Author: Spencer

An article to be published in the winter edition of American Prospect magazine, documents in great detail the extent of the looting, predatory lending and demands for blood practiced by the murderous vulture funds which hold, according to some estimates, anywhere from a third to a half of Puerto Rico’s $72 billion in debt. Not surprisingly, the same vultures that prey on Puerto Rico, such as Aurelius Capital Management, whose founder Mark Brodsky is appropriately named “The Terminator,” have also bought up the debt of Detroit, Argentina and Greece.

Author David Dayen explains that some years ago, as hundreds of U.S. corporations left the island because they lost their tax-exempt status, unleashing a deep economic crisis, Puerto Rico tried to deal with the crisis by issuing more debt. The vulture funds egged them on, since municipal bonds are free from federal, state and local taxes. Public debt has increased every year since 2000, when the debt stood at $25 billion. Once credit rating agencies began to downgrade Puerto Rico’s debt in December 2012, the vultures moved in rapaciously, buying up debt on the secondary market at pennies on the dollar, and then demanding repayment of the bonds’ full dollar value.

Today, these predators have become the only “investors” willing to lend to Puerto Rico, making up almost all of the participants in the 2014 sale of $3.5 billion in low-rated, 8.7% General Obligation Bonds (on which there is a constitutional guarantee of repayment)—the biggest U.S. municipal junk bond sale in history. They were willing to lend even more this past summer, even after Governor García Padilla warned on June 1 that the island’s debt was “unpayable.” Vultures such as DoubleLine Capital and Avenue Capital were still buying up discounted debt as recently as November.

Jeffrey Gundlach of DoubleLine has called Puerto Rican debt “his best idea” for investors. One group of vultures succeeded in overturning a Puerto Rican law that would have allowed public corporations to restructure their debt, hiring Bush League thug lawyer Ted Olson to argue the case.

Russia chief of the general staff, Gen. Valeriy Gerasimov delivered a lengthy report on the Russian military to defense attachés in Moscow, yesterday morning.
He said at the outset:

With the deployment of ballistic missile defense and the development of new weapons war, he said, “the problem of imbalance of strategic forces is getting worse.”

Other threats include color revolutions (he didn’t use the term but his description clearly shows that’s what he was talking about) to overthrow governments, proliferation of weapons of mass destruction; cross-border crimes and narco-trafficking; separatism; and uncontrolled migration and xenophobia. He said:

With respect to Syria, Russia is forging relationships with many countries concerning that conflict.  Gerasimov said”

Much of the rest of the report was devoted to the modernization efforts of the Russian military, in the realms of manpower, training and equipment which are quite extensive. Most significant was the stress that Gerasimov placed on the modernization of Russia’s nuclear deterrent, which, he said, will be developed “to maintain the strategic offensive and strategic defensive forces at a level, which would provide assured deterrence against aggression towards the Russian Federation and its allies.” Other areas that Gerasimov reported on where progress in re-equipping the military services towards the 70% goal of modern equipment by 2020, and the professionalization of the manpower of the services.

That the was the forecast of former Reagan Administration budget official David Stockman, referring to the Federal Reserve’s apparent intention to raise interest rates — for the first time in 10 years — in the teeth of an accelerating junk-debt and commodity price collapse.

Junk debt (junk bonds and leveraged loans) in the U.S. economy, as a reminder, totals at least $2 trillion in “assets” mainly held by banks, although many mutual, pension, and hedge funds are also involved. The junk-debt market decline has become very sharp in December, with interest rates on middling (CCC-rated) junk bonds hitting 17.25% Dec. 10 and shooting upwards. This debt is essentially impossible to refinance. In recent weeks the ratings agencies and banks have charted a “spike” in defaults and bankruptcies of junk debtors — concentrated in oil and gas exploration and related services — and warned the “spike” will become a “wave” in January-February.

Now, two junk creditors have gone under. Two debt-invested funds have liquidated in the past few days. The first was actually a mutual fund: the $1.8 billion, “well-respected” Third Avenue Capital on Dec. 10. Its founder Martin Whitman is designated a “legendary vulture investor.” Just as that was being explained away (“it was investing in unrated debt”), the second went under on Dec. 11. It was Stone Lion Capital, a $2 billion hedge fund which was one of those investing in Puerto Rico distressed debt.

