by David Steven | Nov 7, 2007 | Global system, Influence and networks, South Asia
A message from Asma Jahangir – a heroic defender of human rights in Pakistan.
The situation in the country is uncertain. There is a strong crackdown on the press and lawyers. Majority of the judges of the Supreme Court and four High Courts have not taken oath. The Chief Justice is under house arrest (unofficially) . The President of the Supreme Court Bar (Aitzaz Ahsan) and 2 former presidents, Mr. Muneer Malik and Tariq Mahmood have been imprisoned for one month under the Preventive Detention laws. The President of the Lahore High Court Mr. Ahsan Bhoon and former bar leader Mr. Ali Ahmed Kurd have also been arrested. The police is looking or 6 other lawyers, including President of Peshawar and Karachi bar. The President of Lahore bar is also in hiding. There are other scores political leaders who have also been arrested.
Yesterday I was house arrested for 90 days. I am sending my detention order.
Ironically the President (who has lost his marbles) said that he had to clamp down on the press and the judiciary to curb terrorism. Those he has arrested are progressive, secular minded people while the terrorists are offered negotiations and ceasefires. Lawyers and civil society will challenge the government and the scene is likely to get uglier. We want friends of Pakistan to urge the US administration to stop all support of the instable dictator, as his lust for power is bringing the country close to a worse form of civil strife. It is not time for the international community to insist on preventive measures, otherwise cleaning up the mess may take decades. There are already several hundred IDPs and the space for civil society has hopelessly shrunk.
We believe that Musharaf has to be taken out of the equation and a government of national reconciliation put in place. It must be backed by the military. Short of this here are no realistic solutions, although there are no guarantees that this may work.
The full pdf of Emergency Times can be downloaded here. It’s the first issue of a publication that aims to organise resistance to Pakistan’s state of emergency. Please pass on… and visit the blog too.
by Alex Evans | Nov 7, 2007 | Climate and resource scarcity, Europe and Central Asia
ECFR has a new report out today with a provocative message: “Despite its economic strength and military might, the European Union has begun to behave as if it were subordinate to an increasingly assertive Russia”. The reason, they say: disunity among the EU’s member states, which fall into five different categories:
- ‘Trojan horses’ like Greece and Cyprus who “often defend positions close to Russian interests, and who have been willing to veto common EU positions”;
- “Strategic partners” like Germany, France, Italy and Spain who “have built special bilateral relationships with Russia, which has sometimes cut against the grain of common EU objectives in areas such as energy and the EU Neighbourhood Policy”;
- “Friendly pragmatists” comprising Austria, Belgium, Bulgaria, Finland, Hungary, Luxembourg, Malta, Slovakia, Slovenia and Portugal, who “have a less close but still significant relationship with Russia, in which business interests come first”;
- “Frosty pragmatists” – the Czech Republic, Denmark, Estonia, Ireland, Latvia, the Netherlands, Sweden, Romania and the United Kingdom – who keep business interests high on the agenda but “have not refrained from criticising Russia’s human rights record and failings on democracy”; and finally
- “New Cold-warriors”, Poland and Lithuania, who have “developed an overtly hostile relationship with Moscow and are willing to use the veto to block EU negotiations with Russia”.
For some useful additional context, compare all of this with the interesting conversation that Gideon Rachman reports having with a “senior administration official” in DC in mid-October, in preparation for his trip to Russia:
As this particular American sees it, the only solution to a newly assertive Russia is western solidarity. But he is worried that not everybody in Europe sees this. The French, the British and the German Greens are praised by him for “thinking strategically”. Angela Merkel was praised for her handling of Mr Putin. But the German SPD were condemned as “acccomodationist”.The EU’s major strategic vulnerability, as the Americans see it, is its growing dependence on Russian gas. The administration official mused that sometimes the Americans seem more concerned about this than the Europeans themselves.
“Europe”, he said “needs a serious gas policy, with a major high level EU push to get Caspian gas out on a pipeline that does not go through Russia.” That means that Europe must make the building of the Nabucco pipeline through Turkey, a “top strategic priority”. It also means continuing to support the independence of Georgia, for strategic as well as ideological reasons. If Georgia is brought back within the Russian ambit, then it becomes impossible to build a pipeline that is outside Russian control – unless (gasp) you go via Iran.
Europeans also need to develop their links to Norwegian and North African gas. And they should “revisit the decision to build the Schroder pipeline” – the shorthand name for the under-sea gas pipeline linking Russia and Germany, but bypassing Poland and the Baltic states.And what happens if we in Europe don’t do any of this? “The biggest medium-term risk is that Europe becomes irreversibly dependent on Russia and Russia starts rolling back freedoms gained in the former Soviet Union – starting with Georgia and then moving onto Ukraine.”
by Alex Evans | Nov 7, 2007 | Global system
Gideon Rachman‘s been off to Ditchley for the weekend. Signs of the “new diplomacy” that we’ve been promised by David Miliband appear to have been thin on the ground:
The entertainment … was like something out of a Jane Austen novel. On Saturday night, I found myself listening to an impromptu piano recital in the drawing room. In an Austen novel, it would have been Elizabeth Bennett or some other charming young woman tinkling the ivories. At Ditchley, it was a couple of British ambassadors in black tie, playing a Schubert duet. It certainly made a change from watching “Match of the Day” on a Saturday night.
But, he continues, a certain je ne sais quoi was missing…
I felt the weekend would have been complete if they could have arranged for one of the guests to be murdered. Then – according to tradition – a detective would arrive from the local village. We would all have been interviewed in the library. And the following morning the detective could announce – “It was Sir Andrew Green with the lead piping in the green drawing room.”
by Alex Evans | Nov 7, 2007 | Global system
Time to take stock of the credit crunch. Nouriel Roubini, a professor of economics and international business at NYU’s Stern School of Business, is decidedly downbeat:
It is now clear that the delusional hope that the severe credit and liquidity crunch that hit US and global financial markets would ease has been shattered by the events of the last few weeks. This credit crunch is getting much worse and its financial and real fallout will be severe.
