When China Collapses Financially, it Takes Other Enterprises Down, Oil

China loses control of economy and production is falling.

Investment in China has been a bad bet for many months.

One big issue could be some of the university investments and pension funds along with State pension funds. If you think 2008 was bad, things can could get worse. Let take a look at California.

California Public Pension Funds Lost $5 Billion On Fossil Fuel Investments In One Year

Two of California’s massive public pension funds lost more than $5 billion on investments in coal, oil and natural gas in just 12 months.

According to a report released by environmental group 350.org, the California Public Employees’ Retirement System (CalPERS) lost $3 billion and the California State Teachers’ Retirement System (CalSTRS) lost $2.1 billion from their holdings in the top 200 fossil fuel companies between June 2014 and June of this year.

Combined, the two funds lost a total of $840 million from their stock investments in coal companies alone — one-fourth of the value of their coal holdings.

Meanwhile, Bloomberg reported earlier this month that CalPERS, the largest public pension fund in the US, lost $40 million on just one oil company, Pioneer Natural Resources Co.

Together, CalPERS and CalSTRS represent a total of nearly 2.6 million Californians and their families.

“This is a material loss of money, which directly impacts the strength of the pension fund,” Matthew Patsky, CEO of Trillium Asset Management, which performed the analysis on behalf of 350, said in a statement. “Fossil fuel stocks are volatile investments. Investors and fiduciaries should take this moment to reassess their financial involvement in carbon pollution, climate disruption and the financial risk fossil fuels plays in their portfolio.”

The report comes as California legislators are set to consider a bill that would force CalPERS and CalSTRS to divest from fossil fuels, at least in part.

State Senate President Pro Tem Kevin De León introduced S.B. 185 earlier this year as part of a larger package of legislation intended to address global warming and its impacts. S.B 185 would require both CalPERS and CalSTRS to divest from companies that earn at least half of their revenue from coal mining operations.

The state senate approved the entire package of climate legislation in the Spring. S.B 185 is expected to be considered by California’s lower legislative chamber, the State Assembly, later this month.

“This bill is the right thing to do from both the economic and social perspective,” State Sen. Jerry Hill, who co-authored S.B 185, told the San Francisco Chronicle. “We should be moving to sources of energy, and investments, that are socially responsible and will take us from the 20th century and into the 21st.”

CalPERS has holdings in about 30 coal companies with a combined market value of $167 million that would be impacted by SB185, per the SF Chronicle. CalSTRS holds about $40 million in coal investments that would be affected.

“On behalf of teachers across the state, I have been urging CalSTRS to take our investments out of fossil fuels,” Jane Vosburg, a CalSTRS member and organizer with Fossil Fuel California, said in a statement. “Financial experts have long warned about the high risk of fossil fuel investments. Teachers’ pension funds should not be invested in an industry that threatens human civilization.”

If S.B. 185 passes, the California pension funds will become the latest institutions to join the growing divestment movement, a worldwide effort to compel pension funds, religious institutions, universities and other investors to divest their financial holdings in fossil fuel companies.

“It’s important to see that fossil fuels in general, and coal in particular, are risky bets for the pension system,” said Brett Fleishman, a senior analyst with 350.org. “When folks are saying divestment is risky, we can say, ‘Well, not divesting is risky.’

US crude oil dives below $40 a barrel in opening trade

New York (AFP) – US crude oil prices continued to fall Monday, diving below $40 a barrel to their lowest level since 2009, amid a global market selloff sparked by fears of China’s slowdown.

US benchmark West Texas Intermediate (WTI) for October delivery tumbled by $1.39 to $39.06 a barrel on the New York Mercantile Exchange around 1305 GMT. On Friday the contract had slipped below $40 in intraday trade.

As Iran now is increasing drilling output, oil will go lower in the price per barrel. Sounds good but not so much.

 

North Korea’s Underwater War

S. Korea slams North over submarine, artillery deployments

Seoul (AFP) – North Korea has mobilised dozens of submarines and doubled its artillery units along the border, South Korea said Sunday, accusing Pyongyang of undermining top-level talks aimed at averting a military confrontation.

A defense ministry spokesman said 70 percent of the North’s total submarine fleet — or around 50 vessels — had left their bases and disappeared from Seoul’s military radar.

The movement of such a large number of submarines was “unprecedented,” the spokesman said, adding that Seoul and Washington were beefing up their military surveillance in response.

“The number is nearly 10 times the normal level… we take the situation very seriously,” he said.

The North has also doubled the number of artillery units along the heavily-fortified land border with the South, he added.

