Thursday, February 3, 2011

US Calls for Immediate of Release of Diplomat Detained in Pakistan

A US consulate employee identified by Pakistani authorities as Raymond Davis is escorted by police and officials in Lahore, Pakistan
Photo: AP
A US consulate employee identified by Pakistani authorities as Raymond Davis is escorted by police and officials in Lahore, Pakistan

The U.S. Embassy in Pakistan has issued a strongly worded statement calling for the release of a U.S. diplomat detained after a shooting incident in the eastern city of Lahore.

The embassy statement issued on Thursday calls for the immediate release of the diplomat identified by Pakistani authorities as Raymond Davis.  The statement says his continued detention is a "gross violation of international law."

A Pakistan court ruled on Thursday that police can continue holding Davis, who is accused of a double murder, for at least eight more days.  The embassy statement says that ruling was made without the diplomat having legal representation or a translator and that he has been denied due process and a fair hearing.

The statement says the U.S. deeply regrets the events in Lahore that led to the loss of life after the diplomat was attacked by armed assailants.  But it also says Pakistan must comply with its obligations under international and Pakistani law and that the U.S. diplomat has immunity from criminal jurisdiction.

Davis was arrested after the alleged robbery attempt by two men on January 27.  A third Pakistani was killed when he was struck by a consulate vehicle that had rushed to the scene of the shooting.  Pakistani authorities have scheduled his next court date for February 11.

Some information for this report was provided by AP, AFP and Reuters.

Video: MAP: Clashes in the heart of Cairo Al Jazeera

Oil price shoots above $103 on Egypt crisis

Brent crude rallied to a 28-month high above $103 on Thursday as the political crisis in Egypt erupted into violence, sparking fresh concern over energy supplies in the crude-rich Middle East.

“The continued unrest in Egypt has prompted Brent oil prices to climb overnight to $103 a barrel, the highest level since September 2008,” said Commerzbank analyst Carsten Fritsch.

Brent North Sea crude for delivery in March climbed to $103.37 a barrel — the highest level since September 26, 2008. It later stood at $102.67 in London trade, up 33 cents compared with Wednesday’s close.

New York’s main futures contract, light sweet crude for March, gained 79 cents to $91.65 per barrel.
Egypt’s health ministry said five people were killed and 836 injured since Wednesday in running clashes for control of Tahrir Square, the focal point of the protests against President Hosni Mubarak.

The oil market is jittery due to fears the crisis could spill over to other countries in the crude-rich but politically volatile Middle East.

And although Egypt is not a major crude producer, it is home to the Suez Canal, which carries about 2.4 million barrels daily, roughly equal to Iraq’s output.

“The latest news from Egypt triggered… fresh buying from funds,” Newedge brokerage analyst Ken Hasegawa told AFP on Thursday.

“So far there is no factor to prompt traders to sell. We don’t see any sellout in the market at the moment.”
Hasegawa added that the spread in the price between Brent crude and the benchmark New York contract, also known as West Texas Intermediate (WTI), was likely to widen further because of oversupply in the US port of Cushing in Oklahoma.

The latest weekly stockpiles report from the US Department of Energy showed reserves had increased sharply for a third week in a row.

Crude oil stocks rose 2.6 million barrels to 343.2 million in the week ending January 28, in line with expectations, official data showed on Wednesday.

At the almost-full depot at Cushing, reserves rose 600,000 barrels to a record high of 38.3 million.
“Cushing is the delivery point for WTI and therefore decisive for WTI pricing,” said analyst Fritsch.

“The plentiful supply of crude oil and oil products to the USA should mean that the WTI price continues to benefit less than Brent from the political tensions in the Middle East.

“In the short term, however, WTI prices could gain impetus from a winter storm which is likely to push up the heating demand in the Midwest and Northeast of the USA.

“Even so, distillate inventories are also still at a comfortable level despite the reduction of 1.6 million barrels last week.”

Is the European Central Bank Truly Fighting Inflation?

Often we read, and listen to, opinions on a variety of investment topics and take them at face value. Inflation this, China that, gold here, Europe there ... and the list goes on. I endured that for years, which that led me to pursuing this writing endeavor coupled with searching for sensible explanations, not some Swiss cheese-type opinion. And I still hear them from pundits on the business cable channels whenever I actually devote some time to such entertainment.

Jean-Claude Trichet, the president of the European Central Bank, has a love affair with fighting inflation and his shift from the debt crisis to the "I" word did wonders for the euroat least for now. With the latest European CPI number screaming afrightening2.4%, Trichet is looking into his closet and polishing hisweapons of price destruction.” 

