Posts Tagged ‘Obama’

North Korea threatens to attack White House over hacking claims

December 22, 2014

Pyongyang cranks up its anti-American rhetoric and accuses Barack Obama of spreading rumours that it was behind cyberattack on Sony

Kim Jong Un applauding in front of the participants in the Second Meeting of KPA Exemplary Servicemen's Families

Kim Jong Un Photo: Alamy
The Associated Press
President Barack Obama is “recklessly” spreading rumours of a Pyongyang-orchestrated cyberattack of Sony Pictures, North Korea says, as it warns of strikes against the White House, Pentagon and “the whole US mainland, that cesspool of terrorism”.

Such rhetoric is routine from North Korea’s massive propaganda machine during times of high tension with Washington.

But a long statement from the powerful National Defence Commission late on Sunday also underscores Pyongyang’s sensitivity at a film whose plot focuses on the assassination of its leader Kim Jong-un, who is the beneficiary of a decades-long cult of personality built around his family dynasty.

The US blames North Korea for the cyberattack which escalated into threats of terrorist attacks against American cinemas, leading Sony to cancel The Interview’s release.

Mr Obama, who promised to respond “proportionately” to the attack, told CNN’s State of the Union in an interview broadcast on Sunday that Washington was reviewing whether to put North Korea back on its list of state sponsors of terrorism.

The National Defence Commission, led by Mr Kim, warned that its 1.2 million-member army was ready to use all types of warfare against the US.

Kanwa Defense Review: China Has Already Tested Its South China Sea ADIZ

December 22, 2014


The East China Sea ADIZ (blue hashes) and what may be an undeclared ADIZ in the South China Sea in red. (Photo/China Times)

China secretly set up an air defense identification zone (ADIZ) over the disputed South China Sea before the incident in August where a PLA Navy Air Force’s J-11 fighter intercepted a US P-8 patrol aircraft, according to Kanwa Defense Review, a Chinese-language military magazine based in Canada.

A U.S. Navy P-8 Poseidon aircraft takes off from Perth International Airport. REUTERS/Greg Wood

Unlike the establishment of the ADIZ in the East China Sea in November of last year, the creation of a South China Sea ADIZ was never announced, the magazine said, and the US Navy aircraft was intercepted because it had entered the area.

While China has a dispute only with Japan in the East China Sea, it is in contention with several of its neighbors over territories in the resource-rich South China Sea, making the establishment of an ADIZ more sensitive as an implied assertion of China’s sovereignty claims.

Atr the same time, Beijing has been seeking to improve its relations with Southeast Asian nations through holding the 2014 APEC Economic Leaders’ Week in Beijing. Vietnam, the Philippines and Malaysia may have refused to send representatives to Beijing to attend the meeting in November if China had announced it had decreed that the entire airspace over the South China Sea should be subject to its inspection.

However, the presence of the US military aircraft in the region is still considered a threat by the PLA. The P-8 flying over the South China Sea had apparently taken off from a US base in Okinawa. Kanwa said the plane was tracked and monitored by the PLA’s coastal radar systems before being intercepted by a J-11 fighter taking off from Hainan. As the J-11 has a longer range than the earlier J-8, it was able to follow the patrol plane for an extended period of time.


 (Includes links to two weeks prior articles on this subject and related)

 (November 14, 2014)

Navy P-8 Poseidon

This is the Chinese J-11 plane accused of “dangerous” operations by the U.S. Navy on August 19, 2014. — Photographed by the crew of a U.S. P-8A Poseidon. U.S. Navy

In New York, tensions between police and Mayor Bill de Blasio boil over after killings

December 22, 2014


De Blasio’s Puts New York Police Officers In Cross-Hairs — Now he reaps the whirlwind

New York Mayor Bill de Blasio speaks during a news conference about the shootings at Woodhull Medical Center in New York on Saturday. (John Minchillo/AP)

By Michael Goodwin
The New York Post

After I once criticized President Obama for appearing to abandon Israel by being rude to Prime Minister Benjamin Netanyahu, my mailbag quickly overflowed with anti-Semitic attacks. The writers proudly signed their names to the kind of vile slurs on Jews usually whispered in private.

The president bore some responsibility for that tide of sludge. Not that Obama was guilty of personal anti-Semitism, but his behavior was a whistle the anti-Semitic dogs heard loud and clear. Unintentionally, he gave them license to come out of hiding.

So it is with Mayor de Blasio and the cop-haters. There is no way he wanted to see NYPD officers murdered, and his distress is surely genuine. But he is accountable nonetheless.

“Once a bullet leaves a gun, it has no friends,” the late Sen. Pat Moynihan once said. That is the nature of power, too. Those who have it must take extra care to be precise in their words and actions, lest they unleash the dogs of hell.

The mayor failed that test miserably. He can run from the consequences, but he can’t hide. His mayoralty is sunk unless he comes to grips with the fact that he lit the fuse that led to Saturday’s explosion.

For two years, starting with his 2013 campaign, he painted a target on the NYPD. Many of us warned repeatedly that he was playing with fire, but he saw his election as a blank check.

With Al Sharpton protecting his radical flank, the once-amiable back-bencher from Brooklyn has grown pompous with power. He fancies himself the leader of a national movement, and is comfortable lecturing the public and even the Democratic Party about its shortcomings. He has a habit of silencing critics by declaring, “I am right.”

