had a chance.

Jihad used Grad multiple rocket launchers against S. Israel

Ashdod, Ashkelon, Sderot, Kiryat Malachi, Ofakim, Gan Yavne and the Eshkol farm district were subjected to Jihad Islami volleys of more than 35 missiles Saturday, Oct. 29, in retaliation for the loss of a senior five-man missile team in an Israeli air force strike a few hours earlier. A residential building in Ashkelon took a direct hit injuring 2 people and in Ashdod a fire was started between high-rise buildings. Some 45 shock victims were treated. The damage was extensive.
Jihad Islami was shown firing 20 rounds in rapid succession from a Grad multiple rocket launcher mounted on a small truck which then drove off at speed. The same Russian-made multiple launchers were in common use with the Libyan rebels in the last weeks of the battle for Sirte.

Israel's Homeland Defense commander in the South warned that the escalation is just beginning. The police have raised national security preparedness to one below the highest level.
debkafile's military sources report that it took the IDF five hours from the first launch of Jihad Islami's massive missile offensive Saturday to place the Iron Dome anti-missile system in position and deploy the air force against the terrorists firing from Gaza.

Jihad Islami threatens attack "deep inside Israel" for commander's slaying

An Israeli air strike against a Palestinian Jihad Islami camp near Rafah, southern Gaza, Saturday Oct. 29, killed Ahmad Sheikh Halil, head of its missile engineering and production arm and foiled another attack. "Abu Khader ranked high in the Jihad's Al Qods unit. The Israel raid also killed five of his team members who Wednesday fired three Grad missiles from Hamas-ruled Gaza at Beer Tuvia and Gan Yavne.

Although only one Grad attack was reported, our sources report that at least three missiles were actually aimed at undisclosed towns and at least one strategic site in southern Israel. debkafile's military sources calculate that this barrage was a range-finding run in preparation for a major offensive from a launching pad west of Rafah - probably against targets near Beersheba.
Those sources report that Saturday's air strike foiled this attack. The Jihad Islami's immediate response was a threat to hit back "deep inside Israel," prompting a high missile alert in central and southern Israel. Rishon Lezion is its northern point.

According to debkafile's sources, Jihad Islami is acting on orders from Tehran and Damascus to make trouble and provoke a fresh Hamas-Israel confrontation for the purpose of derailing the deal behind the Shalit prisoner swap which provides for the transfer of Hamas' political headquarters out of the Syrian capital to Cairo and Amman.
The top-level Hamas desertion would seriously undermine Bashar Assad at a time when he needs all the help he can get against the popular uprising against him. It would also deprive Iran of a strong Palestinian asset under its control.

The Israeli-Egyptian border north of Eilat is also on terror alert against the large Jihad Islami cell standing by in Sinai for some weeks waiting for the chance for a multiple-casualty-cum-abduction attack.

YouTube will launch 100 premium channels,

Google’s (NASDAQ: GOOG) YouTube will launch 100 premium channels, in what will be the start-up of a bone-crushing competitor to online video sites like Hulu and Yahoo! video. YouTube’s size in terms of monthly visits dwarfs every other video destination in America. “The venture, in partnership with dozens of media companies, Hollywood production companies, and online-video creators, will generate about 25 hours of new, original programming a day on YouTube. The majority of the roughly 100 channels will launch next year,” according to The Wall Street Journal.

Klaus Regling, the head of Europe’s rescue fund, has actively solicited China’s government to put money into the facility that will be used for a rescue of Greece, and perhaps other southern EU nations. The Chinese will want concessions of course, which may involve some guarantee of the value of their investments. EU officials, of course, will not want to give them. That makes a stalemate likely. The one inducement the Europeans might have is that markets are skeptical about how the new fund will be created and funded. The Chinese could help assure the the financial foundation of the facility is well set.

Main Street and Wall Street are both nervous.

Last week's surge just didn't feel right, particularly because Main Street and Wall Street are both nervous. A guns-and-gold strategy?

Something is amiss when a 375-point stock market advance seems suspect. But that's the feeling after Thursday's massive stock rally. Such pessimism often presages another rally simply because investor sentiment has gotten too negative. But the recent surge higher seems unsustainable when compared with the whirlwinds of concern surrounding the market.

It is difficult to be anything but cautious. Buying bearish puts on the iShares Russell 2000 (ticker: IWM) that expire early next year seems more prudent than just trading off the back of hedge-fund managers desperately trying to catch up with benchmark indexes, favorable seasonal trends, corporate earnings and the news that Europe's financial crisis is apparently now under control.

Main Street and Wall Street usually disagree, but their worries currently sound eerily similar. That in itself is cause for concern.

On Main Street, stories have begun to reappear about doctors declaring bankruptcy, or unable to access bank financing. Dentists claim patients are opting to have teeth pulled for a few hundred dollars because they can't afford crowns that cost several times that. And stock brokers have noted an uptick in client complaints about fees, more account closing and a general reduction in risk-taking. Sounds more like the beginning of 2008's financial crisis than the start of a major rally.

On Wall Street, the fourth year of a global financial crisis has many of the well-heeled nervous. A hedge-fund manager recently told me his neighbors in Summit, N.J., an affluent Manhattan bedroom community, are teetering on the edge of insolvency. Their $20,000 to $30,000 in monthly expenses consumes all their income. Another money manager carries around a picture of gold bars he stores in UBS's vaults in Zurich. There's even talk again of bankers buying guns. Preparing for civil unrest would be easy to dismiss, if buying guns and gold were not increasingly mentioned by serious people. By some accounts gold would be $2,000 an ounce if not for John Paulson, the hedge-fund manager. He is believed to be selling gold to cover investor redemptions because his funds have stumbled.

At a recent gathering of the World Federation of Exchanges in Johannesburg, major stock and derivatives exchange leaders privately expressed concern about the inability of regulators to address the global financial crisis' fallout. Of course, they mostly excused themselves from responsibility.

Consider credit-default swaps that are used to insure corporate debt. They adversely influence stock and options trading because the slightest trading activity or price changes are viewed as a sign that bad things might happen to a corporation. The swaps influence bearish put volatility and invariably pressure stock prices, but the swaps, which have no position limits, are effectively ignored because exchanges do not want to anger banks that make big money in unregulated OTC derivatives like a CDS. The public suffers because banks are increasingly business partners, customers and shareholders of for-profit exchanges. Politicians are similarly encumbered.

One exchange leader said the bourses are only required to regulate their own markets -- not the overall market. That's the job of the Securities and Exchange Commission and the senators and representatives who oversee the agency and the banks. Yet, exchange leaders admit the financial markets are too complex to be understood by the SEC and politicians.

These grim views should make you uneasy. If you want comfort, buy gold bars and coins, a 12-gauge pump shotgun, and slightly out-of-the-money puts on the iShares Russell 2000 Index that expire in February or April.

Two to four months into the new year should be about when the current bullish mood wears off and the sclerotic global economy again slows the financial markets. Hopefully, this skepticism is misplaced and you are left with a fine story about how, in the fourth year of a global financial crisis, the world's problems seemed intractable just before the hardships ended.