Does he have a point? Not really, but hes savvy, and I view him as a master of public relations and manipulation. His objective is to draw attention away from the issue at hand while lending credibility and strength to the euro to attract much needed capital, not fight inflation.

Every month we eagerly await the lonely numbers, react along with the markets, and dont have the time or patience to look back and put a few concepts in perspective. But those are the exercises that get my blood pumping, and I always end up learning something new. I start by throwing a few numbers and charts together on a white board, and then I put on my Sherlock Holmes hat and start dissecting the information and looking for fibers in the vast array of evidence. After all, it is the non-published, apparently unrelated bits of information that deliver the gold nuggets. Everything else tends to be information repackaging ... and if it's wrong, the packaging wont correct it.

But how does the simple task of turning the knobs on money supply/interest rates controls affect the inflation rate? Or could it be that, at times, rate increases are not directed at inflation, but rather currency values that in turn assist in controlling commodity price increases, especially if they are priced in dollars? Or could it be just politics to enhance a currency in trouble and attract much needed capital? Keep in mind that Central Banks know far more of what is brewing below the surface than we do.
[Click to enlarge]

Lets put aside the fact that CPI is unreliable, fake, manipulated, etc., and concentrate on the reality that everyone makes decisions on the numbers anyway. One can yell that inflation is much higher than stated, but that will only bring five seconds of satisfaction and cloud ones judgment when trying to play the investment game. Okay, so the CPI is incorrect.

The charts above tell a story that goes to the heart of the effectiveness, if not credibility, of Central Banks. The dates are between the beginning of 2006 and the end of 2010, and depict the interest rate and inflation movements in the euro zone. The fascinating point is that inflation was containedand decliningup until the end of 2007, the crest of the real estate wave, while rates kept rising, as if the ECB preempted the inflationary times ahead.

Thats not how it works, and we know that it takes six to nine months for rates to filter through the economy. As inflation started to rise after rates had already reached 4%, the ECB didn't become too concerned that the inflation rate was at double its target ... yet a mere 0.4% above the accepted level gets it a little hot under the collar.

Why didn't the ECB keep on increasing rates through 2008 and 2009? Because the euro was now cutting into the export machine and the law of diminishing returns was chipping away at its game. (Or it has a crystal ball.) If one wants to be cynical, the argument could be made that inflation only increased after interest rates were at a higher level; thus, high rates create inflation. Thats what the chart impliesand there are valid points in that construct.

On January 13, 2006, Bloomberg ran a story highlighting thatEuropean Central Bank President Jean- Claude Trichet said the bank must be 'vigilant' on inflation expectations and there are 'encouraging' signs that economic growth is accelerating.” Traders were puzzled, because the markets had scaled back the probability of rate increases, but some clarification was given:
Trichet may have been actually temped to utilize this word again to show that there will likely be a rate increase again,'' said Julian Callow, chief European economist at Barclays Capital (BCS) in London. “I suspect today Trichet felt that he had not been so clearly understood yesterday.''
On March 2, 2006, the ECB increased the minimum bid rate from 2.25% to 2.5% since investors didn't get his message thatThe Euro must rise!” Granted that according to the graph, inflation was above the target 2%, but that wasnt the driver because inflation dropped below 2% and rate increases continued propelling the Euro to $1.60.

Then rates stayed constant through most of 2008 until the debt crisis became a fact. As inflation started to diminish, interest rates followed, but as inflation made a return at the end of 2009, the ECB kept rates at 1% until today. So if inflation hit 4% when rates were at 4%, inflation should be much higher now (based on an inverse relationship) and should be running at about 6-8%.

Looking back (see green rectangle in chart above), the euro was once again heading to parity with the dollar, if not below, and had been declining for one year. Then came the ECB rate increases that were prompted by anything but inflation, while the minimum bid rate had stayed at 2% since June 5, 2003; the euro also increased because the Fed lowered rates due to 9/11. Most likely, the capital flowing out of Europe into the booming U.S. real estate market triggered the defense mechanism, and Trichet knew that the euro was a bad idea and would be in trouble.

At this juncture, the ECB is once again facing the capital outflows of yesteryear, but the game is somewhat different. A lower euro actually supports a euro zone, which is far more dependent on exports than the U.S., but the environment is not conducive to higher rates. And there lies one of the biggest dilemmas for the European Unionalthough there are many more facets to the story. The inflation number, as rare as the instance is, is now incorrect on the wrong side of the axis, because admitting that deflation is the prevalent theme is not convenient to the ECB. Capital would flow out and undermine the currency itself. Oh yes, Ive seen the inflation calculators all over the web, but the problem is that theseappsare as reliable as the IQ tests that Im constantly invited to take.

