http://ideologicalfightback.com/oil-coup/
http://www.counterpunch.org/2014/12/16/the-oil-coup/
“John Kerry, the US Secretary of State, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.†(Stakes are high as US plays the oil card against Iran and Russia, Larry Eliot, Guardian)
U.S. powerbrokers have put the country at risk of another financial crisis to intensify their economic war on Moscow and to move ahead with their plan to “pivot to Asiaâ€. Here’s what’s happening: Washington has persuaded the Saudis to flood the market with oil to push down prices, decimate Russia’s economy, and reduce Moscow’s resistance to further NATO encirclement and the spreading of US military bases across Central Asia. The US-Saudi scheme has slashed oil prices by nearly a half since they hit their peak in June. The sharp decline in prices has burst the bubble in high-yield debt which has increased the turbulence in the credit markets while pushing global equities into a tailspin. Even so, the roiled markets and spreading contagion have not deterred Washington from pursuing its reckless plan, a plan which uses Riyadh’s stooge-regime to prosecute Washington’s global resource war. Here’s a brief summary from an article by F. William Engdahl titled “The Secret Stupid Saudi-US Deal on Syriaâ€:
“The details are emerging of a new secret and quite stupid Saudi-US deal on Syria and the so-called IS. It involves oil and gas control of the entire region and the weakening of Russia and Iran by Saudi Arabian flooding the world market with cheap oil. Details were concluded in the September meeting by US Secretary of State John Kerry and the Saudi King… ..the kingdom of Saudi Arabia, has been flooding the market with deep discounted oil, triggering a price war within OPEC… The Saudis are targeting sales to Asia for the discounts and in particular, its major Asian customer, China where it is reportedly offering its crude for a mere $50 to $60 a barrel rather than the earlier price of around $100. That Saudi financial discounting operation in turn is by all appearance being coordinated with a US Treasury financial warfare operation, via its Office of Terrorism and Financial Intelligence, in cooperation with a handful of inside players on Wall Street who control oil derivatives trading. The result is a market panic that is gaining momentum daily. China is quite happy to buy the cheap oil, but her close allies, Russia and Iran, are being hit severely… According to Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center, the dramatic price collapse is being deliberately caused by the Saudis, OPEC’s largest producer. The public reason claimed is to gain new markets in a global market of weakening oil demand. The real reason, according to Abanmy, is to put pressure on Iran on her nuclear program, and on Russia to end her support for Bashar al-Assad in Syria….More than 50% of Russian state revenue comes from its export sales of oil and gas. The US-Saudi oil price manipulation is aimed at destabilizing several strong opponents of US globalist policies. Targets include Iran and Syria, both allies of Russia in opposing a US sole Superpower. The principal target, however, is Putin’s Russia, the single greatest threat today to that Superpower hegemony. (The Secret Stupid Saudi-US Deal on Syria, F. William Engdahl, BFP)
The US must achieve its objectives in Central Asia or forfeit its top-spot as the world’s only superpower. This is why US policymakers have embarked on such a risky venture. There’s simply no other way to sustain the status quo which allows the US to impose its own coercive dollar system on the world, a system in which the US exchanges paper currency produced-at-will by the Central Bank for valuable raw materials, manufactured products and hard labor. Washington is prepared to defend this extortionist petrodollar recycling system to the end, even if it means nuclear war. How Flooding the Market Adds to Instability The destructive and destabilizing knock-on effects of this lunatic plan are visible everywhere. Plummeting oil prices are making it harder for energy companies to get the funding they need to roll over their debt or maintain current operations. Companies borrow based on the size of their reserves, but when prices tumble by nearly 50 percent–as they have in the last six months– the value of those reserves falls sharply which cuts off access to the market leaving CEO’s with the dismal prospect of either selling assets at firesale prices or facing default. If the problem could be contained within the sector, there’d be no reason for concern. But what worries Wall Street is that a surge in energy company failures could ripple through the financial system and wallop the banks. Despite six years of zero rates and monetary easing, the nation’s biggest banks are still perilously undercapitalized, which means that a wave of unexpected bankruptcies could be all it takes to collapse the weaker institutions and tip the system back into crisis. Here’s an excerpt from a post at Automatic Earth titled “Will Oil Kill the Zombies?â€:
“If prices fall any further, it would seem that most of the entire shale edifice must of necessity crumble to the ground. And that will cause an absolute earthquake in the financial world, because someone supplied the loans the whole thing leans on. An enormous amount of investors have been chasing high yield, including many institutional investors, and they’re about to get burned something bad….. if oil keeps going the way it has lately, the Fed may instead have to think about bailing out the big Wall Street banks once again.†(Will Oil Kill the Zombies?, Raúl Ilargi Meijer, Automatic Earth)