And, he goes on, we need to stop calling this a subprime crisis. It’s far broader than that: not only has the contagion sread to near-prime and prime mortgages, it’s also well advanced into subprime and near-prime credit cards and car loans, and heading off into broader pastures still. “Every corner of the securitization world is now under severe stress, including so called highly rated and “safe” (AAA and AA) securities.”
And there appears to be the potential for it all to get a lot worse on November 15th, when a new accounting standard, FASB 157, comes into effect. FASB 157 is all about the valuation of illiquid assets – i.e. those assets where there isn’t necessarily a ready buyer and hence the asset is less readily convertible into cash. What it says, essentially, is that financial institutions will be much more limited in their ability to put these ‘illiquid’ assets into so-called “level 3” securities – a category of securities where the lack of market prices allows banks to use highly dubious models to price the securities instead. In English – until now, banks have basically been able to make up whatever estimate they like for the value of illiquid assets. And now that party looks set to come to an end.
Quite how bumpy a hangover there might be is illustrated by some back of an envelope calculations provided on Roubini’s blog, which look at various financial institutions and divide their level 3 assets – the ones vulnerable to this new valuation standard – by their overall equity capital base. As one of Roubini’s contributors puts it, “this will give us a better idea as to which of them may really remain solvent at the end of the day”.
Start then with Merrill Lynch, which has had to write down $7.9 billion of debt and seen the loss of its CEO, Stan O’Neal. Here, the totals were $16 billion in level 3 assets, and $42 billion in equity – a ratio, in other words, of 38%. Then look at Citigroup, which lost its CEO Chuck Prince on Sunday. Here, the figures are $135 billion in level 3 assets, against an equity base of $128 billion – a ratio of 105%. Ouch. But now look at a few other firms:
- Bear Stearns: $20 billion level 3, $13 billion equity base = 154%
- Lehman Brothers: $35 billion in level 3, $22 billion equity base = 159%
- Goldman Sachs: $72 billion in level 3, $39 billion equity base = 185%
- Morgan Stanley: $88 billion in level 3, $35 billion equity base = 251%
In other words, most of the media attention so far, and the two highest profile corporate scalps, are actually among the institutions with lowest exposure. Roubini’s summary: “Thus, you can expect that the ongoing credit crunch will get much worse in the year ahead and its fallout spread from the US to Europe and throughout Asia and the globe. Trillions of dollars of securitized assets that were sliced and diced in the long food chain of securitization are now at some risk. The first crisis of financial globalization and securitization is thus only at its beginning stage.”
It looks pretty likely that the current turmoil will lead on swiftly to a discussion about global financial regulation – this was apparently the clear consensus at a seminar on financial market turmoil held at the IMF / World Bank annual meetings last month. Commentators from the left like Will Hutton are already sharpening their claws (and, one suspects, rubbing their hands with glee) in preparation for such a discussion:
To get through this crisis, the American and British governments are going to have to think what hitherto has been unthinkable. Already the Americans are cutting interest rates careless of the inflationary consequences. Britain may have to follow suit. Both governments will have to devise new forms of regulation and control. Banks may have to be taken into public ownership.
Governments, though, so far seem reluctant to engage in such a debate. Here in the UK, Alistair Darling has admitted that the global banking industry is facing “an unparalleled period of financial uncertainty”, but he added that “I believe that we can get through that…our banking system is basically strong and…we have a very strong economy”. He must be hoping so.
by Alex Evans | Nov 7, 2007 | Conflict and security
From BloggingStocks.com, the news that Senator Charles Grassley of Iowa is considering a Congressional investigation into an intriguing tax break: “whether it’s right that they avoid paying any taxes while their ministries contribute immensely to their personal wealth”.
The site quotes the Wall Street Journal that: “Mr. Grassley said his investigation was prompted by complaints from watchdog groups and others that the ministers live in multimillion-dollar homes, travel on private jets and engage in profit-making ventures from their ministries. He said the complaints raised suspicions, “but I would not make a final judgment until I get the story from the ministries.”
Among those Grassley is apparently likely to assess is Benny Hinn, who has made gazillions from donations and tasteful retail items such as this Lord My Rock Desk Sculpture (“A good conversation piece, it is a rugged reminder of the safety and protection God’s provides His children” – yours for $20). BloggingStocks has helpfully provided the following excerpt from a 1991 interview with Hinn in Florida Magazine in 1991, which provides some useful additional context:
He looks like a Ralph Lauren advertisement, a true gentleman of leisure. As always, his hair is sprayed solidly in place. “I don’t know if you’ll ever [again] see a reverend without socks,” he says proudly. [He’s wearing no socks.] “That’s the way I am. I’m more down to earth than most people.”
This comes from a man who just turned in his Mercedes for a Jaguar and recently moved from the exclusive Heathrow development to the even more exclusive Alaqua, where he now lives in a $685,000 home. His suits are tailored, his shoes are Italian leather, and his wrists and finger glitter with gold and diamonds … what he considers a modest lifestyle, as if everyone lives like this.
He wears his diamond Rolex, diamond rings, gold bracelet and custom suits for all to see. …”What’s the big deal, for goodness sake?” he says. “What am I supposed to do, drive a Honda? …That’s not in the Bible. … I’m sick and tired about hearing about streets of gold [in heaven]. I don’t need gold in heaven. I got to have it now!”
