Off the Wires

Cracks show inside Islamic State's shrinking caliphate

June 28th, 2016  |  Source: Reuters

It was barely more than a squiggle, but the mark of a single letter sprayed overnight on a wall in the heart of Islamic State's self-proclaimed caliphate was a daring act of dissent.

The next day, ultra-hardline Islamic State fighters came and scrubbed out the "M" -- the first letter of the word for "resistance" in Arabic -- which appeared in an alley near the Grand Mosque in the Iraqi city of Mosul about three weeks ago.

A video of the single letter, scrawled about a meter long on the wall, was shared with Reuters by an activist from a group called "Resistance", whose members risk certain execution to conduct small acts of defiance in areas under Islamic State rule.

Nearly two years since Islamic State leader Abu Bakr al-Baghdadi delivered a sermon from that same mosque summoning Muslims worldwide to the "caliphate", it is fraying at the edges.

As an array of forces make inroads into their territory spanning Iraq and Syria, the jihadis are becoming even harsher to maintain control of a population that is increasingly hostile to them, according to Iraqi officials and people who managed to escape.

"They are harsh, but they are not strong," said Major General Najm al-Jubbouri, who is in command of the operation to recapture Mosul and the surrounding areas. "Their hosts reject them."

Many local Sunnis initially welcomed the Sunni Muslim militants as saviors from a Shi'ite-led government they perceived as oppressive, while thousands of foreigners answered Baghdadi's call to come and wage holy war.

For a time, the militants claimed one victory after another, thanks as much to the weakness and division of the forces arrayed against them as their own strength. They funded themselves through sales of oil from fields they overran, and plundered weapons and ammunition from those they vanquished.

But two years since the declaration of the caliphate, the tide has begun to turn in favor of its many enemies: Iraqi and Syrian government troops, Kurdish forces in both countries, rival Syrian Sunni rebels, Iranian-backed Shi'ite militias, and a U.S.-led coalition which has bombed the militants while conducting special operations to take out their commanders.

Of the 43 founders of Islamic State, also known as ISIS, ISIL or Daesh, 39 have been killed, said Hisham al-Hashimi, a Baghdad-based expert who advises the Iraqi government.

The self-proclaimed caliph, Baghdadi, is moving in a semi-desert plain that covers several thousand square kilometers west of the Tigris river and south of Mosul, avoiding Syria after two of his close aides were killed there this year: "war minister" Abu Omar al-Shishani and top civilian administrator and second-in-command Abd al-Rahman al-Qaduli, Hashimi said.

The most senior commanders after Baghdadi are now Abu Mohammed al-Adnani, the group's spokesman who took over military supervision after Shishani's death, and Abu Muhammad al-Shimali, who oversees foreign fighters and succeeded Qaduli as civilian administrator, he said.

Kurdish and Iraqi military commanders say the group is deploying fighters who are less experienced and less ideologically committed to defend what remains of its quasi-state, which is under attack on multiple fronts.

Iraqi forces recently entered the Islamic State bastion of Falluja just west of Baghdad, and are pushing north towards Mosul, by far the biggest city Islamic State controls with a pre-war population of 2 million.

In neighboring Syria, U.S.-backed forces are closing in on the militant stronghold of Manbij, and President Bashar al-Assad's Russian-backed army has advanced into the province surrounding the de facto Islamic State capital Raqqa.

On a front south of Mosul, a group of women displaced by the offensive said Islamic State fighters' grip had begun to loosen as Iraqi forces advanced, to the point that they no longer punished people for not wearing the full face veil.

The number of foreign fighters has fallen significantly, and renewed efforts by the group to recruit locals have proven largely unsuccessful, except amongst the young and destitute, according to people who recently fled, including three repentant Islamic State members.

"When you are a young man and you don't own 250 dinars and someone comes and offers you 20,000, 15,000 or 30,000, you will do anything," said a former Islamic State militant from Iraq's northern Hawija district who recently gave himself up to Kurdish forces.

Members of Islamic State's vice squad, the Hisba, are increasingly being sent to the frontlines as designated fighters are killed off, according to people who escaped as well as Iraqi and Kurdish military and intelligence officials.

