Sudanese President Omar al-Bashir has warned of a war between Khartoum and South Sudan because their failure to settle a dispute over an oil export deal.

Al-Bashir told Blue Nile TV on Friday that war “is a possibility” because of escalating tensions with Juba over the spat.

But he said his government will “not be the initiators of such a war.”

Landlocked South Sudan shut down oil production late last month after it accused Sudan of stealing hundreds of millions of dollars worth of oil.

South Sudan broke away from its northern neighbor Sudan on July 9 last year.

A former employee of one of the world’s largest international banks has provided WND with more than 1,000 pages of documents, including customer account ledgers for dozens of companies through which the financial institution was laundering money each month, according to the whistleblower.

“I found many accounts through which hundreds of thousands of dollars were being flowed as a conduit on a monthly basis,” John Cruz, an account relationship manager who worked in the HSBC southern New York region. told WND.

As WND reported, Cruz has a raft of customer account records he claims are evidence of an international money-laundering scheme involving hundreds of billions of dollars by London-based HSBC, which reportedly is under investigation by a U.S. Senate committee.

To illustrate the point, WND and Cruz selected the bank checking account ledger for a particular HSBC commercial account, called “Company ABC” for the sake of this article, for the months May through August 2009.

In the exhibits below, WND has redacted all information that might be used to identify the account holder, including removing the account number from the bank statements.

Company ABC was identified in HSBC records with the following information:

• “Delivery Service, DHL, office products, packages.”
• Located on West 39th Street in New York City, in operation for four years and organized under New York corporate laws.
• The account was identified as being 100 percent owned by a person from Malaysia who had non-resident status in the United States and a permanent address in West Hempstead, N.Y.
• The account registration was deficient in any meaningful “Know Your Customer” information, expect to list for the owner a New York drivers’ license number.
• The file described the business as: “SHIPPING COMPANY, OFFICE ON THE 9TH FLOOR, EMPLOYEES, DESKS, COMPUTERS, PRESIDENT’S OFFICE, OPERATIONS ON 13TH FLOOR.”
• The file noted that the business was last paid a site visit on March 10, 2009, by the HSBC branch manager in E. Northport, Long Island.
• The file listed the annual revenue of the company as $2 million. But also lists the gross for the 2008 tax return as $2,782,857.

“The first words out of my mouth when I first visited Company ABC in person were that this company is bogus,” Cruz said. “There were a few small boxes lying around and a few envelopes – but nothing of value, no large packages or anything else that would justify hundreds of thousands of dollars of business being transacted here on a monthly basis.”

Cruz said he found two women on Company ABC’s 13th floor, but they seemed to be only sitting at desks and talking.

“It turned out that the two women did not speak English,” he said. “So, when I said, ‘Hello,’ they just nodded. There were no managers or other employees around, so I left.”

As seen in Exhibit 1, for the month from May 7, 2009, through June 5, 2009, Company ABC started with an opening balance of $628,081.74 and a closing balance of $328,228.99.

On May 15, 2009, a debit reflects that $300,100 was wired from the account to an unspecified location via a telephone transfer.

Other than to be credited $247.25 on May 28, 2009, the account shows no other activity.

Pedestrians enter a subway pass at the closed Doukisis Plakentias metro station during a 24-hour strike in Athens, Greece, on Tuesday, Jan. 17, 2012.

Greece’s fight to win its second international bailout may only open a new chapter in its struggle to remain in the euro area.

The rescue plan, which European officials and Greek creditors say may be wrapped up in coming days, includes a loss of more than 70 percent for bondholders in a voluntary debt exchange and loans likely to exceed the 130 billion euros ($171 billion) now on the table.

That won’t stanch the bleeding, say economists including Holger Schmieding of Berenberg Bank in London. Greece will be saddled with too much debt, too little growth and too large a budget hole to do without even more money that euro nations led by Germany are increasingly reluctant to offer, they say.

“Greece is in deep trouble,” Schmieding said in a Jan. 30 report. “The current Greek adjustment program is failing. Excessive austerity, a lack of supply-side reforms, administrative incompetence and political deadlock have pushed the Greek economy into an apparent death spiral. More of the same will not work.”

As Greek officials negotiate with representatives of the so-called troika — the European Commission, the European Central Bank and theInternational Monetary Fund – Deutsche Bank AG Chief Executive Officer Josef Ackermann may travel to Athens this weekend for talks over a swap involving Greek debt with a face value of about 200 billion euros.

Greek Prime Minister Lucas Papademos said today the country is close to completing the bailout talks.

‘Final Phase’

“We are in the final phase of this very critical process to shape a new financing program for Greece and to complete the loan agreement which will lighten the burden of public debt and ensure funding for years to come,” Papademos said in a statement posted on his website.

The euro is headed for a weekly decline against all of its 16 major peers. It rose 0.2 percent to $1.3169 at 11:45 a.m. in London. The yield on Germany’s benchmark 10-year bond fell 1.5 basis points to 1.84 percent, while the yield on Italian 10-year bonds declined 2 basis points to 5.58 percent.

Creditors are prepared to accept an average coupon of as low as 3.6 percent on new 30-year bonds in the exchange, said a person familiar with the talks, who declined to be identified because a final deal hasn’t been struck yet. The aim is to cut Greece’s debt load to 120 percent of gross domestic product by 2020 from 162 percent in 2011. The alternative is an uncontrolled default that may lead to deeper losses and ripple effects throughout Europe.

Agreement Seen

An agreement could be reached “in the coming weeks, maybe days,” said Ackermann, also chairman of the Institute of International Finance. The group, based in Washington, has more than 450 financial firms as members and is representing private creditors in the talks.

Meantime, the finance ministers of the AAA-rated euro countries — Germany, Luxembourg, the Netherlands and Finland — are set to meet today in Berlin to discuss options.

