Syria arms missiles with chemical warheads

TODAY’S ZAMAN, İSTANBUL

The Syrian regime, which has endured nine months of civil unrest spurred by the Arab Spring as it swept across the Middle East, has armed its medium-range missile arsenal with chemical warheads.

According to a report published by the Sabah daily Sunday, Damascus armed 600 one-ton chemical warheads to use in the event of a foreign military intervention. Furthermore, President Bashar al-Assad ordered the deployment of 21 missile launchers along its border with Turkey. Syria’s medium-range missiles that can be equipped with chemical warheads have a range of up to 1,300 kilometers and would include the southern and central provinces of Turkey.

According to the daily, the Syrian military keeps its stockpile of chemical warheads in secret facilities in and around the capital city of Damascus. In mid-November, President Assad held a special meeting with top commanders of the Syrian army and argued over how to respond to a possible military intervention by the international community. Additionally, Russia, which stood by the Assad regime’s defiance of international pressure on Damascus, sent 3 million gas masks to the troubled country. Most of those masks will be distributed to the regime’s loyalists, the families of soldiers and Baath supporters. The distribution of the masks is set to be completed by the end of December, according to the daily.

Syria is believed to have had a chemical weapons arsenal for more than three decades. Following heavy defeats against Israel in conventional warfare, international defense sources believe that following the Yom Kippur War of 1973, Hafez al-Assad, the former general of the Syrian Air Force, decided to bolster Syria’s strategic position through the development of ballistic missiles to counter Israel’s superiority in conventional warfare. The unchallenged superiority Israeli air forces led Syrian generals to push for other means to protect the regime. From then on, Syria has launched clandestine efforts to develop chemical warheads with ballistic missile delivery systems.

Nuclear knowhow, S300 are Iran's price for Russian, Chinese access to US drone

DEBKAfile Exclusive Analysis

Iran is driving a hard bargain for granting access to the US stealth drone RQ-170 it captured undamaged last week, as Russian and Chinese military intelligence teams arriving in Tehran for a look at the secret aircraft soon found. debkafile's Moscow sources disclose that the price set by Revolutionary Guards commander Gen. Ali Jaafari includes advanced nuclear and missile technology, especially systems using solid fuel, the last word on centrifuges for enriching uranium and the S-300PMU-1 air defense system, which Moscow has consistently refused to sell Tehran.

This super-weapon is effective against stealth warplanes and cruise missiles and therefore capable of seriously impairing any large-scale  US or Israeli air or missile attacks on Iran's nuclear sites.

Israeli Prime Minister Binyamin Netanyahu sent Russian-speaking Foreign Minister Avigdor Lieberman to Moscow on Dec. 7 to try and dissuade Prime Minister Vladimir Putin from letting Iran have the S-300 batteries as payment for access to the captured US drone.

Sources in Washington report that before sending Lieberman to Moscow, Netanyahu first checked with the White House at the highest levels.

Although he had his hands full with stormy demonstrations in Moscow protesting alleged election fraud, Putin received Lieberman at the Kremlin.  But the interview was short. The Russian prime minister refused to discuss the episode with his Israeli guest or even confirm that Moscow was engaged in any deal with Tehran.

In answer to reporters' questions, Lieberman commented: "Russia's positions on the Middle East were not helpful."

American efforts to reach President Dmitry Medvedev and Putin on the drone deal through other channels were likewise rebuffed.

debkafile's sources report that the Israeli prime minister's decision to sent Lieberman post-haste to Moscow to intercede with Putin followed intelligence tips which indicated to Washington and Jerusalem that the Russians may have played a major role in Iran's capture of the RQ-170 on Dec. 4. They are suspected of even supplying Iran with the electronic bag of tricks for downing the US stealth drone undamaged.

If that is so, it would mean Moscow is deeply involved in helping Iran repel the next and most critical stage of the cyber war that was to have been launched on the day the US UAV was brought down.

Our exclusive intelligence sources add that that the RQ-170 was the first US drone of this type to enter Iranian skies. Its mission was specific.

Iran's success in determining the moment of the unmanned vehicle's entry and its success in transferring command of the drone's movements from US to Iranian control systems is an exceptional intelligence and technological feat in terms of modern electronic warfare.