That means there are fewer militants to enforce the group's draconian rules and dress code. But a 28 year-old teacher who recently fled Mosul said people were so afraid of the militants they did not disobey them even when they were not around.

"If they say black is white, you agree," said the teacher, who asked not to be identified because he still has family inside the city and feared they could be targeted.

School courses were redesigned by the militants to reflect their war-like ideology. He gave an example of a math problem given to his pupils: "The Mudjahid is carrying seven magazines for his rifle, each with 30 bullets; how many rounds can he fire at the unbelievers?"

He said Arabic lessons were also redesigned, with pupils asked to fill in blanks in slogan-like sentences such as "The Islamic State is xxxx and xxxx". The answer is "staying and expanding".


The Sunni population in which the militants have embedded themselves is becoming more of a liability to them but also remains one of their greatest assets.

As living conditions deteriorate and the militants crack down, the local population is increasingly hostile to the group, which has repeatedly used civilians as human shields to slow the advance of Iraqi forces in frontline cities like Falluja.

Those caught trying to escape Islamic State territory are liable to be executed on the spot -- even women and children.

Despite outnumbering the militants, the population remains weaker than them. Residents were disarmed and the security forces purged in the early days after the fighters captured Mosul. But residents are increasingly cooperating with the security forces outside the city by informing on the militants.

Nineveh provincial council member Abdul Rahman al-Wakaa said the group had begun moving local leaders around so people could not identify them as easily and pass their location on to coalition and Iraqi forces.

The jihadis have also cracked down on communications with the outside world, executing people for using mobile phones and confiscating satellite dishes to prevent people from seeing the progress made by Iraqi forces.

Iraqi military leaders are hoping there will be an uprising against the insurgents as the army draws nearer to Mosul. A top Iraqi general told Reuters troops were in contact with people inside Mosul to synchronize such action with an external military assault.

The plan is to engage the militants on several fronts around Mosul simultaneously, to draw them out of the city, giving the local population a chance to revolt.

Acute hardship and hunger since Baghdad cut salaries to state workers living in areas under Islamic State control around a year ago has forced more locals to work for the group.

Islamic State, for its part, plays on the population's fears of retribution from Iraqi forces and pro-government Shi'ite militias. Despite a string of defeats, military officials say there have been few defections from the group.

Three young men who joined Islamic State and recently surrendered to Kurdish forces in northern Iraq said the militants hunted down those who tried to abandon them.

Ahmed Ibrahim Abdullah said he had been arrested and tortured by the militants when he left. He sold a cow to pay for his bail so he could escape.

Twenty-six year old Ahmed Khalaf said he had surrendered to the Kurds in the hope he would be treated with more leniency than if captured by government forces, but that others were too afraid to the same: "There are people who have a certain idea that their fate is tied to the fate of Daesh."

Follow Merkel on Brexit – and keep cool

June 27th, 2016  |  Source: Reuters

Angela Merkel has set the right tone on Brexit.

The German chancellor is keeping her cool, while other EU leaders including her own foreign minister are pressing Britain for a quickie divorce.

David Cameron, who resigned after the electorate voted to leave the EU on June 23, said he would not institute formal divorce proceedings. He would leave that to his successor as prime minister.

A new leader probably won’t be chosen until October. Given that Boris Johnson, the pro-Brexit former Mayor of London who is favourite to take over, hasn’t yet articulated an exit plan, the EU may need to wait a few months after that before Article 50 of the Lisbon Treaty is invoked, triggering the start of divorce talks.

“Quite honestly, it should not take ages, that is true, but I would not fight now for a short time frame,” Merkel told a news conference on June 25.

By contrast, German Foreign Minister Frank-Walter Steinmeier said, after a meeting with colleagues from five other EU states: “This process should get under way as soon as possible so that we are not left in limbo but rather can concentrate on the future of Europe.”

It’s understandable that EU politicians are angry with Britain. They feel they have bent over backwards to keep it in the club, only to be rejected.