Some see a “Bear Stearns moment” — i.e., the bankruptcy of the two CLO-invested hedge funds in June 2007, which exposed the “non-containment” of the mortgage securities/derivatives meltdown. Vulture investor Carl Icahn gave a “keg of dynamite” interview on CNBC, saying “I believe the meltdown in High Yield is just beginning.”

The Wall Street Journal wrote Dec. 11, “The move is also a sign of how much the market for [all —ed.] corporate debt is deteriorating. “‘Investors have been dazzled that yields on bonds have climbed so high, even while default rates remained low,’ said … a longtime junk-bond analyst. ‘Currently, though, the ability to sell a large position is especially poor. When that tension gets especially high, you can see something snap.'”

The century-old British colonial looter Anglo American, which was making “energy-junk” loans on a large scale, is suddenly at the brink of junk itself, with Moody’s downgrading it Saturday to one step above junk for all its divisions and placing a negative advisory on all of them. Credit default spreads on both Anglo American and Glencore rate them at more than a 50% chance of default, requiring $1,000 cash up front to insure $10,000 of their debt.

With so-called “junk debt” markets plunging and experts warning of a “riot in the Wall Street casino” this week if the Federal Reserve raises rates, EIR Founding Editor Lyndon LaRouche made a very strong proposal yesterday; indeed, a demand on the elected representatives and citizens of the United States.

LaRouche said: “Close in on this and shut this Wall Street casino down, this week. Remember what is the effect on the people of this kind of crash. We cannot have more suicides, or any more of what happened in Italy last week.”

Italy is in an uproar since an Italian citizen committed suicide after an insolvent bank expropriated all his savings in an outrageous “bail-in” procedure, which also expropriated many others across four failing banks. This infamous “Cyprus-style” procedure has been repeatedly used in Europe as banks collapse, and more expropriations are coming. “People have been being murdered by their banking systems,” as LaRouche put it.

In the United States the sudden “junk debt collapse” is only a harbinger of a Wall Street collapse worse than 2008, with worse impacts on human livelihoods on a global scale.

LaRouche added:

It is Barack Obama who has blocked restoration of the Glass-Steagall Act, which is the key to bankrupting Wall Street and allowing productive credit to take effect on the economy.

The same Obama has brought in the “Paris climate agreement,” so-called, which — if it were to be carried out — would reduce the economy’s ability to support human life, by 80-90% in the next 35 years.

“This is a bold human genocide if allowed to occur,” LaRouche said. We can’t allow it to occur.

“That means closing out Wall Street — and that includes Donald Trump — and getting Obama out. Good people in both political parties can agree, to move the responsible authorities in Congress to get these objectives done.”

The issue of survival for France after Paris’ second terrorist mass murder in a year, was expressed by French President Hollande’s going immediately and urgently into action, to force a Russia-France-United States alliance to destroy ISIS and al-Qaeda.

The issue of survival for Russia after the ISIS bombing of the Russian airliner over Syria, was expressed by President Putin’s powerful speech to parliament in the military hall, evoking Russia’s 15-year struggle to defeat domestic terror, and now international terror, enlisting every Russian to see himself or herself a “soldier” in that war.

The issue of America’s survival now, has nothing to do with the electoral hullabaloo since the terrorist attack in San Bernardino. The issue, is the President Obama who insists on attacking and confronting Russia and China as enemies, and who hides and denies the evidence of Saudi Arabia, Turkey, Qatar, London support of radical jihadism. The President Obama who ordered the U.S. “opening” to the Muslim Brotherhood since 2011; who since the overthrow and murder of Qaddafi has been driving toward an ultimate showdown with Russia and China, in which he thinks, suicidally, they will capitulate to regime-change anywhere he wills it.

EIR Founding Editor Lyndon LaRouche has called for Obama’s removal from office since the Spring of 2009, identifying Obama’s fatal “Nero” character as soon as he entered the White House.

LaRouche laid it out today:

Obama is now pushing the nation and the planet toward a thermonuclear confrontation which human civilization cannot survive. Nuclear weapons experts can see it, and are making public warnings. At least one U.S. Member of Congress can see it; Rep. Tulsi Gabbard of Hawaii challenged Defense Secretary Carter with this Obama threat of nuclear war in the House Armed Services Committee. President Putin and the Chinese leadership certainly see it, and are taking every preparation, as well as every war-avoidance action.

