- Signs of the Times for Mon, 07 Aug 2006 -

• Signs Editorials
• Lebanon-The Late Response
• Lebanon-More Israeli Crimes
• Had Enough? More Israeli Crimes
• Big Bucks, Bigger Poverty
• Global Chaos
• Best of Friends
• Life Under the Bush Reich
• Huh?
• Iran into an Iraq-mire
• Mass Extinction - Pathocratic Game Plan
• Weirdness one bigfoot at a time
• Do you trust your doctor?
• Today's Weather
• Back to the Future
• Parasites

Referring to the image, neo-fascist Charles Johnson of the LGF blog told his favorite Israeli daily tabloid, YNet News:

"A photographer who would blatantly falsify an entire 'news' image would certainly not be above posing and staging photographs of rescue workers."

It is no surprise that this comes hot on the heels of the comments by Dean Rotbart, host and executive producer of Newsroom Confidential an la-BASED weekly one-hour radio program that "offers listeners an insider's guide to journalists and public relations", where he stated:

"How do words -- no matter how true and rational -- compete with photos of wailing mothers carrying their dead babies?" asks Dean Rotbart, host and executive producer of the program. "It is next to impossible to try to go on camera and explain any justification whatsoever for the compelling visual images that are aired over and over again. "Yet if the world at large thinks with its heart instead of its head, terrorism will prevail." Indeed, the terrorists understand and harness the enormous power of emotional news coverage to win support for their deadly goals."

Apparently, the answer is to find an image by a Reuters photographer that he has allegedly "touched up" (not "staged" mind you, just touched up a little) and then use that fact to imply that ALL photographs of dead Lebanese civilians should be viewed with extreme suspicion, that they may, in fact, be totally "staged". The goal, of course, is to find a way, any way, to stop the world (and in particular Western citizens) from finally understanding that Israel, along with the American and British governments, is and always has been the aggressor in the Middle East conflict.

Missing from the analysis of this mini "scandal" is any explanation as to how the very obviously "photoshopped" image could ever have made it past the Reuters censors.

Many members of the "Sports Shooter" web forum (a forum for professional photographers) who examined the photo, all concluded that, if this was an attempt at fakery, it was a very crass one. One photographer stated:

"I'll second the cloned smoke...but it looks so obvious that I don't know how the photographer could have gotten away with it."

"This has to cast doubt not only on the photographer who did the alterations, but on Reuters' entire review process. If they could let such an obvious fake get through to publication, how many more faked or 'enhanced' photos have not been caught?"

The real irony here however, is that news reports and images and graphics from mainstream news outlets really cannot be trusted, but not because they play up Lebanese suffering but rather because they distort the facts - "however true and rational" - about just how much the Lebanese ARE suffering and instead to make Israel look like the victim.

Apparently, the Reuters photographer is also alleged to have sent a a threatening mail to Charles Johnson of the LGF blog saying: "I look forward to the day when you pigs get your throats cut."

Johnson then used his fascist supersleuth powers to immediately trace the movements of the sender of the threat, and somehow found direct parallels between the internet locations of the sender and Inayat Bunglawala, the Media Secretary of the Muslim Council of Britain no less!

Johnson says:

"There is strong circumstantial evidence connecting Bunglawala to the threat, but there is no way for me to verify this for certain. Only a Reuters network administrator would have access to the necessary records."

Notice how Johnson finds a way to connect a photograph allegedly touched up by a Reuters photographer to "western citizen-hating terrorists" and the Muslim council of Britain! You see! It's the terrorists! They're all Muslims! They're everywhere and they hate us because of our freedoms!

Did this guy go to the Michael Ledeen School of Manufacturing Terrorist Threats or what!

The really strange thing in all of this is that a Reuters photographer, even very pro-Lebanese and Palestinian one, would bother touching up a photo by cloning the smoke. After all, it's not as if there is a lack of very real and very potent images of Israeli war crimes in Lebanon. Did Hajj really expect that a little extra smoke in his image was going to turn the tide against Israel?

Today, Reuters has announced that another photograph by Hajj of an Israeli F-16 fighter over Nabatiyeh, southern Lebanon dated Aug 2, had also been doctored. In this case of alleged fakery, the number of flares dropped by the plane had been increased from one to three. Again we have to ask: why add two flares? Flares aren't even bombs! Could an image of an F-16 dropping three flares rather than one really be expected to alter in any significant way the already tarnished image of the Israeli government or military??

As it turns out, Hajj is not even a member of Reuters staff but a free-lancer working in Lebanon. In this capacity, Hajj would probably have had more freedom of movement within Lebanon to get to areas where other non-Lebanese official Reuters photographers could not. Was Hajj deemed a threat for this reason? Was he identified as a "problem" as a result of the question posed by Israeli sympathiser Dean Rotbart: "How do words - no matter how true and rational - compete with photos of wailing mothers carrying their dead babies?

Apparently we have the answer because, as a result, Reuters withdrew all of Hajj's 920 photographs and removed them from the Reuter's database, which excludes them from future sale to any of the many, many news agencies that purchase them.

So relax, John and Jane Q Israeli, British and American public, from now on, you can expect to see a significant decrease in the frequency with which 'unsavory' images of dead Lebanese children grace the covers of your favorite mainstream daily papers, threatening to shock you out of your apathy and reveal the true face of your governments. Of course, the carnage and murder of children will continue behind the now-censored scene, indeed Israel may ramp up the slaughter, but you won't have to look at it anymore.

How's that for compassionate government?

Needless to say, this little "scandal" emits the particular odour of a US or Israeli government frame up, but forget that, just take your medicine and keeping believeing the lies, and for god's sake, whatever you do, never, ever use your brain and look to who actually benefits.
Comment on this Editorial

"Time's glory is to unmask falsehood and bring truth to light." - William Shakespeare

In an action unprecedented in Maryland politics, Kevin Zeese, an Independent candidate in Maryland for the U.S. Senate, has demanded that an incumbent congressman, who has close ties to the powerful Israel Lobby, break his silence on Israeli wrongdoing. In one of his four “Open Letters” to Rep. Ben Cardin (D-MD), dated July 17, 2006, Zeese requested that the “ardent supporter” of Israel end “his sin of silence" and speak out about "the brutal terrorist attacks by Israel on civilians in Lebanon and Gaza." (1) A scholarly report, the "Harvard Study," revealed that the Israel Lobby has exercised "unmatched power" over U.S. foreign policy, which hasn't been in our "national interest." (2)

       Rep. Cardin, whose political career dates back to the reign of the late political boss Irv Kovens, is presently seeking the Democratic Party’s nomination for the U.S. Senate in the September primary. He has been in Congress for close to 20 years representing the 3rd District, which includes a big slice of Baltimore City. I doubt if he has ever had a serious opponent, like the energetic, issues-oriented Zeese.