It’s understandable too that they are afraid that Brexit could lead to a domino effect with other countries such as France, the Netherlands or Italy – where eurosceptic populism is rife – wanting to quit the EU too. They also fear that the uncertainty caused by the British voters’ decision could knock their fragile economies.

Although the rest of the EU almost certainly couldn’t force the UK to trigger Article 50, they might be able to make life difficult in other ways. But there is there is no need to do so as the immediate economic fallout looks manageable.

The main risk is that financial markets will fret that the euro zone will come apart and push up the borrowing costs of the weaker members. But the European Central Bank could handle that by launching a new bond-buying programme.

The most important task is to sever the unhealthy link between banks and sovereigns, as I have argued for many years. A recent development of this idea by Morgan Stanley’s Reza Moghadam is that the ECB could buy bonds directly from those banks that have excess exposure to the debt of particular countries. This would also give a boost to the most vulnerable large euro countries, Italy and Spain, as their banks are particularly exposed to their governments.

There’s also an upside in playing it cool: the UK could change its mind.

This, admittedly, doesn’t look likely at present. But, as the weeks and months progress, a backlash could build to the referendum outcome. A petition has already been launched calling for the result to be annulled. By the evening of June 26, it had gathered 3.5 million signatures.

There is, admittedly, nothing binding about this petition. On the other hand, the UK economy does seem likely to be worse hit by the uncertainty unleashed by the referendum than the rest of the EU. The pound has already fallen sharply. Prices will rise and so may unemployment.

When the next prime minister spells out his or her exit plan, voter dissatisfaction may grow. It will then become clear that many of the promises made by Johnson and other Brexiteers – notably that it would be possible to get easy access to the EU’s single market while at the same time ending the right of EU citizens to come to Britain – are inconsistent.

None of this is certain. But, if the UK does change its mind – which would need to be validated by the people in a democratic process, such as a general election or a new referendum – the benefits to the rest of the EU are big. For a start, it would avoid the economic dislocation caused by an actual Brexit. This could be serious given that Britain is the EU’s second largest economy.

Even more important, a British U-turn would spike the guns of populists in other countries. Merkel, France’s Francois Hollande, Italy’s Matteo Renzi et al could turn round to their voters and say: “The British looked over the abyss, didn’t like what they saw and pulled back.”

Those who think this is fanciful should remember other countries have changed their minds following referendums on EU matters. The Irish, for example, voted to reject the Lisbon Treaty in 2008 only to reverse their decision after some concessions the following year. A similar scenario played out in Athens just a year ago. The Greek people voted in a referendum to reject a bailout plan offered by the euro zone. But, within days, Alexis Tsipras, the prime minister, was begging his euro partners for a new deal.

Now the UK economy is much stronger than the Greek one. And Britain is not subject to the strictures of the euro zone. So the analogy is not exact. But there is enough of a parallel to give EU leaders pause for thought when they convene in their various configurations over the next few days. If they play it long and cool, they may yet bring this recalcitrant member back into the club.

Trump says Brexit a model for his campaign

June 24th, 2016  |  Source: Reuters

U.S. presidential candidate Donald Trump thrust himself into the heart of Britain's vote to leave the European Union on Friday, calling it a "great thing" and drawing parallels to his own insurgent campaign.

In Scotland to reopen a golf resort he owns, the wealthy New York businessman wasted no time interpreting the outcome of the "Brexit" vote as an example of a global uprising against the established order, an argument he said fits in with his own campaign to shake up Washington by renegotiating free trade deals and stopping illegal immigration.

"People want to take their country back. They want to have independence in a sense. You see it with Europe, all over Europe," said Trump, 70, the presumptive Republican nominee for president.

He said the economic shock from the vote would ebb over time and that more European countries might want to break with the 28-nation European Union. He said Americans would have a chance "to re-declare their independence" and "reject today’s rule by the global elite" when they vote on Nov. 8.

“So I think you're going to have this happen more and more. I really believe that, and I think that it’s happening in the United States. It's happening by the fact that I've done so well in the polls," he said.

