While Iraq Burns, Kerry Talks Climate…

While Iraq Burns, Kerry Talks Climate...

With the Islamic State of Iraq and Syria (ISIS) advancing rapidly through Iraq and posting images of their brutal mass executions, plans have begun to evacuate America’s embassy in Baghdad. In Washington, however, Secretary of State John Kerry hosted a conference on the world’s real “vital security issue”: climate change.
Kerry, who has remarked intermittently in interviews on the current crisis in Iraq, spent the morning hosting the State Department’s “Our Ocean” conference– a summit of 80 countries and academic experts designed to engage global leaders in a discussion on how to save the world’s oceans from the effects of climate change. There, Secretary Kerry announced that the world had a “shared responsibility” to keep the seas clean, and encouraged global leaders to see climate change and the protection of the seas as a national security issue, not an environmental one.
Kerry addressed preemptively concerns that he was focusing time on climate change when the world required his attention on much graver and more immediate threats. “For anyone who questions why are we here when there are so many areas of conflict and so many issues of vital concern as there are,” he announced, “…no one should mistake that the protection of our oceans is a vital international security issue.” Kerry also noted that, because of the conflict in Iraq, he would not be able to attend every event at the conference.
Kerry nonetheless opened the conference with warnings that climate change poses an immediate threat to the world, one that requires addressing before he works to remedy the situation in Iraq. Currently, ISIS jihadists are believed to be within 300 miles of Baghdad, and American military have been sent to protest the embassy in the capital. Partial evacuations have begun, and Kerry has said in an interview previously that the United States will not discount the possibility of working with Iran on the issue.
Unlike the United States, Iran has already deployed troops to its neighbor in an attempt to help stabilize the Iraqi government. Iran has sent in 2,000 troops to reinforce the Iraqi military, which, while grossly outnumbering ISIS fighters, have been unable to quell their invasion of towns and imposition of Sharia law.
While the situation continued to worsen over the weekend, President Obama too delivered a speech on climate change at the University of California, promoting an extreme weather fund to help states allegedly hurt by the advancement of climate change. After the speech, President Obama traveled to Palm Springs for Father’s Day, where he spent the day playing golf.



The annual review cut its growth forecast to 2%

Dominic Rushe in New York

‘We believe that a rise in the minimum wage would be helpful,’ Lagarde said, especially if complemented with tax policies to help low-wage earners. Photo: Pablo Martinez Monsivais /AP

The International Monetary Fund slashed its forecast for US economic growth on Monday, citing a harsh winter, problems in the housing market and weak international demand for the country’s products.

In its annual review of the US economy, the IMF cut its growth forecast by 0.8 percentage points to 2%. At a press conference IMF managing director Christine Lagarde blamed the bad winter for much of the cut and said the setback should be temporary. But she warned: “Growth in and of itself will not be enough.”

As part of a series of reforms the IMF has called for an increase in the minimum wages in the US, currently the lowest when compared to the average wage in any of the Organisation for Economic Co-operation and Development (OECD)’s 34 countries.

She said the number of long-term unemployed, 3.4 million in May according to the Department of Labor, remained too high and the percentage of people in or actively looking for work, the so-called participation rate, remained too low.

“We believe that a rise in the minimum wage would be helpful,” she said, especially if complemented with tax policies to help low-wage earners. “We are talking about significant numbers when you have 50 million living below poverty, many of whom are working. That’s why we are recommending it,” she said.

The IMF’s latest report into the health of the US economy does predict a meaningful economic recovery. Growth is expected to hit 3% next year. Lagarde said this was the first time in recent years that the report was being compiled at a time when the US was not in the midst of a major political or financial crisis.

While the impact of this winter’s frigid temperatures was now dissipating, Lagarde warned that extreme weather events were becoming more frequent and had an outsized impact on the economy. “I think that’s a valid reason to worry about climate change and how to deal with it,” she said.

The IMF believes the US also needs to do more to mitigate the impact of its ageing population and to stimulate productivity. The best option would be for government to boost spending, notably on infrastructure, the IMF said. “But, regrettably, political agreement on such an approach remains elusive,” the fund said.

The IMF also warned that while financial markets appeared relatively stable, the long period of low interest rates had increased the chances of a new financial crisis emerging.