Im not privy to Jean-Claude Trichets game plan, but dont be surprised if the European Central Bank increases rates by 25 basis points on Thursday, February 3. If that happens, a monumental short-term wrench will be thrown into everyones investment plans. And thats Trichets style!

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

By Carlos X. Alexandre 

U.S., China Now In a Super-Cool SPACE Cold War

So, in 2007, China shot one of its satellites with a missile. Then:
In February 2008, America launched its own “test” strike to destroy a malfunctioning American satellite, which demonstrated to the Chinese it also had the capability to strike in space.
America stated at the time that the strike was not a military test but a necessary mission to remove a faulty spy satellite.
The leaked documents appear to show its true intentions.
Yes, welcome to America’s third current war, a cold war with China. Both countries are mad the other will soon be able to shoot down missiles using space and satellites and such, and both are worried the other will shoot down their satellites. And they almost fought each other over it.
We’re glad nobody learned the lessons of the last cold war, because this one is going to be super cool and futuristic and Michael Bay, because SPACE. Space! [Telegraph]

How Do We Teach Black History in the Future?

Thursday Feb 3, 2011 – By The Grio
From The Grio — Black History Month. Today, it’s taken for granted that February is when we celebrate the history and accomplishments of African-Americans. Yet, Black History Month represents only the opening salvo in an ongoing fight to include African-Americans in American history, both in the classroom and in society. And that fight shows no sign of being settled anytime soon.

For decades after the Civil War, African-American history was defined by the idea that ex-slaves came from a sort of nothingness. For centuries, blacks in the United States had been considered property, beasts of burden, so how could these “objects” have a history? As a result, African Americans were typically defined through the eyes of other, usually the writings of whites, particularly Southern white historians, who depicted blacks as happy, mindless slaves.

At the dawn of the 20th Century, W.E.B. DuBois, the great African-American intellectual and historian, was one of the first African-American historians to attack the white hegemony over American history. DuBois tried to transform the story of African Americans from those of property manipulated by whites, to human beings who were integral parts of the American experience. But it wasn’t easy.

“DuBois, the preeminent historian of the time, couldn’t get a job,” Dr. Blair Kelley, associate professor of history at North Carolina State. Dr. Kelley is the author of Right To Ride: Streetcar Boycotts and African American Citizenship in the Era of Plessy v. Ferguson. “But DuBois made sure that his historical work was exhaustive and that it served a purpose in the struggle (for civil rights).”

The idea of a period to celebrate black history was born in 1926, when Dr. Carter G. Woodson, noting the February birthdates of Abraham Lincoln and Frederick Douglass, declared that period Negro History Week. That Americans should celebrate and take pride in the accomplishments of black people was a revolutionary idea for the time, .

Other African-American historians like Rayford Logan, John Hope Franklin and Charles Wesley, thrust forward a history that included African-Americans into the very fiber of America history. Their research and publications grew the African-American historical canon and rediscovered African-American history that had been previously ignored. But the problem is that much of this research was outside of the classroom, and any student interested in reading this African-American history had to do so independently.

Many black students did, creating even more demand to find out more about this hidden history, particular as the struggle for civil rights reached a fever pitch. Leaders like Malcolm X talked about a pan Africanism that broadened African American history from the shores of America to the shores of Africa. In 1962, longtime Ebony editor Lerone Bennett published, Beyond the Mayflower: A History of the Negro in America. And the Black Power movement rekindled a black pride in all things African-American.

In November 1968, Life magazine recognized this interest in black history and commissioned a series called The Search for a Black Past. In this historical series, African-American historian John Hope Franklin wrote a series of articles about slavery rebellions like Paul Cinque and the Armistad saga, Nat Turner, and the African Americans who came to the rescue of abolitionist John Brown. This was a history unknown to the mostly white Life magazine readers.

While African-American history was becoming mainstream, American textbooks of the 50s and 60s continued to reflect a white male dominated point of view. Besides Crispus Attucks, the revolutionary hero of the Boston Massacre, most African-Americans remained scrubbed out of American history.

In the December 1968 issue of Ebony, an African-American magazine modeled after Life, the magazine ran an article titled “Black History in Schools”. It recounted an October 1968 boycott by 30,000 black Chicago area high school students, who demanded that their textbooks include African American history as part of the curriculum before they went back to classes.

Religious Leaders Call On National Prayer Breakfast to Say Prayer in Honor of Slain Ugandan David Kato

Posted February 2nd, 2011 by Wayne Besen 
From The Advocate:

A group of religious leaders including the Rt. Rev. V. Gene Robinson, Episcopal bishop of New Hampshire, are calling on organizers of Thursday’s National Prayer Breakfast in Washington, D.C. to honor Uganda gay rights activist David Kato, who was murdered last week.

