Currency report for the week ending June 10, 2011
1) … Competitive currency deflation intensified on rising European sovereign debt concerns.
Between the hedges reports the Spain sovereign cds is gaining +5.6% to 273.20 bps, the Italy sovereign cds is climbing +6.41% to 171.67 bps, the Portugal sovereign cds is gaining +2.23% to 736.20 bps, the Greece sovereign cds is surging +2.63% to 1,561.18 bps, the Ireland sovereign cds is up +2.21% to 706.08 bps, the Belgium sovereign cds is rising +2.83% to 149.67 bps, the Russia sovereign cds is gaining +3.33% to 142.68 bps and the UK sovereign cds is rising +2.97% to 63.67 bps.
Bloomberg reports Trichet Escalates Greece Clash as ECB Puts Onus on Governments for Rescue. Germany stepped up demands that investors share the cost of a second Greek rescue after Jean- Claude Trichet rejected direct involvement by the European Central Bank. “We have to insist on the participation of the private sector,” German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin today, ignoring warnings from credit-rating firms that his proposal to extend Greek debt maturities by seven years would be deemed a default. A working group set up this week is charged with indentifying “a good solution for the involvement of the private sector that can and has to be supported by the European Central Bank,” he said.
Mike Mish Shedlock relates Politicians Demand “Private Creditor Involvement”; Finland Support for Bailout Vanishes
Bloomberg reports Greece, Portugal, Ireland Credit-Default Swaps Rise to Records. The cost of insuring against default on government debt sold by Greece, Portugal and Ireland rose to records, according to traders of credit-default swaps. Contracts on Greece soared 45.5 basis points to 1,567.5, Portugal increased 11 to 730 and Ireland jumped 20 to 710 as of 4 p.m. in London, according to CMA. The Markit iTraxx SovX Western Europe Index of swaps on 15 governments climbed 10 basis points to 211.5, the highest since Jan. 11. Swaps on Spain rose 14 basis points to 275, Italy increased 9 basis points to 174 and Belgium was up 8 at 153 basis points, according to CMA. France rose 5 basis points to 275. The Markit iTraxx Crossover Index of swaps on 40 companies with mostly high-yield credit ratings jumped 11 basis point to 401, while the Markit iTraxx Europe Index of 125 investment-grade companies rose 3 basis points to 108.75, according to JPMorgan Chase & Co. The Markit iTraxx Financial Index of swaps linked to the senior debt of 25 European banks and insurers rose 7.5 basis points to 167.5 and the subordinated index soared 11 to 288, JPMorgan prices show.
Boris Groendahl of Bloomberg reports: “German lenders were the biggest foreign owners of Greek government bonds with $22.7 billion in holdings last year, making them a likely negotiation partner in burden-sharing deals for the country. French banks, which led the group of Greek creditors with overall claims amounting to $56.7 billion, trailed their German peers on sovereign debt with $15 billion.”
South Korea Bank, KB Financial, KB, -3.0
South Korea, EWY, -3.0
South Korea Small Caps ETF, SKOR, -3.1
China: China All Caps, YAO, -2.0 as Bloomberg reports China Stocks Traded in Hong Kong Fall Most in World This Month. Chinese stocks traded in Hong Kong are the world’s worst performers this month as allegations of fraud at some companies added to concerns that slowing economic growth will hurt corporate profits. The Hang Seng China Enterprises Index of 40 Chinese companies’ H shares has retreated 6.7 percent this month, the most among 91 global benchmark indexes tracked by Bloomberg. A gauge tracking China’s dollar-denominated B shares has plunged 16 percent in June. “Scandals coming out will shake people’s confidence and there will be an overhang on share prices,” said Lee King Fuei, a Singapore-based fund manager at Schroders Plc, which oversaw $331 billion worldwide as of March 31. The declines are “a reflection that global investors are panicky about global economic prospects and worried about Chinese monetary tightening and its slowdown effects on the real economy,” Lee said.
European Shares, VGK, -3.0
Emerging Markets ETF, EEM, -2.1
Sweden, EWD, -4.1
Norway, NORW, -3.0%
Russia Small Cap, RSXJ, -2.9%, United Kingdom, EWU, -2.8%, South Africa, EZA, -2.0, India, INDY, -2.1.