The move came as top officials from both Koreas resumed a talks aimed at easing military tensions after a marathon negotiating session the night before ended without final agreement.

“The North is adopting a two-faced stance with the talks going on,” said the spokesman.

Yonhap news agency, citing military officials, said the submarine deployment was the largest since the end of the 1950-53 Korean War.

“No one knows whether the North will attack our warships or commercial vessels… we are mobilising all our surveillance resources to locate them,” it quoted one military official as saying.

The North operates more than 70 submarines — one of the world’s largest fleets — compared to about 10 in the South, according to Seoul’s latest defense white paper.

The South accused Pyongyang in 2010 of using a submarine to torpedo a Seoul warship resulting in the loss of 46 lives — a charge the North denied.

Tension flared on the Korean peninsula after Seoul accused Pyongyang of planting landmines across the border that earlier this month maimed two South Korean soldiers.

Pyongyang denied involvement but Seoul retaliated by resuming loudspeaker propaganda broadcast hated by the North along the border on August 10.

The North’s leader Kim Jong-Un last week ordered his military to move to a war-footing after an exchange of artillery fire on Thursday that claimed no casualties but further escalated tensions.

We have counter-measures my friends but this is a dangerous time, no doubt.

There are more measures and operations is full use, but it would not be prudent to note those here, for operational security reasons.

However, it should be know that China has yet another piece of advance technology that we should know about.

Embedded image permalink

We have those too and certainly more lethal.

Remember, China never innovates, they only imitate, which is to say they hack and steal anything and everything. Question is who are they sharing it with… Some sources for underwater technology are here.

 

The Iranian Shopping List With the $150 Billion and More

Iran’s Military Is No Match for Its Rivals – But That Could Soon Change

MilitaryEdge: Iran, despite its belligerent behavior and support for terrorism, is not a formidable conventional military force. The Islamic Republic has a handful of weapon systems that make it asymmetrically dangerous, but its military is largely outdated thanks to years of international sanctions and arms embargos. Under the Joint Comprehensive Plan of Action (JCPOA) and the subsequent United Nations resolution endorsing the deal, however, Tehran will soon have access to foreign arms that could substantially upgrade its forces and challenge international efforts to curb its destabilizing activities.

Following the 1979 Iranian Revolution, the U.S. and many of its European allies imposed restrictions on arms exports to Iran. While they were not all air-tight (see the Iran-Contra Affair), they did have a profound impact on Iran’s arsenal when it was embroiled in a devastating eight-year war with Iraq. Tehran was forced to turn to new sources – such as China, Libya, Syria, North Korea and private smuggling networks – to acquire weapons and parts for their existing systems. Iran’s new regime was also forced to rely on indigenous production, which often meant copying foreign-made equipment and replacement parts.

During the 1990s and early 2000s, Russia and China delivered some modern systems to Iran, including MiG-29 fighters, Su-24 bombers, Kilo-class diesel submarines, Tor-M1 surface-to-air missiles systems, C-802 anti-ship missiles, and QW-1 MANPADS. Iran also acquired dozens of French- and Soviet-made Iraqi aircraft that fled to the country during the 1991 Persian Gulf War. Tehran impounded the aircraft, only returning a handful of Su-25s in 2014 to bolster Iraq in its fight against the Islamic State. But Iran was unable to import enough equipment to rebuild its forces following years of war and Western embargos.

Iran’s military suffered further blows as international pressure to curb Iran’s nuclear program enacted comprehensive embargos on arms supplies. In 2007, the United Nations Security Council (UNSC) approved Resolution 1747, forbidding Iran from exporting arms and calling on member states to exercise “vigilance and restraint” in supplying the country with conventional arms. Then in 2010, the UNSC approved Resolution 1929, which required all member states to “prevent” sales to Iran – effectively placing an international arms embargo against it. Tehran’s principal military suppliers, Russia and China, ceased arms deliveries to the Islamic Republic.

Russia halted the delivery of the S-300 air defense system purchased by Iran in 2007, though not as the result of UN restrictions. Moscow could have still provided the S-300 under Resolution 1929 because restrictions are based on the UN Register of Conventional Arms, which permits the transfer of surface-to-air missiles (SAMs) with the exception of the shoulder-launched variety (MANPADS). Russia ended its self-imposed ban on transferring the S-300 in April and is expected to begin delivering components before the end of this year. With the addition of this advanced mobile SAM system, Iran will improve the layered air defense of key sites, thus better protecting its nuclear and military facilities from potential U.S. and Israeli strikes.