“We can’t pay into a bottomless pit,” German Finance Minister Wolfgang Schaeuble said yesterday. “Greece needs a new program, there’s no question about that, but Greece must create the conditions for it.”

Greece remains in intensive care more than two years after triggering Europe’s debt crisis, testing the patience of other European Union nations. Last November, when discussing the Greek situation, French President Nicolas Sarkozy and German Chancellor Angela Merkel for the first time raised the prospect of a country’s exit from the euro.

Contagion

Failure to control Greece’s troubles helped to push Ireland and Portugal into rescue programs, to raise borrowing costs for Italy and Spain, to embroil the European Central Bank in a controversial program of sovereign-bond purchases and to prompt Standard & Poor’s to stripFrance of its top credit rating.

Greece has lagged behind budget targets set when it won an initial, taxpayer-funded rescue of 110 billion euros in May 2010, prompting euro-area threats to cut off aid and hastening a German push to make bondholders contribute. The country is in its fifth year of recession, with a budget deficit still close to 10 percent of gross domestic product and unemployment of around 18 percent.

Bond Payment

Facing a 14.5 billion-euro bond payment on March 20 and general elections as soon as April, Papademos’s caretaker government must heed familiar calls by the euro area and the IMF for tighter austerity to complete the talks on a second aid package. The demands are also for lower wage costs and the deregulation of professions including lawyers and truck drivers.

The cuts risk triggering a “social explosion,” Hieronymos II, the head of Greece’s Orthodox Church, said in a statement posted on the website of the Archdiocese of Athens.

“We are being asked to take even larger doses of a medicine that has proven to be deadly and to undertake commitments that do not solve the problem, but only temporarily postpone the foretold death of our economy,” the Archbishop said.

Greece will default on its debt and is likely to leave the euro, Nobel economics laureate Paul Krugman said yesterday at a conference in Moscow.

“The Greek situation is essentially impossible,” Krugman said. “They will default on their debt. In fact they already have. The question is whether they will also leave the euro, which I think at this point is more likely than not.”

The Obama administration is working to attract more private funding for mortgage markets while winding down government-backed housing giants Fannie Mae and Freddie Mac.

U.S. Treasury Secretary Timothy Geithner told reporters that administration officials are exploring legislative options for overhauling the nation’s housing finance system with lawmakers on Capitol Hill, as well as with academics and other non-government agencies and advocacy groups.

In a white paper last February, the administration outlined three options for a long-term overhaul of the U.S. housing market. Each of those options proposed the elimination of Fannie and Freddie, though they differed on how or whether to replace the two agencies.

Congressional Republicans have also advocated shutting down the taxpayer-backed mortgage agencies, but on a faster timetable.

“We’re in a much earlier stage on housing reform” than with some other financial regulatory changes, said Geithner, though he add that, “What we’re going to try to do is lay the foundation for consensus.”

Geithner doesn’t expect a consensus any time soon. “It’s going to be a complicated process,” he said. “We don’t expect to legislate this year.”

The administration’s priority “is to repair the damage to homeowners, the housing market, and neighborhoods caused by the crisis,” Geithner said, referencing new measures posed by the president this week that would make it easier for struggling homeowners to refinance at record-low interest rates, thus reducing the size of their monthly mortgage payments.

The United States created jobs at the fastest pace in nine months in January and the unemployment rate unexpectedly dropped to a near three-year low, giving a boost to President Barack Obama.

Nonfarm payrolls jumped 243,000, the Labor Department said on Friday, as factory jobs grew by the most in a year. The jobless rate fell to 8.3 percent – the lowest since February 2009 – from 8.5 percent in December.

The gain in employment was the largest since April and it far outstripped the 150,000 predicted in a Reuters poll of economists. It hinted at underlying economic strength and lessened chances of further stimulus from the Federal Reserve.

“More pistons in the economic engine have begun to fire, pointing to accelerating economic growth. One of the happiest persons reading this job report is President Obama,” said Sung Won Sohn, an economics professor at California State University Channel Islands.

The payroll gains were widespread – from retail to temporary help, and from construction to manufacturing – an indication the recovery was becoming more durable.

A survey of households showed the unemployment rate declined even as new job seekers flooded into the labor force. Economists had expected the jobless rate, which has now fallen 0.8 percentage point since August, to hold steady.

“I think this is a sign that maybe the economy is reaching that holy grail of a self-sustaining economic expansion,” Stuart Hoffman, chief economist at PNC Financial Services in Pittsburgh, told Reuters Insider.

The outlook was further brightened by a separate report showing service sector activity quickened last month to a near one-year high. A gauge of service sector employment touched a six-year high.

Stocks on Wall Street were up more than 1 percent at midday, while U.S. Treasury debt prices fell sharply as investors dialed back expectations on Fed easing. The dollar rose against a basket of currencies.

The employment report contrasted with a fairly glum assessment of the economy offered by the Fed last week.

Officials at the central bank have been debating whether to buy more bonds – a program dubbed QE3 – to drive interest rates lower. It also raised doubts about the Fed’s expectation that it could hold interest rates near zero at least through late 2014.

“At the very least this scales back QE3 (quantitative easing) odds. The surprisingly persistent decline in the unemployment rate also calls into question how firmly wedded the Fed is to the late-2014 rate guidance,” said Michael Feroli, an economist at JPMorgan in New York.

Interest rate futures indicated that at least some traders were beginning to lay bets the Fed could move interest rates up in early 2014.

Fed fund futures were pricing in a 38 percent chance of a January 2014 rate hike, up from 29 percent before the report, and the first better than even chance of a rate hike was in April 2014, according to CME Group, where the contracts are traded.

DON’T MUCK IT UP

Obama welcomed the strong jobs report and urged Congress to extend a payroll tax cut and benefits for long-term unemployed, which expire at the end of this month.

“Now is not is not the time for self-inflicted wounds to our economy. I want to send a clear message for Congress. Do not slow down the recovery that we are on, don’t muck it up,” he said at a firehouse in Arlington, Virginia.