Zeese, an Independent candidate for U.S. Senate, has been endorsed by the Populist, Green and Libertarian Parties. His name will be on the ballot for the Tuesday, November 7, 2006 General Election. Close to 19 percent of Maryland electorate is registered as other than a Republican or a Democrat. Zeese is on record opposing the Iraqi War and spotlighting the Far Right Israeli supporters who want the U.S. to attack Iran. (1) Here is part of what Zeese wrote to Rep. Cardin on July 17th, only five days after Cardin's favorite country, Israel, had launched its proportionally unjustified and merciless invasion of Lebanon: "The violence threatens to escalate [in Gaza and Lebanon] if Israel is not told it is violating many laws, and a pro-Israel messenger, like you, would be an excellent messenger." Zeese then went on to point out to Rep. Cardin how Israel is violating U.S. law by using American-made weapons, given to Israel by America, for reasons other than "legitimate self-defense...The intensive bombing of Beirut and other Lebanese cities, and the killing of civilians are not legitimate acts of self-defense." Zeese continued that Israel is also "violating UN Resolutions...and International law by engaging in collective punishment of civilians in breach of the Fourth Geneva Convention, Article 33. Collective punishment is a war crime. A cease fire," he said, "is needed immediately."

Zeese also sharply criticized Rep. Cardin for not speaking out about the plight of the 25,000 Americans, who were trapped in Lebanon when the war broke out. Some of them had complained that Israel had prevented them from "leaving a battle zone." He asked Rep. Cardin: "Why the silence when Israel is threatening U.S. citizens? At least, speak out for Americans civilians-or do you represent Israel before you represent Americans?"

On July 20, 2006, Rep. Cardin voted in the House of Representatives to give Israel's bloodstained regime a "green light" for its rampage through Lebanon. The invasion has killed over 900 Lebanese, wounded 3,200 and left an estimated one million of them homeless. Most of its major cities: Beirut, Sidon and Tyre have been pulverized with air strikes by the IOF. Lebanon has no air force to defend itself. The massacre at Qana by the Israeli Occupation Forces (IOF) should be on Cardin's conscience, too, as well as on the other members of the U.S. Congress. (3) Just before the slaughter at Qana, the extreme Rightist, Olmert, was quoted as saying that nobody "dies from being uncomfortable." As I write, the IOF is pushing into Southern Lebanon, with over 10,000 troops, attempting to seize control of the Litani River, a critical source of water for Israel's expansionist ambitions. (4) Despite their numerical advantage and superior military arms, however, the IOF is facing defiant resistance from the Hezbollah fighters. About 68 Israelis have died so far in the conflict.

Zeese, in his July 11th letter to Rep. Cardin, along with two other letters, which dealt with Occupied Palestine, condemned the Israeli invasion of Gaza and the destruction there of homes, power plants, government buildings, along with the targeted assassinations of individuals by the IOF. He added: "Israel is now preventing Palestinian Americans from entering the Palestinian territories. Surely, you do not approve of Americans being forbidden to travel to their home country? Further, Israel is walling off Bethlehem, the town of Jesus’ birth, as a result it is very difficult for Christians to visit this important town that is the birthplace of Christianity. Surely, this is not something you condone?" It is fair to say that Occupied Gaza, with a population of 1.4 million, as a result of the Israeli invasion and constant shelling by the IOF, is in a state of near total humanitarian collapse. (5)

Meanwhile, more Americans are beginning to view Israel as the problem. Here are some reasons for that change in attitude: Israel's deliberate attack on the USS Liberty on July 8, 1967; its ruthless killing of the peace activist, Rachel Corrie on March 16, 2003; its extracting $140 billion from our national treasury; and its letting loose the Zionist fanatic, Jonathan Pollard to steal our military secrets. These actions all stick in the throats of many in this country; along with the Neocons' scheme to destabilize the Middle East. (6) Some are coming to realize the U.S. didn't have any enemies in the Islamic World, until the state of Israel was created in 1948. (7) And, many more would like someone to explain to them why those five Israelis were celebrating, over in New Jersey, while the WTC's towers were collapsing on 9/11? (8)

One politician of Jewish origins, who has dared to openly criticize Israel's conduct is Jonathan Tasini. He is running as a Democrat for the U.S. Senate, in New York, against the hawkish incumbent, Sen. Hillary Clinton. Tasini has not only derided Israel for its brutal occupation of Gaza, but for its excesses, too, in Lebanon. (9)

On July 20, 2006, candidate Zeese, in the matter of Lebanon, asked Rep. Cardin these questions: "How many Bin Ladens is Israel, with U.S. acquiescence -- and the silence of U.S. politicians -- creating? How many Americans will die because of the support of the United States for Israel in reaction to its abusive behavior?" Zeese also emphasized to Rep. Cardin that Israel's targeting of civilians in Lebanon and its extreme actions have been condemned by both the Vatican and the European Union. The Vatican said: "The right of defense on the part of a state does not exempt it from its responsibility to respect international law, particularly regarding the safety of civilian population." (10)

At press time, Rep. Cardin's office submitted this two sentence reply to Zeese: "Ben Cardin firmly believes Israel has the right to defend itself against terrorist attacks. He's proud to stand with the Israeli people during this difficult time." Obviously, this curt, cheer-leading type of response is totally inadequate under the circumstances. It doesn't begin to answer the substantial questions raised. Zeese is doing a tremendous service for the Republic by calling for a series of debate with Rep. Cardin on Israel's off-the- wall military behavior, which can't be sustained under any kind of "just war" theory. (11)

Finally, Occupied Gaza and Lebanon are presently suffering under the terror bombings of the IOF. (12) Israel needs to be reigned in, immediately! Its reckless conduct is also creating more enemies for America. Marylanders must insist that Rep. Cardin get off his high horse and answer fully all the questions raised by the Independent candidate for the U.S. Senate - Kevin Zeese. The Middle East, thanks to a militant Israel and a complicit Bush-Cheney Gang, is only one errant missile attack away from igniting WWIII.