The U.S. dollar, $USD, index rallied 1.4%. For the week on the upside, the New Zealand dollar, BNZ, increased 0.7%. On the downside, the Swedish krona, FXS, declined 3.1%, the Norwegian krone 2.8%, the Russian Ruble, XRU, 2.5%, the Mexican peso, FXM, 2.0%, the Danish krone 2.0%, the Euro, FXE, 2.0%, the Australian dollar, FXA, 1.7%, the South African rand, SZR, 1.4%, the Brazilian real, BZF, 1.3%, the British pound, FXB, 1.2%, the Swiss franc, FXF, 1.1%, the Singapore dollar 0.7%, the Taiwanese dollar 0.4%, the South Korean won 0.2%, the Indian Rupe, ICN, 0.2%, the Canadian dollar, FXC, 0.2%.
2) … The Commodity Oil, USO, BNO, and DBC, turned lower as Bloomberg reports Oil Falls Most in Four Weeks on Saudi Arabia’s Plan to Increase Production.
Crude oil tumbled the most in four weeks after al-Hayat newspaper reported Saudi Arabia will raise oil production to 10 million barrels a day next month, and on concern the global economic recovery is slowing. Oil declined as much as 3.1 percent as London-based al- Hayat cited unidentified senior OPEC and industry officials as the sources of the Saudi output plan. China reported a smaller- than-estimated trade surplus today. India’s industrial output growth eased in April and U.K. manufacturing dropped. “The expressed intent of the Saudis has been to make up for the missing Libyan barrels and to cap oil prices,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “In addition to the Saudi news, most economic indicators have been looking terrible.” Crude oil for July delivery declined $2.63, or 2.6 percent, to $99.30 a barrel at 10:56 a.m. on the New York Mercantile Exchange. Prices are down 0.9 percent this week and are 32 percent higher than a year ago. “It’s starting to sink in that the Saudis intend to do what they said, and will increase oil production,” said Rick Mueller, a principal with ESAI Energy, LLC in Wakefield, Massachusetts. “This will ease any supply worries.”
Other commodities, DJP, falling lower included Timber CUT, Silver, SLV, and Base Metals, DBB, turned lower.
3) … Bonds, BND, rose manifesting a questioning doji, as international corporate bonds, PICB, and world government bonds, BWX, turned lower; junk bonds, JNK, turned lower as well as bond vigilantes called interest rates higher on sovereign debt risk. Peak credit has likely been achieved
Bloomberg reports Greek Debt Crisis Causing Company Bond Sales to Be Pulled as Spreads Widen. Political wrangling over the future of Greece is infecting Europe’s corporate bond market, pushing relative yields to a 2 1/2-month high and forcing borrowers to pull deals. The extra yield investors demand to hold non-financial company debt instead of government securities rose 3 basis points this month to 118, the highest since March 24, according to Bank of America Merrill Lynch index data. Denmark’s Nykredit Bank A/S and Finnish lender Pohjola Bank Plc (POH1S) postponed bond sales yesterday citing market conditions. Nykredit, Denmark’s biggest issuer of mortgage bonds, postponed its sale of senior unsecured bonds because the market “was much weaker” than when the deal was announced, according to Morten Vagnoe, head of debt investor relations. Pohjola Bank delayed its 300 million-euro, 10-year lower Tier 2 notes issue because “market conditions dramatically changed,” said Lauri Iloniemi, head of group funding. “Participation of private creditors in cases of insolvency is indispensable,” Schaeuble told lawmakers in Berlin today, ignoring warnings from credit-rating firms that his proposal to extend Greek debt maturities by seven years would be deemed a default.
Wall Street Journal reports on the failure of the Seigniorage of Neoliberalism, specifically the exhaustion of quantitative easing stating As ‘Junk’ Bonds Fall, Some Blame the Fed. A steep decline in prices of bonds backed by subprime mortgages has spread through the riskiest segments of the credit markets, ending rallies in high-yield corporate bonds and commercial real-estate debt.
Merijn Knibbe writes Miltorn Firedman’s Capiralism Failed Latvia. The discussion about the Baltic economies is flaring up again: did Extreme Austerity work, or did it fail? Krugman, Aslund and Hugh have joined the debate (see websites below). Can some historical and comparative analysis add someting to this clash of ideas?