Republicans acknowledged the improvement in the labor market, but said the jobless rate was still too high.

“Our economy still isn’t creating jobs the way it should be and that’s why we need a new approach,” said House Speaker John Boehner.

While employment growth has quickened there are no jobs for three out of every four unemployed people and 19.3 million Americans are either out of work or underemployed. The level of employment is still 5.57 million from its pre-recession level.

But steady progress is being made. The economy added 60,000 more jobs in November and December than previously reported.

In addition, average hourly earnings rose four cents, which should help to support spending. The report suggested that expectations of a slowdown in U.S. economic growth in the first quarter were not yet impacting on companies’ hiring decisions.

Employment in the private sector surged 257,000 – the largest gain since April. Government payrolls fell 14,000, the least since September.

U.S. economic growth accelerated to a 2.8 percent annual rate in the final three months of 2011, but it was widely expected to slow as businesses ease back on efforts to rebuild inventories and exports slip amid a likely recession in Europe.

Some economists cautioned that January’s jobs figures could overstate the pulse of the recovery, citing still lackluster consumer confidence, income and spending growth.

While some said the jobless rate could drop below 8 percent by year end, others warned it would likely move up in the near-term as people who had given up the search for a job re-enter the workforce.

“For this to mark an upturn in the labor market, then businesses will have to continue to hire on this scale throughout the winter,” said Kathy Bostjancic, director of macroeconomic analysis at the Conference Board in New York.

CAUTIOUS OPTIMISM

The unemployment rate has now declined for five straight months, although part of the drop reflects discouraged Americans giving up the hunt for work.

A broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, slipped to a near three-year low of 15.1 percent in January from 15.2 percent in December.

Revisions to the payrolls figures showed 180,000 more jobs were created last year than previously believed.

Mild winter weather boosted employment last month in construction, which added 21,000 jobs after a 31,000 increase in December. Manufacturing payrolls surged 50,000, the largest gain in a year, after rising 32,000 the prior month.

Overall, the goods-producing sector added 81,000 jobs last month, the most since January 2006.

Transportation and warehousing employment increased 13,100 and courier jobs only fell 1,500. Last month, the Labor Department reported a large increase in courier jobs in December, but revisions showed they actually declined.

Retail employment rose 10,500 after gaining 6,200 in December. Temporary help services jumped 20,100 after rising 8,300, a potentially good sign for future permanent hiring.

Prime Minister David Cameron will make an official visit to the US next month, the White House has said.

Mr Cameron and his wife Samantha will be in the US on 13-14 March.

A spokesman said President Barack Obama would welcome Mr Cameron to “highlight the fundamental importance of the US-UK special relationship”.

The two leaders will discuss the forthcoming Nato and G8 summits, as well as developments in Afghanistan and the Middle East.

‘Liberties and values’

The White House spokesman said: “The visit will highlight the fundamental importance of the US-UK special relationship and the depth of the friendship between the American people and the people of the United Kingdom, as well as the strong personal bond that has developed between the two leaders and their families.

“It will also be an opportunity to recall the valour and sacrifice of the US and British armed forces and their long tradition of standing shoulder to shoulder beside each other in defence of our liberties and shared values.

“The visit will underscore the strength of our economic links, which contribute to millions of jobs on both sides of the Atlantic.”

The White House said issues such as Afghanistan, the Middle East, Iran, human rights and global economic stability and growth would be on the agenda.

“They will also review progress in the implementation of the various initiatives launched during the president’s state visit to the UK last year,” said the spokesman.

Troop withdrawal

Downing Street confirmed on Twitter that Mr Cameron and his wife had accepted the invitation to visit the White House.

A message from the official @Number10gov account said: “The Prime Minister and Mrs Cameron have accepted invitation from @whitehouse for official visit the US on 13th & 14th March.”

Downing Street said on Thursday that British troops would step back from their lead combat role in Afghanistan by the end of 2013.

Mr Cameron’s spokesman said UK and international troops would offer a “supporting combat role” in 2014.

The prime minister had previously said the UK’s military role in Afghanistan would be completed by the end of that year.

Mr Obama became the first US president to address members of both Houses of Parliament in Westminster Hall when he and wife Michelle were on a two-day state visit to the UK in May last year.

Mr Cameron made his first official visit to the US as prime minister in July 2010.

At least 37 people have been killed in South Sudan during a shoot-out at a peace meeting aimed at ending recent violence, officials said.

Officials from three states and the UN had met for talks in the remote town of Mayendit in Unity state in an effort to reduce inter-ethnic tensions.

The talks were called after a series of clashes, including one in which 74 people were killed earlier this week.

Thousands of people have been displaced in the violence.

According to the UN, the fighting took place when four trucks of gunmen arrived at the meeting after a row broke out, and began to shoot indiscriminately.

The gunmen included policemen from different units, soldiers, bodyguards and armed wildlife officials, according to AFP news agency.

Many others were wounded in the confrontation, including a UN staff member.

Correspondents say the lack of security in South Sudan, which became independent last July, is one of its greatest challenges.

Hundreds of people have also been killed in a series of tit-for-tat cattle raids in Jonglei state in recent weeks.

An independent Scotland would be heavily indebted and at increased risk of default, placing greater restrictions on economic and fiscal policy, a think tank has warned.

“Even with a favourable settlement on future oil revenues, its fiscal balances are likely to be volatile with large deficits in some years as a result of its dependence on oil revenues. Under these assumptions fiscal debt is likely to be around 70pc of GDP,” NIESR said.

Scotland should continue to use the pound even if it votes for independence, the think tank said, because it is so highly integrated with the rest of the UK.

“This would bring with it its own set of problems; as the example of the eurozone shows, using a currency which a parliament has no direct control over brings restrictions,” said Angus Armstrong of NIESR.