Notes:

1. http://kevinzeese.com/component/option,com_frontpage/Itemid,1/

2. http://ksgnotes1.harvard.edu/Research/wpaper.nsf/rwp/RWP06-011/% 24File/rwp_06_011_walt.pdf

3. http://www.informationclearinghouse.info/article14276.htm

4. http://www.uruknet.info/?p=24790

5. http://www.washington-report.org/ and http:// baltimore.indymedia.org/newswire/display/13013/index.php

6. http://batr.net/neoconwatch/archives/ 2004_12_01_neoconswatch_archive.html and http://irmep.org/ Policy_Briefs/3_27_2003_Clean_Break_or_Dirty_War.html

7. http://baltimore.indymedia.org/newswire/display/13104/index.php

8. http://www.antiwar.com/justin/j062402.html

9. http://www.huffingtonpost.com/jonathan-tasini/the-children-of- qana-and-_b_26240.html

10. http://kevinzeese.com/content/view/168/45/ and http:// baltimore.indymedia.org/newswire/display/13213/index.php

11. http://www.iep.utm.edu/j/justwar.htm

12. See, satellite images from Geo/Eye of the IOF's bombing of a Christian section of Beirut-before and after photos: http:// news.yahoo.com/photo/ 060803/481/0d4bf4975624426492174d021ada116f&g=events/wl/ 080601mideast;_ylt=AnFfcQZNXNyvOPMSkWlBs5EUewgF;_ylu=X3oDMTA3bGk2OHYzBHN lYwN0bXA

© William Hughes 2006.

Examples are numerous, from FDR denying Americans passport and travel documents to let them flee the Japanese onslaught of the Philippines in the lead up to the Second World War (see US prisoners claim Roosevelt left them in Philippines deliberately) to Operation Northwoods, a plan drawn up by the Joint Chiefs of Staff to stage fake terror attacks in America (including assassination, airplane hijacking, and sinking of boats) in order to devise a pretext to invade Cuba.

Indeed, some of us, routinely dismissed as tinfoil hatters, believe elements within the United States government engineered and executed the terrorist events of September 11, 2001, as a way to get the ball rolling on the "war against terrorism," that is to say the war against Islam, currently heating up big time in the Middle East.

Considering the above, and other examples, including the sinking of the Lusitania, a passenger ship loaded up with a secret cargo of munitions (a fact admitted by the decidedly less than conspiratorial Encyclopedia Britannica), which contributed indirectly to the entry of the United States into World War I, and the suspicious sinking of the Maine in the Havana harbor, used as a pretext for the United States to declare war on Spain in 1898, the allegation "Israel has deliberately allowed Hezbollah to retain some of it's fire power, essentially for PR purposes, because having Israeli civilians killed helps them in the public relations war" should not be a startling or especially mind-boggling revelation.

According to Tom Ricks, a reporter for the Washington Post, during an appearance on CNN's Reliable Sources, citing "military analysts," Israel "purposely has left pockets of Hezbollah rockets in Lebanon, because as long as they're being rocketed, they can continue to have a sort of moral equivalency in their operations in Lebanon."

Or, put differently, if Hezbollah continues to rocket northern Israel, the IOF may claim "moral equivalency" and continue its push into Lebanon, once again to the Litani River, a plentiful source of fresh water that long ago figured into Israel's calculations of its endangered water resources (see Angela Joy Moss, ICE Case Studies, Litani River and Israel-Lebanon), in fact a resource long coveted by the Zionists, going as far back as Chaim Weizmann in 1919 and, a few decades later, Ben-Gurion and Moshe Dayan, who advocated Israeli occupation of Lebanon up to the Litani River (see Stephen C. Lonergan and David B. Brooks, Watershed: the Role of Fresh Water in the Israeli-Palestinian Conflict).

Ronald Bleier wrote for the Middle East Labor Bulletin, Spring 1994:

Zionist interest in the waters of Lebanon goes back as least as far as the Paris Peace Conference of 1919 when Chaim Wietzman wrote to the British Prime Minister explaining that because of its water requirements, a Jewish homeland in Palestine must include the Litani River.

In the 50's, Israeli Prime Minister Moshe Sharett recorded in his diaries that Moshe Dayan's plan for the control of the Litani River was to "'enter Lebanon, occupy the relevant territory' then the 'territory south of the Litani will be annexed to Israel and everything will fall into place.'" (Quoted in Amery, pp. 18-19)

In addition to establishing a "security zone," or maybe we should call it a "fresh water for Israel" zone, allowing Hezbollah to fire rockets more or less unhampered into Israel, and thus killing a token number of Israelis, addresses the "moral high ground problem," that is to say it neutralizes, at least for supporters of Israel, the troublesome fact the IOF has killed around a thousand Lebanese to date (no doubt this number is much higher), the vast majority civilians, a third to half children. In addition, it allows them to reduce Lebanon to ruins and impoverish its people, part of a well-documented Zionist goal in its own right (see Oded Yinon).

If indeed Tom Ricks is correct-and the fact he works for the Washington Post should, at minimum, send up a red flag, as the Post was long ago co-opted by the CIA under Operation Mockingbird-it represents another example of government shamelessly using mostly gullible and unassuming citizens as little more than expendable pawns, as Hitler, Stalin, FDR, Mao, and any number of other cold-blooded leaders have done since time immemorial.

Original
Comment on this Editorial

2. We need always to remember that the key players in the Bush regime are all closely tied to, a part of Big Oil and as the excellent interview conducted by my buddy Doug Henwood on WBAI-FM, New York with Jonathan Nitzan, economics professor at York University in Toronto shows, every Middle East war since the 1960s shows a direct correlation between a rise in oil profits and the outbreak of conflict (listen to the interview).

Original
Comment on this Editorial

Now you know!

Did you know that the UN draft contains ambiguous wording, such as demanding cessation of the fighting instead of a complete and immediate ceasefire?!

Now you know!

Did you know that some Israeli pilots are 'deliberately missing' targets in Lebanon as disquiet grows in the military about flawed intelligence? The pilots were worried that targets had been wrongly identified as Hizbollah facilities.

Now you know!

Did you know that IOF stormed shortly before midnight on Saturday the house of Aziz Dweik -speaker of the Palestinian Legislative Council (PLC) (he is a professor at al-Najjah University)- and kidnapped him. "He is the head of Hamas's legislature and since Hamas is a terrorist organization, he is a target for arrest," IOF spokesman said.

Now you know!

Did you know that by his own definition - and his actions - Blair is as much of a danger to world peace as al-Qaida?!

Now you know!

Did you know that President George W. Bush was unaware that there were two major sects of Islam just two months before he ordered troops to invade Iraq?!

Now you know!

Did you know that EVERY night of this 26-day-old conflict, Israeli warplanes have tried to destroy Hezbollah's television station, al- Manar. Every night they have failed?!

Now you know!

Did you know that the type of missiles being fired by Hizbullah at Israeli cities cannot be fired from within houses, mosques, hospitals or even UN facilities as has been suggested by the IOF?!

Now you know!