On Wednesday a LaRouchePAC collaborator in the Midwest called his Congressman, briefed him, and told him Obama had to be removed using the 25th Amendment, immediately. The Congressman said he hadn’t heard any discussion of that. The constituent replied, forcefully, “Then you start it.” The Congressman, improbably, did that, and called the constituent back twice more to report how others in Congress had reacted.

That’s one citizen. Multiply that. Change your thinking about  your ability to help do, what’s really right and necessary.

There is growing evidence that ISIS is in the process of seizing control of the enormous heroin trafficking that emanates from Afghanistan. Russian officials have been sounding the alarm about that for well over a year, and yesterday Iranian Interior Minister Abdolreza Rahmani Fazli, according to a report that appeared in the Young Journalists Club website, said that ISIS is funded to a great extent from the smuggling of illegal drugs: “We are seeing that the benefit gained from the agriculture of narcotics in Afghanistan feeds many terrorist groups. Aid going to the ISIS also comes from the benefits gained from the smuggling of narcotics. The group are themselves smugglers of narcotics.”

On Sept. 20 of this year, Carol Adl of YourNewsWire.com reported that Russia’s UN envoy Vitaly Churkin told a UN Security Council session that there is increasing heroin trafficking activities by the ISIS terrorists. “There is information that a group of militants from ISIS … already control a part of the routes of illegal drug supply from the Badakhshan Province” in northeastern Afghanistan. At that session, Adl said, Churkin had urged the UN body to closely monitor the situation of drugs in Afghanistan, given that it is one of the main routes of drug trafficking into Europe. Badakhshan Province, she noted, “is especially strategic since it extends into Afghanistan’s neighbors Pakistan, Tajikistan and the Xinjiang Province in China, which could also become a militant corridor for the ISIS group.”

On Oct. 8, the Russian news agency nakanune.ru reported that Gen. Valeri Gerasimov, chief of the Russian military’s General Staff, announced an estimate that Afghan heroin production will have increased 20% this year over 2014. Gerasimov also said that the General Staff estimates that two to three thousand Islamic State guerrillas are currently in Afghanistan.

Almost a year earlier, in late November 2014, Russia’s Federal Drug Control Service (FDCS) Director Victor Ivanov told the annual meeting in St. Petersburg of the Counternarcotics Group of the Collective Security Treaty Organization (CSTO), that the enormous narcotics business in Afghanistan was a global threat to security and peace, citing the fast-developing role of the Islamic State terrorists and African coastal pirates as drug-runners. He said that ISIS was then handling the logistics for half of the heroin reaching Europe via Iraq and Africa, deriving steady financing from its drug-running. Ivanov said: “Without the elimination of large-scale Afghan drug production, there will be no settlement of the conflicts in these regions.”

Ivanov has also repeatedly noted the dependence of the world financial system on laundered drug money, and has presented programmatic proposals for the rapid industrial development of Afghanistan and the region as the antidote to the drug trade.

ISIS is functioning like any other narco-terrorist tool in the British Empire’s Dope, Inc. armamentarium, and is increasingly involved in the multi-billion-dollar Afghan heroin trade. This reality is being insistently pointed to by Russian officials and media outlets, for the world to better understand what the war against ISIS really involves.

The Dec. 7 RT quotes from a recent study by the IHS Conflict Monitor, which reports that ISIS’s control over illegal oil shipments is not the major source of their financing. Some 43% of ISIS’s income comes from oil, the prestigious British defense and security analysis firm reports, but 50% comes from “taxation of all business activities on the territories under their control [including] trafficking of antiques and drugs.” The article reports that the Russian air strikes against the ISIS oil contraband from Iraq and Syria to Turkey, has really hurt ISIS, and that “for that purpose, ISIS also intends to take under full control heroin production and trafficking in Afghanistan. The terrorists are already making $1 billion a year from Afghan heroin.”

That figure of $1 billion comes from Russia’s Federal Drug Control Service, which was cited in an earlier Nov. 30 RT piece on ISIS and drugs, which also quoted Russian anti-drug czar Viktor Ivanov from earlier this year:

The UN currently estimates the value of Afghan heroin trade at $100 billion per year—something of an underestimate, according to EIR’s estimates.