Trump's rival, Democratic candidate Hillary Clinton, said in a statement: "This time of uncertainty only underscores the need for calm, steady, experienced leadership in the White House to protect Americans' pocketbooks and livelihoods, to support our friends and allies, to stand up to our adversaries, and to defend our interests.

"It also underscores the need for us to pull together to solve our challenges as a country, not tear each other down," said Clinton, 68, a former U.S. secretary of state, who had openly favored Britain's remaining in the EU.

More than half a million Britons signed a petition earlier this year to bar Trump from entering Britain, where he has business interests, in response to his call to temporarily ban Muslims from entering the United States.

British lawmakers decided against a ban as a violation of free speech.


Trump assailed as inappropriate Democratic President Barack Obama's open appeals to Britain not to split off. Shaking off a tradition of not commenting on U.S. politics from foreign soil, Trump said Obama had been embarrassed.

"It's something he shouldn't have done. It's not his country. It's not his part of the world. He shouldn't have done it. And I actually think that his recommendation perhaps caused it to fail," Trump said.

Trump arrived in his signature helicopter at Turnberry near his clubhouse resort, a Scottish flag blowing in the wind.

Joined by sons Don Jr. and Eric and daughter Ivanka, the candidate praised his mother who was born in Scotland, his children who manage his business affairs and the golf course itself, dismissing complaints from Republicans that he should have stuck to the campaign trail at home.

Brexit: from an American perspective, there is only one good outcome

June 22nd, 2016  |  Source: The Guardian

While UK voters have good reasons to either stay in or leave the European Union this Thursday, a British exit would only hurt the US

While there are good reasons for British voters to either support or oppose theproposed withdrawal of the UK from the European Union, there is little argument at all from an American perspective that Brexit would hurt the US.

The strongest argument for the UK leaving the EU is that European bureaucrats have usurped many of the powers that should be vested in democratically elected officials in Westminster. Laws in Brussels are not made by people who can be readily held accountable to voters. Instead, a maze of one-size-fits-all bureaucracy has slowly and steadily eroded the role of national parliaments and other political institutions.

This is a convincing argument for British voters. However, it needn’t matter at all to Americans. What may matter to Americans, however, is the economic and national security impact of the UK deciding to leave the bloc.

There is consensus among economists that Britain leaving the EU would lead to a major economic shock, which would have worldwide impacts. In recent days, global markets have followed polls in the UK. The less likely it is that Britain leaves the better markets have done, and vice versa. Janet Yellen, the chair of the Federal Reserve, warned on Tuesday that Brexit could have “significant economic repercussions” in the US.

Furthermore, from a national security perspective, Brexit would deprive the US of a crucial window and important pro-American voice in pan-European meetings.

It also would risk Scottish independence, which would probably require the relocation of Britain’s nuclear submarines and weaken the UK’s military at a time when Europe faces a growing threat from Russian expansionism.

There is also an argument that the pro-Brexit campaign in the UK has set a disturbing trend for western democracies. Those campaigning for Britain to leave the EU have not focused on the gaping democratic deficit in European institutions. Instead, much of the campaign has focused on inflated anti-immigration rhetoric and demagoguery. One pro-Brexit poster unveiled by UK Independence party (Ukip) leader Nigel Farage featured a picture of a number of Middle Eastern refugees with the slogan “Breaking point: the EU has failed us all.” A win by pro-Brexit forces would be yet another signal of the potency of this variety of demagoguery in western politics and probably further influence the tone of what is already a historically divisive and bitter US presidential election.

British voters will make their decision on Thursday about whether the UK is better off within or without the European Union. And while the subject can be the topic of fair and reasonable debate in the UK, there is only one good outcome from the American perspective.

Wall Street donors seek to block Warren VP pick

June 20th, 2016  |  Source:

If Clinton chooses the Massachusetts senator as her running mate, donations will dry up, fundraisers warn.

Big Wall Street donors have a message for Hillary Clinton: Keep Elizabeth Warren off the ticket or risk losing millions of dollars in contributions.

In a dozen interviews, major Democratic donors in the financial services industry said they saw little chance that Clinton would pick the liberal firebrand as her vice presidential nominee. These donors despise Warren’s attacks on the financial industry. But they also think her selection would be damaging to the economy. And they warned that if Clinton surprises them and taps Warren, big donations from the industry could vanish.