Maiden Lane Sales Spark Stampede to Dump Risk. Federal Reserve auctions of mortgage securities that the central bank assumed in the rescue of American International Group Inc. are fueling a selloff in credit markets as Wall Street rushes to hedge against losses on stockpiled debt. Declines in credit-default swaps indexes used to protect against losses on subprime housing debt and commercial mortgages accelerated this month, reaching almost 20 percent in the past five weeks as the cost of the insurance climbs, according to Markit Group Ltd. The plunge this week started infecting everything from junk bonds to the debt of financial companies. The Fed has been selling the $31 billion Maiden Lane II portfolio piecemeal after rejecting a $15.7 billion bid from AIG for the entire pool in March. Since then, Europe’s sovereign debt crisis has deepened and the U.S. recovery has shown signs of slowing, with unemployment rising to 9.1 percent, the highest level this year, and the economy growing 1.8 percent in the first quarter, less than forecast. “Dribbling risk into the market makes sense if everything is good and continues to improve,” said Ashish Shah, the head of global credit investments in New York at AllianceBernstein LP, which oversees $214 billion in fixed-income assets. “But when you get yourself into a position where the Street suddenly feels they’re long inventory and the macro backdrop is weaker, now you’re selling into weakness.” Distressed investments, FAGIX, turned lower, while the 300% 20 Yr US Treasury Bull, TMF, rose.
Doug Noland of Prudent Bear in The King of Non-Productive Debt writes The world is in the midst of history’s greatest Credit Bubble. A dysfunctional global financial system essentially operates without mechanisms to regulate the quantity and quality of debt issuance. In response to severe banking system impairment and fiscal problems in the early-nineties, the Greenspan Fed helped nurture a Credit system shift to nontraditional marketable debt. The bank loan was largely replaced by mortgage-backed securities (MBS), asset-backed securities (ABS), GSE debt instruments, derivatives and a multitude of sophisticated “Wall Street” Credit instruments. The Credit expansion grew exponentially, while becoming increasingly detached from production and economic wealth-creation; the boom, in fact, exacerbated deindustrialization.
The Fed implemented momentous changes in monetary management to bolster the new “marketable debt” Credit system structure, including “pegging” short-term interest rates; serial interventions to assure “liquid and continuous markets;” and adopting an “asymmetrical” policy framework that disregarded asset inflation/Bubbles, while guaranteeing the marketplace an aggressive policy response to any risk of market illiquidity or financial/economic instability. Massive expansion of marketable debt coupled with a highly-accommodative policy backdrop incited incredible growth in speculation and leveraging. Over time, trends in U.S. Credit, policy and speculative excess took root around the world.
In particular, set off a panic throughout global markets for private-sector debt, especially Credit intermediated through sophisticated Wall Street structures. Unprecedented government intervention reversed the downward spiral in Credit and economic output. Especially in the U.S., Trillions of private debt instruments were put under the umbrella of government backing. Meanwhile, Trillions more were acquired by the Fed, ECB and global central bankers in the greatest market intervention and debt monetization in history. Policy making – fiscal and monetary, at home and abroad – unleashed the “Global Government Finance Bubble”.
Currency market distortions have been instrumental in sowing financial fragility and economic instability.
I would argue strongly that the euro currency regime owes much of its great success to the structurally weak U.S. dollar. For all the flaws and potential pitfalls of a common European currency, the euro has from day one looked awfully appealing standing side-by-side with the dollar. And the buoyant euro created powerful market distortions that promoted Credit excess throughout the region, especially in Europe’s periphery (Greece and the so-called “PIIGS” would never have enjoyed the capacity to push borrowing to such extremes had they been issuing debt denominated in their own currencies). The weak dollar and strong euro – along with the perception that the Eurozone and ECB would never tolerate a default by one of its sovereigns – were instrumental in promoting profligate borrowing, lending, spending and speculating.
I have recently turned more focused on differentiating between “productive” and “non-productive” debt. This is an important analytical distinction – although, by nature, a challenging gray area for Macro Credit Analysis. At the time of its creation, there might actually be little difference from a systemic perspective whether a new financial claim is created in the process of financing real investment or an asset purchase or, instead, to fund a government stimulus program. In each case, new purchasing power is released into the system. The key is that the new Credit stimulates economic “output” through increased spending, incomes and/or asset inflation. Especially during the halcyon Credit boom days, the markets will pay scant attention to the assets underpinning the new debt instruments (particularly when policymakers are actively intervening and distorting markets!). However, don’t be fooled and don’t become too complacent. At some inevitable – if not predictable – point the markets will care tremendously whether a Credit system is sound or not.
Regrettably, the current era’s (unrestrained global finance, structurally-unsound dollar, “activist” policymaking, rampant global speculation, etc.) unique capacity for sustaining non-productive debt booms poses major problems. In short, the booms last too long and activist policymaking ensures they end up afflicting the heart of Credit systems. These protracted Bubbles are resolved through problematic crises of confidence, debt revulsion and economic restructuring.
It has been my thesis that last year’s aggressive market interventions – QE2, the European fiscal and monetary “bailouts,” and massive global central bank monetization – incited a highly speculative Bubble environment vulnerable to negative liquidity surprises. And now we’re down to the final few weeks of QE2. The European bailout strategy is unwinding, with little possibility of near-term stabilization. Meanwhile, the US economy has downshifted in spite of massive fiscal and monetary stimulus. Risk and uncertainty abound; de-risking and de-leveraging are making a comeback
Bloomberg went with the headline, “Fed’s Maiden Lane Sales Trigger Bank Stampede to Dump Risk.” At The Wall Street Journal, it was “As ‘Junk’ Bonds Fall, Some Blame the Fed.”
Both articles noted the deterioration in pricing for a broadening list of Credit market instruments, including junk bonds, subprime mortgage securities, and various Credit derivatives. And while the Fed’s liquidation of an old AIG portfolio is surely a drag on some prices, I believe the rapidly changing liquidity backdrop is more indicative of global de-risking dynamics. This is providing important confirmation of the bear thesis.
There are fascinating dynamics at work throughout our Credit market. Arguably, the U.S. is the King of Non-Productive Debt. In the wake of a historic expansion of non-productive household debt comes a Bubble in government (Treasury and related) Credit. The assets underpinning too much of the U.S. debt mountain are of suspect quality, although this hasn’t mattered recently. And in true Bubble fashion, the marketplace has increasingly gravitated to Treasury debt as the “Greek” crisis escalates and contagion effects gather momentum. The corporate debt market has enjoyed extreme bullish sentiment – along with waves of investment and speculative inflows. While the corporate balance sheet appears sound, I would counter that corporate earnings and cash flows have been artificially inflated by unsustainable federal deficits. In particular, the bubbling junk bond market would appear vulnerable to the deteriorating liquidity backdrop.
Elsewhere, there is the murky world of subprime derivatives and such. This bastion of speculative excess certainly enjoyed the fruits of policy-induced reflation. But not only has housing performed dismally, there are now the market issues of de-risking and liquidity uncertainties.
Today from the WSJ: “Since April, prices of many subprime mortgage securities have declined between 15% and 20%… The decline in subprime mortgage bonds accelerated in the last two weeks…” From Bloomberg this morning: “Declines in credit-default swaps indexes used to protect against losses on subprime housing debt and commercial mortgages accelerated this month, reaching almost 20% in the past five weeks..” Also from Bloomberg: “Default swaps on the six largest U.S. banks have gained an average of 19.4 bps to 137.2 bps since May 31…”
In conclusion, support seemed abundant this week for the thesis which holds that the U.S. Credit system and economy are much more vulnerable to contagion effects than is commonly appreciated.
Treasury and dollar rallies appear constructive for system liquidity. In reality, it is likely that both markets are heavily impacted by speculative trading (speculators, in various forms, have used Treasury and dollar short positions to finance higher-returning holdings). Strength in the Treasury market and the dollar are indicative of – and place additional pressure on – the unwind of leveraged trades. And it is when the speculator community finds itself back on its heels and backing away from risk that liquidity becomes a critical market issue.
4) … World Stocks, ACWI, and VT, fell lower 1.9% lower on falling world currency DBV, emergency currency, CEW, and commodity prices.
World Small Caps, VSS, -2.2%
International Dividend Payers, DOO, -2.7%
Chinese Mining Company Yanzouh Coal Mining,-YZC, -4.4%
Copper Miners ETF, COPX, -3.0%; these manifest inflation destruction.
Small Cap Pure Value, RZV -2.1% while RZG fell only 1.7%
Networking, PXQ, -2.3
Aluminum, ALUM, -2.3
Real Estate,IYR, -2.4
Timber and Paper, WOOD, -2.5
US Energy Service, IEZ -2.5
Design Build, FLM, -2.6
Energy Service, OIH, -2.7
Automobile, CARZ, -2.7%
Silver Mining, SLV, -3.9%
The currency yield curve, the Small Cap Value Shares Relative To Small Cap Growth Shares Daily,. RZV:RZG Daily, traded lower communicating that competitive currency deflation is underway.
5) …. Private listed equity, that is leveraged buyouts, PSP, fell lower
6) … FactorShares 2X Gold/Short S&P, FSG,rose
7) … Just who and what is sovereign?
The Wall Street Journal reports on the rising sovereignty of government that is coming with the ending of Neoliberalism and the rise of Authoritarianism. Libertarians suffered a defeat in court; we are witnessing the defeat of the concept of sovereign individuals NY Court Says Strip Club Lap Dances Are Taxable.
Zero Hedge reports Kitco Charged With Massive Tax Fraud Scheme, Business Viability In Question.
Bloomberg reports Euro May Have to Coexist With a German-Led Uber Euro: Business Class. It appears another rescue is on the way for Greece. It won’t solve the currency union’s problems. The real threat to the euro isn’t that a weak peripheral country like Greece might withdraw in an effort to devalue its way to competitiveness, but rather that Germany might want to pull out. Germany’s incentive to leave grows with each bailout, and Berlin could ultimately make a simple calculation that extrication will be less costly than continuing the sacrifice needed to keep the euro.
Zero Hedge asks Is Greece Preparing to Give Europe The Finger? George Papandreou said that reforms on the political system or the public administration need the voting of Greek people through referendums.
Chris Marsden, of WSWS.org writes on Portugal and the collapse of European social democracy.
Markus Salzmann of WSWS.org reports Austria poll shows far-right FP as strongest party. According to a poll conducted in late May, the ultra-right Freedom Party of Austria (FP), led by Heinz-Christian Strache, has the highest level of support in Austria..
Sabrina Taverne of the New York Times writes Rainbow Flag Goes Up; Letters Flow In A rainbow flag flown at the Federal Reserve Bank of Richmond has drawn a flurry of commentary.
Toby Reese of WSWS.org reports Medicaid cuts in Washington state highlight bipartisan attack on health care. Last week Democratic Party Governor Christine Gregoire of the US state of Washington signed a bill that, if approved by the federal Department of Health and Human Services, will give officials of the state increased power to cut patients from Medicaid, the health care program for the poor and elderly. The bill is similar to a proposal advanced by Republicans on a national level.
Medicaid covers over 1 million people in Washington state and some 50 million people nationally. Up to 75 percent of nursing home residents depend on the program, along with millions of low-income children, pregnant mothers and the disabled. This segment of the population has been hardest hit by the economic crisis, leading to increased numbers of Medicaid beneficiaries.
Medicaid is jointly financed by the federal and state governments, with national regulations on who must be covered by each state program. The bill in Washington would remove these regulations, provide a set amount of spending from the federal government, and free up the state to cut benefits and services.
According to the bill, the state would receive “block grant authority” for its Medicaid program and would “operate as a laboratory of innovation for bending the cost curve, preserving the safety net, and improving the management of care for low-income populations.” These are merely code words for massive cuts.
The bill would provide state legislators with “the ability to streamline eligibility determination, free from maintenance of eligibility requirements imposed by the federal patient protection and affordable care act or any future federal laws.”
With these new rules, many will be told they are ineligible for care entirely. Others will face differential cost-sharing, increased prescription drug copays, selective contracting for certain services, and new payment methodologies. Most of these changes will boil down to an out-of-pocket increase in spending or a complete lack of coverage for needed services.
The Washington bill underscores the unanimity of Democrats and Republicans throughout the US in cutting billions from health care, including Medicaid. While a Republican senator drew up the bill, Democratic Governor Gregoire has been the main proponent.
The Wall Street Journal, in an article entitled “Liberal Washington State Tries to Kiss Medicaid Goodbye,” noted the “remarkably nonpartisan” character of the bill. The Journal also noted the similarity between the state’s plan for Medicaid and the block-grant program for welfare established as part of the Clinton administration’s overhaul in 1996, writing, “With finite funding [for welfare], states were given an incentive to reform programs and reduce costs.”.
As a result of these measures, millions of people have been cut off from basic assistance. Washington state has itself reduced its welfare rolls by tens of thousands. Earlier this year, the state implemented a 15 percent cut in benefits.
