-Caveat Lector- from http://www.aci.net/kalliste/ <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- ------------------------------------------------------------------------ Today's Lesson from The Laundrymen by Jeffrey Robinson With a 2,000-mile common border that is at best badly patrolled, at worst unpatrollable, it's easy to understand why Mexico has become the front door to the world's most important drug market. Mexican police forces are inefficient, bribery is rampant, a large part of the judiciary is totally crooked, and the government has proved otherwise helpless. Literally thousands of Justice Ministry officials and federal judicial police have been fired in the past few years for conspiring with drug traffickers. These days, around Washington, and especially at the DEA, the feeling is that the Mexicans are our worst allies in the war on drugs. In tandem with their newfound trafficking successes, the Mexicans face the problem of washing their money. At first they settled for the obvious ways. Where the Colombians favored cashier's checks, the Mexicans showed a preference for traveler's checks because the government does not require that records of them be kept. Laundrymen used to brag of buying a thousand of them in $1,000 units, stuffing five hundred in their left pocket, five hundred in their right pocket, and crossing the border with $1 million. The money would then be wired from a cambio to banks in the Caribbean before being brought back to the States as part of a real estate deal, the way it was done by Ricardo Aguirre Villagomez through the American Express Bank International. Mexican laundrymen have also sometimes seized an opportunity to spend it all in Mexico. Following a 40 percent devaluation of the peso, they simply went on a buying spree, turning dirty dollars into pesos to buy cars, vacation homes, and yachts, which they then marketed through shell companies to Americans for clean dollars. ===== Missile Targeting Saddam Buys a CD-ROM Pretty Russian Pictures IRAQ has signed an agreement to buy satellite intelligence photographs from Russian firms that will enable Saddam Hussein to target his missiles at neighbouring oil-rich Gulf states. In a move that increases the threat to British and American aircraft enforcing Iraq's no-fly zone, the Iraqis have taken possession of 70 digital satellite images of the Gulf region, The Telegraph can reveal. The images were delivered to Baghdad last month on a CD-Rom as part of a deal which was finalised when an Iraqi delegation visited Moscow's annual International Air Show in August. The Iraqis are in negotiations with a number of Russian firms to buy an advanced computer system which would enable them to hit targets with accuracy. The Russians have agreed to provide satellite photographs of Iran, Saudi Arabia, Turkey and Syria. But Western intelligence experts fear that the contract could be extended to take in more sensitive targets such as Israel and British and American military positions in the region which are being used to enforce Iraq's no-fly zone. The deal is the latest development in a multi-million arms contract between the two countries agreed earlier this year, details of which were revealed exclusively in The Telegraph. The agreement is part of a concerted Russian effort to develop trade contacts with Iraq, despite the fact that Moscow is one of the signatories to the wide-ranging United Nations sanctions imposed against Baghdad following the Gulf war. Last week Victor Kalyuzhny, Moscow's fuel and energy minister, encouraged Russian companies to break the trade sanctions and do business with Baghdad, arguing that other countries responsible for imposing the restrictions were violating UN sanctions. He said: "Everybody is making money out of the Iraqis, including the countries that want the embargo." The value of the satellite imagery deal is relatively modest - the initial agreement is worth about �200,000 - compared with the millions of pounds the Iraqis have spent buying new Russian aircraft parts and anti-aircraft missile batteries. But defence analysts believe the photographs will greatly improve the ability of the Iraqi armed forces to target neighbouring countries. An American official said: "Iraq has not possessed this kind of high-grade intelligence since the Gulf war. Apart from giving the Iraqis the capability to target neighbouring countries, it will also enable them to pose a more serious challenge to British and American attempts to enforce the no-fly zone." Abbas Janabi, a former high-ranking Iraqi official who defected to the West two years ago, says the latest deal between Russia and Iraq is merely the continuation of the mutually beneficial military deals that the two countries enjoyed before the Gulf War. Mr Janabi, who is now in hiding in London, said: "Before Saddam invaded Kuwait in 1990, the Russians provided Iraq with satellite intelligence