“Over the past few years, much has been done to reduce financial system risks: the banks are stronger, corporate balance sheets are healthy, overall leverage is contained, and the regulatory framework has been greatly improved. Nevertheless, the prolonged period of very low interest rates continues to raise financial stability concerns, particularly related to activities in the so-called ‘shadow’ banks and in other non-bank intermediaries including,” the IMF said in its report.

Fragmented oversight of these nonbank financial entities and the volume of business they deal with present a potential threat to the stability of the markets, said the IMF.



Conflict threatens output in OPEC’s second-biggest crude producer

By Mark Shenk Jun 16, 2014 2:35 PM CT

June 16 (Bloomberg) — Ian Bremmer, president and founder at Eurasia Group, talks with Tom Keene about the violent unrest in Iraq, Iran’s talks with the U.S. as it focuses on a nuclear deal

Brent crude was projected by Wall Street analysts to average as much as $116 a barrel by the end of the year. Now, with violence escalating in Iraq, how far the price will rise has become anyone’s guess.

The international benchmark surged above $114 on June 13 for the first time in nine months as militants routed the Iraqi army in the north and advanced toward Baghdad, threatening to ignite a civil war. The Islamic State in Iraq and the Levant, known as ISIL, has halted repairs to the pipeline from the Kirkuk oil field to the Mediterranean port of Ceyhan in Turkey.

The conflict threatens output in OPEC’s second-biggest crude producer. The Persian Gulf country is forecast to provide 60 percent of the group’s growth for the rest of this decade, the International Energy Agency said June 13. Global consumption will “increase sharply” in the last quarter of this year and OPEC will need to pump more oil to help meet the demand, according to forecasts from the Paris-based IEA.

“We’ve been waiting for the other shoe to drop in this tightly balanced market and now it’s happened,” Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, said June 13 by phone. “There have been lurking risks but nobody was projecting how quickly things would turn worse.”

Photographer: Dan Kitwood/Getty Images
Families arrive at a Kurdish checkpoint next to a temporary displacement camp in Kalak,… Read More
Rising Prices

Brent for August settlement rose 48 cents, or 0.4 percent, to end at $112.94 a barrel on the London-based ICE Futures Europe exchange today. The July contract expired June 13 after climbing 0.4 percent to $113.41, the highest close for a front-month future since Sept. 9. Vikas Dwivedi of Macquarie Group Ltd. predicts Brent will average $116 in the fourth quarter. He was the best forecaster of Brent prices in the first quarter, according to Bloomberg Rankings.

West Texas Intermediate crude, the U.S. benchmark, slid 1 cent to $106.90 a barrel on the New York Mercantile Exchange today. U.S. regular gasoline at the pump rose 0.1 cent to an average of $3.662 a gallon yesterday, the fifth consecutive daily gain, according to AAA in Heathrow, Florida, the largest American motoring group.

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Oil-price volatility rebounded from the lowest on record as the violence escalated in Iraq. The 20-day historical volatility of Brent futures rose as high as 13 percent on June 12, according to exchange data compiled by Bloomberg. It was at 7.2 percent on June 3, the least since the contract began trading in 1988. The volatility is a reflection of market uncertainty, according to Olivier Jakob, managing director of Switzerland-based researcher Petromatrix GmbH.

Market Movements

“The market is going to be whipsawed by headlines from Iraq,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said June 13 by phone. “If there’s shooting on the streets of Baghdad, we’ll get a spike in prices, but I don’t see WTI passing $120.”

ISIL has control of the pipeline to the 310,000-barrel-a-day Baiji refinery, the country’s biggest. The insurgents also took Mosul, the country’s second-largest city. Kurdish forces moved into Kirkuk to protect the northern oil fields from the militants. The main pipeline from that field to Turkey hasn’t operated since early March because of attacks.

The fighting hasn’t spread to the south, which the U.S. Energy Information Administration says is home to three-quarters of Iraq’s crude output. The country’s three biggest oilfields — Rumaila, West Qurna-2 and Majnoon — lie in the south, and crude production there has been increasing. The region has a Shiite majority opposed to ISIL’s Sunni militants.

Export Impact

“The immediate impact on Iraq’s crude oil exports is limited for now as the conflict in northern and western Iraq is far from the southern — and Shiite-controlled — oilfields and export terminals from where all current oil exports originate,” Goldman Sachs Group Inc. analysts Damien Courvalin, Anamaria Pieschacon and Jeffrey Currie said in a report received by e-mail yesterday and dated June 13.