He said an independent Scotland would issue its own bonds, presumably in sterling. “Like any other country, the issue of Scottish government bonds without the ability, in extremis, to print money to repay creditors opens up the possibility of default, albeit in very remote circumstances.

The US economy created 243,000 jobs in December, the highest total for nine months, official figures show.

The rise was much more than expected. Analysts had forecast an increase of about 150,000 jobs.

The unemployment rate dropped to 8.3%, which was the lowest rate in nearly three years, and down from a revised rate of 8.5% in December.

News of the jobs growth boosted share prices, with the Dow Jones index rising almost 1% on opening.

In Europe, the FTSE 100 index rose 1.2% while Germany’s Dax rose 1.4%. The Cac 40 in France was 0.6% higher.

Employment boost

Job growth was widespread, with large gains in business services, leisure and hospitality, and manufacturing.

Leisure and hospitality, which includes restaurants and hotels, added 44,000 jobs.

Retailers added nearly 11,000 jobs, and professional and business services, which includes higher paying jobs in accounting, architecture and engineering, gained 70,000 – the most in 10 months.

Factories added 50,000 workers, much more than expected and a one-year high.

Retailers added 10,500 workers and construction employment rose by 21,000. Analysts believe the figure was helped by a mild US winter, which boosted employment in those sectors.

The report was also buoyed by revisions to November and December data, which showed 60,000 more jobs created across the two months than previously reported.

Upbeat data

Lindsey Piegza, economist at FTN Financial, said: “It was a better-than-expected report, the strongest report that we’ve seen in quite some time.

“The big question is whether the reason we’re seeing the unemployment rate drop is because more and more people are dropping out of the labour force.

“I know the market wants to rally on this number but remember we need a minimum of 250,000 just to cover demographic change.”

The figures add to a range of data pointing to a gradual US economic recovery.

Last week, it was announced that the US economy expanded at a 2.8% annual pace in the October-December quarter, a full percentage point higher than in the previous quarter.

Earlier this week, a survey from the Institute for Supply Management (ISM) indicated that the US manufacturing sector expanded at its fastest pace in seven months in January.

The recovery remains “frustrating slow” in the United States, and now Europe’s debt crisis is posing additional challenges, Federal Reserve Chairman Ben Bernanke told Congress Thursday.

“Risks remain that developments in Europe or elsewhere may unfold unfavorably and could worsen economic prospects here at home,” Bernanke told the House Budget Committee.

But he also assured lawmakers that the Fed is doing everything in its power to prevent an economic slowdown in the U.S.

“We are in frequent contact with European authorities, and we will continue to monitor the situation closely and take every available step to protect the U.S. financial system and the economy,” Bernanke said.

Europe’s debt problems started in Greece more than two years ago, and the situation there has yet to be fully resolved.

Repeating points he has made before Congress in prior appearances, Bernanke told the committee members that while cutting the national debt should be a priority over the long term, they should also take great care not to impede the current economic recovery.

“Do no harm is an important piece of advice I would offer you,” Bernanke said.

Fed to keep rates low until 2014

Rep. Scott Garrett, a Republican from New Jersey, slammed Bernanke for giving Congress advice on how to fix the struggling housing market. The Fed is in charge of monetary policy, and Republicans have critiqued Bernanke for overstepping his bounds by giving its opinion on fiscal matters.

“I was truly taken aback when just recently, as you know, the Fed issued in an unsolicited white paper on housing policy where if you didn’t advocate for, you certainly mirrored much of the positions of this administration,” Garrett said.

“Well, Congressman, first the Fed has a lot of interest in housing. It’s important for the economy. It’s important for monetary policy,” Bernanke said.

“We were trying to provide pros and cons, analysis, background. I’m sorry if you think we went too far,” he added.

The House hearing comes a week after the Fed said it intends to keep interest rates low until the end of 2014, a move that signals the central bank fears the economy will not recover fully for another three years. The Fed also laid out a goal to keep inflation around 2% each year, while it also tries to bring down the unemployment rate.

Fed forecasting breaks new ground

Many Republicans, including Rep. Paul Ryan, oppose the move, fearing it could trigger rapid inflation later on.

“I think this policy runs the great risk of fueling asset bubbles, destabilizing prices and eventually eroding the value of the dollar,” Ryan said. “The prospect of all three is adding to uncertainty and holding our economy back, in many of our judgments.”

While Ryan commended Bernanke for the Fed’s recent efforts to increase its transparency, he also pressed him on the inflation question.

Bernanke responded, “We are not seeking higher inflation. We do not want higher inflation and we’re not tolerating higher inflation.”

The Fed forecasts the unemployment rate will remain high in 2012, ending the year between 8.2% and 8.5%. It also cut its predictions for growth, forecasting U.S. gross domestic product will expand by only 2.2% to 2.7% this year.

Greece’s international debt inspectors have discovered that the debt-ridden country still needs an extra euro15 billion ($20 billion) in help — on top of a promised euro130 billion bailout and a euro100 billion debt relief from private investors, a European official said Thursday.

The European Commission, the executive arm of the European Union, has asked the other 16 countries that also use the euro to help foot the bill for the missing euro15 billion, the official said, indicating that a limit has been reached of what can be achieved by Athens implementing further cuts and private investors taking losses on the bonds they hold in the country.

The gap could be filled either though more help from eurozone governments or by eurozone central banks or state-owned banks like France’s Caisse de Depots taking a cut on their Greek bondholdings, the official said. He was speaking on condition of anonymity because of the sensitivity of the matter.

The new push for Greece’s public and government creditors to take a cut on their investments — dubbed the official sector involvement, or OSI — is a new front in the battle to save the country from a potentially devastating default. So far the eurozone and the International Monetary Fund have given billions in bailout loans to the struggling country, but they haven’t been asked to take losses.

The official added that a related deal with private creditors to take losses on their holdings has to be announced before the end of the week, adding that experts from national finance ministries will discuss the tentative deal on Friday.

