It is better to be an outcast, a stranger in one’s own country, than an outcast from one’s self. It is better to see what is about to befall us and to resist than to retreat into the fantasies embraced by a nation of the blind.
Chris Hedges

Tuesday, March 16, 2010

Is Iran Next?

The Herald of Scotland reported today that 387 Bunker Buster bombs are being shipped to Diego Garcia in the Indian Ocean in preparation for an attack on Iran.

Could Joe Biden's embarassment in Jerusalem last week have been an elaborate ruse to hide his real mission - to plan a co-op attack with Israel? At the very least, this apparent "chilling" of US/Israeli relations takes Iran's eye off the ball. Mahmoud Ahmadinejad's visit to Afghanistan, last week, to visit with Afghan President Hamid Karzai in Kabul, only pours more fuel on a situation that could explode into an expanded regional war.

Despite Obama's visible "Open Hand Policy" with Iran, there is little support for a gasoline embargo on Iran. China (perhaps in response to US arms shipments to Taiwan?) and Russia have both said they would not support an embargo. Last year, a Bipartisan Policy Task Force wrote a report called, "Meeting the Challenge: Time is Running Out."
In an Op-ed that appeared in the Wall Street Journal, the authors warned that Iran could fast-track production of a nuclear device by 2010. They suggested an embargo would not work and urged the United States to prepare a contingency plan to use air strikes to take out Iran's capability. The Centre for Strategic and International Studies prepared a report entitled:
"Study on a Possible Israeli Strike on Iran's Nuclear Development Facilities", one year ago.
1800 K Street, NW Suite 400 Washington,
Iran has said they will choke off the Suez Canal and cut oil shipments to the west if attacked. The "Blu" series bunker-busters were thought to be incapable of penetrating Iran's hardened sites. A new type of bomb called the "Massive Ordnance Penetrator" (pictured above) was said not to be ready until July 2010. The MOP was developed to hit deep re-enforced sites like those thought to exist in Iran.

The likelihood of an attack, without the requisite "last ditch" attempt to find a UN solution, is not expected. However, if Iran should attempt to close the Suez or stage an attack on its neighbours, all bets are off. In any case, today the world took one step closer to a new conflict that could provide the "Black Swan" event that catapults the world into a new oil crisis and almost certain Global Depression.

A Rigged Game

The Lehman Brothers 105Repo fiasco being brought to light, begs the question? Who else was doing this? In a classic off-balance-sheet switch, Lehman "sold" fragile debts to offshore banks to hide them, a week prior to the regular checks made by banking regulators, then bought the assets back after the regulators left. This was done in full view of the Federal Reserve Bank of New York and the SEC, without repercussion. In the end, Lehman was brought down by their competitors, JP Morgan and Citibank, who demanded cash collateral in deal roll-overs - cash Lehman never had.

The nail in the coffin was when Hank Paulson, then Treasury Secretary, allowed the firm to die. "Hammering" Hank had accomplished the job he was hired to do by Goldman Sachs, where he had served as CEO, prior to taking public office. The former linebacker was made CEO to counter the presence of Lehman CEO, Dick Fuld, a notorious bully who intimidated his staff and competitors alike. Hank's physical presence neutralised Fuld's dominance of the Wall Street banking community.
“Dick is in no condition to make any decisions,” Paulson is quoted as telling a group of bankers gathered at the New York Fed to try to arrange a private rescue of Lehman. “He is in denial,” Paulson added, calling Fuld “dysfunctional.”

One can only imagine the satisfaction for Paulson, when Fuld came begging during Lehman's dying hours.

Michael Lewis, author of Liar's Poker, has written a new book called, "The Big Short" that gives insight into the financial mess that is so deep, and has so captured the framework of checks and balances that was supposed to regulate it. Check out his interview on 60 minutes:

Watch CBS News Videos Online

An excerpt from The Big Short is included in the recent edition of Vanity Fair.