If the conflict reached the southern oil fields and the port of Basra, it would “likely have a significant impact on crude prices given current supply disruption in other OPEC members, in particular Libya,” the Goldman analysts said.

Iraq’s armed forces have attacked positions held by Sunni Muslim militants to try to halt their advance, while Prime Minister Nouri al-Maliki deployed the air force to defend his Shiite-led government.

U.S. Carrier

The U.S. has dispatched an aircraft carrier to the Persian Gulf as President Barack Obama weighs options to help Maliki repel ISIL attacks. The U.S. withdrew its forces from Iraq in 2011. Obama said on June 13 that the conflict can’t be resolved unless Iraq’s leaders bridge political differences.

Iraqi crude output capacity will increase by more than 1.2 million barrels a day in the six years through 2019, the IEA estimated. Production rose to 3.3 million barrels a day last month, according to data compiled by Bloomberg. Output surged to 3.4 million in February, the highest level since 2000. Neighboring Saudi Arabia had 2.83 million barrels of spare production capacity in May.

“A disruption of Iraqi supply would represent a global energy crisis,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone on June 13. “This isn’t hyperbole.”

The increase in concern about Iraqi supply comes as fighting in Libya has curbed production in the North African country, international sanctions against Iran for its nuclear program have cut its exports and sabotage reduced the flow of Nigerian barrels.

Libyan Output

Libyan output fell by 35,000 barrels a day to 180,000 in May, the lowest level since September 2011. Production was down 87 percent from a year earlier.

“The roughly 3 million barrels a day that Iraq is producing accounts for about 10 percent of OPEC’s overall production,” Kilduff said. “The Libyan outage and the up and down in Nigerian output leave OPEC with limited spare capacity. Saudi Arabia can’t make up for a loss of Iraq.”

The 12-member Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s oil, kept its production target unchanged at 30 million barrels a day when ministers gathered in Vienna last week.

The conflict has the potential to push U.S. crude and gasoline prices higher, Andy Lipow, president of Lipow Oil Associates LLC in Houston, said by phone yesterday.

“Given the current unrest in Iraq, I expect oil prices to reach $110 here for WTI, which would mean that the national average would go towards $3.80 for gasoline,” he said. “Should we see a significant supply disruption in exports, then I expect oil prices to go to $125 and the national retail average to exceed $4 a gallon.”

It’s been almost six years since U.S. retail gasoline averaged more than $4 per gallon, in the week of July 21, 2008, according to data from the EIA.




“A standing military force, with an overgrown Executive will not long be safe companions to liberty.”—James Madison

“Here [in New Mexico], we are moving more toward a national police force. Homeland Security is involved with a lot of little things around town. Somebody in Washington needs to call a timeout.”—Dan Klein, retired Albuquerque Police Department sergeant

If the United States is a police state, then the Department of Homeland Security (DHS) is its national police force, with all the brutality, ineptitude and corruption such a role implies. In fact, although the DHS’ governmental bureaucracy may at times appear to be inept and bungling, it is ruthlessly efficient when it comes to building what the Founders feared most—a standing army on American soil.

The third largest federal agency behind the Departments of Veterans Affairs and Defense, the DHS—with its 240,000 full-time workers, $61 billion budget and sub-agencies that include the Coast Guard, Customs and Border Protection, Secret Service, Transportation Security Administration (TSA) and the Federal Emergency Management Agency (FEMA)—has been aptly dubbed a “runaway train.”

In the 12 years since it was established to “prevent terrorist attacks within the United States,” the DHS has grown from a post-9/11 knee-jerk reaction to a leviathan with tentacles in every aspect of American life. With good reason, a bipartisan bill to provide greater oversight and accountability into the DHS’ purchasing process has been making its way through Congress.

A better plan would be to abolish the DHS altogether. In making the case for shutting down the de facto national police agency, analyst Charles Kenny offers the following six reasons: one, the agency lacks leadership; two, terrorism is far less of a threat than it is made out to be; three, the FBI has actually stopped more alleged terrorist attacks than DHS; four, the agency wastes exorbitant amounts of money with little to show for it; five, “An overweight DHS gets a free pass to infringe civil liberties without a shred of economic justification”; and six, the agency is just plain bloated.