The JCPOA and UNSC Resolution 2231 terminated Resolutions 1747 and 1929 and made the abolition of the conventional arms and ballistic missile embargos rewards for Iran’s implementation of its nuclear obligations. During the final days of the nuclear negotiations, Russia and China are reported to have been the primary advocates for removing the arms embargos. For years, Moscow and Beijing missed out on the lucrative arms race in the Middle East as American and European defense firms made billions on sales to the Arab Gulf states. Now, they are expected to be among the prime beneficiaries of Iran’s re-entry into the legitimate arms market.

Because of the substantial lead Iran’s Sunni adversaries hold in military spending and capabilities, it will be some time until the Iranian military is considered a peer competitor. Still, with investments in certain Russian and Chinese platforms and weapons systems, Iran could significantly increase its offensive lethality in the airspace and waters of the Persian Gulf to threaten its Arab neighbors and U.S. interests. Meanwhile, it can forego purchases of land systems such as tanks and armored vehicles, as a major ground war with its rivals appears unlikely.

Reports already indicate that Tehran may be shopping for new equipment that could offset, or at least reduce, its adversaries’ qualitative edge. Iran, for example, has allegedly already begun negotiations to acquire between 24 and 150 Chengdu J-10 multirole fighters from China in exchange for turning over its largest oil field to Beijing for two decades. Although news of the prospective sale of J-10s remains unconfirmed by China, Iran’s desire to acquire modern combat aircraft to update its aging air force is well documented.

Prior to the 1979 revolution, the scores of first-rate American fighters sold to the shah gave Iran one of the strongest air forces in the Middle East. Today, many of those aircraft that survived the Iran-Iraq War still remain in the IRIAF’s inventory and are likely unusable or have been cannibalized to keep other aircraft in service. Iran’s limited number of bombing missions on Islamic State targets in Iraq may be an indication of just how degraded the IRIAF has become.

Iran_possible_aircraft_buys_table

Currently, the Islamic Republic of Iran Air Force (IRIAF) and Islamic Revolutionary Guard Corps air wing is made up of F-14A Tomcats, F-4E Phantom IIs, F-5E Tiger IIs, Chengdu F-7 (a Chinese copy of the iconic Soviet MiG-21), MiG-29 Fulcrums, Su-24 Fencers, Su-25 Frogfoots, and Mirage F-1s – nearly all manufactured before 1990. Iran also produced a handful of its own fighters, such as the Azarakhsh and the Saegheh. However, these aircraft appear to be only slightly modified copies of the American-designed F-5 Tiger – a light fighter outclassed by modern competitors.

Modern multirole fighter aircraft tend to only be as effective as the weapons and sensors they carry, so buying the jets themselves would not be enough. Iran would also have to shop for sophisticated munitions for air-to-air, anti-ship, and long-range standoff strikes. In fact, with certain air-to-surface missiles, the ban on its ballistic missile development becomes almost meaningless as Iran would be able to launch long-range precision-guided strikes that are likely more accurate and harder to intercept than any ballistic missile they are able to develop. While there are existing international agreements to limit the transfer of the more dangerous missiles, some systems could be altered to expand their range and payload.

With new weapons and an unrestricted supply of parts and technical assistance, Iran will be able to close the gap with it foes and far more easily exert its will in the Persian Gulf. Facing the U.S. and the Gulf states in a prolonged conflict, Iran’s military would still be at a significant disadvantage. Armed with a handful of advanced systems, however, Tehran could make a brief conflict with the U.S. or its neighbors costly, granting it the ability to double down on its rogue behavior while better deterring adversaries from stopping it.

Patrick Megahan is a research analyst at Foundation for Defense of Democracies focusing on military affairs.

***

NYT in part:

There is little question that Iran needs the money, $185 billion to update the petrochemical sector alone, officials say. It also needs a new airline fleet of as many as 400 planes and further investments in almost every aspect of the economy and infrastructure.

Yet, critics of President Hassan Rouhani’s government, the main driving force behind Iran’s foreign and economic diplomacy, say that many top officials in his reformist government have vested business interests, a common feature of almost the entire Iranian political elite. More details here.

The Argument for Terminating Passport/Visa Waiver Program

Other countries are taking a hardline stance against immigration and those foreigners seeking refuge. Failed nations are to blame when advanced countries do little to control crime, terror insurgencies and financial tailspins. The United States is experiencing historic influxes of people seeking asylum, refuge and otherwise aliens from worldwide locations. However, the United States is not alone when it comes to failed international relations and policy but Europe is as well, where a larger debate on the matter is required.