on a regular basis, particularly during the Iran-Iraq war. It is logical that Saddam should turn to Moscow to provide this kind of material." According to documents seen by The Telegraph, the main contract has been signed with the Russian company NPO Mashinostroyenia, which specialises in satellite imagery. Negotiations were initially conducted during a visit to Moscow by Amer Rashid, the Iraqi oil minister, in April, and were concluded in August. Under the terms of the initial deal, the company has agreed to provide Iraq with 220 high and medium-resolution images of Iraq's immediate neighbours, in particular Iran, Saudi Arabia, Turkey and Syria. The 70 images already passed to Baghdad have been given to a special unit of Iraqi intelligence for analysis. When questioned about the deal by The Telegraph, a spokesman for NPO Mashinostroyenia said he had no knowledge of the deal. He said: "This is an attempt by our commercial rivals to make trouble for us." But intelligence experts are convinced the deal is genuine, and see it as part of Saddam's attempts to take advantage of the absence of international weapons teams in Iraq to upgrade the country's military capabilities. This latest arms deal shows that while Saddam's regime claims it cannot afford to feed the Iraqi population, there is no shortage of funds available for buying military equipment. The London Telegraph, October 10, 1999 Holy Wars Ty Warner Copyrights God� Where there's beans, there must be gas. HOLYBEARS, a new range of bean-filled teddy bears which carry a religious message, have found themselves at the centre of a David and Goliath struggle. Months after their launch, they are being sued by the ubiquitous Beanie Babies. The action by Ty Inc - a Goliath �650 million-a-year company that sells millions of Beanie Babies across the world - has infuriated America's Bible belt, the original home of the HolyBears, which are also sold in Britain and Europe. Ty Inc claims that the HolyBears, which carry slogans such as WWJD (What Would Jesus Do?) sewn into their chests, are infringing copyright. Last month it filed an action in an American court demanding that every one be "impounded for destruction". But Rob LeClair, the founder of the Texas-based HolyBears Inc, is fighting back. He said: "Our bears are little messengers of God's word, and we will fight to protect them from destruction even as we pray for their aggressors. Our bears were independently developed and do not infringe anyone's copyright." In an open letter to supporters, he has portrayed the legal battle as a crusade. He wrote: "Very little has changed over the centuries. There is always someone who believes they are strong enough to stop the spread of God's word. If you have one of our bears handy, pick it up and look at it carefully. Do you see the teddy bear face, the beaming smile, the embroidered religious design on the chest, and the message of God's word attached to its paw? It is clear that our teddy bears have a purpose and a mission - and it will take more than a lawsuit to prevent them from spreading the word!" He warned the "gargantuan toy manufacturer" that "there is a good book that tells us about Davids defeating Goliaths". He said that, in addition to hiring a group of skilled lawyers, he was asking "every one of our friends to pray". Keith Simmons, who distributes HolyBears from his business in Plymouth, Devon, said yesterday that he would be praying for Mr LeClair. Mr Simmons said: "We are selling dozens of these bears, although they have only recently arrived in this country. A woman rang from Scotland yesterday because she wants to give the marriage bears to the bridesmaids at a wedding. Mr LeClair is doing this for a purpose - to spread God's word. This legal action is like a whale trying to swallow a minnow." Each HolyBear carries a tag carrying a religious message. Launched in March, they come under a variety of guises, from Benevolence, the Good Samaritan Bear, and Precious, the Annunciation Bear, to New Purity, the Baptism Bear, and the God Bless Texas Bear. The "unity" HolyBear, for example, celebrates "matrimony, the first union ordained by God" with a logo of two joined rings embroidered on its chest. George W Bush, the presidential contender, was presented with a special edition of the God Bless America Bear when he announced his candidacy earlier this year. But Ty Inc has accused HolyBears of trying to capitalise on what it calls the "national phenomenon" of the Beanie Baby. More than one billion of the toys have been sold since 1993. Ty has limited the production and sale of Beanie Babies and they have soared in price since they have been "retired" and taken off the shelves, selling to collectors for as much as �6,250 each. Toy manufacturers are surprised, however, that Ty Inc, which makes more than 260 types of stuffed toy, is suing HolyBears, whose bears are intended mostly for sale in Christian