Western intelligence watchers keeping track of the Russian and Chinese teams in Tehran have not discovered where the negotiations stand at this time or whether the Iranians have taken on both teams at once or are bargaining with each separately to raise the bidding.

Saturday, Dec. 10, the Revolutionary Guards Deputy Commander Gen. Hossein Salami, said Iran would not  hand the captured drone back to the United States. He boasted: "The gap between us and the US or the Zionist regime and other developed countries is not so wide."

He sounded as though the bargaining with the two visiting teams was going well.

Police to test laser that 'blinds rioters'

A shoulder-mounted laser that emits a blinding wall of light capable of repelling rioters is to be trialled by police under preparations to prevent a repeat of this summer's looting and arson.

By Matthew Holehouse

The technology, developed by a former Royal Marine commando, temporarily impairs the vision of anyone who looks towards the source.

It has impressed a division of the Home Office which is testing a new range of devices because of the growing number of violent situations facing the police.

The developer, British-based Photonic Security Systems, hopes to offer the device to shipping companies to deter pirates. Similar devices have been used by ISAF troops in Afghanistan to protect convoys from insurgents.

The laser, resembling a rifle and known as an SMU 100, can dazzle and incapacitate targets up to 500m away with a wall of light up to three metres squared. It costs £25,000 and has an infrared scope to spot looters in poor visibility.

Looking at the intense beam causes a short-lived effect similar to staring at the sun, forcing the target to turn away.

"The system would give police an intimidating visual deterrent. If you can't look at something you can't attack it," said Paul Kerr, the firm's managing director, told The Sunday Times.

"If police spot someone trying to do something untoward, painting them with this would certainly make them think twice about it," he said. He said it could also be deployed during hostage rescues.

The Home Office has been considering new forms of non-lethal equipment since the August riots, with the limited range of tasers and CS gas leaving a "capability gap".

A Home Office spokesman said scientists at its Centre for Applied Science and Technology believe the use of lasers "has merit" and that it will be piloted by at least one police force. However, they will have to be satisfied the technology does not cause long-term health damage before it can be approved by the Home Secretary.

Other technology being studied includes 'wireless electronic interceptors' that can be fired a greater distance than Tasers, and long-range chemical irritant projectiles, the newspaper said.

The Metropolitan Police is exploring the possibility of buying three water cannons at a cost of £4m. Currently the only police force in the UK to operate water cannon is the Police Force of Northern Ireland (PSNI), which has six. Scotland Yard is also increasing the number of officers trained to fire plastic bullets, as a direct response to the riots.

Eurozone banking system on the edge of collapse

The eurozone banking system is on the edge of collapse as major lenders begin to run out of the assets they need to keep vital funding lines open.

By Harry Wilson, Banking correspondent

Senior analysts and traders warned of impending bank failures as a summit intended to solve the European crisis failed to deliver a solution that eased concerns over bank funding.

The European Central Bank admitted it had held meetings about providing emergency funding to the region's struggling banks, however City figures said a "collateral crunch" was looming.

"If anyone thinks things are getting better then they simply don't understand how severe the problems are. I think a major bank could fail within weeks," said one London-based executive at a major global bank.

Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding.

"The system is creaking. There is a large amount of stress," said Anthony Peters, a strategist at Swissinvest, pointing to soaring interbank lending rates.

CreditSights' weekly funding report said the ECB had effectively become the central clearer for the region's banks as lenders are increasingly distrustful about funding one another.

Bank deposits with the ECB now stand at their highest level since June 2010 at €905bn (£772bn) as lenders withdraw deposits held with their peers and put them into the central bank. At the same time, banks in major eurozone countries such as France and Italy have become increasingly reliant on central bank funding. This follows the trend seen in smaller countries like Ireland where lenders have effectively becomes taxpayer-funded "zombie" banks.

Alastair Ryan, a banks analyst at UBS, said there would be "no Lehman moment" – or single catastrophic event – for the European banking sytem, but added that without a full backstop of bank liabilities by governments the system would "struggle to finance itself in the next year in a durable way".

"The system at the moment hasn't got funding of a duration that allows it to function, so it's failing," he said.

Others think the eurozone banks are heading for a catastrophe and the worry is growing that a major bank could collapse within weeks.