People familiar with the talks on so-called private sector involvement — or PSI — have said that the deal would see investors take losses of more than 70 percent through a 50 per cent cut in the value of the bonds, a lower interest rate of between 3.5 per cent and 4.5 per cent on the bond and more time to pay back the debt.

Analysts estimate that the European Central Bank holds euro50 billion to euro55 billion in Greek bonds. The majority of these bonds were bought at a discount by the ECB, with the idea that the central bank would up give up any profits it may get on these holdings. However, the ECB has so far given no indication that it is willing to do so, with some of its governing board members saying that forgoing profits would clash with the bank’s ban on funding national governments.

If eurozone states are unwilling to boost their bailout loans beyond euro130 billion, some relief for Greece could be achieved by further lowering interest rates on these loans.

Recently the BBC saw a secret NATO report which says that the Taliban in Afghanistan are being directly supported by the Pakistani security services – the ISI (Inter-Services Intelligence). There is nothing particularly new about this revelation, as we have heard much on this alignment before. It is the fact that the co-operation between the Pakistani ISI and Taliban is in black and white in a (formerly secret) NATO document.

What does the NATO document tell us?

-         Information garnered from over 27,000 interrogations of over 4,000 Taliban, Al-Qaeda and other Afghan insurgents.

-         The Taliban generally and more and more so have the backing of the people.

-        Pakistan knows the locations of the Taliban leadership.

-         Report itself states that it should be taken as informational and not necessarily analytical.

-         Widespread collaboration between insurgents and Afghan police and military.

-         Unprecedented interest from Afghan government officials in joining Taliban.

-         Where ISAF (International Security Assistance Force) has withdrawn, Taliban influence increases with no resistance from Afghan forces and police who are supposed to fill the void. In fact they often join the Taliban.

Additional Information:

-         Haqqani family resides immediately west of ISI office at the airfield in Miram Shah inPakistan. (The Haqqani family used to be the CIA-backed anti-Soviet group, which has now become one of the most feared anti-western militant organizations in the area.)

-         Taliban weary of war, but see little hope of negotiated peace.

-         Narcotics trade provides funding, but not indirectly from donations made to the Taliban by farmers or smugglers or others along the production line of the drug.

-         This past year (2011) more funds than in any previous year given to the Taliban.

There is much more contained in the report, but I have highlighted the main points.

So why are we in Afghanistan? There is more reason to wonder why. The Karzai government is corrupt and the last elections were unfair, Osama bin Laden was captured in a compound inPakistan  – most probably set up by the Pakistani ISI for his safety.

Deadly attacks by Afghan army personnel on US, British and most recently French troops amongst others. (Possibly a reason President Sarkozy has moved up the French withdrawal to the end of 2013 in addition to the French soldiers’ deaths is the likelihood that he saw, or got wind of the NATO report.)

Again, Why Are We Still in Afghanistan?

The real reason for going intoAfghanistan, or so we were told, was to capture Osama bin Laden. That has been done, he is dead (according to theUSauthorities as we have seen no proof).

We sent over 100,000 troops between NATO and US forces intoAfghanistanwhen a much smaller specialist force of Marines and Rangers could have done the job of tracking down Al-Quada, and much quicker. Instead we decided to nation-build, putting US and NATO forces in harm’s way by having them build schools, act as public liaison officers with the locals, and playing a politically correct game which has reduced significantly the ability of US and NATO forces to act as soldiers in order to win the war.

Cost of the War

-         Going on 3,000 US and NATO troops lives.

-         Financial burden is half a trillion dollars and rising.

-         Billions of dollars in aid toPakistan.

Where Do We Stand Right Now?

Relations between the US and Pakistan are at one of their lowest points ever, since the US raid that captured Osama bin Laden, the killing of Pakistani soldiers by US aircraft through a misunderstanding on both the Afghan and Pakistani sides of the border, as a result of which Pakistan closed a vital NATO supply route into Afghanistan. Now this no-holds-barred NATO report has ratcheted the whole mess up even further.

This Correspondent says we cannot trust the Pakistanis, if we ever could, and there is no reason to believe that we ever can. They control, one way or another, the whole Afghanistan/Pakistan picture. We cannot win and never could. It is time to leave. Not in 2014, not in one year, but RIGHT NOW.

So Why Are We Still in Afghanistan? Answer: For No Good Reason Whatsoever.

The Assembly budget committee approved a bill today that would enable $865 million of borrowing from existing state accounts, Senate Bill 95. Chiang, after consultation with the Department of Finance and state Treasurer Bill Lockyer, is also seeking about $2.4 billion in delayed payments to universities, counties and Medi-Cal, as well as additional borrowing from outside investors.

The question of whether or not Greece will default seems moot at this point. Greece is in the process of defaulting. The only question is whether the default will be orderly or disorderly.

Make no mistake. The ongoing negotiations in which Greek debt holders are being asked to take losses estimated at around 70% of their original investment are tantamount to a default. Greece is acknowledging it can’t pay its debts, and that’s a default.

It’s the first phase of what all of Europe hopes is an orderly default.

The point has already been conceded by officials at two of the big three ratings firms. Last week a senior official at Standard & Poor’s told Bloomberg Television, “Greece will default very shortly.” And a Fitch official told Reuters, “It is going to happen. Greece is insolvent so it will default. So in that sense it shouldn’t be a surprise to anyone.”

So regardless of how these current negotiations are described, the orderly default now being cobbled together in Athens greatly reduces the likelihood of a much messier alternative. But any final deal hinges on whether investors can be persuaded that taking massive losses is in their best interests.

A lot of people think it is.

Brian Dolan, chief currency strategist at Forex.com, described the worst-case-scenario of a disorderly default as “akin to mayhem.”

Argentina’s disorderly default in 2002 comes to mind. At the time, Argentina simply stopped paying its debts and the country’s economy came to a virtual standstill. Rioters, angered by severe austerity measures and soaring inflation, vented their frustrations on banks and foreign companies. The widespread chaos chased foreign investors out of Argentina and a decade later the country has yet to fully recover.

Europe is desperate to avoid a repeat of Argentina in Greece. That’s why Europe’s fiscal decision makers – namely the leaders of the European Union, the European Central Bank and the International Monetary Fund – are being patient with the tortuous process now playing out in Athens.

An agreement is needed soon, however. Greece must come up with 14.5 billion euro by March 20 to pay down its bond debt. If Greece fails to make that payment, it will almost certainly trigger a disorderly default, the impact of which is certain to reach far beyond Greece’s borders.

Inside Greece the impact would be devastating. Greek banks would be forced to close for an extended period to prevent runs by depositors afraid of losing their life’s savings. A banking freeze could shut down Greece’s already fragile economy, causing shortages of food and other essential goods.

Greece has been wracked with protests for months by citizens angered by harsh austerity measures imposed largely by authorities outside Greece. If a worst-case disorderly default scenario plays out, some fear those protests could escalate into civil war.

On a global scale, if Greece is unable to meet its obligations in March, the default would trigger payment of costly credit default swaps written by various large financial institutions to protect investors against that very possibility.

But given the fragile state of the global economy, there are fears that those financial institutions couldn’t cover the credit default swaps. There could also be an increase of collateral requirements on contracts related to other countries, requiring further cash burdens on those financial institutions.  That could set off a domino effect much like the situation in 2008 when insurer AIG couldn’t cover credit default swaps triggered by the collapse of investment bank Lehman Brothers.

If the institutions that wrote credit default swaps on Greece can’t cover their losses, they in turn can’t pay their debts to their creditors. Those creditors then can’t pay their debts, and so on.

The hope among Europe’s leaders is that Greece can persuade as many of its creditors as possible to voluntarily accept the haircuts, a move that would avoid triggering the credit default swaps. By most estimates, Greece will need 90% of its bondholders to agree to the cuts for that to happen.

There will be elements of a disorderly default unless 100% of those creditors agree to the cuts, an unlikely scenario.

“Governments will push for it to be orderly and voluntary, but the individual investors may file suit and litigate the matter,” said Peter Tchir, with TF Market Advisors in Connecticut.

Already there have been reports that a major Spanish hedge fund has dropped out of the negotiations. No wonder. Various reports suggest that under the agreement now under consideration bondholders would take a 70% loss by virtue of cutting the bonds’ face value in half, reducing the average interest rate to between 3.5% and 4% and pushing repayment of the bonds 30 years into the future.

Such an agreement would reduce Greece’s debt by about euro100 billion, or $131.1 billion, and save it billions of euros in interest payments.

Another wild card that could throw the delicate situation into chaos is Europe’s patience with Greece’s fiscal policy makers in terms of the latter’s conviction for implementing further austerity measures sought as part of a rescue packages cobbled together in October.

If the EU, the ECB and IMF decide Greek politicians don’t have the stomach to cut spending further, they could rescind that 130 billion euro rescue package, forcing Greece into default.

Many critics of Europe’s approach to the long-running debt crisis have argued that Greece should have been allowed to default months ago. An earlier default, they argue, would have isolated the problem in Greece and allowed Europe to spend its time and resources addressing similar debt problems in Italy and Spain, two countries whose economies are far more important to the eurozone than Greece’s.

But after allowing the process to drag out for this long, it’s unlikely Europe’s leaders will settle on that option now.

Against a backdrop of loud opposition from protesters, Indiana has become the first Rust Belt state to enact the right-to-work labor law prohibiting labor contracts that require workers to pay union representation fees.

Republican Gov. Mitch Daniels signed the bill Wednesday after it passed the Senate following weeks of discord that saw House Democrats boycott the Legislature and thousands of protesters gather at the Statehouse.

“Seven years of evidence and experience ultimately demonstrated that Indiana did need a right-to-work law to capture jobs for which, despite our highly rated business climate, we are not currently being considered,” Daniels said in a statement.

“This law won’t be a magic answer but we’ll be far better off with it. I respect those who have objected but they have alarmed themselves unnecessarily: no one’s wages will go down, no one’s benefits will be reduced and the right to organize and bargain collectively is untouched and intact.The only change will be a positive one. Indiana will improve still further its recently earned reputation as one of America’s best places to do business, and we will see more jobs and opportunity for our young people and for all those looking for a better life,” he said.

Supporters say the measure helps create a pro-business climate that attracts employers and increases jobs. Opponents say right to work leads to lower wages and poorer quality jobs.

Indiana will be the first state in a decade to enact a right-to-work law, although few states with legislation in place boast Indiana’s union clout, borne of a long manufacturing legacy. The move is likely to embolden national right-to-work advocates who have unsuccessfully pushed the measure in other states following a Republican sweep of statehouses in 2010.

Protesters say the fight isn’t over and note that Indiana passed right to work once before but repealed it. Thousands of union members gathered inside the Statehouse chanted “Shame on you!” and “See you at the Super Bowl!” as the vote was announced, a preview of their plan to hold a rally outside in the Indianapolis streets.

Earlier this week, Daniels called it a “colossal mistake” for protesters to try to disrupt Super Bowl festivities, predicting it would backfire on them.

The Republican-controlled Senate approved the bill in a 28-22 vote Wednesday morning.

“We’re giving freedom to workers who don’t want to be a part of something they don’t believe in,” said Republican Sen. Carlin Yoder, shortly before the vote.

But testifying against the bill Wednesday, Sen. Vi Simpson, D-Bloomington, said there was no evidence that right to work created jobs.

Passage of the law closes one chapter in the contentious debate that sparked a five-week walkout by outnumbered House Democrats last year and saw them stage numerous boycotts this session. This year, however, Republicans outnumbered Democrats in the House and Senate, and House Democrats facing stiff fines if they walked out for a lengthy period.

Germany’s Bundesbank has entirely exhausted its stock of private assets and run up a quarter of a trillion euros in liabilities propping up the eurozone system, testing the political limits of EMU solidarity in Germany.

“This is reaching the danger point. It is already one and a half times the total budget of the German government,” said Professor Frank Westermann of Osnabrück University. “If any of the crisis countries exits the euro or if there is an EMU break-up, the Bundesbank bears extreme risks.”

The Bundesbank – the dominant body in the euro system – used to keep a stock of €270bn of private securities (refinance credit) before the start of the financial crisis. This was depleted last year as it sold assets to meet growing demands on the TARGET2 scheme.

Once the debt drama began to engulf the bigger economies, the Bundesbank was forced to borrow money to meet its obligations to offset capital flight, since it refused to sell its stash of gold. It now owes €228bn to German banks.

Bundesbank’s official position is that TARGET2 does not increase risk for Germany, but there has been mounting alarm from Germany’s IFO Institute and private economists.

“There are political limits to TARGET2 support. The reason why the ECB started printing money in December was to avoid pushing the Bundesbank deeper into debt,” said Prof Westermann, referring to the ECB’s provision of €489bn in cheap loans to banks for three years.

David Marsh, author of books on both the Bundesbank and the euro, said the TARGET2 system has the effect of locking Germany ever deeper into monetary union.

“The longer it goes on, the larger the cost of a eurozone break-up since these credits could be wiped out with horrendous losses. It is about time this was the focus of proper debate in the Bundestag, since the German taxpayers may have to pay for it,” he said.

The Bundesbank does not have legal immunity for losses, the flip-side of its feisty independence. It is already at risk in Greece as the OECD and the International Monetary Fund push for the ECB system to share the burden of Greek debt-relief. The Bundesbank holds an estimated €12bn of Greek debt.

Prof Westermann said the ECB’s latest lending has not been “sterilised” and amounts to money creation. While it has averted a banking crash, the move is double-edged and could intensify the crisis since the bank cannot ensure that extra liquidity stays in the Club Med bloc.

The early evidence in January is that much of ECB largesse has been used to buy Italian, Spanish, French and other state bonds. The problem is what could happen if there is a fresh spasm of Europe’s debt drama and a flood of capital flight from the South into the safe-haven of German banks. The greater the liquidity, the greater the tidal wave.

“If everybody tries to get out of crisis states at the same time, this will overwhelm TARGET2. In principle, a speculative attack could occur within a day. We are heading towards the multiple equilibria zone in which beliefs of a breakdown of the Eurozone are self-fulfilling,” he said.

Halfway through what might turn out to be the second mildest U.S. winter on record, major parts of the nation’s economy are feeling the impact, for better or worse.

Apparel sales have been dented, ski slopes are emptier, and there has probably been a modest impact on economic figures for everything from payroll numbers to housing starts.

But lower energy prices mean that some consumers and municipal governments will likely benefit as heating charges and snow removal costs decline. And some retailers are betting on the early sale of lawn mowers.

After two brutally long winters, the temperatures this year have been so balmy – forecasters say the average temperatures across the nation have been 3-4 degrees Fahrenheit above normal in January – that many Americans have been wondering whether the cold will arrive at all.

In January, the U.S. recorded the least amount of snowfall since the mild winter of 2006, while Canada had the second lowest snowfall amount in 50 years, according to Planalytics weather forecasters.

Natural gas prices have slumped to 10-year lows as warm weather cuts heating demand, hammering the profits of drillers and forcing firms like Chesapeake Energy and ConocoPhillips to shut in production.

In shopping malls, retailers are struggling to get rid of winter clothing as consumers do without seasonal apparel.

“We are going through peak heating season and temperatures have been well above normal for most of the nation with weather maps going into early February painting a similar picture,” said Chris Jarvis, president of Caprock Risk Management in Rye, New Hampshire.

Below is a summary of some of the sectors affected:

NATURAL GAS PRICES

Energy prices offer the clearest signal that the weather isn’t behaving normally, as traders scour forecast screens for a hint of how much heat households and businesses will need in the coming days and weeks.

The answer this winter: not much. November, December and January have come and gone without much sustained cold in the major energy demand centers such as the Northeast, swelling gas inventories to more than 20 percent above last year. Even oil demand has been hit slightly.

Heating degree days, a measurement that reflects the strength of energy demand for home heating, are running 12 percent below winter norms and analysts say gas storage levels will remain high unless there is an extreme and prolonged spell into early spring.

To return storage levels to normal by the end of winter, every single day between mid-February and mid-April would need to be 10 degrees colder than normal, according to Jan Schulte, in-house analyst at Thomson Reuters Natural Gas Analytics.

“That is simply impossible,” Schulte said.

Above-normal temperatures are forecast for the first half of February, though private forecaster Weather Services International sees colder than normal temperatures across most of the northern and western United States for some weeks after that.

THE ECONOMY

The mild winter likely provided a slight temporary boost to the economy as builders broke ground on new home construction earlier than normal, though researchers at JPMorgan recently estimated this impact was minor.

Goldman Sachs estimates the weather probably led employers to add about 20,000 jobs to payrolls in December, about 10 percent of the total gain in employment that month.

Fewer snow storms allowed people to shop more readily. Without the mild weather, there may have been a small contraction in retail sales in December rather than a 0.1 percent increase, Goldman estimates.

Lower spending by households on heating in the fourth quarter subtracted a bit from economic growth during the period. The money, though, may show up eventually in higher consumption of other products and services or in a higher savings rate.

RETAIL

Warm winter weather forced many U.S. retailers to offer deeper-than-usual discounts in January to clear their shelves off winter gear ranging from coats and sweaters to boots and gloves. Meanwhile restaurants and beer sellers might see a kick up in business.