“We’re asking that prayers be said for David Kato and his family and friends in Uganda, who continue to face this hostile climate,” Robinson told The Advocate.

That the Fellowship (also known as The Family), the influential conservative group that has hosted the annual breakfast since 1953, has extensive ties to African leaders like Anti-Homosexuality Bill sponsor David Bahati in Uganda, continues to be of great concern to Robinson, the Episcopal Church’s first openly gay bishop.
“They need to know that we are watching this very closely,” said Robinson, who will not be attending the event.
“I don’t think there’s anything wrong with people getting together to pray,” he continued. “As you know when I said a prayer at the opening inaugural event [for President Obama], I was careful not to make it a Christian prayer or one associated with any particular belief. It’s walking a thin line. I think what’s of greater concern to me is Obama’s attendance at an event sponsored by a group like The Family.”
Last year Robinson was among several religious leaders who, along with advocacy groups like Truth Wins Out, helped to organize the American Prayer Hour as an alternative to the National Prayer Breakfast. The coalition also urged President Obama and Secretary of State Hillary Clinton, who attended the prayer breakfast, to speak out against draconian legislation in Uganda commonly referred to as the “kill the gays bill” (both did so in their remarks).

Officials in Egypt: SmartPower™ administration is issuing contradictory edicts and we don't know what to do

I think you'll agree that this story in the Washington Post represents the Obama administration in microcosm.

An Egyptian official says his government believes that White House demands for President Hosni Mubarak to step down immediately are in "clear contradiction" with Obama administration calls for an orderly transition to a new government.

...The official spoke on condition of anonymity, saying his government would not allow him to associate his name with the statement... [he] said in the statement: "There is a clear contradiction between an orderly process of transition and the insistence that this process be rushed."

There's only one word for an administration this competent: SmartPower™!

Journalists Report Tahrir Square Attacks Clearly Directed By Mubarak Government

By: David Dayen Wednesday February 2, 2011 10:30 am   
The White House’s terse two-line statement condemning attacks on protesters at Tahrir Square in Cairo today expresses “concern” about attacks on media and peaceful demonstrators. It makes no mention of the fact that the Mubarak regime, based on multiple reports, directed these attacks.
Nick Kristof:
In my area of Tahrir, the thugs were armed with machetes, straight razors, clubs and stones. And they all had the same chants, the same slogans and the same hostility to journalists. They clearly had been organized and briefed. So the idea that this is some spontaneous outpouring of pro-Mubarak supporters, both in Cairo and in Alexandria, who happen to end up clashing with other side — that is preposterous. It’s difficult to know what is happening, and I’m only one observer, but to me these seem to be organized thugs sent in to crack heads, chase out journalists, intimidate the pro-democracy forces and perhaps create a pretext for an even harsher crackdown.
The attacks on journalists is the big giveaway. I heard an observer of the scene in Tahrir Square today say that the pro-Mubarak forces yelled two chants, one in support of Mubarak and one in opposition to Al Jazeera. Authoritarian regimes traditionally take out the communications networks first so nobody outside the country can see their repression.
One prominent American television correspondent, Anderson Cooper of CNN, was struck in the head repeatedly.
Reporters Without Borders said it had received dozens of confirmed reports of violence against local and international journalists in Egypt. Tala Dowlatshahi, a spokeswoman for the group, said “to expect more foreign journalists to be targeted” as violence continued.
The attacks against the news media were reported by Al Jazeera, CNN and Twitter users almost as soon as violent clashes began in the square, eliciting a swift reaction from the United States government.
Al Arabiya reporter Ahmad Abdallah was captured by the pro-Mubarak thugs. According to The New York Times, two of their reporters were cornered by the thugs who tried to stop them from reporting. “Protesters are hunting down Al Jazeera journos,” wrote Gulf News’ Abbas Al Lawati. The Guardian bluntly says that the government is involved, and quotes British Prime Minister David Cameron that such a turn of events would be “completely unacceptable.”

This has all the earmarks of a coordinated strategy. Internet access returned to Egypt for the first time in days today. Egyptian state television started broadcasting images from Tahrir Square of clashes between pro-democracy and pro-Mubarak forces.

The pro-democracy forces still have control of Tahrir Square, and have formed a human chain around it. The Egyptian health ministry has said that one is dead and 403 are injured in the clashes. Ambulances cannot get in to reach the wounded.

It’s hard to avoid the conclusion that this is a state-sponsored attack against the Egyptian people.
More from Siun.

…Heck, even four Israeli journalists have been arrested for trying to report on events. The government doesn’t want anyone to see what happens next.