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“If Clinton picked Warren, her whole base on Wall Street would leave her,” said one top Democratic donor who has helped raise millions for Clinton. “They would literally just say, ‘We have no qualms with you moving left, we understand all the things you’ve had to do because of Bernie Sanders, but if you are going there with Warren, we just can’t trust you, you’ve killed it.’”

Most big donors don’t want Warren on the ticket because she is the most accomplished anti-Wall Street populist in the Democratic Party. But many also think her presence would drive a potential Clinton administration too far to the left, poison relations with the private sector from the start and ultimately be damaging to the economy.

A constant theme that emerged in the interviews is that executives in the financial industry believe the first 100 days of a Clinton administration could feature potential deal making with Republicans, who are likely to maintain their majority in the House of Representatives.

The dream deal for Wall Street would be a combination of targeted infrastructure spending that appeals mostly to Democrats and corporate and international tax reform that could bring Republicans along. The fear is that Warren would make such a deal more difficult.

“Clinton is going to face a divided government unless there is a total tsunami,” said one moderate Washington Democrat with close ties to the banking industry. “What you want in a vice president is someone who can negotiate for you on the Hill, someone like Joe Biden. And that is not a Warren strength.”

All of the donors and senior Democrats interviewed for this story demanded that their names not be used both because they were not authorized to speak about the Clinton campaign’s internal deliberations and because they feared Warren’s wrath. “There is no upside to my talking to you on the record,” one big donor said. “Either I piss off the Clinton campaign or I piss off Warren, or both.”

Several donors said they did not really fear Warren going on the ticket because they do not believe Clinton has a strong relationship with the senator and would not trust Warren to be a loyal No. 2, either on the campaign or in the White House.

“First of all, they don’t particularly like each other,” said one prominent hedge fund manager who has raised millions for Hillary Clinton and Bill Clinton before her. But, the manager added, “The absolute predicate for a vice presidential nominee is they have to understand they are No. 2 both during the campaign and once you take office, and I just don’t think Elizabeth Warren is that type of person.”

The distaste for Warren in the banking industry is not surprising. No American politician in recent history has done more to harness the powerful anti-Wall Street sentiment that continues to rage in the country since the financial crisis of 2008.

Warren created the Consumer Financial Protection Bureau that many bankers dislike, and she continues to push for far stronger regulations including breaking up the nation’s largest financial institutions into smaller, simpler pieces. This is exactly the reason that many on the left, including ardent backers of Sen. Bernie Sanders’ presidential campaign, want to see Warren on the ticket.

“It’s very clear that Wall Street guys don’t like her because she has been a lot more effective than most in communicating an anti-Wall Street message that has been part of the Democratic Party for 80 years, since the 1930s,” said Charles Geisst, a Wall Street historian at Manhattan College. “It’s not so much that Wall Street doesn’t like her personally, most of them don’t even know her, but they don’t like anyone that espouses that particular ideology.”

A Clinton campaign spokesman declined to comment for this story. A representative of Warren did not respond to requests for comment.

Clinton earlier this month said she thinks Warren is “qualified” to be vice president. “I have the highest regard for Sen. Warren,” she said in an interview with Politico. “I think she is an incredible public servant, eminently qualified for any role. I look forward to working with her on behalf of not only the campaign and her very effective critique of [Donald] Trump, but also on the issues that she and I both care about.”

Warren has maintained the typical stance of potential vice presidents, saying she is perfectly happy in her current job. But she has some powerful backers pushing Clinton to pick her for the vice-presidential slot, including outgoing Senate Minority Leader Harry Reid (D-Nev.).

People close to the Clinton campaign say that while Warren might not wind up as the vice-presidential selection, Wall Street executives are dead wrong to think that it couldn’t happen.

They say Warren is very high on the list of possible vice presidential candidates along with Sens. Tim Kaine of Virginia, Sherrod Brown of Ohio and Cory Booker of New Jersey; Labor Secretary Tom Perez; Housing and Urban Development Secretary Julián Castro; and Rep. Xavier Becerra of California, among others. “We are not at the point of ruling anyone in or out,” a person close to the process said.