To Kenny’s list, I will add the following: The menace of a national police force, a.k.a. a standing army, vested with so much power cannot be overstated, nor can its danger be ignored. Indeed, as the following list shows, just about every nefarious deed, tactic or thuggish policy advanced by the government today can be traced back to the DHS, its police state mindset, and the billions of dollars it distributes to police agencies in the form of grants.

Militarizing police and SWAT teams. The DHS routinely hands out six-figure grants to enable local municipalities to purchase military-style vehicles, as well as a veritable war chest of weaponry, ranging from tactical vests, bomb-disarming robots, assault weapons and combat uniforms. This rise in military equipment purchases funded by the DHS has, according to analysts Andrew Becker and G.W. Schulz, “paralleled an apparent increase in local SWAT teams.” The end result? An explosive growth in the use of SWAT teams for otherwise routine police matters, an increased tendency on the part of police to shoot first and ask questions later, and an overall mindset within police forces that they are at war—and the citizenry are the enemy combatants.

Spying on activists, dissidents and veterans. In 2009, DHS released three infamous reports on Rightwing and Leftwing “Extremism,” and another entitled Operation Vigilant Eagle, outlining a surveillance program targeting veterans. The reports collectively and broadly define extremists as individuals and groups “that are mainly antigovernment, rejecting federal authority in favor of state or local authority, or rejecting government authority entirely.” In 2013, it was revealed that DHS, the FBI, state and local law enforcement agencies, and the private sector were working together to conduct nationwide surveillance on protesters’ First Amendment activities.

Stockpiling ammunition. DHS, along with other government agencies, has been stockpiling an alarming amount of ammunition in recent years, which only adds to the discomfort of those already leery of the government. As of 2013, DHS had 260 million rounds of ammo in stock, which averages out to between 1,300 to 1,600 rounds per officer. The US Army, in contrast, has roughly 350 rounds per soldier. DHS has since requisitioned more than 1.6 billion rounds of ammo, “enough,” concludes Forbes magazine, “to sustain a hot war for 20+ years.”

Distributing license plate readers. DHS has already distributed more than $50 million in grants to enable local police agencies to acquire license plate readers, which rely on mobile cameras to photograph and identify cars, match them against a national database, and track their movements. Relying on private contractors to maintain a license plate database allows the DHS and its affiliates to access millions of records without much in the way of oversight.

Contracting to build detention camps. In 2006, DHS awarded a $385 million contract to a Halliburton subsidiary to build detention centers on American soil. Although the government and Halliburton were not forthcoming about where or when these domestic detention centers would be built, they rationalized the need for them in case of “an emergency influx of immigrants, or to support the rapid development of new programs” in the event of other emergencies such as “natural disasters.” Viewed in conjunction with the NDAA provision allowing the military to arrest and indefinitely detain anyone, including American citizens, it would seem the building blocks are already in place for such an eventuality.

Tracking cell-phones with Stingray devices. Distributed to local police agencies as a result of grants from the DHS, these Stingray devices enable police to track individuals’ cell phones—and their owners—without a court warrant or court order. The amount of information conveyed by these devices about one’s activities, whereabouts and interactions is considerable. As one attorney explained: “Because we carry our cellphones with us virtually everywhere we go, stingrays can paint a precise picture of where we are and who we spend time with, including our location in a lover’s house, in a psychologist’s office or at a political protest.”

Carrying out military drills and lockdowns in American cities. Each year, DHS funds military-style training drills in cities across the country. These Urban Shield exercises, elaborately staged with their own set of professionally trained Crisis Actors playing the parts of shooters, bystanders and victims, fool law enforcement officials, students, teachers, bystanders and the media into thinking it’s a real crisis.

Using the TSA as an advance guard. The TSA now searches a variety of government and private databases, including things like car registrations and employment information, in order to track travelers’ before they ever get near an airport. Other information collected includes “tax identification number, past travel itineraries, property records, physical characteristics, and law enforcement or intelligence information.”

Conducting virtual strip searches with full-body scanners. Under the direction of the TSA, American travelers have been subjected to all manner of searches ranging from whole-body scanners and enhanced patdowns at airports to bag searches in train stations. In response to public outrage over what amounted to a virtual strip search, the TSA has begun replacing the scanners with equally costly yet less detailed models. The old scanners will be used by prisons for now.

