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NightWatch 20110825


For the Night of 25 August 2011

North Korea: Update. Kim Chong-il's leadership train departed Russia for Manchuria in northeast China. The train was spotted at the Zabaikalsk railway station on the Russian border with China one day after Kim and Russian President Dmitri Medvedev held talks.

Comment: The US rejected as inadequate the phony concessions Kim announced in Ulan Ude. That is tonight's good news.

Special comment: Kim's return trip via China indicates his train will return to Pyongyang using the west coast main line to Pyongyang. A point missed in news coverage is that the trip to Vladivostok requires using the eastern line from Pyongyang to Wonsan and up to east coast to the Russian border. For years the segment between Wonsan and the Russian town of Khasan has been barely passable and only at slow speeds, according to a NightWatch source who traveled portions of the line fairly recently.

The North Koreans apparently have upgraded that line or Kim would not have traveled it.

Pakistan-US: Update. A Foreign Ministry spokeswoman said orders had not been made for 200 American diplomats to leave Pakistan in the next 30 days, contrary to press reports.

Yemen: President Ali Abdullah Saleh and his relatives are preparing for military action and all political efforts to have Saleh resign have failed, according to Mohamed Qahtan, spokesman of the opposition coalition Joint Meeting Parties.

Qahtan called upon defected army personnel and armed tribesmen to fulfill their promises to the revolution. According to witnesses and local residents, Saleh's government forces and opposition fighters were deploying within the capital of Sanaa and other major provinces.

Comment: Saleh has made plain his intention to transfer power to a duly elected successor. When he was sick, he was willing to hold early elections for this purpose, but the opposition insisted he step down. As his health has improved, his terms for leaving office have stiffened.

Saleh has not wavered in his position that he will leave only after general elections. What has changed is that early elections no longer appear part of his position. If his health holds, he appears intent on serving his term of office to completion.

Russia-Cyprus: For the record. Russia sent two nuclear-powered submarines to patrol the eastern Mediterranean waters around Cyprus and to help enforce Cyprus's right to explore for underseas oil and natural gas in its territorial waters, Russian Foreign Ministry spokesman Alexander Loukasevits said, Cyprus News Report reported on 25 August. The submarines should arrive in early September. Loukasevits said Russia supports Cyprus and guarantees its safety.

Comment: The Turks, who occupy the northern Cyprus, strongly oppose oil exploration by the Greek Cypriot Republic of Cyprus. Turkey insists seabead resources belong to all Cypriots, Greek and Turkish. The US and Russia strongly support the rights of the Greek Cypriot Republic of Cyprus to explore.

More on this later, but it looks as if the Russians are contracting out submarine patrol services.

Note: the British retain one of their largest, full scale overseas bases at RAF Akrotiri, a British sovereign base area in southern Cyprus. It is vital to US global airlift operations and has supported British air combat operations against Libya.

Syria: Expatriate Syrian opposition members who met in Istanbul will need two more weeks to coordinate with the opposition inside Syria to ensure that all factions are represented in the creation of a council, opposition figure Adib al-Shishakly told the press on 25 August. Another council delegate said the additional time was needed to convince activists inside Syria that the proposed council would further the anti-government uprising , adding that more time was also needed to negotiate disputes over council positions and resolve how different factions will be represented.

Comment: The distrust reflected in the above news reports explains why the al-Asad government is not threatened by the opposition. Expatriate and domestic opposition factions are fractious; cannot agree on a unifying structure and have no weapons. Despite western media reporting, the opposition mostly looks like a Friday-after-prayers young man's diversion.

Even the Turks have turned their attention towards killing Kurds, more than to supporting the Syrian opposition. The Turkish fight with the Kurds produces measurable results that the Syrians and Iranians can approve.

Egypt: Some political activists have called for a million man protest outside the Israeli embassy in Cairo next Friday. The call was sent on Tuesday for the purpose of demanding the expulsion of the Israeli ambassador in Cairo and the withdrawal of the Egyptian ambassador in Tel Aviv.

Comment: The Egyptian and Israeli governments are managing the investigation of the incidents. The activists and Islamists are looking for a cause to revive the Friday-after-prayers demonstrations. The call is not likely to resonate as long as the armed forces council retains its tight control of the weak civilian administration.

Libya: The National Transitional Council began working from Tripoli on 25 August, rebel Oil and Finance Minister Ali Tarhouni said, according to pro-opposition Libya TV.

Comment: The relocation of rebel government offices to Tripoli has not been reported by sources other than the BBC, but it would be an important step to ensure no power vacuum develops in the capital and that east and west rebel groups work together.

The leaders of the western rebel forces that moved into Tripoli over the weekend remain unreported in open sources, except for two local tribal leaders.

Libya-Arab League: The Arab League has recognized Libya's National Transitional Council as the representative of that country's citizens, Al Jazeera reported on 25 August.

Europe: For the record. Belgium, Spain, Italy, Greece and France all have in effect temporary or indefinite bans on short selling, that is, investments that would profit from a more serious downturn of their economies. A London Business School professor offered that the real threat to international financial stability comes from credit default swaps, essentially insurance against default. He assesses that these derivative instruments should be banned.

One of the purposes of the bans on short selling is to reduce the threat of default by banks and other institutions in honoring credit default swaps. Another purpose is to prevent profiteering on poor economic performance, which translates into investing in the likelihood of government failure. The ban means that if the economies decline, short sellers will not profit from bad economic news and returns.

The ban indicates the threat of default by some banks in five European countries is so serious that national governments have intervened to disrupt normal market mechanics. The financial markets in some countries have moved beyond risk into the domain of threat.

End of NightWatch for 25 August.

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