Did you know that since the establishment of the UN, the US has used its veto no less than forty times to shield Israel from the international scrutiny and to enable it to violate international norms and to commit war crimes with impunity. The latest such obstruction of the international will occurred only two and a half weeks ago, when the US blocked a resolution that would have demanded Israel cease its onslaught against Gaza. Not uncharacteristically, ten members voted in favor, while the US was alone voting against. Eight of the last nine vetoes protecting Israel have been cast by the U.S. Remarkably, this is the first time in UN history that a call for a ceasefire is opposed so blatantly?!

Now you know!

Did you know that Israel has finally conceded that air power alone will not defeat Hezbollah. Over the coming weeks, it will learn that ground power won't work either. The problem is not that the Israelis have insufficient military might, but that they misunderstand the nature of the enemy?!

Now you know!

Did you know that The Independent and Save the Children are launching an appeal for the children of Lebanon, for urgent food, medicine and clothing desperately needed as the violence continues to escalate.

Now you know!

Did you know that if Bush, Blair and Olmert truly believe that their war crimes in Lebanon are going to crush the influence of Hezbollah they not only suffer from all of the aforementioned ailments but are, in addition to those, utterly delusional?!

Now you know!

Original

Gold closed at 658.10 dollars an ounce on Friday, up 1.8% from $646.40 at the close of the previous week. The dollar closed at 0.7765 euros Friday, down 0.9% from 0.7837 for the week. That put the euro at 1.2878 dollars at Friday's close compared to 1.2760 at the end of the Friday before. Gold in euros, then, would be 511.03 euros an ounce, up 0.9% from 506.58 for the week. Oil closed at 74.57 dollars a barrel Friday, up 1.6% from $73.36 at the end of the previous week. Oil in euros would be 57.90 euros a barrel, down 0.7% from 57.49 for the week. The gold/oil ratio closed at 8.83 Friday, up 0.2% from 8.81 at the end of the previous Friday. In U.S. stocks, the Dow closed at 11,240.35 on Friday, up 0.2% from 11,219.70 at the end of the week before. The NASDAQ closed at 2,085.05, down 0.4% from 2,094.14 for the week. In U.S. interest rates, the yield on the ten-year U.S. Treasury note closed at 4.89%, down ten basis points from 4.99 at the end of the week before.

The dollar was down last week amid signs that the United States' economy is slowing and interest rate increases are less likely. The monthly jobs report was released last week, showing an anemic job creation figure of 113,000. That should have boosted stocks, but it didn't very much in the U.S., probably due to an accumulation of unease about the economy, the Bush regime, and the Middle East. It is getting harder and harder to ignore the fact that the U.S., Israel and the United Kingdom are declining powers. Not surprisingly, gold and oil were up last week

We have been speculating in recent weeks about the relation between the markets and the perilous world situation. In the following article, Susan Walker turns upside down the conventional assumption of some that bad news about wars in the world would lead to bear markets. Walker claims that it is in fact the wars that are caused by bear markets and that peace is caused by bull markets. Although, I suspect the interaction between wars and markets are a little more non-linear than Walker acknowledges, her argument is interesting and, when applied to the transition between the Clinton and Bush administrations in the United States, disturbing:

War and the Financial Markets

Susan C. Walker
July 28, 2006

Hezbollah in Lebanon vs. Israel; Shiite vs. Sunni in Iraq; Al Qaeda proclaiming jihad on Israel; Iran and North Korea pursuing nuclear weapons ... Roiled by bloody conflicts, terrorism and acts of violence, the world is increasingly at war today, harking back to Bob Marley's 1976 lyric, "War, war and rumors of war."

Generally, people think that war and violence make the public feel worried, depressed, and angry. First comes war, then comes the negative reaction in social mood. But the opposite point of view makes even more sense. That is, first people feel angry, and then they make war. The corollary is that when people feel happy, they make peace.

This formula is a 180-degree turn from the normal idea about which came first. But if this different perspective sounds right to you, then you might also like to know that a good way to take the measure of a nation's social mood is to look at its financial markets. Bull markets signify a positive social mood, while bear markets signify a negative social mood.

The longer a bull market goes on, the more positive and happy the populace feels and the more it works together on social goals. The longer a bear market goes on, the more negative and unhappy people feel and the more they become polarized from one another and want to fight over issues. Bob Prechter of Elliott Wave International has developed this theory, which he calls "socionomics," based on patterns of the human herding instinct.

Since financial markets record the bullish (positive) and bearish (negative) moods of millions of people, they turn out to be a useful measure of social mood. That's why back in 1982, Prechter was able to predict that with a bull market in full swing - and here to stay for a while, according to his technical analysis - there would be "no major international war for at least 10 years." And there wasn't. In fact, the euphoria of the bull market lasted until 2000.

As Prechter tells it, a bull market brings with it a sense of community, good will and feeling of inclusion, while a bear market brings the rise of factions, intolerance and a feeling of wanting to exclude others. "At a peak in the markets, it's all 'we.' Everyone is a potential friend," he says. "At a bottom, it's all 'they.' Everyone is a potential enemy. When times are bad, intolerance for differences grows, and people build walls and fences to shut out those perceived to be different. When times are good, tolerance is greater and boundaries weaker."

That might help explain why Bush and Cheney talked the markets into a bear market as they were running for office in 2000. They had a military agenda that could not be sold to a country with "a sense of community, good will and feeling of inclusion."

But, you might say, the bull market during the 1950s and '60s wasn't exactly a total love-in. There was something called the Cold War. What do you say about that? Prechter says that was a perfect example of the kind of conflicts that take place during bull markets: "Bull-market hostilities mean you don't fight," he says. "The Cold War was a phenomenon of a bull market. Hot wars happen in bear-market trends."

Which leads us to the state of martial affairs in the world today. Although the world's financial markets are not out-and-out bear markets now, the trend lately has been more sideways and down than up. Many hit multi-year highs two months ago. Social mood could be turning from the powerful pull of positivity to one of negativity. From the looks of the warlike world around us, it seems that people have become less likely to want to work out solutions to conflicts together and more likely to start shooting and ask questions later.

It looks - and feels - like fear, anger, terrorism, fighting, missile launching, and belligerent behavior are on the ascendancy. If the markets rise again along with a more positive social mood, however, we may see the leaders of some nations decide to back down or find a way to conciliate their differences, almost a return to Elvis Costello singing Nick Lowe's lyrics in 1979, "What's so funny about peace, love and understanding?"

But if the markets continue to fall, as Prechter predicts via Elliott wave analysis, then the world could be heading in the other direction toward a more dangerous and longer-lasting conflict, maybe even a return to the "Eve of Destruction," Barry McGuire's anti-war song from 1965. Remember that one?