book shops. Ty Warner, who started Beanie Babies, is one of the wealthiest men in America. HolyBears has yet to make a profit. The London Telegraph, October 10, 1999 Electronic Trading Spot Commodities Come to the Internet Now you can stock up on cobalt, nickel, lead, and zinc. LONDON � Commodity traders, more used to frenetic dealings on the exchange floor, are slowly setting up in cyberspace hoping to profit from the vast commercial potential of the Internet. With the volume of electronic commerce transactions on the Internet increasing daily, analysts say it would only be natural for commodity traders to sell and buy metals, coffee, sugar and other commodities on the Internet. "It is a great place for trading,'' said Alex Letts, president of Internet consulting group Publicis Technology. "What it does is create an instant global forum which gives you the ability, wherever you are in the world and whatever time of day or night, to trade with people on the other side of the world,'' Letts said. The global e-commerce market has doubled this year to around $111 billion, according to technology consulting firm Andersen consulting. Although e-commerce revenues have been concentrated in the United States, Europe is catching up and by 2002 Andersen Consulting expect European e-commerce income to be up to half that of the U.S. total. AUSTRALIAN MINER HAPPY WITH INTERNET SALES Metals like nickel and cobalt are already being sold on the Internet while a physical sugar trading Web site, (www.comdaq.net) started trading on October 1. Commodity futures contracts have been traded on the internet for some time but physical commodity trade has been a late starter. In mid-August, Australian mining firm WMC Ltd launched a Web site selling cobalt and nickel (www.nickel.com). Flush with the success of the site, the company recently said it planned to add more metals for sale. WMC nickel division executive general manager Peter Johnston said the initial aims were to deepen the company's market and attract a better price. Both aims had already been achieved. "We have put ourselves into direct contact with old customers, and started doing business with new customers. "Customers are even asking us to enhance the page,'' Johnston said. A leading metal trader and ring-dealing member of the London Metal Exchange (LME) said it has launched the first Internet-based LME futures trading system. MG Plc said its MITS trading Web site (www.mgltd.co.uk), allows trading, execution and real-time prices for the base metals traded on the LME. Lawrence Eagles, commodity analyst at brokers GNI Ltd, said the Internet is an ideal vehicle to trade physical commodities. "Before you would have to go through a broker and that is quite difficult. "It cuts out the middleman and reduces commission but it reduces transparency and the end result may be that one party doesn't end up with a fair price,'' Eagles said. COMMODITY EXCHANGES IN CYBERSPACE? With the Internet growing by the day and more and more businesses embracing e-commerce, analysts expected more and more commodity traders to move onto the Internet. "I think it is the way everybody is going to go, even in metals. I think it is going to happen more and more and more,'' said an analyst at a London commodity brokerage. Forrester Research, a U.S.-based Internet research firm, estimated that European e-commerce was worth $1.16 billion last year. In 1999, total European e-commerce should reach $7.9 billion with the huge increase on 1998, mainly due to business-to-business commerce. GNI's Eagles said it was likely that physical commodity trade may take off to such an extent that virtual marketplaces are born. "What you may well see happen is the forming of physical commodity exchanges on the Internet and they can almost be done on a global basis,'' Eagles added. Analysts said the success of online equity brokers like Charles Schwab Corp and E+Trade Group Inc illustrated the lucrative potential of online trading. Between seven million to 10 million Americans have opened online stock trading accounts in the past three years, creating an entire new industry and moving an estimated 575,000 trades through the internet each day. EXCHANGE FLOOR TRADING NOT IN DANGER Online trading is unlikely to put trading on the floor of commodity exchanges like the 123-year old London Metal Exchange (LME), the New York Mercantile Exchange (NYMEX) and the Tokyo Commodity Exchange (TOCOM) in danger. Analysts said online trading could complement floor trading on the LME � the world's dominant base metals market � where daily open outcry sessions around a ring sees metal worth millions of dollars sold and bought daily. "I don't think it is going to completely change the shape of floor trading, but it is probably going to start eating into what is done down there. I think it will complement floor trading,'' one analyst said. Fox News, October 10, 1999 Deflation