The Nov. 30 RT article also quotes Tom Keatinge of RUSI (Royal United Services Institute), in London, who concurs that

RT concludes by quoting Vladimir Markin, the spokesman for Russia’s Investigative Committee (a powerful investigative agency within the executive branch of the Russian government): “Daesh [isis] and Al-Nusra Front are nothing but political cronies for massive trafficking of oil, currency, weapons, items of cultural value, transplant organ harvesting and slave trade.”

Lyndon LaRouche yesterday berated President Barack Obama for his open support for the Muslim Brotherhood, Al Qaeda and the more recent Islamic State.  Obama refused to keep his promise to the 9/11 families and release the 28 pages that would reveal the depth of the Saudi involvement in the Sept. 11, 2001 attacks.  As the result, Saudi Wahhabism, the “father” of the jihadist movement, has proliferated under this U.S. protective umbrella.  Obama issued secret executive orders promoting the Muslim Brotherhood as the “progressive Islamic” force in the Middle East/North Africa region.  He adopted Turkey’s Recep Tayyip Erdogan as his closest ally among all foreign leaders, and he most recently gave his blessing to Erdogan for the shooting down of the Russian Su-24 over the Turkish-Syrian border.

In all of these actions, President Obama has shown himself to be a tool of the British.  He is in the same camp as Erdogan’s Muslim Brotherhood regime in Turkey, and the Saudi Monarchy. This is the apparatus that has created, nurtured and protected ISIS and the earlier al-Qaeda.  This is precisely what Gen. Michael Flynn, former head of the Defense Intelligence Agency has been saying in public venues all over the world:  It was not an “oversight” that Obama’s actions fueled the rise of the Islamic State.  It was willful policy.  Now, with the terrorist attack in San Bernardino, the reality of Obama’s perfidy should be clear to all sane Americans.

As Charles Hurt put it bluntly, on Dec. 1 in the Washington Times, it is now time to invoke the 25th Amendment and remove Obama from office post haste.  “Someone alert the Senate president pro tempore.  Somebody call the Speaker of the House. And let’s all dust off the 25th Amendment.”

On Sunday night, President Obama once again demonstrated his deteriorated mental state, by appearing on national television with nothing to say about the San Bernardino attack, other than that he refused to make the obvious admission:  That it was part of the new ISIS blind terror campaign, that began with the suicide bombings in Beirut, the bombing of the Russian Metrojet Flight 9268 over Sinai, and the Nov. 13 Paris massacres.

Obama is operating as a British agent, just like his Turkish ally Erdogan and the Saudi Royal Family.  The deployment of more American troops into Iraq, announced last week by Secretary of Defense Ashton Carter, is qualitatively different.  These are Joint Special Operations Command (JSOC) hunter-killer teams that were deployed in Afghanistan and only fueled the expansion of terrorism.  200 JSOC killers will be deployed in Iraq, with no coordination with the Iraq Army or the government in Baghdad. There will be no intelligence sharing, and they will be simply running amok.  Iraq’s Prime Minister Haider Abadi has already denounced the deployment as an invasion of Iraq’s sovereignty. And three days after the Carter announcement, a battalion of Turkish troops invaded the Mosul region in north Iraq, ostensibly as part of a rotation of Turkish trainers of the Kurds.  But a well-placed U.S. military source warned that the Turkish troops are a vanguard for a much larger planned force to be sent into Iraq, uninvited, to back up Kurdish Peshmerga fighters in an effort to retake Mosul. In effect, this will be tantamount to the breakup of Iraq, and it could be a lot worse.

In addition to the Iraq actions, the Syrian government charged on Monday, Dec. 7, that U.S. missiles had struck a Syrian Army base in the center of the country and that three soldiers were killed in the incident.

Every aspect of the U.S. and Turkish actions in Iraq and Syria are aimed, not against ally ISIS, but against Russia.  Paul Craig Roberts, in his latest column, noted that the U.S., the U.K., and other European nations deploying fighter planes into the Iraq-Syria theater are equipping them with air-to-air missiles that have no application to the Islamic State and other jihadists, which have no air force.  They are clearly aimed against Russia.