The problem with falling oil prices is not just mounting deflation or droopy profits; it’s the fact that every part of the industry–exploration, development and production — is propped atop a mountain of red ink (junk bonds). When that debt can no longer be serviced or increased, then the primary lenders (counterparties and financial institutions) sustain heavy losses which domino through the entire system. Take a look at this from Marketwatch:
“There’s ‘no question’ that for energy companies with a riskier debt profile the high-yield debt market “is essentially shut down at this stage,†and there are signs that further pain could hit the sector, †senior fixed-income strategist at U.S. Bank Wealth Management, Dan Heckman told Marketwatch. “We are getting to the point that it is becoming very concerning.†(Marketwatch)
When energy companies lose access to the market and are unable to borrow at low rates, it’s only a matter of time before they trundle off to extinction. On Friday, the International Energy Agency (IEA) renewed pressure on prices by lowering its estimate for global demand for oil in 2015. The announcement immediately sent stocks into a nosedive. The Dow Jones Industrial Average (DJIA) lost 315 points by the end of the day, while, according to Bloomberg, more than “$1 trillion was erased from the value of global equities in the weekâ€. The world is awash in cheap petroleum which is wreaking havoc on domestic shale producers that need prices of roughly $70 per barrel to break-even. With West Texas Intermediate (WTI) presently headed south of 60 bucks–and no bottom in sight–these smaller producers are sure to get clobbered. Pension funds, private equity, banks, and other investors who gambled on these dodgy energy-related junk bonds are going to get their heads handed to them in the months ahead. The troubles in the oil patch are mainly attributable to the Fed’s easy money policies. By dropping rates to zero and flooding the markets with liquidity, the Fed made it possible for every Tom, Dick and Harry to borrow in the bond market regardless of the quality of the debt. No one figured that the bottom would drop out leaving an entire sector high and dry. Everyone thought the all-powerful Fed could print its way out of any mess. After last week’s bloodbath, however, they’re not nearly as confident. Here’s how Bloomberg sums it up:
“The danger of stimulus-induced bubbles is starting to play out in the market for energy-company debt….Since early 2010, energy producers have raised $550 billion of new bonds and loans as the Federal Reserve held borrowing costs near zero, according to Deutsche Bank AG. With oil prices plunging, investors are questioning the ability of some issuers to meet their debt obligations… The Fed’s decision to keep benchmark interest rates at record lows for six years has encouraged investors to funnel cash into speculative-grade securities to generate returns, raising concern that risks were being overlooked. A report from Moody’s Investors Service this week found that investor protections in corporate debt are at an all-time low, while average yields on junk bonds were recently lower than what investment-grade companies were paying before the credit crisis.†(Fed Bubble Bursts in $550 Billion of Energy Debt: Credit Markets, Bloomberg)
The Fed’s role in this debacle couldn’t be clearer. Investors piled into these dodgy debt-instruments because they thought Bernanke had their back and would intervene at the first sign of trouble. Now that the bubble has burst and the losses are piling up, the Fed is nowhere to be seen. In the last week, falling oil prices have started to impact the credit markets where investors are ditching debt on anything that looks at all shaky. The signs of contagion are already apparent and likely to get worse. Investors fear that if they don’t hit the “sell†button now, they won’t be able to find a buyer later. In other words, liquidity is drying up fast which is accelerating the rate of decline. Naturally, this has affected US Treasuries which are still seen as “risk freeâ€. As investors increasingly load up on USTs, long-term yields have been pounded into the ground like a tentpeg. As of Friday, the benchmark 10-year Treasury checked in at a miniscule 2.08 percent, the kind of reading one would expect in the middle of a Depression. The Saudi-led insurgency has reversed the direction of the market, put global stocks into a nosedive and triggered a panic in the credit markets. And while the financial system edges closer to a full-blown crisis every day, policymakers in Washington have remained resolutely silent on the issue, never uttering as much as a peep of protest for a Saudi policy that can only be described as a deliberate act of financial terrorism. Why is that? Why have Obama and Co. kept their mouths shut while oil prices have plunged, domestic industries have been demolished, and stocks have gone off a cliff? Could it be that they’re actually in cahoots with the Saudis and that it’s all a big game designed to annihilate enemies of the glorious New World Order? It certainly looks that way. MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.