In signing the Medicaid bill, Gregoire, who is currently the head of the National Governors Association, made clear that she sees it as a model for states throughout the country. “On behalf of the governors,” she said, “I’m going to be presenting some agreed-upon ideas where we seek flexibility from health and human services in administering the Medicaid program.” Gregoire is currently in Washington DC to press for acceptance of the proposal.
A similar block grant was given to the state of Rhode Island in 2009 under George Bush’s presidency. Rhode Island has already reportedly cut $100 million from its budget as a result. At the time, Democrats postured as opponents of the measure.
Medicaid “block grants” are also a key component of the Republican Party proposals to dismantle health care programs introduced by Representative Paul Ryan earlier this year. The aim is to cap the grants at current levels, indexed to inflation instead of demand and costs, while eliminating federal requirements. This will force states to cuts services and push millions out of the program altogether.
In the media and the political establishment, most of the discussion on health care spending has focused on Medicare, the federally funded health care program for the elderly. Both parties are agreed on the need to cut trillions of dollars in spending on Medicare, but there is some disagreement on how this is to be done.
There has been almost no discussion of the cuts that are already being made to Medicaid. At least 15 states are currently planning sharp cuts in Medicaid spending, on top of tens of billions already cut.
The situation facing states has been compounded by the fact that the meager federal aid made available last year has dried up. The Obama administration also recently intervened to block individuals from filing legal challenges to state cuts to Medicaid.
The policy of block grants will shift the burden of carrying out many of the severe cuts onto the state administrations. This is significant when considering the health care overhaul passed by Obama and the Democrats last year. Supporters of the measure, which was an initial step toward cutting billions from health care spending, claimed that it would increase health care coverage by expanding Medicaid eligibility.
Certain populations are to be covered in 2014 by the state/federal Medicaid program based on new rules in Obama’s plan. The states, however, with the complicity and support of the federal government, are moving in the opposite direction. Any individuals who actually gain access to Medicaid will receive the absolute minimum of care.
All of these health care cuts are overwhelmingly opposed by the population. After bailing out the banks, however, the entire political establishment is engaged in a ferocious campaign against all social programs that benefit the working class.
8) … Will banks be integrated with Governments Will Greece or will Europe express its sovereignty and step in to buy banks, that is nationalize banks?
Bloomberg reports Greece’s banks face a $32 billion funding gap over the next year should depositors continue to withdraw their money at the current pace, according to Henderson Global Investors. Deposits by businesses and households held in Greek banks have declined more than 17% since December 2009.
While the lenders have been able to make up the shortfall by posting collateral at the ECB or calling in loans to foreign banks, they are running out of assets, said Simon Ward, Henderson’s London-based chief economist.
“The end game is a full-scale bank crisis, so at some point depositors will have to be stopped from ithdrawing their funds,” said Ward, who helps oversee Henderson’s $100 billion of assets. “I can’t see what is going to plug the gap. Any new money coming from the European Union or International Monetary Fund is going to be needed for government finances so there seems to be an additional requirement for the banking system.”
The Wall Street Journal reports Bond Deal May Augur More European Travails. A crack opened in Europe’s credit markets last week that could portend deeper trouble for the region’s banks and governments. Investors balked at buying a €1 billion ($1.46 billion) bond offering by Banco Santander SA that was backed by debt of Spanish local governments, according to people familiar with the sale. That left a group of big European banks that managed the deal holding roughly €500 million of the debt. The lack of demand, unforeseen by Santander or the managers, underscores the jittery nature of the region’s credit markets. That some of the biggest banks in Europe, including Commerzbank AG, HSBC Holdings PLC and Société Général SA, were left holding the bag also demonstrates how easily sovereign risk can spread around the euro zone.
European Financials, EUFN traded 2.1% lower
9) … Could a middle east military strike by Israel with a base in Syria, be waged against Iran, which might draw both Russia and Europe into a Eurasia war
Haaertz reports UN Report: Iran Accelerating Development of Long-Range Missiles. Monitors sent to various countries uncover and document unauthorized activity by Iranian officials. A report by a panel of experts convened by the United Nations reveals that over the past year Iran has stepped up the pace of its efforts to develop long-range missiles. The report by the panel, which was convened a year ago after the UN Security Council imposed stiffer sanctions against Iran in an effort to halt the Iranian nuclear program, has not been officially released. In a campaign led by the United States, the United Nations has shown concern over Iran’s development of medium- and long-range missiles in addition to the nuclear program itself. Iran’s efforts to develop missiles have therefore been monitored along with Iranian weapons-smuggling operations