Europe migrant crisis: Surge in numbers at EU borders

BBC: The number of migrants at the EU’s borders reached a record high of 107,500 in July, officials say, as a sharp surge in expected asylum requests was reported in Germany.

Germany has seen a wave of migration from Syria and the Balkans, and now says it could receive as many as 750,000 asylum seekers this year.

The EU has been struggling to cope with migrant arrivals in recent months.

France and the UK say they will sign a deal to tackle the crisis in Calais.

Over the summer, thousands of migrants have sought to get to the UK through the Channel Tunnel from makeshift camps around the northern French city.

 

France’s Interior Minister Bernard Cazeneuve and his British counterpart, Theresa May, say they will sign a deal there on Thursday to strengthen their countries’ co-operation on security, the fight against criminal smugglers, human traffickers, and clandestine immigration.

In early August, the UK pledged to add €10m (£7m) to a fund established in September 2014 to secure the port of Calais, and initially endowed with €15m over three years.

‘Third consecutive record’

EU border agency Frontex said the number of migrants surpassed the 100,000 mark in a single month for the first time since it had begun keeping records in 2008.

The Warsaw-based agency said in a statement that the figure of 107,500 migrants for July was the “third consecutive monthly record, jumping well past the previous high of more than 70,000 reached in June”.

The German government had earlier forecast that 450,000 asylum seekers could arrive in 2015, but is now set to increase that to 650,000 or higher.

UN High Commissioner for Refugees Antonio Guterres said more countries in Europe should share the burden.

“It is unsustainable in the long run that only two EU countries, Germany and Sweden, take in the majority of refugees,” he told German daily Die Welt.

Hungary’s southern border marks the edge of the EU’s Schengen zone of passport-free travel and is thus a target for migrants seeking to enter the EU.

Its government has said it will send thousands of police officers to its southern border with Serbia in its latest step to stem the flow of migrants. More here.

SAN DIEGO (AP) — Walking into Mexico at the nation’s busiest border crossing with the United States is no longer an uninterrupted stroll for foreigners.

Starting late Wednesday, pedestrians going to Tijuana from San Diego at the San Ysidro crossing must choose between a line for Mexicans who get waved through, and a line for foreigners who must show a passport, fill out a form and — if staying more than a week — pay 322 pesos, or roughly $20, for a six-month permit.

About a dozen foreigners stood in line Wednesday night, directed by English-speaking agents to six inspection booths where they got passports stamped. It took about 10 minutes from start to finish.

Travelers have long followed similar protocol at Mexican airports, but the new border procedure marks a big change at land crossings that weren’t designed to question everyone. Pedestrians and motorists have generally entered Mexico unencumbered along the 1,954-mile border with the United States.

“This is about putting our house in order,” said Rodulfo Figueroa, Mexico’s top immigration official in Baja California state, which includes Tijuana.

The changes, which have been in the works for years, come as Donald Trump has surged to the top of the Republican field in the U.S. presidential race. He has insisted that Mexico sends criminals to the U.S. and pledges to build a border wall at Mexico’s expense.

For Mexico, it is a step toward closing an escape route for American criminals who disappear in Mexico. Border inspectors will tap into international criminal databases. Motorists will see no change, and if lines get too long, officials will also wave pedestrians through.

More than 120 Americans expelled from Mexico this year while living in Baja California had arrest warrants in the U.S., according to Figueroa, delegate of the National Migration Institute. Some ordered to leave last year were on the FBI’s most-wanted list.

But authorities say benefits extend beyond stopping unwanted visitors. A recent hurricane stranded twice as many Americans in Cabo San Lucas than U.S. authorities thought were there, Figueroa said, and registering as a foreigner would have made it easier to identify those who needed help.

Figueroa said Mexico can initially process about 1,000 foreigners daily, up from about 50 currently.

“If the line becomes clogged up, we will just let everybody through,” Figueroa said. “If we can’t check everybody, we won’t.”

Figueroa said San Ysidro is believed to be the first U.S. land crossing to have a separate line for foreigners to show passports and that it will serve as a model for others as they are upgraded. Aurora Vega, a spokeswoman for the National Migration Institute, referred questions to other departments. Officials at the Foreign Relations Department and Mexican Embassy in Washington had no immediate comment.

About 25,000 pedestrians (and 50,000 motorists) cross daily at San Ysidro to work, shop and play but it is unclear how many are foreigners in Mexico. U.S. Customs and Border Protection says about one-third entering San Diego are U.S. citizens, one-third are U.S. legal residents and the rest are from other countries, largely Mexico. An unknown number have dual citizenship or residency in the U.S. and Mexico.