Web Only / Features » December 19, 2014
Why Bernie Sanders Needs to Run for President—As an Independent
The corporate capture of both parties, explosion of energy in grassroots movements, and popular disgust with politics as usual make this the perfect moment for Sanders to run outside the Democratic Party.
Source: In These Times
It’s time for a new course of action—and Bernie Sanders has the name recognition, the resume and the gravitas to be the face of a new national democratic socialist political party that has the potential to change the direction of U.S. politics.
Bernie Sanders, the fiery, independent, populist U.S. Senator from Vermont, has been mulling a presidential campaign in 2016. There is no question about it: He should absolutely run.
Mr. Sanders has the credentials, the charisma and the community support he needs to seize the populist moment we are in and help spark a grassroots insurgency against the billionaire class.
Somebody has to take on Hillary Clinton from the Left—otherwise the 2016 elections will be nothing more than two corporate politicians making hollow promises to the American people while selling their souls behind the scenes to war profiteers and Wall Street banksters. And while Elizabeth Warren is also a compelling candidate, chances are at least moderately high that she may not run, opting to play it safe in favor of maintaining good standing with the party’s leadership.
And even if Warren does run, her candidacy will not contribute to the building of a genuine third party movement—which is what the Left really needs to do to build long-term independent political power.
That’s why Bernie Sanders must run—and it’s why he should run on a third party ticket, not as a Democrat.
Merely impacting the 2016 presidential elections through the Democratic primaries is too small of a goal given the times we are in, and will not go far or fast enough to move the people and the planet away from the brink of corporate and climate catastrophe. The last thing we need is a firebrand like Mr. Sanders to spearhead a populist electoral charge and raise expectations, only to concede after a few weeks, endorse Hillary and urge his followers back into the folds of the establishment Democratic tent.
It would be disappointing, to say the least, to see a lifelong independent and self-described democratic socialist using the specter of a Republican boogey-man to scare millions of everyday people back into the two-party closet. The truth is, our country’s neoliberal turn advanced tremendously under the Carter, Clinton and Obama Administrations, and it was the Supreme Court that stole the 2000 election from Al Gore, not Ralph Nader.
Neither should Mr. Sanders run only as an independent without attempting to build the kind of organizational and party infrastructure that can live on after his campaign is over, as Nader failed to do in 2004. Mr. Sanders should instead aim higher and strive to change the course of U.S. history by making 2016 the year that an independent third party broke through the white noise and became a permanent fixture in American politics. This should not be done through the Green Party, but through the construction of a new, broad-based democratic socialist party.
Building a nationally viable third party in less than two years will be challenging, but Mr. Sanders has long enough coattails to pull it off. For one thing, the conditions in this country are ripe for this kind of move. Grassroots social movements, from Madison to Occupy Wall Street to #BlackLivesMatter, have been growing steadily since the economic crash in 2008, and have articulated a reform agenda that neither political party appears willing to embrace.
The 2014 midterm elections saw the lowest voter turnout of the modern era, after which the much ballyhooed left turn by President Obama and Senate Democrats turned out to be little more than liberal hype. (See, for example, the party’s capitulation to the corporate right without much of a fight during the recent “Crominbus†budget debate.) The incident serves as yet another example of a political culture that has become thoroughly corrupted by big corporate money.
Voters aren’t stupid. Their apathy in these elections comes from a lack of appealing choices. In a system where neither party is willing to address the bread-and-butter issues that impact us most like jobs, education, housing, health-care and debt, our only options are to stay home or to “vote the bums out,†replacing them with another set of bums we’ll want to vote out, ad infinitum.
That’s why the history of U.S. electoral politics is such a schizophrenic seesawing of power back and forth between two wings of the same corporate power structure. One party swoops into office using the voter backlash against the other’s broken promises as a wedge, and then once in power does very little (at best) to make everyday people’s lives better in material, tangible ways.
Such a system will never be able to solve the staggering number of social problems confronting us. A third party candidacy led by Bernie Sanders, perhaps with a strong running mate like Seattle council woman and fellow socialist Kshama Sawant as his running mate, can give voice to the aspirations of millions of working-class Americans who have been effectively shut out of the governing process by the corrosive influence of corporate power. Their goals should include winning at least a third of the popular vote, concrete victories in dozens of local, county, statewide, and federal down-ballot races, construction of permanent party infrastructure and close collaboration with social movement actors independent of the Democratic Party.
There is already an emerging electoral precedent that suggests such a strategy is not outside of our ambitious reach. Ms. Sawant’s successful campaign in Seattle in 2013 not only elevated a card-carrying socialist to office, it helped catapult (alongside tenacious street demonstrations) the national Fight for $15 movement that has seen several major American cities pass significant minimum wage increases.