“In this economy, nobody is going to buy unless there is a need for it, and the weather says, ‘You don’t need it,’” said Scott Bernhardt, chief operating officer of Planalytics, which provides weather data for businesses.

“It’s apparel that’s hit the most,” said Bernhardt, who expects outerwear sales to drop 20 to 30 percent in the month. Demand was weak for items such as snow shovels and rock salt as well, Bernhardt said.

At a Home Depot store in Overland Park, Kansas, where the temperature was an unseasonably warm 65 degrees Fahrenheit on Tuesday, snow shovels, snow blowers and other winter equipment had been relegated to a small corner at the end of the store. Prime selling space has been given over to shiny green lawn mowers.

A Target store in the Kansas City area had snow sleds on clearance last week.

Toro Co, which makes snow throwers, would not provide specifics on demand ahead of its quarterly earnings report. “Certainly the snow thrower products we sell would be negatively impacted by the lack of snow pretty much everywhere,” said Kurt Svendsen, spokesman for Toro.

Instead of hats, gloves and snow blowers, what consumers may be after in balmy weather is a nice cold beer.

“Warm weather does always help beer sales in the winter. Hard to quantify how much it’s helped the past two months though. Too early to tell,” said Harry Schuhmacher, editor and publisher of Beer Business Daily.

LOCAL GOVERNMENT

The mild winter is delivering welcome savings to many U.S. local governments still battling drag from the financial crisis and subsequent deep recession.

Cities, counties and other local governments report lower costs on heating bills for schools and other government buildings.

Lower overtime costs for ploughing crews, less use of salt to de-ice highways, and less wear and tear on equipment and roads, have also helped local authorities.

The state of Illinois reported that it saved $50,000 in December on heating the State Capitol and other buildings it controls in the state.

In Chicago, where a single fierce blizzard blew through the city’s snow budget in February 2011, the unseasonably warm December and January have barely dented the $20 million allocated for snow costs.

Plows were deployed just nine times in the past two months, versus 17 times during the same two months in the previous winter, while the amount of salt used so far is about half, said Matt Smith, spokesman for Chicago’s Department of Streets and Sanitation.

But the city, where Mayor Rahm Emanuel continues to chip away at a nearly $636 million structural budget gap with layoffs and other measures, is not counting yet on any savings.

“Just like every snow flake is different, every winter is different,” Smith said, adding “we still have a long way to go this winter.”

Kansas City snowfall this season is just three-tenths of an inch, down from the 1981-2010 seasonal average snowfall of 19.5 inches, and following two years when snowfall annually topped 40 inches, according to Kansas State climatologist Mary Knapp.

So far this has saved at least $250,000 in overtime pay, fuel and other snow-removal costs, city spokesman Dennis Gagnon said.

“No one wants to put a number on total savings, because you never know what will happen, and last February we had a big storm,” Gagnon said. “If we don’t use any salt, and can use it next year, additional savings might be as much as $1.3 million.”

The savings in the city’s $2.75 million yearly budget for snow removal were being offset by lost revenues tied to a tax on home heating fuel use, Gagnon said.

TOURISM

Business at ski resorts in New Hampshire in the U.S Northeast is down roughly 30 percent from a year ago because of the warmer weather, hurting sales at local inns and restaurants as well as the earnings of staff, said Ben Craig, snowsports school director and resort marketing coordinator for Dartmouth Skiway in the state.

“The warmer weather has certainly impacted business,” Craig said. “When people don’t see snow in their front yard, it’s hard to get excited to go skiing,” he said.

The lack of natural snow has forced the Dartmouth Skiway to make more snow than normal, raising costs, Craig said.

“A lot of ski resorts are in more rural areas and they are the biggest economic factor in those areas,” he said.

Warm-weather travel is also less on people’s minds when they don’t see snow on the ground, travel industry executives said.

David Fishman, president of Cadillac Travel in the Detroit suburb of Southfield, Michigan, said people have to be reminded during warmer winters that they want to go on vacation, preferably to a place where it’s sunnier.

“When it’s like this, people don’t think about travel as much,” he said. “People just aren’t as quick to pull the trigger because they are not looking outside or seeing snow or ice.”

The Royal Navy’s most sophisticated warship is being sent to the South Atlantic in a move that will send a powerful message to Argentina.

The Type 45 destroyer is the most advanced anti-aircraft and anti-ballistic ship in the world equipped with 48 Sea Viper missiles and the Sampson radar, which is more advanced than Heathrow air traffic control

The ship is in a league of its own in air defence able to track dozens of multiple targets

“It can shoot down Argentine fighters as soon as they take off from their bases,” said another Navy source. “This will give Buenos Aires serious pause for thought.”

The deployment, expected in late March, comes as Argentina has stepped up its sabre rattling over possession of the islands with a ban on all Falkland registered ships in South American ports.

David Cameron has responded that the sovereignty of the islands is not for negotiation.

Sending the £1 billion Dauntless on her first mission to the area will reinforce Britain’s position although it will cause difficulties for the Foreign Office which is trying to downplay the rhetoric.

Admiral Lord West, the former First Sea Lord and Falklands veteran, said the Type 45 has an “amazing anti-air warfare capability.”

He also sent a warning to the Buenos Aires government. “Should there be any foolish nonsense from Argentina, Dauntless can sit just off the airfield and take down any aircraft coming in. It’s a game-changing capability.”

A Navy Spokesman said: “The Royal Navy has had a continuous presence in the South Atlantic for many years. The deployment of HMS Dauntless to the South Atlantic has been long planned, is entirely routine and replaces another ship on patrol.”

Dauntless will replace the ageing Type 23 frigate Montrose.

Earlier this month the Navy sent Daring, the first Type 45, to the Arabian Gulf as tensions with Iran increase.

Britain is prepared to sue other European countries if the new financial agreement between 25 member states threatens our national interest, Prime Minister David Cameron said today.