Both countries have long wrestled with logistical hurdles of stopping people going to Mexico by land. The U.S. occasionally stops motorists and pedestrians as they leave — mainly to check for guns and cash — but it doesn’t have a system to record exits like at airports, seen by many as a significant shortcoming in border security.

Previous efforts to question more foreigners entering Mexico met resistance in Tijuana, whose economy partly relies on Americans who visit restaurants, beaches, doctors and dentists. Lines to enter the United States at San Ysidro have exceeded four hours.

Roberto Arteaga, who has made tacos, shined shoes and sold tickets for private bus and van rides in Southern California during 28 years as a street vendor near the border crossing, says requiring passports and imposing a fee for longer stays sends the wrong message.

“We should be welcoming,” he said during a lull in business Tuesday. “This will hurt Tijuana’s economy.”

Other crossers said the move was overdue.

“Anything to keep the country safer is much better for everyone,” Cynthia Diaz of Oceanside, near San Diego, said as she stood in line to return to the U.S with her niece, who visited Tijuana for a root canal. “It’s safer for us on the other side too.”

The First Lie About the IRS Hack Gets Some Truth?

Social security numbers are the basis and entry point to hack when it comes to the cyber intrusion into the IRS. Given the software platform the IRS uses, which is outdated completely, there are warnings there could be more intrusions.

IRS Hack Far Worse Than First Thought

USAToday:

SAN FRANCISCO — A hack of the Internal Revenue service first reported in May was nearly three times as large as previously stated, the agency said Monday.

Thieves have accessed as many as 334,000 taxpayer accounts, the IRS said.

In May, the IRS reported that identity thieves were able to use the agency’s Get Transcript program to get personal information about as many as 114,000 taxpayers.

On Monday, the IRS said an additional 220,000 accounts had also been hacked. In all, 334,000 accounts were accessed, though whether information was stolen from every one of them is not known.

The hackers made use of an IRS application called Get Transcript, which allows users to view their tax account transactions, line-by-line tax return information or wage and income reported to the IRS for a specific tax year.

To enter the Get Transcript system, the user must correctly answer multiple identity verification question.

The hackers took information about taxpayers acquired from other sources and used it to correctly answer the questions, allowing them to gain access to a plethora of data about individual taxpayers.

The Get Transcript service was shut down in May.

Hackers love authentication-based systems because it’s very difficult to distinguish between “the good guys and the bad guys” when someone is trying to get in, said Jeff Hill of STEALTHbits Technologies, a cyber security company.

“Here we have a case where a successful authentication-based attack was discovered in May, and yet the IRS is still unclear of the extent of the breach’s damage months later. Even now, how confident is the IRS they fully understand the extent of the attack completely, or should we expect yet another shoe to drop in the coming weeks?” Hill said.

Notification of the increased number of hacked accounts came Monday.

In a statement the agency said, “as part of the IRS’s continued efforts to protect taxpayer data, the IRS conducted a deeper analysis over a wider time period covering the 2015 filing season, analyzing more than 23 million uses of the Get Transcript system.”

That analysis revealed an additional 220,000 accounts had also potentially been accessed.

In addition to accounts the hackers were successfully able to access, the IRS disclosed hack attempts that didn’t succeed. There were 111,000 attempts on accounts disclosed in May and 170,000 disclosed on Monday, for a total of 281,000 of accounts where the hackers “failed to clear the authentication processes,” the agency said.

Taxpayers whose information was potentially breached will get letters in the mail from the IRS in the coming days.

They will also get access to free credit protection and Identity Protection PINs, the IRS said in a statement.

Taxpayers Fleeced

1/2 TRILLION spent on IT upgrades, but IRS, Feds still use DOS, old Windows

Examiner: President Obama’s team has spent more than a half trillion dollars on information technology but some departments, notably the IRS, still run on DOS and old Windows, which isn’t serviced anymore, according to House chairman.

“Since President Obama has taken office, the federal government has spent in excess of $525 billion dollars on IT. And it doesn’t work,” said Rep. Jason Chaffetz, chairman of the House Oversight and Government Reform Committee.

In an address to the centrist Ripon Society, Chaffetz suggested that the slow change of the federal government’s IT led to the recent and historic hack of personal data of millions of current and former federal workers, including CIA and other clandestine employees.

“The IRS still uses the DOS operating system. You have a Patent office that just got Windows 97. They don’t even service Windows 97 anymore. And yet they just got it. So the procurement process is really, really broken in this regard,” he added.

Chaffetz also offered to praise for Obama’s pick to head the Office of Personnel Management, home to the massive computer hack.