Carrying out soft target checkpoints. VIPR task forces, comprised of federal air marshals, surface transportation security inspectors, transportation security officers, behavior detection officers and explosive detection canine teams have laid the groundwork for the government’s effort to secure so-called “soft” targets such as malls, stadiums, bridges, etc. Some security experts predict that checkpoints and screening stations will eventually be established at all soft targets, such as department stores, restaurants, and schools. DHS’ Operation Shield, a program which seeks to check up on security protocols around the country with unannounced visits, conducted a surprise security exercise at the Social Security Administration building in Leesburg, Fla., when they subjected people who went to pick up their checks to random ID checks by federal agents armed with semi-automatic weapons.

Directing government workers to spy on Americans. Terrorism Liaison Officers are firefighters, police officers, and even corporate employees who have received training to spy on and report back to government entities on the day-to-day activities of their fellow citizens. These individuals are authorized to report “suspicious activity” which can include such innocuous activities as taking pictures with no apparent aesthetic value, making measurements and drawings, taking notes, conversing in code, espousing radical beliefs, and buying items in bulk.

Conducting widespread spying networks using fusion centers. Data collecting agencies spread throughout the country, aided by the National Security Agency, fusions centers—of which there are at least 78 scattered around the U.S.— constantly monitor our communications, collecting and cataloguing everything from our internet activity and web searches to text messages, phone calls and emails. This data is then fed to government agencies, which are now interconnected: the CIA to the FBI, the FBI to local police. Despite a budget estimated to be somewhere between $289 million and $1.4 billion, these fusion centers have proven to be exercises in incompetence, often producing irrelevant, useless or inappropriate intelligence, while spending millions of dollars on “flat-screen televisions, sport utility vehicles, hidden cameras and other gadgets.”

Carrying out Constitution-free border control searches. On orders from the DHS, the government’s efforts along the border have become little more than an exercise in police state power, ranging from aggressive checkpoints to the widespread use of drone technology, often used against American citizens traveling within the country. Border patrol operations occur within 100 miles of an international crossing, putting some 200 million Americans within the bounds of aggressive border patrol searches and seizures, as well as increasingly expansive drone surveillance. With 71 checkpoints found along the southwest border of the United States alone, suspicionless search and seizures on the border are rampant. Border patrol agents also search the personal electronic devices of people crossing the border without a warrant.

Funding city-wide surveillance cameras. As Charlie Savage reports for the Boston Globe, the DHS has funneled “millions of dollars to local governments nationwide for purchasing high-tech video camera networks, accelerating the rise of a ‘surveillance society’ in which the sense of freedom that stems from being anonymous in public will be lost.” These camera systems, installed on city streets, in parks and transit systems, operating in conjunction with sophisticated computer systems that boast intelligent video analytics, digital biometric identification, military-pedigree software for analyzing and predicting crime and facial recognition software, create a vast surveillance network that can target millions of innocent individuals.

Utilizing drones and other spybots. The DHS has been at the forefront of funding and deploying surveillance robots and drones for land, sea and air, including robots that resemble fish and tunnel-bots that can travel underground. Despite repeated concerns over the danger surveillance drones used domestically pose to Americans’ privacy rights, the DHS has continued to expand its fleet of Predator drones, which come equipped with video cameras, infrared cameras, heat sensors, and radar. DHS also loans its drones out to local, state, and federal law enforcement agencies for a variety of tasks, although the agency refuses to divulge any details as to how, why and in what capacity these drones are being used by police. Incredibly, the DHS has also been handing out millions of dollars in grants to local police agencies to “accelerate the adoption” of drones in their localities.

It’s not difficult to see why the DHS has been described as a “wasteful, growing, fear-mongering beast.” If it is a beast, however, it is a beast that is accelerating our nation’s transformation into a police state through its establishment of a standing army, a.k.a. national police force.

This, too, is nothing new. Historically, as I show in my book A Government of Wolves: The Emerging American Police State, the establishment of a national police force has served as a fundamental and final building block for every totalitarian regime that has ever wreaked havoc on humanity, from Hitler’s all-too-real Nazi Germany to George Orwell’s fictional Oceania. Whether fictional or historical, however, the calling cards of these national police agencies remain the same: brutality, inhumanity, corruption, intolerance, rigidity, and bureaucracy—in other words, evil.