Ted Postol, the MIT scientist who formerly was an advisor the U.S. Chief of Naval Operations, in a lengthy interview with RT, warned that U.S. actions under the Obama Administration have driven the world close to thermonuclear war. While he fudges on the issue of Obama’s willful role as a British agent in provoking such a war, he nevertheless makes clear that the U.S. and NATO have been the provocateurs, at every turn, since NATO expansion and the ABM deployment began, forcing Russia to respond from the standpoint that they are being targeted, and that some lunatics in the U.S. are once again promoting the idea that the West can fight and win a thermonuclear war with Russia.

This madness can be stopped by only one action, and that action is now being debated widely:  Invoke the 25th Amendment and get Obama out of office immediately.

Shortly before Barack Obama’s self-serving prime-time TV appearance Sunday night, purporting to discuss the San Bernardino incident and terrorism more broadly, Lyndon LaRouche stressed to a Sunday gathering of associates that “Obama must be thrown out, period.” There is no way to avoid thermonuclear war; there is no way to stop terrorism; there is no hope for mankind in general, unless we promptly oust Obama, LaRouche stated.

In this moment of crisis, with a dysfunctional American Presidency, it is urgent to recall what Lyndon LaRouche stated at the outset of his Dec. 3 Fireside Chat discussion with supporters. Just 24 hours after the San Bernardino massacre, while Obama was engaging in Benghazi-like lies that the attack may have merely been “workplace violence,” Lyndon LaRouche provided the required leadership:

Later in the discussion, LaRouche reiterated:

“This President must be removed from office because he is terrorizing the entire population of the United States, and therefore he’s not fit to be President of the United States.”

LaRouche’s leadership is intersecting growing revulsion in the country against Obama’s lies, and his deranged drive towards thermonuclear confrontation with Russia and China—most recently using the Erdogan government in Turkey to launch one provocation after another against Russia. On Dec. 4, Mellon-Scaife’s Pittsburgh Tribune Review became the latest media to pick up on Washington Times columnist Charles Hurt’s raising of the necessity of activating the 25th Amendment against a President Obama responsible for ISIS now “coming to America.” Other media, such as the Boston Herald, are outraged at Obama’s handling of San Bernardino, writing: “Workplace violence? Really?”

But few in the U.S. yet comprehend the depth of change that is required to solve these problems—such as the urgent extension of the World Land-Bridge into every corner of the planet, including the war-torn Middle East. Nor have they considered the unique qualities of human creativity, outside the ordinary habits of “practical thinking,” that are needed to bring that revolutionary transformation about.

Enter LaRouche’s Manhattan Project, which is addressing precisely that critical point. As LaRouche stated in his Fireside Chat:

Speaking at the House Armed Services Committee hearing on Tuesday, Defense Secretary Ash Carter announced with much fanfare that the U.S. would deploy a Special Operations task force to Iraq—a “specialized expeditionary targeting force” he called it—to carry out “unilateral” operations against ISIS’s leadership, in order to “pressure” and demoralize the terrorist group and “dent” its popularity.

 While the elite force is reportedly limited to 200 members, Military Times quotes an unnamed official who says the force could total more hundreds of troops, including assault teams, aviation units and other support units. The group would reportedly be based in Irbil, capital of Iraq’s autonomous northern Kurdish region.

Carter insisted that the deployment was taking place “at the invitation of the Iraqi government,” but in a statement reported by the International Business Times, Iraqi Prime Minister Haider al-Abadi said his government “does not need foreign ground combat forces” in Iraq. It needs weapons, training, and support from international partners. The deployment of foreign troops is unacceptable, he said, “without its approval, full coordination, and with full respect for Iraqi sovereignty.”

Immediately, Secretary of State John Kerry had to intervene, saying from Brussels that Iraq had been “briefed” on the operation in advance, and stressed that Washington would of course work closely with Baghdad on what kind of forces will deploy, where they will go, and what type of missions they will conduct, Military Times reported. The U.S., he added, has “full and total respect” for al-Abadi’s leadership, and all future plans will go forward “in full consultation and with full consent of the Iraqi government.”  