Continues Inflation Lowest Since the 1950's But watch central banks drive up real interest rates. At the end of the 1990s, the world's largest economies have achieved price stability. Virtually all the countries in the Organisation for Economic Co-operation and Development have inflation rates below 3 per cent, the lowest level since the 1950s. Inflation across the euro-zone is running at just 1.2 per cent. In the UK, the comparable figure is 1.3 per cent. In the US, excluding food and energy prices, inflation stands at 1.9 per cent. Japan still suffers deflation. Policymakers have done their bit, and several global trends have been at work to help them hold down prices. Japan has been in the dumps, and this together with the troubles in developing Asia has brought imported disinflation to the rest of the world. Increased competition in global markets has meant increased pressure on prices. There is a great deal of spare capacity in the world. So as global growth speeds up, the main threat to price stability in rich countries comes from oil and commodity prices, which after prolonged weakness are beginning to recover. This week, the US Federal Reserve, the European Central Bank and the Bank of England all met to decide on interest rates, and to judge the risks of inflation. In the event, the equity markets were relieved at the outcome: all three banks left rates unchanged. Alan Greenspan and his colleagues at the Fed set the trend on Tuesday. Fed-watchers, most of whom were confident that policy would stay on hold, speculated before the meeting about whether the Fed would announce a policy "bias" to raise rates at a future meeting. It did. The case for higher interest rates in the US is strong. Although inflation remains subdued, there are clear signs at the end of a remarkable decade that over-heating is becoming a significant danger. Wall Street remains highly valued, despite a 10 per cent fall in equities and a sharp rise in bond yields since the start of the summer. Consumer spending has been growing at above 4 per cent a year. Business investment remains buoyant, spurred by high share prices. Warning lights With private demand continuing to expand at a rate faster than the economy's underlying potential to supply goods and services, the current account deficit is expanding at a rate that has set warning lights flashing. Morgan Stanley forecasts that next year the US economy will have to draw in more than $1bn a day in foreign capital to plug the gap. As prospects improve elsewhere in the world, this will become more difficult. Holding fire A healthy rate of productivity growth was the Fed's main reason for holding fire this week. But it is worried about tightness in the labour market, which explains its bias towards higher rates in the future. And there was something in yesterday's employment figures both for the doves and the hawks. The number of people on US payrolls fell by 8,000 in September, the first fall in three years. But unemployment remained at 4.2 per cent, and average hourly earnings recorded their biggest jump in six years. Like the Fed, the European Central Bank left rates unchanged - at 2.5 per cent - on Thursday. However, a run of good news in recent weeks, together with a good deal of sabre-rattling by top ECB policymakers, made its decision more uncertain. Indeed, predicting the ECB's movements is a difficult job: it is a new institution, and far less transparent than the Fed. The events surrounding this week's meeting were also somewhat confusing. Wim Duisenberg, the bank's president, revealed that the governing council had not taken a vote on the matter of interest rates - which seems odd. It is also unclear whether Mr Duisenberg's comments about a bias to raise rates represent a formal stance adopted by the council - or not. Insofar as a formal bias is useful, it is in the way that it helps to shape market expectations. The Fed has been especially keen to massage the market's view. Indeed, it is fair to bet that its decision to hold rates this month in large part reflects a desire not to upset a stock market which looks precarious. The ECB does not have to worry about asset price inflation. But Mr Duisenberg's comments presumably suggest that the bank will consider a rise next time. The rationale for an increase is far from clear. There is little sign that consumer prices will rise quickly in Europe - despite rising oil and commodity prices. And the bank does not have to prove its credentials as far as being tough on inflation is concerned: delaying its rate cut at the start of the year made that obvious. Since the euro-zone has a good deal of spare capacity, Mr Duisenberg and his colleagues can relax for the time being. The Financial Times, October 9, 1999 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance�not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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