Warning that UK is on brink of depression

Britain is facing an economic depression, one of Scotland's most prominent businessmen has warned, as the government prepares to announce its last-ditch attempt to shore up confidence in the banking industry.

Sir George Mathewson, a former chairman of the Royal Bank of Scotland and chairman of the Scottish Government's economic advisory council, said that economic conditions would worsen.

He also attacked Gordon Brown and Labour for their key policy moves during the crisis: the VAT cut, recapitalisation of the banks and the £20 billion guarantees of loans to small business.

In his bleak assessment, Sir George said: "Right now it's depression we should be really worried about because that causes real, personal suffering for a lot of people."

Asked if this was a real risk, he said: "Oh yeah, of course it is."

He also warned that injecting more capital into banks would not revive the economy.

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German banks: $300B more in writedowns?

German banks face further losses totalling billions of euros because they have only written off a fraction of their non-performing securities linked to American mortgages and student loans, according to a survey of 20 major German banks conducted by the German central bank and banking watchdog BaFin.

All the country's top commercial banks and the publicly owned regional banks known as Landesbanken took part in the survey which revealed that the banks hold so-called "toxic" securities totalling just under €300 billion ($398 billion), of which only a quarter has been written off.

They hold the remainder in their books at values that are now illusory. The government expects the banks to make further writedowns as a result, which should lead to further big losses for the banks. That in turn means that even more banks are likely to require government cash injections in the near future.

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Israel expects army officers to be prosecuted for war crimes

The Israeli government is preparing defenses for a “wave of international lawsuits” expected over its offensive in Gaza.

The government believes Israeli army officers and soldiers will be sued over actions in the 21-day old offensive which began on December 27.

A number of human rights organizations, and the International Red Cross, have already indicated they are looking at breaches of international law. The whole question of the legality of the Gaza War is also being examined.

Amnesty International has written to the United Nations Security Council calling for the establishment of full accountability for crimes committed in the Gaza conflict and for deployment of human rights monitors.

In the letter, Amnesty says it wants the Security Council to “take firm action to ensure full accountability for war crimes and other serious abuses of international human rights and humanitarian law.”

Israeli Defense Minister Ehud Barak has ordered the Israeli army to establish a task force comprising operational, intelligence, and legal experts, to assemble information, documentation, and footage of military operations during the offensive, which will assist in the defence of officers against legal actions expected to be filed by a number of international bodies.

The task forced named “Incrimination Team” is presently examining all footage taken by the Israeli army of the Gaza operation since it began.

Israeli Attorney General Menahem Mazuz warned the government earlier this week a “wave of international lawsuits” was expected.

"We need to be prepared for the potential lawsuits that will be filed against senior officers," a defense official told The Jerusalem Post. "The team will review the footage and intelligence information and formulate arguments that can be used to defend against claims that Israel committed war crimes in Gaza." The footage collected by the team was filmed by regular combat soldiers who received special training on how to film and document military operations under combat conditions.

What will hamper legal actions brought on by international groups is that virtually the only footage and documentation of the violence in Gaza will be that produced by the Israeli army. Israel has banned the entry of journalists, TV camera crews, and photographers from Gaza, a decision that preceded the commencement of the offensive. The Israel High Court has ruled the ban illegal and ordered the government and army to allow news media to enter the Strip. The court order has not been complied with.

Israel is accused of bombing schools, including some run by the United Nations, mosques, government buildings, and homes. Hundreds of civilians, including women and children have been killed by bombs, artillery shelling and tank fire. Israel has also staged a blockade of the Strip for eighteen months which has restricted the provision of food, medical supplies, water, oil, and other commodities. Much of the area has been without electricity for several months. The blockade has plunged Gaza into a depression.

The UN Committee on the Rights of the Child said in a statement that the pledges 193 states have made to protect the lives and development of children "have been blatantly violated during this crisis."

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Systemic economic crisis: The sequence of global insolvency begins

In 2007, LEAP/E2020 announced that US banks and consumers were both insolvent. More than a year ago, our team estimated that USD 10,000-billion worth in « ghost-assets » would vanish in the crisis. Both announcements came in complete opposition with the common opinion of that time; however they proved perfectly justified in the months after. In the same line, LEAP/E2020 today estimates that a new sequence of the fourth phase (so-called « decanting phase ») of the unfolding global systemic crisis has began: the sequence of global insolvency.

The heavy consequences conveyed by the global insolvency are anticipated in this GEAB N°31, of which this announcement presents an excerpt meant to put clearly what is at stake in this new sequence of the crisis. GEAB N°31 also details the 20 "ups and downs" of the year 2009 according to the LEAP/E2020 team : fifteen upward trends and fourteen downward trends, as many decision- abnd analysis-support instruments for all those worried or intrigued by the coming year.

Contrary to what political leaders and their central bankers seem to believe worldwide, the problem of liquidity that they are striving to solve by means of historic interest rate drops and unlimited money creation, is not a cause but a consequence of the current crisis. It is in fact a problem of solvency which is digging « black holes » where liquidities disappear, whether we call these holes bank balance sheets (1), household debt (2), corporate bankruptcies or public deficits. In consideration of the fact that a conservative estimation of these “ghost-assets” reaches already USD 30,000-billion (3), our team considers that the world is now facing a situation of general insolvency affecting in the first place the most indebted countries and organizations (public or private) and/or those depending most on financial services.

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Al Qaeda bungles arms experiment

An al Qaeda affiliate in Algeria closed a base earlier this month after an experiment with unconventional weapons went awry, a senior U.S. intelligence official said Monday.

The official, who spoke on the condition he not be named because of the sensitive nature of the issue, said he could not confirm press reports that the accident killed at least 40 al Qaeda operatives, but he said the mishap led the militant group to shut down a base in the mountains of Tizi Ouzou province in eastern Algeria.

He said authorities in the first week of January intercepted an urgent communication between the leadership of al Qaeda in the Land of the Maghreb (AQIM) and al Qaeda's leadership in the tribal region of Pakistan on the border with Afghanistan. The communication suggested that an area sealed to prevent leakage of a biological or chemical substance had been breached, according to the official.

"We don't know if this is biological or chemical," the official said.

The story was first reported by the British tabloid the Sun, which said the al Qaeda operatives died after being infected with a strain of bubonic plague, the disease that killed a third of Europe's population in the 14th century. But the intelligence official dismissed that claim.

AQIM, according to U.S. intelligence estimates, maintains about a dozen bases in Algeria, where the group has waged a terrorist campaign against government forces and civilians. In 2006, the group claimed responsibility for an attack on foreign contractors. In 2007, the group said it bombed U.N. headquarters in Algiers, an attack that killed 41 people.

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