The results of the fourth round of European Banking Authority (EBA) stress tests conducted in just under 18 months pointed to a €115bn capital shortfall in the eurozone financial system, with German banks showing the most notable deterioration in their core capital ratios.

Moody's on Friday downgraded France's three largest banks, BNP Paribas, Credit Agricole and Societe Generale in light of what the US rating agency said were "liquidity and funding constraints". The banks' downgrade came despite Moody's acknowledging the three lenders could depend on a higher level of French taxpayer support in future.

Two weeks ago, rumours abounded that it was the near failure of a major French lender that had been the trigger for a massive co-ordinated intervention by the world's largest central banks to shore up the banking system.

The fear is the European authorities do not have the financial firepower to deal with the banks' problems. Analysts at BarCap say that even if the European rescue funds were able to raise €1 trillion of funding this would only meet the needs of the Italian and Spanish government and banks.

The European banking sector's problems are being exacerbated by a wave of asset sales as lenders look to dramatically shrink their balance sheets. UBS estimates eurozone banks could sell off between €3.7 trillion and €4.5 trillion of assets in the next three years.

The Worldwide Depression/Recession Of 2012

By Jeff Harding

In case you haven’t noticed, the rest of the world continues to slow down and the negative data is accelerating. The big powerhouses of the world, the eurozone including Germany, Japan, and China are leading this trend and there is no reason to believe that the U.S. will not follow.

I’ve been writing about this theme frequently lately because, while we are seeing some positive numbers here in the U.S., we are also seeing signs of weakness starting to show up, and since we live in a world of international trade, the world’s woes will hit us.

The first thing to note about this phenomenon is that the central banks of the world, including the Fed, have been doing all they can to support their economies with plentiful money. According to a recent Bloomberg article, “Central banks across five continents are undertaking the broadest reduction in borrowing costs since 2009 to avert a global economic slump stemming from Europe’s sovereign-debt turmoil.”

Monetary easing will push the average worldwide central bank interest rate, weighted for gross domestic product, to 1.79 percent by next June from 2.16 percent in September, the largest drop in two years, according to data and projections from JPMorgan, which tracks 31 central banks. The number of those banks loosening credit is the most since the third quarter of 2009, when 15 institutions cut rates, the data show. …

The People’s Bank of China has raised its main interest rate three times this year to fight inflation. India’s central bank lifted rates on Oct. 25 by a quarter of a percentage point, while signaling it was nearing the end of its record cycle of increases as the economy cooled.

This is nothing new. Since the Crash of 2008, most central banks have been pumping fiat money into their economies.

The multiple EU sovereign insolvencies—you don’t need to default to be insolvent—are hitting eurozone credit hard, which is a trigger for deflation as money supply declines. Lenders are stuck with bad sovereign loans and there isn’t enough money to bail them all out, much less the PIIGS.

The thing to remember about the eurozone is that it’s not just sovereign insolvencies that is their problem. They became insolvent, yes because governments spent too much, but also because their economies are in the tank mainly for many of the same reasons the U.S. economy declined (money inflation boom, high debt/spending, housing market collapse triggering depression, high taxes and regulation, and various bailouts to prevent recovery). Until they fix the underlying causes, their banks will collapse and countries will default.

China’s economy relies on the West for its exports, and as a result:
 •Manufacturing production falls at fastest rate in 3 months; the lowest service sector growth since August;

 •Overall input costs fall for the first month since July 2010;
 •Service sector business optimism second-lowest in series history.

China’s frequent monetary stimulus, along with government real estate policies, keeps feeding their real estate boom-bust cycles.

Once you look at the data, below, you will see where we and the world are headed.

While these economies are shrinking, demand for commodities, capital goods, and manufactured goods all decline. This is impacting commodity prices; they have been falling since this summer (mainly a supply-demand factor, not just a money deflation issue). Each country/zone will have a different reaction to all this. Most will continue to inflate (“print” money).

Money printing will have little impact on declining prices for the time being. Unless they panic. If they panic, that is, massively pump money, they will suffer from price inflation. China will have more booms and the eurozone will also stagnate as well. Japan will continue to go “Japanese”, and depending on what the Fed does, it is likely we’ll go Japanese as well.

Here is what it looks like: