via

Army Lt. Gen. Ronald L. Burgess, director of the Defense Intelligence Agency, disclosed new details of China’s space weapons programs last week, including information regarding China’s anti-satellite missiles and cyber warfare capabilities.

Burgess stated in little-noticed written testimony prepared for an appearance before the Senate Armed Services Committee that Beijing is developing missiles, electronic jammers, and lasers for use against satellites.

Much of the space warfare activity is being carried out under the guise of China’s supposedly non-military space program, he said.

“The space program, including ostensible civil projects, supports China’s growing ability to deny or degrade the space assets of potential adversaries and enhances China’s conventional military capabilities,” Burgess said.

“China operates satellites for communications, navigation, earth resources, weather, and intelligence surveillance, and reconnaissance, in addition to manned space and space exploration missions,” he said.

“China’s successfully tested a direct ascent anti-satellite weapon (ASAT) missile and is developing jammers and directed-energy weapons for ASAT missions,” he said. “A prerequisite for ASAT attacks, China’s ability to track and identify satellites is enhanced by technologies from China’s manned and lunar programs as well as technologies and methods developed to detect and track space debris.”

China’s January 2007 anti-satellite missile test involved a modified DF-21 missile that destroyed a Chinese weather satellite. The blast created a debris field in space of some 10,000 pieces of space junk that could damage both manned and unmanned spacecraft.

For the U.S. military, the successful 2007 ASAT test represented a new strategic capability for China. Analysts estimate that with as many as two-dozen ASAT missiles, China could severely disrupt U.S. military operations through attacks on satellites.

Burgess said China rarely admits that its space program has direct military uses and refers to nearly all satellite launches as scientific or civil.

Additionally, Burgess said Chinese state-run enterprises “continue to proliferate space and counter-space related capabilities,” including some with direct military applications.

For example, China’s Beidou global positioning system satellites will be available for regional users this year and globally by 2020, he said.

The satellites will provide foreign militaries with precision targeting capabilities through purchases of Chinese Beidou receivers and services.

The system will provide foreign militaries with “greater redundancy and independence in a conflict scenario that employs space assets,” he said.

The Chinese, as well as the Russians, are also developing space capabilities that interfere with or disable U.S. space-based navigation, communications, and intelligence satellites.

Moreover, North Korea has demonstrated its ability to disrupt U.S. navigational capabilities through Soviet-made electronic jammers placed on vehicles near the North-South demarcation line that, when activated, were able to disrupt U.S. Global Positioning System signals up to 62 miles away.

Don’t worry about it; we have decoupled…no ?

Weighing the pros and cons….

“The European Central Bank wants its second offer of cheap ultra-long funds next week to be its last, putting the onus back on governments to secure the euro zone’s longer-term future.

Bloomberg / Bloomberg via Getty Images A Euro sign sculpture stands in front of the European Central Bank’s (ECB) headquarters.

Powerful members of the central bank’s 23-man governing council are privately hoping demand at the February 29 auction will fall well short of the 1 trillion euros (837.8 billion pounds) some expect, backing their view that it should be the last.

Central bank sources say they are worried that banks will become too reliant on ECB funds, removing the incentive to restart lending between themselves.

The ECB first offered banks low cost three-year money in December to stave off a freeze in interbank lending that threatened to make the region’s debt crisis much worse.

Banks flocked to take advantage of the offer, filling their coffers, and ECB President Mario Draghi said “a major, major credit crunch” had been averted.

Some European officials have been hoping the central bank would carry on supporting the economy with a series of subsequent cheap money auctions, known as LTROs.

But the ECB wants to keep pressure on governments to improve their defense of the euro zone with better economic policies and by bolstering their European Stability Mechanism (ESM) firewall which will come into being by mid-year.

Making hundreds of billions of euros easily available to banks over a three-year period also risks fuelling a credit binge that some central bankers worry could push up inflation.

The ECB funneled banks nearly half a trillion euros in cash at the first operation on December 21. A Reuters poll of over 60 economists showed a mid-range expectation for it to allot another 492 billion euros next week with some expecting up to a trillion to be taken.

Too Generous

The first LTRO, or longer-term refinancing operation, has already eased market pressures…..”

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“Bank of England policy makers Adam Posen and David Miles were defeated in their bid to raise stimulus by 75 billion pounds ($118 billion) as the majority argued such a move might provoke alarm on the economy.

Seven of the nine-member Monetary Policy Committee, including Governor Mervyn King, voted to raise the asset- purchase target by 50 billion pounds to 325 billion pounds, according to minutes of the Feb. 8-9 meeting published today in London. They argued a larger increase “risked sending a signal that the committee thought the economic situation was weaker than it was.”

“Recent data on the domestic and international economies had on balance been more positive than might have been anticipated towards the end of 2011, pointing to the possibility that growth might be stronger than expected in the near term,” the majority argued, according to the minutes.

The pound fell against the dollar after the report and was trading at $1.5717 at 10:31 a.m. in London, down 0.4 percent on the day. Gilts advanced, pushing the yield on the 10-year bond down 5 basis points to 2.17 percent.

Posen and Miles called for 75 billion pounds of additional quantitative easing because of “the considerable margin of spare capacity remaining in the economy and the extent of deleveraging still likely to be required,” the minutes showed. They saw a risk of a “prolonged period of depressed demand causing inflation to fall materially below” the central bank’s 2 percent target….”

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“China’s manufacturing may shrink for a fourth month in February, indicating the world’s second- biggest economy remains vulnerable to a deeper slowdown as Europe’s crisis caps exports and the housing market cools.

The preliminary 49.7 reading of an index from HSBC Holdings Plc (HSBA) and Markit Economics today compared with a final 48.8 in January. A number below 50 points to a contraction. January and February economic data are distorted by a weeklong holiday.

China is cutting banks’ reserve requirements from Feb. 24 to support an economic expansion that Nomura Holdings Inc. estimates may be 7.5 percent this quarter, the least since the global financial crisis. In today’s report, a measure of export orders fell to an eight-month low, underscoring Commerce Minister Chen Deming’s Feb. 9 caution that the government is not optimistic about the outlook for trade after a decline in shipments in January.

“With a meaningful rebound of domestic demand not in sight, external weakness is starting to bite, adding more downside risks to growth,” said Qu Hongbin, a Hong Kong-based economist for HSBC. The central bank “should step up policy easing as inflation pressures continue to ease,” he added….”

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South Africa’s inflation rises to 6.3%

Consensus was for a reading of 50.5, but the number came in at 49.7…

Finally we have some concrete agreements between Greece and the ECB….

By Bjørn Lomborg

“Japanese Finance Minister Jun Azumi said that his nation and China are committed to help resolve the European debt crisis through the International Monetary Fund once euro region members take further steps themselves.

“We shared the view that Europe needs to make more efforts to create a bigger firewall,” Azumi told reporters in Beijing yesterday after meeting Chinese Vice Premier Wang Qishan. “We also agreed to act together as the IMF will probably ask the U.S., Japan and China” to help boost its lending capacity.

The meetings deepened dialogue between Asia’s two largest economies after a visit by Prime Minister Yoshihiko Noda to Beijing in December, and contrast with periodic tensions between the two over maritime boundaries. The continued readiness of Japan and China to help offers Europeans an inducement as they close in on a 130 billion-euro ($170 billion) Greek bailout.

“Showing China and Japan are united to support the debt crisis is good news for European markets,” Hiroshi Miyazaki, chief economist at Shinkin Asset Management Co. in Tokyo, said before the meeting. “It may still take some time for the two to decide specifics as Europe hasn’t reached agreement on a solution within the region.”

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TOKYO (AP) — Japan posted a record high trade deficit in January after its nuclear crisis shut down nearly all the nation’s reactors for tougher checks, sending fuel imports surging. Exports were hurt by a strong yen and weak demand.

The 1.48 trillion yen ($18.7 billion) deficit reported Monday highlights Japan’s increased dependence on imported fuel after the March 11 earthquake and tsunami sent the Fukushima Dai-ichi nuclear plant into multiple meltdowns.

As public worries grew, nearly all the 54 nuclear reactors in Japan were stopped for inspections. The government wants to restart at least some of the reactors, after checking for better tsunami and quake protection.

Resource-poor Japan imports almost all its oil. Until the Fukushima disaster, the country had trumpeted nuclear technology as a safe and cheap answer to its energy needs.

Now, Japan is importing more natural gas and oil as utilities boost non-nuclear power generation. Imports of natural gas in January vaulted 74 percent from a year earlier and imports of petroleum jumped nearly 13 percent.

Increased energy imports contributed to Japan last year recording its first annual trade deficit since 1980. Analysts have said Japan may return to a trade surplus in 2013.

There was bad news for Japan’s manufacturing powerhouses, with a strong yen and sluggish global economy contributing to slowing exports.

Exports declined 9.3 percent in January from a year earlier, particularly in computer chips and electronic parts. Imports in January grew 9.8 percent.

BEIJING (AP) — Ms. Zhang, a schoolteacher in the central city of Anyang, lent $43,000 last year to entrepreneurs who couldn’t get loans from state banks. Now as growth cools and Beijing cracks down on informal credit, Zhang and thousands of other small lenders are unpaid and angry.

Underground lending by ordinary Chinese like Zhang flourished over the past decade, providing trillions of yuan (hundreds of billions of dollars) needed by private companies that create China’s new jobs and wealth.

Its popularity reflects public desperation for an alternative to China’s banks, which pay low deposit rates that fail to keep up with inflation and channel savings to government companies.

But the high cost of underground credit — interest rates of 70 percent a year or higher — and a slump in global demand caused a wave of business failures last year, prompting owners in cities such as Wenzhou in the southeast to flee.

The shockwave is now hitting the Chinese savers who put up money for those loans. Protests erupted in Anyang and other areas as lenders demanded officials get back their money.

“We have no other investment options and bank interest rates are too low,” said Zhang, who asked not to be identified further. Hopes of getting back the 270,000 yuan ($43,000) she lent are pinned on the courts so long as the government is willing to let a case proceed.

Rising defaults threaten to aggravate social tensions as the Communist Party tries to enforce calm ahead of a once-a-decade handover of power to a younger generation of leaders due late this year. The public already is fuming over inflation, corruption, product safety scandals and pollution.

Leaders including Premier Wen Jiabao, the top economic official, have repeatedly promised more credit for small companies. But most loans still go to state enterprises that have close ties with banks and form the power base of officials. Experts say there have been slight improvements but the situation hasn’t changed fundamentally.

“It always has been hard for small Chinese companies to borrow money from banks,” said Guo Tianyong, director of the Banking Research Center at Beijing’s Central University of Finance and Economics. He said the situation has worsened in the past year.

Entrepreneurs were struggling with slumping global demand when Beijing clamped down on a credit boom to cool its overheated economy. State banks cut the small amount of private sector lending they were doing while continuing support to state industry. Private companies failed and the survivors cut payrolls.

Only 19 percent of bank lending last year went to small businesses, while total loans fell 6 percent from 2010 to 7.5 trillion yuan ($1.2 trillion), according to the official Xinhua News Agency.

Exclusive: Nightline Goes Inside Apple Factories

via Jewish News 

A prostitute helped Thai police in the arrest of three Iranian terrorists involved in last week’s botched bomb plot. A fourth suspect, a woman, who arranged for renting a house for her and the terrorists, has fled to Iran.

Bombs that the men were putting together accidentally blew up in the house, and the trio have been arrested, two of them in Thailand and one in Malaysia.

Thai police discovered that the terrorists, all of them Iranians who had entered the country a week and a half ago, has been hanging around a city known for its brothels. A photograph published in a Bangkok newspaper showed the men with prostitutes while they sat in a bar with drinks and hookah pipes in the background, according to Newstrack India.

One of the women identified one of the terrorists, Mohammad Kharzei, and almost discovered the terror plot. Police said he stopped her from getting closer to a closet in his hotel room, where explosive materials were hidden.

Thai authorities said that a fourth suspect, Leila Rohani, fled to Iran and that there is no chance of her being extradited because of the lack of an extradition treaty between the two countries.

Police have confirmed that the terrorists intended to target Israelis, particularly diplomats. 

One of the terrorists, Saerb Morabi, blew off his own legs when he threw a bomb at police. The explosive device hit a nearby vehicle, bounced back to him and then exploded, leaving him on the ground and without one leg.Two other possible suspects still are at large, one of them a white-bearded man who is thought to be a bomb-maker. He was caught on a closed circuit camera as he fled the house where the explosion took place.   

The other suspect rented out the house to the Iranians along with Rohani.

By Jason Kephart

Peter Chiappinelli, portfolio strategist at institutional money manager Grantham Mayo Van Otterloo & Co. is preparing for the worst from the Chinese stock market.

The firm is currently hedging its China exposure to near zero in the emerging-markets sleeves of its mutual funds, he said. The company has also taken a net short position on China in the hedge fund it operates.

The problem Mr. Chiappinelli sees is that there’s going to be no easy way out of the bubble that exists in China’s infrastructure and real estate.

“China is experiencing the mother of all bubbles,” he said today at the Bloomberg Portfolio Manager Mash-up in New York. “We don’t know when it’s going to pop or what’s going to cause it to pop, but there’s very little track record of countries successfully navigating a soft landing out of a bubble,” he said.

Read the rest here.

We shall see what happens Monday; ’cause you know this story is getting to be like a reoccurring dream…. 

A  few interesting facts of history, economics, and politics kept me interested, but there is a lot to be digested.

Cheers on your weekend…

If the above  is not to your liking here is a great discussion about The Rise of China

“Spanish bonds rose for a second day amid speculation European officials are closing in on an agreement to grant a second bailout to Greece.

Italian bonds also advanced. The European Central Bank will swap its Greek bonds for new ones by Feb. 20, euro-area officials said. The exchange may pave the way for a private- sector debt reduction and convince the region’s finance ministers to agree to provide an aid package when they meet that day in Brussels. Debt from Italy and Spain outperformed benchmark German bunds.

“The market seems to be trying to get itself into a better place in terms of anticipating some good news” on Greece, said Eric Wand, a fixed-income strategist at Lloyds Bank Corporate Markets in London. “The periphery is marginally more positive, Spain is recovering a bit.”

The Spanish 10-year bond yield dropped six basis points, or 0.06 percentage point, to 5.27 percent at 12:35 p.m. London time. The 5.85 percent security due in January 2022 rose 0.445, or 4.45 euros per 1,000-euro ($1,317) face amount, to 104.385. Italy’s 10-year yield declined four basis points to 5.61 percent.

Spain’s 10-year bonds headed for a weekly advance amid increasing confidence that Greece will manage to restructure its debt without triggering contagion to other markets. Finance chiefs will probably approve the rescue package along with a debt exchange designed to cut its obligations, as long as Greece meets conditions for its bailout, three German officials said yesterday.

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“The European Central Bank is swapping its Greek bonds for new ones to ensure it isn’t forced to take losses in a debt restructuring, three euro-area officials said.

The Frankfurt-based ECB is exchanging its Greek bonds for bonds of an identical structure and nominal value, the only difference being that they would be exempt from so-called collective action clauses, the officials said late yesterday on condition of anonymity. One said the bonds have a face value of about 50 billion euros ($65 billion). An ECB spokesman declined to comment. Giorgios Zanias, chairman of the Council of Economic Advisors to the Greek Finance Ministry, didn’t respond to calls to his mobile phone.

The move may be completed by Monday, the officials said. That could pave the way for a private-sector bond swap that aims to slice about 100 billion euros off Greece’s debt as the embattled nation struggles to stave off default. Euro-area finance ministers convene in Brussels on Feb. 20 to discuss a second bailout for Greece that includes a debt-swap agreement.

An exemption from collective action clauses, or CACs, would mean the ECB would not have to participate should the Greek government impose involuntary losses on bondholders. That may occur if not enough private creditors agree to a voluntary swap….”

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