Picking Warren would be risky for Clinton’s fundraising operation. The presumptive Democratic nominee hopes to raise $1.5 billion for her campaign against Trump, and Wall Street has been a big source of funding for her over the years.

According to the Center for Responsive Politics, Clinton and outside groups supporting her have raised $289 million so far in the 2016 cycle. The securities and investment industry is easily Clinton’s top source of cash, donating over $28 million so far, according to the CRP.

“Things are so volatile now with all of the outside groups that all it can take is pissing off one billionaire on Wall Street to make it difficult,” said Sheila Krumholz, executive director of the CRP. “And you don’t run national campaigns for as many years as Clinton has without some serious support from Wall Street, they are just too much of a heavy hitter.”

The progressive case for Warren holds that she would immediately energize the liberal base and bring Sanders voters into the fold. And Warren backers note that the senator has been an early and enthusiastic basher of Trump and shown a knack for getting under the presumptive GOP presidential nominee’s skin.

“Elizabeth Warren very effectively called out Donald Trump for cheering the Wall Street collapse because it would make him money — and that moment reminded Democrats how powerful Warren’s megaphone can be,” said Stephanie Taylor, co-founder of the Progressive Change Campaign Committee. “Whether it’s as vice president or as co-chair of the presidential transition committee, it’s hard to imagine Hillary Clinton not wanting a very large role for Elizabeth Warren at the table.”

But more moderate Democrats in the financial services industry argue that Sanders voters will come on board anyway and that Clinton does not need to pick Warren to help her win.

“We are going to win this. Trump shouldn’t be president and he isn’t going to be president,” said one senior executive at a Wall Street bank who is close to Clinton. “Picking Warren would indicate weakness and panic for no reason and make them look like they are running scared of Trump. There will be plenty of time to galvanize the left and get them to come out. And Warren would be a nightmare to try and manage.”

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Russia launched its first military icebreaker in almost a half-century

June 17th, 2016  |  Source: The Verge

Capable of smashing through a meter of ice

Last week, Russia launched its first military icebreaker in 45 years, according to the TASS news agency. The vessel, named Ilya Muromets after a Russian folk hero, has a cruising range of 12,000 nautical miles and an endurance run of two full months. It is capable of smashing through up to a meter-thick of ice.

The Ilya Muromets, which launched out at the shipyard in St. Petersburg June 10th, is expected to be inducted into the Russian Navy in 2017, the news agency said. It is the latest addition to a fleet of 40 icebreakers, as Russia seeks to build a dozen more ships over the next several years. Some experts warnthat the US faces the prospect of falling behind Russia, as well as China, when it comes to developing fleets of icebreakers capable of traveling through the resource-rich Arctic region.

Last year, President Obama announced plans to acquire new icebreakers to ensure the US can operate year-round in the Arctic Ocean. Meanwhile, Russia has been stepping up its activities in the Arctic by building transport and energy production infrastructure, as well as installing military facilities and developing sea routes linking Europe and Asia, according to Sputnik News.

VW bets on electric cars, services to recover from crisis

June 16th, 2016  |  Source: Reuters

Volkswagen (VOWG_p.DE) will invest more than 10 billion euros ($11 billion) by 2025 in areas such as electric cars and ride-hailing as it seeks to reshape its business in the wake of its emissions-test cheating scandal, it said on Thursday.

Europe's biggest carmaker said it would fund what it dubbed "the biggest change process in the company's history" with an efficiency drive, including integrating components businesses that currently employ 67,000 people in 26 locations worldwide.

"The Volkswagen Group will be more focused, efficient, innovative, customer-driven and sustainable – and systematically geared to generating profitable growth," CEO Matthias Mueller said, launching a plan called "TOGETHER – Strategy 2025".

Volkswagen is battling to recover from the biggest business crisis in its 79 year history after admitting in September to cheating U.S. diesel emissions tests.