The eastern world, it is exploding
Violence flarin', bullets loadin'
You're old enough to kill, but not for votin'
You don't believe in war, but what's that gun you're totin'
And even the Jordan River has bodies floatin'

But you tell me
Over and over and over again, my friend
Ah, you don't believe
We're on the eve of destruction.

One person who never could believe that we are on the eve of destruction is the economist/blogger Brad DeLong. In the following piece from Salon, DeLong appears to grudgingly admit the possibility of a "recession." I hope all we get is a recession. I believe the title of the following was not written by DeLong, but rather Salon's headline writer:

The odds of economic meltdown

With interest rates and oil prices rising and consumers spending beyond their means, we may be headed for recession -- and worse.

By Brad DeLong
Aug. 03, 2006

Forecasting recessions is a fool's game. If there is enough solid economic information to make it appear highly likely that a recession is coming -- that production, employment and consumer demand will actually fall -- then it is highly likely that there already is a recession. Businesses are not stupid, and they don't have to wait for economists to tell them what they already know. By the time a gloomy forecast has been issued they've probably already noticed a drop in consumer demand and responded by firing workers and reducing production.

So: Never say that a recession is coming. Say only that a recession is here, or that there might be a recession on the way. Which, in fact, is what I'm saying today. As of the beginning of August 2006, a recession is not here, and I'm not going to violate my own rule by saying one is coming. But there is a good chance -- for the first time since 2003 -- that there might be a recession in progress six months from now.

"Recession?" "Might?" Easy there, Brad.

Why? Three factors: 1) A Federal Reserve that finds itself with less inflation-fighting credibility than it thought it had; 2) upward pressure on inflation from rising energy and, perhaps, import prices; and 3) millions of middle-class homeowners who for too long have treated their houses as gigantic ATMs, using home equity loans and refinancing to generate extra spending money.

First, the Federal Reserve, now chaired by Bush appointee Ben Bernanke. The Federal Reserve sets interest rates, and when it does it tries to hit the economy's sweet spot: that point that produces maximum employment, purchasing power and growth without generating enough upward pressure on prices to produce expectations of inflation. The Federal Reserve does this by pushing interest rates up and down. Push interest rates up and businesses find it more expensive to expand capacity and production, causing them to cut back on investment spending. Push interest rates up and households' balance sheets deteriorate, causing them to cut back on consumption spending. Push interest rates down and firms find it cheaper to expand capacity and production, and so they ramp up investment spending. Push interest rates down and households find their balance sheets looking better and feel flush, expanding consumption spending.

There is one major complication: what Milton Friedman calls the "long and variable lags" in the system. Every action the Federal Reserve takes now affects production, demand and inflation roughly 15 months in the future. What the Federal Reserve has done in the past 15 months has not yet had a chance to affect the economy.

This leads to the Federal Reserve's current dilemma. The last two percentage points' worth of increases in interest rates -- increases in interest rates that will in the end make businesses cut back on investment spending and households feel pinched -- have not yet had a chance to affect the economy. Because of "long and variable lags," they are still "in the pipeline." When they emerge from the pipeline they will slow the economy further. By how much? Nobody is really sure.

In this situation it seems reasonable that the Federal Reserve should stop raising interest rates. Waiting to see what the interest-rate increases of the past couple of years will do to the economy would be a prudent strategy. Indeed, since last December the Federal Reserve has been quietly signaling that it is about to "pause," to adopt such a wait-and-see strategy. Yet so far it has not done so. Why not? One important reason is that the Federal Reserve is scared that if it pauses too soon it will convince many observers that it is not truly serious about fighting inflation -- and a central bank has a hard time fighting inflation if businesses, speculators and workers ever conclude that it is not truly serious.

The Federal Reserve is also unwilling to stop increasing interest rates because it is afraid of recession risk factor No. 2: a rise in oil and import prices. Those fears are justified. Remember how the invasion of Iraq, besides bringing a golden age of democracy to the Middle East, was also supposed to produce $15-dollar-per-barrel oil? Oil is now at $75 a barrel, and this rise in oil prices is putting upward pressure on prices in general. As for import prices, they are vulnerable to a U.S. dollar that has been weakened by the Bush budget deficit and massive borrowing from China. Suppose the dollar declines suddenly, which is not a far-fetched possibility. Should the dollar fall by, say, 30 percent, and should importers raise their dollar prices in proportion, then the one-sixth of U.S. spending that is spending on imports will see prices rise by 30 percent. Because 30 percent times one-sixth equals 5 percent, that would boost U.S. consumer prices by 5 percent nearly overnight.

Thus there are two big reasons for the Federal Reserve to keep raising interest rates, in spite of how much downward pressure on demand is still in the pipeline. The Federal Reserve thinks it needs to do so in order to establish its long-term credibility, and there are the twin dangers of oil- and import price-triggered inflation to guard against.

Most likely the Federal Reserve's continued raises in interest rates will not send the economy into recession. But there is that chance, and the chance is raised from a low-probability possibility to a serious worry by the third factor: that home-as-ATM problem. The unprecedented use of home loans to squeeze cash out of equity has allowed middle-class consumers to spend well beyond their means. Someday this spending spree has to come to an end. If it comes to an end suddenly, at a time when the Federal Reserve has raised interest rates a little too much, then we have our recession.

Make no mistake about it: The U.S. economy is close to the edge. Retail sales in the second quarter were rising at only a 2.1 percent annual pace. Business investment in equipment and software was falling. Residential construction was falling. Either households will continue spending beyond all reason, or businesses will start boosting investment, or exports will start booming, or there will be a recession sometime in the next year. Figure the odds at 3 out of 10.

What can be done to head off the danger? Unfortunately, very little. The bag of macroeconomic tricks is empty. In 2000-2001 the Federal Reserve could lower interest rates to the floor, boosting residential construction and consumer spending to offset the decline in high-tech investment, and turn the 2001 recession into a very small event indeed. In 2002-2003 the short-run stimulative effect of the Bush tax cuts came online at exactly the right moment to offset fears of a deflationary spiral. But today further fiscal stimulus would increase global imbalances -- meaning, raise the trade deficit -- and do more damage to confidence than it might do good in curing a recession. And sharp reductions in interest rates would lower the value of the dollar and increase inflationary pressures from import prices in a way that the Federal Reserve does not dare allow.

The past 24 years have been an amazing run as far as the business cycle is concerned. There have been only two recessions, and both of those were short and shallow. But Ben Bernanke and Co. are now at real risk of presiding over the third.

