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NightWatch 20111006

NightWatch

For the night of 6 October 2011

North Korea-Hong Kong: For the record. Kim Han Sol, the 16-year old grandson of Kim Chong-il, was denied a student visa to attend an elite English language high school in Hong Kong. The refusal was not personal, necessarily, but North Koreans, Nepalese, Cambodians and Filipinos always overstay their visas so they are not longer accepted. Han Sol is bound for a school in Bosnia.

Pakistan-Afghanistan: Pakistani Chief of Army Staff General Kayani warned Afghanistan to stop its cross-border activities. He said such activities will not be tolerated as Pakistan has the capability to respond to any situation. Kayani made his comments during an address at the Saudi joint military exercise in Mangla, Azad Kashmir, Pakistan.

Comment: Both sides engage in cross border shelling and raids. Pakistani shelling often appears to be cover for Hekmatyar or Haqqani infiltration into Afghanistan, precisely like covering fires the Pakistan Army artillery lays down in support of Kashmiri terrorists. Kayani's statements do not signify an escalation of cross-border shelling, just more verbal blowback for the new Afghanistan-India strategic partnership. Karzai actually outsmarted the Pakistanis.

Lebanon Syria: For the record. In a marked departure from previous Maronite Catholic patriarchs, Patriarch Bisharah Butrus Al-Ra'i defended the Syrian Government and the pro-Syrian Lebanese Shiite group Hezbollah during an official visit to France in early September.

Al-Ra'i expressed concern that a new Syrian Sunni-dominated regime would endanger the Christian minority there and in the region. On 5 September, he conveyed his apprehension over a transition to "the rule of the Muslim Brotherhood" in Syria, commenting that "Christians there would pay the price." In an interview with Agence France-Presse on 8 September, Al-Ra'i called Syrian President Bashar al-Asad "open-minded" and argued that the president should be given "more chances to implement reforms."

Comment: The Christians in Lebanon and Syria have a keen insight about the implications of a regime change in Syria that brings Sunni fundamentalists to power, an outcome about which they have no doubt. One brilliant and well-informed Reader reported in feedback that Syrian Christians would be massacred just as they have been in Iraq. Reflexive support for so-called "democratic activists' tends to dismiss or minimize the intentions of Islamists to use democracy in order to destroy it by creating a caliphate by ballot.

The patriarch also defended Hezbollah. In comments directly at variance with traditional Maronite support for 14 March campaigns to eliminate Hezbollah's weapons supplies, Al-Ra'i told pan-Arab Al-Arabiyah Television that Hezbollah should "only hand over its weapons" after Israel relinquishes Lebanese "occupied territories" and Palestinian refugees return to their homes.

Comment: The Patriarch is a good Catholic and a Lebanese patriot. His positions are not contradictory in that context.

Yemen: Brigadier General Yehia Mohamed Abdullah Saleh, the nephew of President Saleh and one of his most effective military commanders, said on 6 October that Yemeni protests are the result of a conspiracy against democracy between the Yemeni opposition and the West because the West supports forces seeking a coup, DPA reported. Saleh added that the Gulf Cooperation Council's initiative on power transfer in Yemen is an internal affair.

Comment: It is not clear what prompted General Saleh's comment, but it is a reasonable interpretation of the Western reflexive support for any group that says it supports democracy, regardless of its pedigree or actual behavior. Also implied in Saleh's criticism is a widespread conclusion among Arab allies of the US that the US abandons its allies under stress, as it did President Mubarak.

This week international media published two significant assessments of negative Arab attitudes towards the US precisely because of the speed with which the US walked away from Mubarak, thereby encouraging the cell phone activists. Trust in the US as an ally has plummeted in the Arab states of the Middle East.

Yemen: For the record. Yemen's security agencies do not have substantial evidence that al Qaida leader Anwar al-Awlaki was killed in a 30 September drone attack, an unnamed security source said on 6 October.

Al-Awlaki was traveling with a motorcade of three vehicles when a US unmanned aerial vehicle targeted the motorcade, the source said. One vehicle was hit and the other two escaped, he said, adding that there is no irrefutable information that al-Awlaki was in the damaged vehicle. He said there is no body. After the incident, there were remains and wreckage of the targeted car, which area residents collected and buried.

Belgium: Special comment. The Luxemburg- Belgian-French bank Dexia Banque Internationale a Luxembourg has collapsed and begun negotiations for its disposal, according to a press release posted on its home page. This bank is primarily a holder of sovereign debt, including Belgian, Spanish and Italian bonds. It helped finance the Belgian government. Agence France-Presse described it as the first casualty in the eurozone debt crisis.

A few months ago it successfully passed two stress tests administered by European Union banking regulators and was judged stable. In 2008 France and Belgium helped bailout the bank for its poor investments, including in the US subprime debacle. Belgium, Luxembourg and France are taking action to protect their national interests, as part of the break up

The commentaries on the implications of this bank failure are diametrically opposite. One set of views is that Dexia is the domino that will eventually cause other European banks to fall. The Economic Intelligence Unit (EIU) judges that this is a unique, exceptional case that should not be seen as a portent of imminent collapse of other troubled European banks. The EIU commentary does not explain why.

News service reports during this Watch indicate Dexia has a buyer and the three concerned governments are using a variety of measures to rescue the bank or at least its national branches. The EIU's main lesson is that European Union bank stress tests are not reliable indicators of bank stability. A major weakness of stress tests is that they assess risk, not threat.

The speed and apparent success with which Luxembourg, France and Belgium responded to the bank's crisis this week support the EIU view that this bank failure is not the start of a systemic banking collapse in Europe. However, that is what the national authorities intend to convey so as to avoid a massive crisis of confidence.

The news accounts have tended to not dwell on the triggers that precipitated the banks collapse, such as a down grade by Standard and Poors resulting in a large drop in the value of stock. A living systems analysis of the danger for other European banks warns of the lemming effect.

End of NightWatch for 6 October.

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