Again and again, he depicted the great and gallant NYPD as an occupying army of racist brutes and foolishly boasted that he had warned his biracial son that the police were a danger to him. Just Friday, he met with demonstrators despite the fact that five cops had been assaulted in the so-called peaceful protests, and despite a video in which hundreds if not thousands of protesters are seen demanding “dead cops.”

As John Lindsay and David Dinkins learned, you cannot govern New York if you are hostile to the police. But even those mayors never experienced the shunning dished out to de Blasio Saturday night at the hospital.

The instant when scores of officers turned their backs on him was spontaneous, but reflected the hostility he spent two years creating. He earned their wrath.

As it stands, the bonds between City Hall and the Thin Blue Line are not merely strained. They are severed.

That is a threat to the entire fabric of the city. If it is open season on cops, nobody in New York is safe. Gun-toting maniacs like the one who assassinated Officers Rafael Ramos and Wenjian Liu will not be stopped by reason or appeasement.

They are evil, and they feel emboldened by the demonizing of cops. Give them an inch, they will take a mile. They won’t stop until they are stopped.

That is the lesson of the last 20 years. The crime wave that swept the nation was stopped in New York under the leadership of Rudy Giuliani and Michael Bloomberg.

They didn’t do it with midnight basketball or compassionate-sounding social programs. Nor are New Yorkers inherently less violent and more honest than the people of Chicago or Detroit or Baltimore.

Gotham became the safest big city in American only through smart, aggressive policing that was demanded by two mayors who knew the difference between good and evil. Their relentless approach to arresting criminals and preventing crime was not without risks or mistakes. But their approach worked beyond imagination and amounted to a man-made miracle.

The lesson they left was that, as mayor, you are either with the police, or you are against them. No matter what you say about respecting them or how many tears you shed when you try to comfort grieving families, the choice is binary.

That fact is nowhere to be found in the progressive playbook, which sees everything through race and class. But it is how the real world works.

Yes or no? De Blasio said no to the police, and now he reaps the whirlwind.


By Karen Tumulty
The Washington Post

Tensions between New York Mayor Bill de Blasio and the city’s police — which boiled over in the wake of the assassination-style slayings of two officers Saturday — have been simmering since the mayor’s 2013 campaign and represent a sharp turn from the close alliance between the city’s mayors and law enforcement over the past two decades.

Recriminations against de Blasio began within hours of the news that the officers had been shot at point-blank range as they sat in their patrol car near a housing project in the Bedford-Stuyvesant area of Brooklyn — and that the gunman had been motivated to kill them as retribution for the black men whose deaths at the hands of police in New York City and Ferguson, Mo., have sparked protests around the country.

A video of the arrival of de Blasio and Police Commissioner William J. Bratton at the hospital where officers Wenjian Liu and Rafael Ramos had been taken showed dozens of police officers silently turning their backs.

Bill de Blasio prays at St. Patrick’s Cathedral with his wife Chirlane McCray, Police Commissioner Bill Bratton and Chief James O’Neill.  Photo: Helayne Seidman

“There’s blood on many hands tonight,” Patrick Lynch, president of the largest police union, said late Saturday. “Those that incited violence on the street in the guise of protest, that tried to tear down what New York City police officers did every day. We tried to warn it must not go on, it shouldn’t be tolerated. That blood on the hands starts at the steps of City Hall in the office of the mayor.”

Although New York is a city where Democrats outnumber Republicans by more than 6 to 1, de Blasio is its first Democratic mayor in 20 years, and his stewardship of the city is being watched nationally as a test of unabashedly liberal leadership. After his landslide victory, he declared: “Make no mistake. The people of this city have chosen a progressive path. And tonight we set forth on it together, as one city.”

As de Blasio nears the end of his first year governing a huge and diverse city, there is a striking racial divide in how his constituents feel about his performance. A Quinnipiac University poll released Dec. 18 found that about 47 percent of those surveyed approved of how he has handled his job. But only 34 percent of whites had a favorable view, compared with 70 percent of African Americans and 47 percent of Hispanics.

On the question of how the mayor is handling police relations with the community, 56 percent of those surveyed disapproved and 36 percent approved.

Relations between the mayor and uniformed police officers have become so strained that “he probably needs an intermediary to go between himself and the unions, maybe a religious leader,” former New York City police commissioner Raymond Kelly said in an interview. “I don’t know how receptive the unions would be.”

Kelly added that in his experience, the Patrolmen’s Benevolent Association — the largest of several dozen law enforcement unions, representing uniformed officers — has been a good barometer of the sentiments of its 23,000 rank-and-file members.

There have been a number of flash points between de Blasio and police, including one earlier this month when the mayor spoke to George Stephanopoulos of ABC News about his fears for his biracial son.

“It’s different for a white child. That’s just the reality in this country,” de Blasio said. “And with Dante, very early on with my son, we said, ‘Look, if a police officer stops you, do everything he tells you to do, don’t move suddenly, don’t reach for your cellphone,’ because we knew, sadly, there’s a greater chance it might be misinterpreted if it was a young man of color.”

That echoed previous statements the mayor had made, going back to a campaign ad in which he invoked his Afro-wearing teenage son to explain his opposition to the New York Police Department’s controversial “stop and frisk” tactic, which entailed stopping hundreds of thousands of people a year for what was deemed suspicious activity. The vast majority of those targeted were nonwhite and innocent of any wrongdoing.

Lynch, head of the Patrolmen’s Benevolent Association of the City of New York, complained that such comments made police officers feel as though they had been “thrown under the bus.”

Members of the city’s police force, along with its firefighters, achieved iconic status for their performance as first responders in the terrorist attacks of Sept. 11, 2001. People wore hats and shirts emblazoned with “NYPD” not just in New York, but around the country.

In recent years, the attention on the department has focused more on the question of whether enforcement is applied fairly. De Blasio’s opposition to stop-and-frisk was a major emphasis when the former New York City public advocate ran for mayor, and a New York Times analysis in September found that the tactic “all but vanished” after he took office.

The department found itself in the middle of another controversy in July, when a group of officers descended upon Eric Garner, a Staten Island African American suspected of illegally selling loose cigarettes. Garner — an asthmatic father of six and grandfather of two — died after one of them, Officer Daniel Pantaleo, used a chokehold on him.

All of it was captured on amateur video, as were Garner’s pleas of, “I can’t breathe.” After a grand jury declined earlier this month to bring the officer to trial, protests erupted. Early on, they were seen as a peaceful, more productive contrast to those that ensued around the shooting of teenager Michael Brown by a police officer in Ferguson.

Recently, however, the demonstrations have taken a different turn — and that has increased tensions between the mayor and the department. After two police lieutenants were attacked by protesters on the Brooklyn Bridge, de Blasio described them as having been “allegedly assaulted” — terminology that rankled police.

The police union has posted a form on its Web site where officers can request that de Blasio and City Council Speaker Melissa Mark-Viverito “refrain from attending my funeral services in the event that I am killed in the line of duty.”

Minor incidents also have fueled the sense of grievance against the mayor among police. When he was late for a November memorial service for plane crash victims, for example, he blamed weather and a police ferry. De Blasio later acknowledged he “had a very rough night, woke up sluggish and I should have gotten myself moving quicker.”

One longtime associate of de Blasio, who spoke on the condition of anonymity because of the sensitivity of the moment, said that the standoff with city police “is a very potentially dangerous situation for the mayor politically.”

But the de Blasio ally predicted that the mayor is “going to weather it through. He will be evenhanded. He’s not anti-cop. [But] he is not going to be buffaloed.”

Karen Tumulty is a national political correspondent for The Washington Post, where she received the 2013 Toner Prize for Excellence in Political Reporting.

Mayor Bill de Blasio with James P. O’Neill and William J. Bratton at St. Patrick’s Cathedral. Credit Yana Paskova for The New York Times

A Widening Rift Between de Blasio and the New York City Police Is Savagely Ripped Open
The New York Times

Mayor Bill de Blasio sat in the front pew at St. Patrick’s Cathedral on Sunday, head bowed at times, with his wife on his left and the police commissioner on his right.

The crowd had come, Cardinal Timothy M. Dolan said, to mourn the two officers killed in an ambush in Brooklyn on Saturday. It had come to pray for their families and their “brothers and sisters in uniform.”

He went on.

“We pray for our leaders as well,” the cardinal said, looking toward the mayor’s row. “You’ve done what so many New Yorkers do in times of trial. You’ve come to St. Patrick’s.”

At the helm of a grieving New York, still raw from weeks of protests amid a national reckoning over law enforcement and race, Mr. de Blasio faces his biggest test yet.

The mayor, who does not attend church regularly, did not speak publicly on Sunday. His administration said he hoped to convey, in subdued terms, the need for unity in the city.

Read the rest:

China says it “opposes all forms of cyberattacks and cyber terrorism” — But no mention of North Korea

December 22, 2014

BEIJING/WASHINGTON Mon Dec 22, 2014 1:12am EST

U.S. Secretary of State John Kerry (R) delivers remarks as China's Foreign Minister Wang Yi (L) looks on, before their meeting at the State Department in Washington October 1, 2014. REUTERS/Jonathan Ernst

U.S. Secretary of State John Kerry (R) delivers remarks as China’s Foreign Minister Wang Yi (L) looks on, before their meeting at the State Department in Washington October 1, 2014. Credit: Reuters/Jonathan Ernst

(Reuters) – China has said it opposes all forms of cyberattacks, but it stopped short of directly condemning the hacking of Sony Pictures, or of responding to U.S. calls for action against North Korea, blamed by Washington for the assault.

Chinese Foreign Minister Wang Yi “reaffirmed China’s relevant position, emphasizing China opposes all forms of cyberattacks and cyber terrorism” in a conversation with U.S. Secretary of State John Kerry on Sunday, the foreign ministry in Beijing said in a statement.

“(China) opposes any country or individual using other countries’ domestic facilities to conduct cyberattacks on third-party nations,” it said.

The statement made no direct mention of North Korea.

China is North Korea’s only major ally, and would be central to any U.S. efforts to crack down on the isolated state. But the United States has also accused China of cyber spying in the past and a U.S. official has said the attack on Sony could have used Chinese servers to mask its origin.

South Korea, which is still technically at war with North Korea, said on Monday that computer systems at its nuclear plant operator had been hacked and non-critical data stolen, but there was no risk to nuclear installations or reactors.

“It’s our judgment that the control system itself is designed in such a way and there is no risk whatsoever,” Chung Yang-ho, deputy energy minister, told Reuters by phone.

He made no mention of North Korea and could not verify messages posted by a Twitter user claiming responsibility for the attacks and demanding the shutdown of three aging nuclear reactors by Thursday.

U.S. President Barack Obama and his advisers are weighing how to punish North Korea after the FBI concluded on Friday that Pyongyang was responsible for the attack on Sony.

It was the first time the United States had directly accused another country of a cyberattack of such magnitude on American soil and set up the possibility of a new confrontation between Washington and Pyongyang.

North Korea has denied it was to blame and has vowed to hit back against any U.S. retaliation.

“We do not know who or where they (the hackers) are but we can surely say that they are supporters and sympathizers with the DPRK,” said a commentary on KCNA, the North’s state news agency. DPRK, or the Democratic People’s Republic of Korea, is the official name for the North.

“Our toughest counteraction will be boldly taken against the White House, the Pentagon and the whole U.S. mainland, the cesspool of terrorism, by far surpassing the ‘symmetric counteraction’ declared by Obama,” it said.

Japan, one of Washington’s closest allies in Asia, said it strongly condemned the attack on Sony Pictures, but also stopped short of blaming North Korea.

Japan is maintaining close contact with the United States and supporting their handling of this case,” Chief Cabinet Secretary Yoshihide Suga told a regular news conference.

He did not answer when asked if Japan was convinced North Korea was behind the cyber attack, but repeated that he saw no effect on talks with North Korea over the fate of Japanese citizens abducted by Pyongyang agents decades ago.


Obama put the hack in the context of a crime.

“No, I don’t think it was an act of war,” he told CNN’s “State of the Union” show that aired on Sunday. “I think it was an act of cyber vandalism that was very costly, very expensive. We take it very seriously. We will respond proportionately.”

Obama said one option was to return North Korea to the U.S. list of state sponsors of terrorism, from which Pyongyang was removed six years ago.

The hack attack and subsequent threats of violence against theaters showing the film prompted Sony to withdraw a comedy, “The Interview,” prepared for release to movie theaters during the holiday season. The movie depicts the fictional assassination of North Korean leader Kim Jong Un.

Obama and free speech advocates criticized the studio’s decision, but Sony Pictures Entertainment CEO Michael Lynton defended it, saying U.S. theaters did not want to show it.

In the CNN interview, which was taped on Friday, Obama acknowledged that in a digitized world “both state and non-state actors are going to have the capacity to disrupt our lives in all sorts of ways.”

“We have to do a much better job of guarding against that. We have to treat it like we would treat, you know, the incidence of crime, you know, in our countries.”

Republican Senator John McCain disagreed with Obama, telling CNN the attack was the manifestation of a new kind of warfare.

Republican Representative Mike Rogers, chairman of the House Intelligence Committee, would not call the hacking an act of war. But he did criticize Obama for embarking on a two-week vacation in Hawaii on Friday without responding to the attack.

“You’ve just limited your ability to do something,” Rogers said. “I would argue you’re going to have to ramp up sanctions. It needs to be very serious. Remember – a nation-state was threatening violence.”

(Additional reporting by Doina Chiacu and Diane Bartz in Washington; Tetsushi Kajimoto and Kiyoshi Takenaka in Tokyo, Editing by Raju Gopalakrishnan)

Obama’s Response To North Korea Hacking of Sony Was ‘Saying Aloha And Getting On An Airplane To Hawaii’

December 21, 2014


House Intelligence Committee Chairman Mike Rogers speaks at the Reuters Cybersecurity Summit in Washington May 15, 2013. REUTERS/Yuri Gripas

House Intelligence Committee Chairman Mike Rogers speaks at the Reuters Cybersecurity Summit in Washington May 15, 2013. Credit: Reuters/Yuri Gripas

Republican Chairman of the House Intelligence Committee Mike Rogers said on “Fox News Sunday” that America needed a stronger response to North Korea’s cyber-attack on Sony than President Barack Obama gave in a lighthearted speech Friday afternoon.

“We kept warning, those of us that have been paying attention to this, this is coming to the United States, probably sooner than later. What you saw was a nation-state who engaged in trying to really destroy an American company and then took it to the broader level of using threats of violence in order to get their political will. This was a nation-state attack on the United States, and saying aloha and getting on an airplane going to Hawaii is not the answer that really the world needs, let alone America.”

Includes video:


Outgoing House Intelligence Committee Chairman Mike Rogers lambasted President Barack Obama for not taking quick action against North Korea following hackers’ cyber-attack on Sony Pictures Sunday, saying his reaction was not fast enough.

“Saying ‘aloha’ and getting on the plane to Hawaii is not the answer,” Rogers told “Fox News Sunday” host Chris Wallace Sunday. “This was a nation state attack on the United States.”

The Michigan Republican, who is leaving office at the end of the year, complained that while Obama promised a proportional response to the attacks on Friday, he “laid out a little of the playbook.”

Instead of Obama saying that the United States would respond, the press conference should have said “here are the actions,” said Rogers, noting that the United States has “the capability to make this very difficult for them in the future.”

In an interview recorded Friday and aired on CNN Sunday, President Barack Obama does not consider the cyber attack on Sony Pictures to be an act of war, but instead an “act of cyber-vandalism that was very costly, very expensive. We will respond proportionately.”

The hacking, which exposed Sony’s financial records and personal e-mails, also included threats of 9-11-style attacks on the United States unless the Japanese-owned studios withdrew its comedy, “The Interview.”

North Korea was outraged at the film which had been due to open on Christmas Day, because of its depiction of a fictional assassination of leader Kim Jong Un and its portrayal o the dictator as a buffoon.
The country has denied being involved in the cyber-attack and has said it will help with the investigation, an offer the United States has rejected.

Obama said that as a result of the incidents, his administration is considering putting North Korea back onto the United States’ list of countries that sponsor terrorism, after removing it from the list six years ago.

Rogers also made a final push Sunday for a bill that aids sharing cyber-security information between the National Security Agency and the private sector. His bill passed the Republican-controlled House, but was one of many other House bills that have stalled in the Senate this past year.

The NSA is limited in how it can protect private critical networks, said Rogers, and if passed, the measure will allow the agency to read “malicious source code,” not Americans’ emails.


Superpower disintegrated: Russia’s Putin now sees economic nightmare

December 21, 2014

“It’s going to be worse than the default crisis in 1998. This time you have a situation where the West is against them,” said Mr Browder from Hermitage

Fox news uses Athens riots footage for Russian protests

Vladimir Putin, Russia’s President, delivered his annual news conference this week Photo: AFP/GETTY
By , International Business Editor

The Telegraph

Gallows humour is back in Moscow. Asked what he would do to stop the rouble spiralling out of control, the former governor of Russia’s central bank replied: “I would pick up a pistol and shoot myself.”

This was the week when the country’s long-festering crisis turned virulent. A last-ditch attempt to defend the exchange rate by raising interest rates to 17pc failed within hours, yet the shock is surely enough to set off a chain of corporate failures and push banks over the edge.

Traders in the City watched open-mouthed as the dam broke on Black Tuesday. The event exposed the awful reality that the Kremlin does not have the infinite foreign reserves that many had supposed. “What is happening is a nightmare that we could not even have imagined a year ago,” says the central bank’s deputy chief, Sergei Shvetsov.

The currency has since stabilised at 60 to the dollar. But it has lost half its value in a year. Russia’s $2.1 trillion (£1.3 trillion) economy has shrunk to $1.1 trillion, half the GDP of California.

The external debt of Russian banks and companies has by mathematical effect ballooned to 70pc of total output. “A Russian downgrade to junk is only a matter or time,” says Tim Ash, from Standard Bank.

“The crisis is suddenly filtering into people’s daily lives,” says Bill Browder from Hermitage. “55pc of consumer goods in Russia are imported and these are  doubling in price. People are buying anything they can that keeps its value.”

Vedomisti reports that there is a de facto run on banks as depositors pull what they can from ATM machines, fearing the guillotine at any moment. Soviet queues are appearing again.

Crowds have descended on Ikea stores, converging in pick-up trucks to buy hard goods before it is too late. The company suspended sales of kitchens on Thursday, saying it cannot meet demand.

Those scrambling to buy cars may have missed their chance. Jaguar Land Rover has halted sales to Russia. So has General Motors, citing “rouble volatility”. The big three dealerships – Transtekhservice, Major Auto, and Avilon – have frozen sales.

As the buying frenzy subsides, the eerie stillness of depression may instead take hold. The central bank says the economy could contract by 4.7pc next year if oil prices settle at $60 a barrel, but that was before the rate shock. BNP Paribas says each 100-basis point rise cuts 0.8pc off GDP a year later. Rates have risen 750 points in a week.

It was also before President Vladimir Putin disclosed his second line of defence. “We must squeeze rouble liquidity to stabilise the currency. We mustn’t waste our foreign exchange reserves thoughtlessly,” he says. This means driving the MosPrime (Libor) rates to 30pc. Those borrowing to “short” the rouble are crushed, but so are Russian banks.

“It’s going to be worse than the default crisis in 1998. This time you have a situation where the West is against them,” says Browder. “Russian companies are shut out of the global capital markets. The country can’t turn to the IMF because Washington will block it. There is no lender of last resort.”

Western sanctions are still escalating. With wicked timing, President Barack Obama this week chose not to veto a law passed by the US Congress that tightens the noose further, even though he warned previously that it may irk European leaders and erode Atlantic unity. The law implies fresh curbs on the Russian energy sector, and may limit credit to Gazprom. It stiffens Ukraine with $350m of military aid, a high-risk move. The White House says Putin can reverse the process at any time by implementing the Minsk ceasefire deal agreed three months ago. “The aim is to sharpen the choice that he faces,” it says.

Putin lashed out defiantly on Thursday, accusing the West of trying to “chain the Russian” bear and tear out its claws. “The issue is not Crimea. We are protecting our sovereignty and our right to exist,” he says.

It was vintage Putin, a three-hour tirade, with a strong hint that the oil price crash is due to a plot by the US and Saudi Arabia to cripple Russia. It contained a warning to his enemies at home that there is no safe line between opposition and “Fifth Columnists”.

Putin invoked the cause of Mother Russia, calling on his people to brace for two years of hardship, yet he is clearly on thin ice. “Putin’s sales pitch has always been that he brought the country back to stability after the craziness of the Yeltsin years,” says Browder. “He could get away with it because the oil boom created enough money for everybody, but now the money has run out. People are getting very angry. If oil all stays at $60 for a year, he risks a palace coup from his own ‘Siloviki’ (former KGB) circle.”

There was a frisson of this at Putin’s press conference, though he deflected a blunt question by saying “there can’t be a palace coup in Russia, because there are no palaces”.

The grumbling is getting louder. “We all cheered when we took back our Crimea. Now we are reaping the fruits of our conquest,” says the governor of Krasnodar, Alexander Tkachyov. “We thought that nothing would happen. Now we face the payback, because there are no miracles. It has become clear that Russia is facing a real economic war, and there should be no illusions.”

Bloomberg reports that Putin asked his key advisers at a secret meeting in February whether Russia had sufficient foreign reserves to withstand a showdown with the West if it annexed Crimea. They assured him that Russia could weather the storm.

Putin took a huge gamble. Deutsche Bank and other lenders were already forecasting an oil glut in 2014 as the US flooded the markets with shale oil. Nor did the Kremlin team seem to fully grasp that Russia is far more vulnerable to sanctions now that it depends on foreign capital and is tied into global finance. For the last decade, an elite cell at the US Treasury has been sharpening the tools of economic war, crafting ways to bring countries to their knees without firing a shot.

The strategy relies on hegemonic control over the global banking system, buttressed by a network of allies. Iran has felt its grim effects. “It is a new kind of war, like a creeping financial insurgency, intended to constrict our enemies’ financial lifeblood, unprecedented in its reach,” says Juan Zarate, who once led the team.

Putin can retaliate in other ways. “He is going to escalate. The huge prize for him is to test the credibility of Nato while Obama is still in office,” says Browder. That worry is shared by many, especially in the Baltic states with Russian minorities. Four fifths of Estonia’s fortress town of Narva are ethnic Russians, and they live within sight of the border. An incident could flare up at any time.

“The nightmare scenario is if ‘little green men’ appear in one of the Baltics, and it then invokes Nato’s Article V [mutual defence clause],” says Ian Bond, the former British ambassador to Latvia and now at the Centre for European Reform. Any dispute may be murky. Yet if Nato ever fails to uphold an Article V plea, the alliance withers.

Russia was sliding into decline before the storm hit this year. Its trend growth rate had collapsed. It was near recession when crude was trading at $110 a barrel, a remarkable indictment of Putin’s 15-year reign. The country has become reliant on the commodity supercycle. Oil, gas, and metals together make up 73pc of exports and half the budget. The economy is a patronage machine built on commodity rents, a textbook case of the “Dutch Disease”.

The IMF says the effect has been to smother everything else, hollowing out the industrial core. Non-oil exports fell from 21pc to 8pc of GDP.

The economy is a tangle of bottlenecks. Russia ranks 136 for road quality, 126 for the ability of firms to absorb technology, 124 for availability of the latest technology, 120 for the burden of government regulation, and 105 for product sophistication, in the World Economic Forum’s index of competitiveness.

Critics say Russia squandered its chance to build a modern, diversified economy at the end of the Cold War. It now faces a bleak future as an ageing crisis hits and the workforce shrinks by 1m a year. Lubomir Mitov, from the Institute of International Finance, says Russia is weaker than it was in the Soviet era of the 1980s, when it still made things and brimmed with engineers. “They have lost their technology,” he says.

Mitov says it will be lucky merely to repeat the stagnation of the Brezhnev era. Every $10 fall in the price of oil cuts export revenues by 2pc of GDP. The “financing gap” will soon be 10pc of GDP. “It is a perfect storm,” he says.

Russia still has $414bn of reserves but this is below the country’s $700bn external debt, in stark contrast to 2008.

“In addition to being twice as levered, Russia is entering this crisis with lower reserves,” says Tatiana Tchembarova from BNP Paribas. She says the Kremlin has already committed $143bn of reserves for next year, and “more will be required to support Russia’s banking system”. The bank rescue cost $170bn five years ago.

Russia firms must repay $120bn of hard-currency debt over the next year. They cannot roll over the loans. Eric Chaney from AXA warns clients to brace for a wave of defaults by “non-strategic” companies.

The Kremlin will prop up national champions but this bleeds their reserves. Browder says Putin is trying every trick to put off the inevitable, but capital controls are coming. “They won’t announce it: they will just starting doing it quietly by forcing companies to convert dollars into roubles,” he says.

The Nordic bank SEB says the central bank faces a horrible choice between ferociously high interest rates – perhaps 100pc – or exchange controls. “We think it will reluctantly opt for the latter,” it says. SEB expects the Kremlin to freeze dividends and force companies to repatriate earnings. Isolation and Stalinist autarky lie ahead.

What is remarkable is that Russia’s leaders so quickly forgot the lesson of the mid-1980s when collapsing oil prices broke the back of the Soviet Union. Former premier Yegor Gaidar dated the moment to September 1985, when Saudi Arabia flooded the crude market. The Kremlin sold its gold, down to its pre-1917 imperial bars, until it ran out of cash for food imports. “The collapse of the USSR should serve as a lesson to those who construct policy based on the assumption that oil prices will remain perpetually high. A seemingly stable superpower disintegrated,” he said.

Obama Calls Sony Hack ‘Cybervandalism’ Not Act of War

December 21, 2014

By Byron Tau
The Wall Street Journal

This December 16, 2014 file photo shows the entrance of Sony Pictures Studios in Culver City, Calif.Agence France-Presse/Getty Images

President Barack Obama said that the North Korean hacking of Sony Pictures’ computer systems was an act of “cybervandalism,” not an act of war, and confirmed that the U.S. was considering adding North Korea back to the list of state sponsors of terrorism.

In an interview that aired Sunday on CNN’s “State of the Union,” Mr. Obama said that the United States was reviewing its options in response to the attack.

“I don’t think it was an act of war. I think it was an act of cybervandalism that was very costly, very expensive. We take it very seriously. We will respond proportionately,” the president told host Candy Crowley.

Mr. Obama also confirmed that the U.S. was reviewing North Korea’s State Sponsors of Terrorism designation. The State Department under President George W. Bush de-listed North Korea in 2008. The Wall Street Journal reported Friday that the U.S. was considering such a move.

“We’re going to review those through a process that’s already in place,” Mr. Obama told CNN. “I’ll wait to review what the findings are.”

Sony Pictures, an American subsidiary of Sony Corp., withdrew the film “The Interview” this week after a major intrusion into its computer systems along with threats of violence against theaters who show the film.

“The Interview,” a James Franco and Seth Rogen comedy, depicts a fictional assassination plot against North Korean leader Kim Jong-un by two American journalists.

Mr. Obama said that incidents of hacking from either foreign governments or criminal organizations were a manageable problem that should not disrupt commerce or cause a panic.

“We’re going to be in an environment in this new world where so much is digitalized that both state and non-state actors are going to have the capacity to disrupt our lives in all sorts of ways,” he said, adding: “When other countries are sponsoring it, we take it very seriously. But, you know, I think this is something that we can manage.”


Obama Says Sony ‘Made a Mistake’ Canceling Film

U.S. Reaches Out to China in Effort to Respond to Hacking

North Korea Wants Joint Probe With U.S.

Related on Peace and Freedom:

 (Most of North Korea’s telecommunications traffic runs through China’s infrastructure)


US mulls putting North Korea on terrorism sponsor list

December 21, 2014


Photo: Sony Pictures Plaza building is seen in Culver City, California. AP Photo

By Josh Lederman

HONOLULU (AP) — The United States is reviewing whether to put North Korea back onto its list of state sponsors of terrorism, President Barack Obama said as the U.S. decides how to respond to the cyberattack on Sony Pictures Entertainment that law enforcement has blamed on the communist nation.

Obama described the hacking case as a “very costly, very expensive” example of cybervandalism, but did not call it an act of war. In trying to fashion a proportionate response, the president said the U.S. would examine the facts to determine whether North Korea should find itself back on the terrorism sponsors list.

“We’re going to review those through a process that’s already in place,” Obama told CNN’s “State of the Union” in an interview to air Sunday. “I’ll wait to review what the findings are.”

President Obama during his White House news conference on December 19, 2014

North Korea spent two decades on the list until the Bush administration removed it in 2008 during nuclear negotiations. Some lawmakers have called for the designation to be restored following the hack that led Sony to cancel the release of a big-budget film that North Korea found offensive.

Only Iran, Sudan, Syria and Cuba remain on the list, which triggers sanctions that limit U.S. aid, defense exports and certain financial transactions.

But adding North Korea back could be difficult. To meet the criteria, the State Department must determine that a country has repeatedly supported acts of international terrorism, a definition that traditionally has referred to violent, physical attacks rather than hacking.

Obama also leveled fresh criticism against Sony over its decision to shelve “The Interview,” despite the company’s insistence that its hand was forced after movie theaters refused to show it.

While professing sympathy for Sony’s situation, Obama suggested he might have been able to help address the problem if given the chance.

“You know, had they talked to me directly about this decision, I might have called the movie theater chains and distributors and asked them what that story was,” Obama said.

Sony’s CEO has disputed that the company never reached out, saying he spoke to a senior White House adviser about the situation before Sony announced the decision. White House officials said Sony did discuss cybersecurity with the federal government, but that the White House was never consulted on the decision not to distribute the film.

“Sometimes this is a matter of setting a tone and being very clear that we’re not going to be intimidated by some, you know, cyberhackers,” Obama said. “And I expect all of us to remember that and operate on that basis going forward.”

North Korea has denied hacking the studio, and on Saturday proposed a joint investigation with the U.S. to determine the true culprit. The White House rejected the idea and said it was confident North Korea was responsible.

But the next decision — how to respond — is hanging over the president as he vacations with his family in Hawaii.

Obama’s options are limited. The U.S. already has trade penalties in place and there is no appetite for military action.

Reach Josh Lederman at

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Liberalization Hasn’t Worked in Vietnam or China, Won’t Work in Cuba

December 21, 2014


Economic liberalization has not changed the politics of Vietnam or China, and it’s not going to change much in Cuba, either, says Charles Krauthammer.

“In the early days of the Cold War, the very early days, there was a semi-tongue-in-cheek proposal that, instead of having bombs on the B-52s, we ought to fill them with nylons and drop them over the Soviet Union. As a result, there will be a revolution, they’re going to become capitalists.”

“This is exactly the same idea for Cuba,” he continued. “It hasn’t worked for Vietnam or China, if your objective is to liberalize it. And the bulk of the benefit is going to go to the military and the repressive apparatus. That’s the argument against normalization.”

See video:


Cuba says U.S. must respect its communist system

HAVANA Sat Dec 20, 2014 6:29pm EST

Cuba's President Raul Castro (L) speaks with his first vice-president Miguel Diaz Canel during a session of the National Assembly in Havana, December 20, 2014. REUTERS/Enrique De La Osa

Cuba’s President Raul Castro (L) speaks with his first vice-president Miguel Diaz Canel during a session of the National Assembly in Havana, December 20, 2014.

Credit: Reuters/Enrique De La Osa

(Reuters) – President Raul Castro demanded on Saturday that the United States respect Cuba’s communist rule as the two countries work to restore diplomatic ties, and warned that Cuban-American exiles might try to sabotage the rapprochement.

U.S. President Barack Obama this week reset Washington’s Cold War-era policy on Cuba and the two countries swapped prisoners in a historic deal after 18 months of secret talks.

Cubans have treated the end of open U.S. hostility as a triumph, especially the release of three Cuban intelligence agents who served long U.S. prison terms for spying on Cuban exile groups in Florida.

U.S. officials will visit Havana in January to start talks on normalizing relations and Obama has said his government will push Cuba on issues of human and political rights as they negotiate over the coming months.

Castro said he is open to discussing a wide range of issues but that they should also cover the United States and he insisted Cuba would not give up its socialist principles.

“In the same way that we have never demanded that the United States change its political system, we will demand respect for ours,” Castro told the National Assembly.

He again praised Obama for the policy change in a speech that became a partly defiant, partly celebratory show of pride for resisting five decades of U.S. aggression.

Despite the markedly improved tone in relations, Castro said Cuba faces a “long and difficult struggle” before the United States removes a decades-old economic embargo against the Caribbean island, in part because influential Cuban-American exiles will attempt to “sabotage the process”.

Obama has pledged to remove economic sanctions against Cuba but he still needs the Republican-controlled Congress to lift the embargo.

Castro confirmed he will take part in a Summit of the Americas in Panama in April, potentially setting up a first meeting with Obama since they shook hands at Nelson Mandela’s funeral a year ago.

That brief encounter drew wide attention. Unbeknownst to the world at the time, the United States and Cuba were already six month into secret talks set up with the help Pope Francis and the Canadian government.

Castro’s older brother and retired leader Fidel Castro, 88, has not been seen or heard from since Obama’s announcement and he was not at the National Assembly on Saturday. Raul Castro ended his speech with an energetic “Viva Fidel!”

The Assembly gave a long standing ovation to Cuba’s five “anti-terrorist heroes,” intelligence agents who spent between 14 and 16 years in U.S. prison for spying on Cuban exiles.

Two had been released after serving their terms and the United States freed the final three on Wednesday as part of a prisoner swap.

In return, Cuba freed U.S. aid subcontractor Alan Gross, who had been held for five years for bringing in banned telecommunications equipment, plus a Cuban who had spied for the United States and dozens of other unidentified prisoners.

(Reporting by Daniel Trotta Additional reporting by Rosa Tania Valdés and Nelson Acosta; Editing by Kieran Murray)

‘Blood on Many Hands': Police union president slams De Blasio after cops’ killing

December 21, 2014


NYPD PBA President Patrick Lynch speaks to reporters following the shooting deaths of two NYPD officers in Brooklyn on Dec. 20, 2014. (credit: Sonia Rincon/1010 WINS)

The president of the NYPD union slammed Mayor Bill de Blasio in reaction to the deaths of two officers who were ambushed and gunned down in their patrol car in broad daylight Saturday in Brooklyn.

“There’s blood on many hands tonight,” Patrolman’s Benevolent Association President Patrick Lynch said late Saturday. “Those that incited violence on this street under the guise of protest, that tried to tear down what New York City police officers did everyday.

“We tried to warn it must not go on, it cannot be tolerated,” Lynch continued. “That blood on the hands starts on the steps of city hall in the office of the mayor.”

Also on Saturday evening, video obtained by the New York Post showed several officers turning their backs on the mayor as he made his way down a hallway at Woodhull Medical Center in Brooklyn, where Officers Rafael Ramos and Wenjian Liu had earlier been pronounced dead.

The Post also reported that earlier in the evening, de Blasio approached a group of officers outside the hospital and told them, “We’re all in this together.”

“No, we’re not,” an officer responded, according to the Post, which cited another policeman who witnessed the exchange as its source.

Following the shunning by officers in the hospital hallway, de Blasio spoke emotionally of meeting the families of the deceased officers and praying over their bodies.

“We depend on our police to protect us against forces of criminality and evil,” de Blasio said. “They are a foundation of our society, and when they are attacked, it is an attack on the very concept of decency.”

The mayor declined to address a question about the possible political ramifications of the killings, saying it was “time to think about these families. I don’t think it’s a time for politics or political analysis. It’s a time to think about families that just lost their father, their husband, their son.”

Lynch and de Blasio have been locked in a public battle over treatment of officers following a Staten Island grand jury decision Dec. 3 to not indict a police officer in connection with the death of Eric Garner. Garner was stopped by police this past July on suspicion of selling so-called “loosies”, or untaxed cigarettes. Amateur video captured an officer appearing to put Garner in a chokehold and wrestle him to the ground. Garner was heard gasping, “I can’t breathe” before he lost consciousness and later died.

Demonstrators around the country have staged die-ins and other protests the grand jury decision, which closely followed a Missouri grand jury’s refusal to indict a white officer in the fatal shooting of Michael Brown, an unarmed black 18-year-old. New York City Police Commissioner Bill Bratton said they were investigating whether the suspect, 28-year-old Ismaaiyl Brinsley had attended any rallies or demonstrations.

The Associated Press contributed to this report.




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