If the worst thing we face in the next year or two is a third short and shallow recession then we should consider ourselves lucky beyond belief. It says a lot about the economics profession that he can be so blindly optimistic, while thinking himself to be warning about something bad. Bankers, however, who suffer real consequences for inaccurate forecasts, may have a more profound view of the risks we face. So too might historians. The following is by a historian about the bankers:

Bankers Fear World Economic Meltdown

By Gabriel Kolko
July 26, 2006

There has been a profound and fundamental change in the world economy over the past decade. The very triumph of financial liberalization and deregulation, one of the keystones of the "Washington consensus" that the U.S. government, International Monetary Fund (IMF), and World Bank have persistently and successfully attempted over the past decades to implement, have also produced a deepening crisis that its advocates scarcely expected.

The global financial structure is today far less transparent than ever. There are many fewer reporting demands imposed on those who operate in it. Financial adventurers are constantly creating new "products" that defy both nation-states and international banks. The IMF's managing director, Rodrigo de Rato, at the end of May 2006 deplored these new risks - risks that the weakness of the U.S. dollar and its mounting trade deficits have magnified greatly.

De Rato's fears reflect the fact that the IMF has been undergoing both structural and intellectual crises. Structurally, its outstanding credit and loans have declined dramatically since 2003, from over $70 billion to a little over $20 billion today, doubling its available resources and leaving it with far less leverage over the economic policies of developing nations - and even a smaller income than its expensive operations require. It is now in deficit. A large part of its problems is due to the doubling in world prices for all commodities since 2003 - especially petroleum, copper, silver, zinc, nickel, and the like - that the developing nations traditionally export. While there will be fluctuations in this upsurge, there is also reason to think it may endure because rapid economic growth in China, India, and elsewhere has created a burgeoning demand that did not exist before - when the balance-of-trade systematically favored the rich nations. The U.S.A. has seen its net foreign asset position fall as Japan, emerging Asia, and oil-exporting nations have become far more powerful over the past decade, and they have increasingly become creditors to the U.S.A. As the U.S. deficits mount with its imports being far greater than its exports, the value of the dollar has been declining - 28 per cent against the euro from 2001 to 2005 alone. Even more, the IMF and World Bank were severely chastened by the 1997-2000 financial meltdowns in East Asia, Russia, and elsewhere, and many of its key leaders lost faith in the anarchic premises, descended from classical laissez-faire economic thought, which guided its policy advice until then. "...[O]ur knowledge of economic growth is extremely incomplete," many in the IMF now admit, and "more humility" on its part is now warranted. The IMF claims that much has been done to prevent the reoccurrence of another crisis similar to that of 1997-98, but the international economy has changed dramatically since then and, as Stephen Roach of MorganStanley has warned, the world "has done little to prepare itself for what could well be the next crisis."

The whole nature of the global financial system has changed radically in ways that have nothing whatsoever to do with "virtuous" national economic policies that follow IMF advice - ways the IMF cannot control. The investment managers of private equity funds and major banks have displaced national banks and international bodies such as the IMF, moving well beyond the existing regulatory structures. In many investment banks, the traders have taken over from traditional bankers because buying and selling shares, bonds, derivatives and the like now generate the greater profits, and taking more and higher risks is now the rule among what was once a fairly conservative branch of finance. They often bet with house money. Low-interest rates have given them and other players throughout the world a mandate to do new things, including a spate of dubious mergers that were once deemed foolhardy. There also fewer legal clauses to protect investors, so that lenders are less likely than ever to compel mismanaged firms to default. Aware that their bets are increasingly risky, hedge funds are making it much more difficult to withdraw money they play with. Traders have "re-intermediated" themselves between the traditional borrowers - both national and individual - and markets, deregulating the world financial structure and making it far more unpredictable and susceptible of crises. They seek to generate high investment returns - which is the key to their compensation - and they take mounting risks to do so.

In March of this year the IMF released Garry J. Schinasi's book, Safeguarding Financial Stability, giving it unusual prominence then and thereafter. Schinasi's book is essentially alarmist, and it both reveals and documents in great and disturbing detail the IMF's deep anxieties. Essentially, "deregulation and liberalization," which the IMF and proponents of the "Washington consensus" advocated for decades, has become a nightmare. It has created "tremendous private and social benefits" but it also holds "the potential (although not necessarily a high likelihood) for fragility, instability, systemic risk, and adverse economic consequences." Schinasi's superbly documented book confirms his conclusion that the irrational development of global finance, combined with deregulation and liberalization, has "created scope for financial innovation and enhanced the mobility of risks." Schinasi and the IMF advocate a radical new framework to monitor and prevent the problems now able to emerge, but success "may have as much to do with good luck" as policy design and market surveillance. Leaving the future to luck is not what economics originally promised. The IMF is desperate, and it is not alone. As the Argentina financial meltdown proved, countries that do not succumb to IMF and banker pressures can play on divisions within the IMF membership - - particularly the U.S. - - bankers and others to avoid many, although scarcely all, foreign demands. About $140 billion in sovereign bonds to private creditors and the IMF were at stake, terminating at the end of 2001 as the largest national default in history. Banks in the 1990s were eager to loan Argentina money, and they ultimately paid for it. Since then, however, commodity prices have soared, the growth rate of developing nations in 2004 and 2005 was over double that of high income nations - - a pattern projected to continue through 2008 - - and as early as 2003 developing countries were already the source of 37 per cent of the foreign direct investment in other developing nations. China accounts for a great part of this growth, but it also means that the IMF and rich bankers of New York, Tokyo, and London have much less leverage than ever.

At the same time, the far greater demand of hedge funds and other investors for risky loans, combined with low-interest rates that allows hedge funds to use borrowed money to make increasingly precarious bets, has also led to much higher debt levels as borrowers embark on mergers and other adventures that would otherwise be impossible.

Growing complexity is the order of the world economy that has emerged in the past decade, and the endless negotiations of the World Trade Organization have failed to overcome the subsidies and protectionism that have thwarted a global free trade agreement and end of threats of trade wars. Combined, the potential for much greater instability - and greater dangers for the rich - now exists in the entire world economy.

High-speed Global Economics

The global financial problem that is emerging is tied into an American fiscal and trade deficit that is rising quickly. Since Bush entered office in 2001 he has added over $3 trillion to federal borrowing limits, which are now almost $9 trillion. So long as there is a continued devaluation of the U.S. dollar, banks and financiers will seek to protect their money and risky financial adventures will appear increasingly worthwhile. This is the context, but Washington advocated greater financial liberalization long before the dollar weakened. This conjunction of factors has created infinitely greater risks than the proponents of the "Washington consensus" ever believed possible.