The German company has set aside $18 billion to cover the cost of vehicle refits and a settlement with U.S. authorities, and analysts expect more fines and legal costs.

The scandal has cast a shadow over the entire market for diesel cars, which account for about half of new vehicle sales in Europe, and has ramped up pressure on Volkswagen to cut costs at its namesake brand, which lags the profitability of rivals.

Spelling out a new strategy ahead of its annual shareholder meeting on Wednesday, the company said it planned to launch more than 30 electric vehicles over the next ten years, forecasting they would account for 2-3 million unit sales in 2025, compared with a tiny number currently.

It also said it would build a services business encompassing areas such as ride-hailing and car-sharing that it expects to generate sales in the billions of euros by 2025, as well as developing its own autonomous driving and battery technologies.

Mueller said the transformation would require a "double-digit billion" amount of investment, funded by an efficiency drive across the group aimed at delivering around 8 billion euros a year in savings.

He gave few further details, saying they would be announced by the company's individual brands in due course, but said the Volkswagen brand was counting on a "pact for the future" with unions to be agreed by the autumn, aimed at both boosting competitiveness and preserving jobs.


Critics of the company, including activist investor TCI, have urged it to take more radical action to cut costs despite union protests, particularly at the Volkswagen brand.

Some have also called for Volkswagen to tackle a complex ownership structure, in which the founding families, the German state of Lower Saxony and labor unions all have strong voices.

Investors are braced too for the results of an ongoing investigation into who was responsible for, and who knew about, the emissions test cheating.

"For me, this is not an investible stock. That is really to do with the corporate governance issues, which they still haven't addressed," Kevin Lilley, European equities fund manager at Old Mutual Global Investors, said on Wednesday before the strategy announcement.

He said a "cosy relationship" between key shareholders meant "this company never reaches proper profitability."

However, Evercore ISI analyst Arndt Ellinghorst said on Thursday the new strategy was an encouraging sign.

"Has VW changed? While only time will tell, there is certainly evidence that this is the case," he said, retaining a "buy" rating on Volkswagen shares.

At 1150 GMT (7.50 a.m. ET), the stock was down 1.2 percent at 118.65 euros, within a European blue-chip market .FTEU3 down 0.7 percent.

Volkswagen said its new plan aimed to improve its operating return on sales before one-off items to 7-8 percent by 2025 from 6 percent in 2015, and the return on capital employed in its automotive division to more than 15 percent from 13.8 percent.

Mueller reaffirmed the company's expansion and investment plans for North America and China, adding he expected China would be the main market for its new electric cars.

He also said Volkswagen was in talks with potential partners to bolster its position in China's growing economy-car market, a current weak spot for the business.

IT worker at Panama Papers firm detained in Geneva

June 15th, 2016  |  Source: Reuters

A computer technician at the Geneva office of the Panama Papers law firm was detained several days ago on suspicion of recently removing large amounts of data, the newspaper Le Temps reported on Wednesday, citing a source close to the case.

A spokesman for the Geneva prosecutor's office confirmed to Reuters that it had opened an investigation following a criminal complaint by the company, but he declined to comment further.

Mossack Fonseca, a law firm based in Panama, is at the centre of a massive leak of data related to offshore businesses.

The paper said the suspect had denied any wrongdoing but was accused of theft of data, unauthorised access and breach of trust following a complaint lodged by the firm.

The newspaper said there was no evidence the detained man was responsible for the massive Panama Papers data leak in April, which embarrassed several world leaders and shone a spotlight on the shadowy world of offshore companies.

The paper said the prosecutor had searched the company's office and seized computer equipment, and checks were underway to see if the detained man had stolen data and, if so, how much and when.

The prosecutor's spokesman declined to comment on that information.

Mossack Fonseca, which specialises in setting up offshore companies, has said it broke no laws, destroyed no documents, and all its operations were legal.

The Geneva prosecutor's office began a criminal inquiry in early April, shortly after the leaks that revealed many offshore companies set up by lawyers and institutions in the Swiss financial centre.