The success of Howie Hawkins and Brian Jones on the Green Party ticket in November’s New York gubernatorial race is also strong evidence that the appetite for third-party movement-building is there—if organizers and activists are willing to seize the initiative and take some risks.
The liberal establishment will cry “spoiler,†but their strategy has long proven to be bankrupt. It’s time for a new course of action—and Bernie Sanders has the name recognition, the resume and the gravitas to be the face of a new national democratic socialist political party that has the potential to change the direction of U.S. politics.
David Goodner is union organizer in La Crosse, Wisconsin. Originally from Iowa, he worked in Des Moines as a community organizer and Catholic Worker between 2009-2014. He may be reached at david.a.goodner [at] gmail.com or @davidgoodner.
by James Thompson
In the article previously posted on this website from the Huffington Post, Igor Bobic writes:
“Rubio, who is the son of Cuban immigrants, loudly protested the shift in policy all week. He chided the president on Wednesday for “coddling dictators and tyrants” and for dealing with a regime that has “harassed, imprisoned and even killed” its own people.” He is writing about Sen. Marco Rubio (R-Fla.).
It appears there may be some weaknesses in the esteemed Senator’s argument. The rhetoric has been intense among congresspeople from both the Republican and Democratic party on the President’s admirable actions towards Cuba. The president is to be commended for his brave new policies towards Cuba. With the actions he took last week, President Obama has earned his Nobel Peace Prize.
Now the hypocrites are coming out of the woodwork. Sen. Rubio’s remarks stink of hypocrisy. The USA has a long history of “coddling dictators and tyrants.” Prior to the Cuban revolution, the US fully supported Batista. Batista was one of the most terroristic dictator/tyrants in human history. He terrorized the Cuban people, harassed them, imprisoned them and murdered them mercilessly with full US support. Similar terrorists receive full financial and propagandistic support from the US government around the world today.
The Zionist regime in Israel receives full US support for its terroristic activities towards the Palestinians. Dictators throughout Africa continue to terrorize their populations with full US support. The right wing regime in Colombia receives full US support for its terroristic activities towards its own citizens and towards the people of Venezuela. The US imposed fascist government in the Ukraine receives full support from the US as it advocates the extermination of Jews and Russian speaking people in the Ukraine. Saddam Hussein received full US support when he used gas purchased from the US on the Kurdish people. However, when he refused orders from the US, shock and awe was unleashed on him. The US supported the terrorist regime of Diem in Vietnam and slaughtered innocent people in Vietnam who opposed this nasty dictator.
Not only has the US supported petty dictators around the world who do the bidding of the wealthiest elite, agents of the US state (including CIA, NSA, etc.) have carried out terroristic operations directly. The US now has a reputation for violating international law and previous US heads of state cannot travel to many parts of the world since they risk arrest for war crimes. The US has a reputation for torture, drone attacks and the list goes on and on.
Rubio’s application of the phrase “‘harassed, imprisoned and even killed’ its own people” to Cuba is particularly egregious. The USA leads the world in the number of incarcerated people and in the application of capital punishment.
We must also remember the spectacular police killings of African-American males in the USA. These murders are on a par with the terroristic activities of the vicious Nazi regime in Germany. It should be remembered that the Nazi regime in Germany was partly financed by the Bush family, Henry Ford and many other wealthy people of the US.
Of course, it should be remembered that the only military use of nuclear weapons in the history of the world against a foreign country, i.e. Hiroshima and Nagasaki, occurred as a result of the direction of a President of the United States who was a member of the Democratic Party. The US also participated in the firebombing of Dresden at the same time in history.
No one has accused Cuba of using nuclear weapons against a sovereign nation. No one has  accused Cuba of waging terroristic, imperialistic wars against sovereign nations.
Â
So, perhaps Sen. Rubio should also criticize President Obama for attempting to normalize relations with a country, i.e. Cuba, that wants to normalize relations with its northern neighbor, i.e. the USA, that has a history of “coddling dictators and tyrants” and has “harassed, imprisoned and even killed its own people.”
Sen. Rubio and many others are fighting hard to make the world safe for hypocrisy.
By Igor Bobic
Huffington Port, Dec. 19, 2014
http://www.huffingtonpost.com/2014/12/19/rand-paul-marco-rubio-cuba-2016_n_6355646.html
A dispute between two possible presidential candidates escalated on Friday around the topic of newly opened diplomatic relations with Cuba, and the latest jabs took place on — where else — the Internet.