“Has Barack Obama just lost his voice, or has he lost his mind?” is the headline of an article in examiner.com by Mark Whittington from Houston. He is pointing to an article by Richard Cohen of the Washington Post, a “disappointed liberal” who wrote a column in the Post Tuesday worrying that Obama has “lost his voice,” that “his eloquence has been replaced by petulance and he has lost the power to persuade,” and that “his problem is that he often has nothing to say.”

The Cohen article came a week after another top Obama supporter at the Post, Dana Milbank, on Nov. 24 described Obama as “President Oh-bummer.” When Obama and Hollande met after the Paris bombing, Milbank wrote, Hollande argued to crush ISIS, and to work with the Russians and the Sysrian government to do so, while Oh-bummer Obama was hemming and hawing about how beating ISIS would be long and hard, and that Assad had to go first.

Whittington’s article quoted from a similar piece in the Washington Times by Charles Hurt. Both pointed to Obama’s “halting and disconnected speech patterns during the Paris Climate Summit,” indicating he has lost not just his voice, but his mind.

Hurt’s article is titled: “Has the president lost his ability to discharge the powers and duties of office?” He notes that in Obama’s press conference in Paris, without the teleprompter, “it was impossible to count the number of times he seized up, able to deaden the silence with only a drawn out Uh-um-ahh,” calculating that it was more than 330 times.

Hurt concludes,

Neither reporter references Obama rusing to push the button, but only his lies and incoherence. But Tulsi Gabbard’s hitting Obama’s Defense Secretary in Congressional hearings Tuesday on Obama’s rush to nuclear war was also published widely yesterday in the US press.

House Armed Services Committee hearing: Rep. Tulsi Gabbard (D-HI) questions Defense Secretary Ashton Carter at 2 hours 50 minutes of the C-SPAN hearing record.

GABBARD: Since our policy to overthrow the Syrian government of Assad has brought us, essentially, into a direct head-to-head conflict with Russia, I have some important questions along this line. How many nuclear warheads does Russia have aimed at the U.S., and how many does the U.S. have aimed at Russia?

CARTER: Congresswoman, I will get you those precise numbers as best we know them. [Then states that both sides have an awesome nuclear capacity.]

GABBARD: Right. And it would be correct to say that both of our countries have the capacity to launch these nuclear weapons within minutes?

CARTER: We do.

GABBARD: I’ve seen pictures, images from Nagasaki and Hiroshima, and I know you have as well. I assume you would agree with me that nuclear war would be devastating for the American people; the amount of suffering it would cause to our families, to our children, our communities, our planet, to future generations, is difficult to imagine. So I’m wondering if there’s been an assessment that has been done, of how many lives would be lost, and the damage that would be done if this nuclear war between our two countries were to occur?

CARTER: Congresswoman, I’ve been doing this for a long time, since the Cold War, and working on nuclear weapons since the beginning of my career. There have been estimates made right along, when it was the Soviet Union, then with Russia, and it is as you say: Nuclear war would result in catastrophic destruction. That is why deterrence is so important; that is why prudence by leaders all over the world is so important.

GABBARD: So, the fact that we now have our F-15s patrolling the Turkey-Syria border, with a primary air-to-air combat operation — there is no air-to-air combat against ISIS; they don’t have any air assets; so, I can only presume that the purpose of these planes is to target Russian planes. Is that accurate?

CARTER: Congresswoman, let me answer the point you began with. We have a very different view from Russia, about what would be constructive for them to do in Syria. We have that disagreement. We can’t align ourselves with that they’re doing. We’re opposing, and want them to change, what they’re doing in Syria. That’s not the same as the United States and Russia clashing. I think the Chairman [Gen. Joseph Dunford] and his Russian counterpart [Gen. Valery Gerasimov] talked about yesterday, about making sure that we don’t have, by accident, any incident involving U.S. and Russian forces. …

GABBARD: But that sharp disagreement, with two diametrically opposed objectives — one, the U.S. government seeking to overthrow the government of Assad; the other, Russia seeking to uphold the Syrian government of Assad — creates that potential, that strong potential and strong likelihood for head-to-head combat — or that head-to-head military conflict. And Russia’s installation of their anti-aircraft missile defense system increases that possibility of — whether it’s an accidental or intentional event, where one side may shoot down the other side’s plane. And that’s really where the potential is for this devastating nuclear war, for something that could blow up into something much larger.

CARTER: I have to disagree with something you have said….