Gun Stocks Way Up After Attack in Orlando

June 13th, 2016  |  Source:

In the early hours of yesterday morning, a shooter killed 49 people in a gay nightclub in Orlando, Florida. The reactions were swift, plentiful, and varied. For instance, editors at some newspapers focused on the threat of radical Islamic terrorism while others focused on gun control. Still, others have reacted by buying shares of gun companies.

According to Fox Business, “Smith & Wesson rallied 6.9% to $22.88, and Ruger jumped 7.9% to $61.93. Vista Outdoor (VSTO), which owns Savage Arms and Federal Premium ammunition, rose 2.3% to $48.11.”

Both of those companies manufacture a type of AR-15, which is the model of weapon used by the gunman on Saturday morning.

Obama administration not pursuing executive order to shut Guantanamo

June 13th, 2016  |  Source: Reuters

The Obama administration is not pursuing the use of an executive order to shutter the Guantanamo Bay military prison after officials concluded that it would not be a viable strategy, sources familiar with the deliberations said.

The conclusion, reached by administration officials, narrows the already slim chances that President Barack Obama can fulfill his pledge to close the notorious offshore prison before leaving office in January.

The White House has said repeatedly that Obama has not ruled out any options on the Guantanamo center, which has been used to house terrorism suspects since it was set up in 2001 following the Sept. 11 attacks on New York and Washington.

Obama is eager to fulfill his 2008 campaign pledge to close the prison and could still choose to use his commander-in-chief powers, but the option is not being actively pursued, the sources said.

Without executive action, the chances of closing the prison would hinge on convincing a resistant Congress to overturn a long-standing ban on bringing possibly dozens of remaining prisoners to maximum-security prisons in the United States.

White House lawyers and other officials studied the option of overriding the ban but did not develop a strong legal position or an effective political sales pitch in an election year, a source familiar with the discussions said.

"It was just deemed too difficult to get through all of the hurdles that they would need to get through, and the level of support they were likely to receive on it was thought to be too low to generate such controversy, particularly at a sensitive (time) in an election cycle," the source said.

Republicans in Congress are opposed to bringing Guantanamo detainees to U.S. prisons and have expressed opposition to transfers to other countries over concern that released prisoners will return to militant activities. They have vowed to challenge any potential Obama executive action in court.

At its peak, the prison at the U.S. naval base in Cuba housed nearly 800 prisoners, becoming a symbol of the excesses of the "war on terror” and synonymous with criticism of detention without trial and accusations of torture. Obama has called it a recruitment tool for terrorists.


The number of Guantanamo detainees has fallen to 80 now, the lowest since it was opened.

The administration is focusing on getting the number of detainees at the prison down to such a low number, perhaps 20, that the cost of keeping it open could prove unpalatable to Congress. Republican lawmakers remain unswayed.

The Guantanamo prison and associated military commissions cost $445 million in fiscal year 2015. That works out to more than $5.5 million a year for each of the 80 remaining prisoners.

Thirty of the remaining detainees at Guantanamo have been approved for transfer to foreign countries and the State Department says it will move all of them out this summer. Those who would be left include 10 being prosecuted in military commissions, and other detainees deemed too dangerous to release or transfer.

“The administration's goal is to work with Congress to find a solution to close Guantanamo," said Myles Caggins, a spokesman for the White House National Security Council.

He said the government had made "substantial progress" moving prisoners to foreign countries and was working to identify more countries for additional transfers. Reviews to determine whether certain prisoners need to remain detained to prevent a threat to U.S. security had been accelerated and would be completed in the coming months, he said.

Obama, who issued an order to shut the prison within a year on his first day in office, released his latest plan to close it to Congress in February, but it has not gained traction.

The White House has not publicly ruled out the executive order option in part to keep pressure on the Pentagon to move prisoners who have been cleared for release to other countries, one of the sources said.

"If Congress ... would finally say no to the president's plan and the executive order option wasn't on the table, there was a concern that the wheels could grind to a halt," said the source familiar with discussions at the White House.

Gregory Craig, who served as Obama's first White House counsel, said that without an executive order, Obama would likely need the cooperation of Congress to shut down the prison.

"I think the odds are probably challenging," Craig said.

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