There are now many hedge funds, with which we are familiar, but they now deal in credit derivatives - and numerous other financial instruments that have been invented since then, and markets for credit derivative futures are in the offing. The credit derivative market was almost nonexistent in 2001, grew fairly slowly until 2004 and then went into the stratosphere, reaching $17.3 trillion by the end of 2005.

What are credit derivatives? The Financial Times' chief capital markets writer, Gillian Tett, tried to find out - but failed. About ten years ago some J.P. Morgan bankers were in Boca Raton, Florida, drinking, throwing each other into the swimming pool, and the like, and they came up with a notion of a new financial instrument that was too complex to be easily copied (financial ideas cannot be copyrighted) and which was sure to make them money. But Tett was highly critical of its potential for causing a chain reaction of losses that will engulf the hedge funds that have leaped into this market. Warren Buffett, second richest man in the world, who knows the financial game as well as anyone, has called credit derivatives "financial weapons of mass destruction." Nominally insurance against defaults, they encourage far greater gambles and credit expansion. Enron used them extensively, and it was one secret of their success - and eventual bankruptcy with $100 billion in losses. They are not monitored in any real sense, and two experts called them "maddeningly opaque." Many of these innovative financial products, according to one finance director, "exist in cyberspace" only and often are simply tax dodges for the ultra-rich. It is for reasons such as these, and yet others such as split capital trusts, collateralized debt obligations, and market credit default swaps that are even more opaque, that the IMF and financial authorities are so worried.

Banks simply do not understand the chain of exposure and who owns what - - senior financial regulators and bankers now admit this. The Long-Term Capital Management hedge fund meltdown in 1998, which involved only about $5 billion in equity, revealed this. The financial structure is now infinitely more complex and far larger - the top 10 hedge funds alone in March 2006 had $157 billion in assets. Hedge funds claim to be honest but those who guide them are compensated for the profits they make, which means taking risks. But there are thousands of hedge funds and many collect inside information, which is technically illegal but it occurs anyway. The system is fraught with dangers, starting with the compensation structure, but it also assumes a constantly rising stock market and much, much else. Many fund managers are incompetent. But the 26 leading hedge fund managers earned an average of $363 million each in 2005; James Simons of Renaissance Technologies earned $1.5 billion.

There is now a consensus that all this, and much else, has created growing dangers. We can put aside the persistence of imbalanced budgets based on spending increases or tax cuts for the wealthy, much less the world's volatile stock and commodity markets which caused hedge funds this last May to show far lower returns than they have in at least a year. It is anyone's guess which way the markets will go, and some will gain while others lose. Hedge funds still make lots of profits, and by the spring of 2006 they were worth about $1.2 trillion worldwide, but they are increasingly dangerous. More than half of them give preferential treatment to certain big investors, and the U.S. Security and Exchange Commission has since mid-June 2006 openly deplored the practice because the panic, if not chaos, potential in such favoritism is now too obvious to ignore. The practice is "a ticking time bomb," one industry lawyer described it. These credit risks - risks that exist in other forms as well - seemed ready to materialize when the Financial Times' Tett reported at the end of June that an unnamed investment bank was trying to unload "several billion dollars" in loans it had made to hedge funds. If true, "this marks a startling watershed for the financial system." Bankers had become "ultracreative... in their efforts to slice, dice and redistribute risk, at this time of easy liquidity." Low-interest rates, Avinash Persaud, one of the gurus of finance concluded, had led investors to use borrowed money to play the markets, and "a painful deleveraging is as inevitable as night follows day.... The only question is its timing." There was no way that hedge funds, which had become precociously intricate in seeking safety, could avoid a reckoning and "forced to sell their most liquid investments." "I will not bet on that happy outcome," the Financial Times' chief expert concluded in surveying some belated attempts to redeem the hedge funds from their own follies.

A great deal of money went from investors in rich nations into emerging market stocks, which have been especially hard-hit in the past weeks, and if they (leave then the financial shock will be great -- the dangers of a meltdown exist there too.

Problems are structural, such as the greatly increasing corporate debt loads to core earnings, which have grown substantially from four to six times over the past year because there are fewer legal clauses to protect investors from loss - - and keep companies from going bankrupt when they should. So long as interest rates have been low, leveraged loans have been the solution. With hedge funds and other financial instruments, there is now a market for incompetent, debt-ridden firms. The rules some once erroneously associated with capitalism -- probity and the like -- no longer hold.

Problems are also inherent in speed and complexity, and these are very diverse and almost surrealist. Credit derivatives are precarious enough, but at the end of May the International Swaps and Derivatives Association revealed that one in every five deals, many of them involving billions of dollars, involved major errors - as the volume of trade increased, so did errors. They doubled in the period after 2004. Many deals were recorded on scraps of paper and not properly recorded. "Unconscionable" was Alan Greenspan's description. He was "frankly shocked." Other trading, however, is determined by mathematical algorithm ("volume-weighted average price," it is called) for which PhDs trained in quantitative methods are hired. Efforts to remedy this mess only began in June of this year, and they are very far from resolving a major and accumulated problem that involves stupendous sums.

Stephen Roach, Morgan Stanley's chief economist, on April 24 of this year wrote that a major financial crisis was in the offing and that the global institutions to forestall it - ranging from the IMF and World Bank to other mechanisms of the international financial architecture - were utterly inadequate. Hong Kong's chief secretary in early June deplored the hedge funds' risks and dangers. The IMF's iconoclastic chief economist, Raghuram Rajan, at the same time warned that the hedge funds' compensation structure encouraged those in charge of them to increasingly take risks, thereby endangering the whole financial system. By late June, Roach was even more pessimistic: "a certain sense of anarchy" dominated the academic and political communities, and they were "unable to explain the way the new world is working." In its place, mystery prevailed. Reality was out of control.

The entire global financial structure is becoming uncontrollable in crucial ways its nominal leaders never expected, and instability is increasingly its hallmark. Financial liberalization has produced a monster, and resolving the many problems that have emerged is scarcely possible for those who deplore controls on those who seek to make money - whatever means it takes to do so. The Bank for International Settlements' annual report, released June 26, discusses all these problems and the triumph of predatory economic behavior and trends "difficult to rationalize." The sharks have outfoxed the more conservative bankers. "Given the complexity of the situation and the limits of our knowledge, it is extremely difficult to predict how all this might unfold." The BIS (does not want its fears to cause a panic, and circumstances compel it to remain on the side of those who are not alarmist. But it now concedes that a big "bang" in the markets is a possibility, and it sees "several market-specific reasons for a concern about a degree of disorder." We are "currently not in a situation" where a meltdown is likely to occur but "expecting the best but planning for the worst" is still prudent. For a decade, it admits, global economic trends and "financial imbalances" have created increasing dangers, and "understanding how we got to where we are is crucial in choosing policies to reduce current risks." The BIS is very worried.