Sen. Rand Paul (R-Ky.) took to Twitter and Facebook to lambaste Sen. Marco Rubio (R-Fla.), who claimed Thursday on Fox News that his fellow Senate Foreign Relations Committee member “has no idea what he’s talking about” on Cuba. Paul came out in support of the Obama administration, which reached a historic accord with the communist island that included the release of U.S. Agency for International Development worker Alan Gross.
“The United States trades and engages with other communist nations, such as China and Vietnam. Why not Cuba?” the Kentucky Republican wrote on Facebook. “I am a proponent of peace through commerce, and I believe engaging Cuba can lead to positive change.”
“Seems to me,” Paul continued, “Senator Rubio is acting like an isolationist who wants to retreat to our borders and perhaps build a moat. I reject this isolationism. Finally, let’s be clear that Senator Rubio does not speak for the majority of Cuban-Americans. A recent poll demonstrates that a large majority of Cuban-Americans actually support normalizing relations between our countries.”
Rubio, who is the son of Cuban immigrants, loudly protested the shift in policy all week. He chided the president on Wednesday for “coddling dictators and tyrants” and for dealing with a regime that has “harassed, imprisoned and even killed” its own people.
The spat highlights a fissure in the Republican party, and is a sign of things to come should both senators decide to run for the White House. But it’s not the first time the two have tangled over foreign policy. Last year, Rubio delivered a speech in Paul’s home state in which he passionately made the case against isolationism — a philosophy the libertarian senator from Kentucky has flirted with in the past.
At this rate, we may as well just cancel the debates.
Source: Houston Chronicle
News
Â
Former teacher was let go after filing two other free speech suits
By Harvey Rice
December 15, 2014 Updated: December 15, 2014 9:29pm
GALVESTON – The College of the Mainland has settled a lawsuit with a professor it fired after he filed two other lawsuits alleging violation of his free speech rights.
The settlement is the latest in a long string of federal lawsuits against the college board and administration over the last several years by faculty, staff and students.
The lawsuit settled last week by former professor David Michael Smith accused the board of directors of firing him on Aug. 1, 2013, on a unanimous vote in retaliation for his two previous free speech lawsuits.
College President Beth Lewis said Smith was fired for insubordination and for harassing his colleagues.
Neither Smith nor Lewis would discuss the terms of the confidential settlement. Smith declined to say whether he would be reinstated, but said he had no plans for full-time teaching.
Smith’s lawsuit sought $750,000 in damages plus attorneys fees of at least $250,000.
Smith, who taught political science at the community college for 15 years, predicted more lawsuits unless the administration and board agreed to work cooperatively with employees and students.
“I’m certain there will be additional lawsuits,” Smith said. “If you ask me, I’m afraid the current board is intent on turning a traditionally progressive institution of higher learning into a Walmart.”
Lewis dismissed Smith’s accusation that the administration was unwilling to tolerate dissent from employees and students. “There is no merit to this assertion,” she said.
Board member Ralph Holm refused comment, but board member Rachel Delgado said that there would be fewer problems with Smith’s departure. “I feel that we are developing a very positive relationship” with faculty and staff, she said.
She also declined to discuss the settlement’s terms.
Smith, as head of the faculty union, was at the forefront of disputes over policy affecting college employees, often arguing points of policy before the board. His outspokenness and liberal viewpoints earned the ire of conservatives as expressed in letters to the editor of the Galveston Daily News.
His first lawsuit was filed after he and his wife were prevented from addressing the board during the public comments section of a June 22, 2009, meeting. The college settled the lawsuit after a federal judge accepted a recommendation that the college board be barred from excluding members of the public from speaking during the public comment portion of public meetings.
Smith sued the college again in June 2011 claiming that he was issued a disciplinary letter in retaliation for the first lawsuit. The college settled after the judge found that a jury was likely to side with Smith, according to Smith’s lawsuit.
Two years later, the college’s letter terminating Smith said that an investigation “has revealed a pattern of behavior in which you routinely challenge directives and requirements from your supervisors,” the lawsuit states.
Smith’s view is backed by Lee Medley, president of the AFL-CIO Galveston County Labor Council, who has at times tried to intercede on behalf of college faculty. Medley said Smith’s firing is part of an attempt by the college to break the faculty union.
Stephanie Macaluso, who graduated last week with an associates degree from Mainland College, said that she encountered problems defending a different professor fired last year for mentioning faculty problems in the classroom. Macaluso said faculty have told her that they fear expressing viewpoints contrary to the administration’s.