Given such profound and widespread pessimism, the vultures from the investment houses and banks have begun to position themselves to profit from the imminent business distress - a crisis they see as a matter of timing rather than principle. Investment banks since the beginning of 2006 have vastly expanded their loans to leveraged buy-outs, pushing commercial banks out of a market they once dominated. To win a greater share of the market, they are making riskier deals and increasing the danger of defaults among highly leveraged firms. There is now a growing consensus among financial analysts that defaults will increase substantially in the very near future. But because there is money to be made, experts in distressed debt and restructuring companies in or near bankruptcy are in greater demand. Goldman Sachs has just hired one of Rothschild's stars in restructuring. All the factors which make for crashes - excessive leveraging, rising interest rates, etc. - exist, and those in the know anticipate that companies in difficulty will be in a much more advanced stage of trouble when investment banks enter the picture. But this time they expect to squeeze hedge funds out of the potential profits because they have more capital to play with.

Contradictions now wrack the world's financial system, and a growing consensus now exists between those who endorse it and those, like myself, who believe the status quo is both crisis-prone as well as immoral. If we are to believe the institutions and personalities who have been in the forefront of the defense of capitalism, and we should, it may very well be on the verge of serious crises.

A senior General Staff officer told Ha'aretz that for the first time since the fighting began, Israel plans to attack strategic infrastructure targets and symbols of the Lebanese government.

Other than bombing the Beirut airport to prevent arms transfers to Hezbollah, Israel has hitherto not targeted Lebanon's infrastructure, insisting that it is only at war with Hezbollah, not with the Lebanese government or people.

However, the officer said, "we are now in a process of renewed escalation. We will continue hitting everything that moves in Hezbollah - but we will also hit strategic civilian infrastructure."

No word here of the fact al-Gama'a al-Islamiyya (Islamic Group) was provided with "political asylum" in Britain, thus leading us to one of two obvious conclusions-either the British government is clueless, or the group is a British intelligence operation. "Gamaa al-Islamiya (Islamic Group), the terrorist organization responsible for killing 62 tourists in Luxor, Egypt, was provided political asylum in Britain and numerous efforts by the Egyptian government to have members extradited were denied. The Algerian Armed Islamic Group, responsible for the assassination of Algerian President Mohamed Boudiaf on June 29, 1992, has its international headquarters in London," I wrote last August.

It should be noted that Gamaa al-Islamiya was created by Sheik Omar Abdel Rahman, the blind cleric currently serving a life sentence for "seditious conspiracy," that is to say he wasn't actually convicted of a terrorist crime, although it is assumed he was involved in Oplan Bojinka, or Operation Bojinka, a terror op described as a CIA and FBI "intelligence failure," in other words, they more than likely had a hand in the scheme. Emad Salem, an ex-Egyptian army officer turned FBI informant, "received money from Kahane Chai, Rabbi Meir Kahane's group," according to the late William Kunstler, the famous attorney retained by Siddig Ibrahim Siddig Ali and Ibrahim El-Gabrowny, two defendants in the case. Kunstler also alludes to Mossad involvement in the plot, according to a 1993 interview with Kunstler by Paul DeRienzo. According to Emad Salem, the FBI was behind the 1993 World Trade Center bombing, as it refused to swap harmless powder for explosives in the bomb that killed 6 people and injured over a 1,000 (see Ralph Blumenthal, Tapes Depict Proposal to Thwart Bomb Used in Trade Center Blast, the New York Times, October 28, 1993).

Considering the far less than coincidental involvement of the CIA, FBI, Mossad, and other intelligence and law enforcement agencies in a number of so-called Muslim terrorist events, usually dismissed as "intelligence failures," and the terrorists involved are usually clueless patsies incapable of such acts without close supervision, one has to take this latest declaration concerning al-Gama'a al-Islamiyya with a grain of salt, to say the least. In fact, when the wealth of data documenting the link between "al-Qaeda" and American, British, and Israeli intelligence is examined, there is a strong case indicating the al-Gama'a al-Islamiyya and "al-Qaeda" merger is but another phase of the "war on terrorism," or rather the behind the scenes effort to manufacture and unleash contrived terrorist organizations in an effort to gain support for the ongoing "clash of civilizations" war against Islam.



Comment on this Article

"The irony in all this is that Israel has an interest in a multicultural Lebanon and not an Islamist Lebanon, and the high hopes for the former are being dashed."

--Secretary Rumsfeld approved Gen. George Casey's request to extend the Iraq tour of a 3,700-strong Stryker brigade, which had been scheduled to return to the US this summer, and the Pentagon announced that the number of US troops in Iraq rose last week to 132,000-the highest level since May. In a command performance in June, Gen. Casey reportedly gave Bush a plan for withdrawing 7,000 troops before the mid-term elections-a plan that probably will be overtaken by events.

--Whether he intended to or not while fielding questions from the press, national security adviser Stephen Hadley, virtually redefined the mission of US troops. Addressing what he called the "new challenge," Hadley said, "This isn't about insurgency. This isn't about terror. This is about sectarian violence." The number of sectarian killings has doubled since the start of the year. Press reports indicate that many Sunnis are even afraid to go out to retrieve the bodies of relatives in Baghdad's overflowing morgues, lest they too become prey to Shia militia. The very large unanswered question: Is that why our troops lie exposed in the middle-to stop Iraqis from killing one another?

--Richard Armitage, who was Secretary Colin Powell's deputy at the State Department, warned of the danger that bringing in more troops at this late stage may prove to be "too little too late, and that the US will turn into a bystander in an Iraqi civil war it does not have sufficient resources to prevent." Western press reports suggest that this is already the case-with virtually everyone below the rank of general admitting that inadequate troop strength remains a major problem. At the same time, it is universally recognized that requesting more troops would sound the death knell for one's career.

--One important Shia leader has objected to the deployment of additional US forces to Baghdad, and Shia militias are increasingly clashing with US troops. The Shia militias are also using more effective, armor-piercing IEDs. US officers have expressed concern over what the Shia might do in reaction to the US green light for Israeli attacks on Lebanon. And Col. Patrick Lang (USA, ret.) has expressed grave concern over the vulnerability of US supply lines from Kuwait into the Iraqi heartland, and Iran's ability to stir up the Shia in that area.

--Former adviser to the US occupation authority in Iraq, Michael Rubin, now with the American Enterprise Institute has said, "The Shia-led Interior Ministry is out of control." And there is a strong move afoot in the Iraqi Parliament to replace the interior minister.