30 September 2016   Leave a comment

Shares of Deutsche Bank recovered today, but the bank continues to suffer a crisis of confidence as major hedge funds have pulled out their investments.  The recovery is due to a rumor that the US Department of Justice may reduce the $14 billion fine it levied on Deutsche Bank for marketing fraudulent financial products prior to the financial crisis of 2008.   Interestingly, the US government seems willing to cut the bank some slack even at the expense of the harm done to its citizens.  It would be hard, however, to quantify the potential harm that may ensue if the full fine did in fact cause Deutsche bank to collapse.   The speculation is a clear example of how politics and economics are completely intertwined.  Nonetheless, Germany’s second largest bank, Commerzbank, announced that it was laying off nearly 10,000 workers and suspending its dividend.  Chancellor Merkel had earlier announced that the German government would not bail out Deutsche Bank as the US government bailed out its banks in 2008, but it is hard to believe that the government would let the bank collapse.  But the rest of Europe would be bemused as the paragon of financial rectitude bent the rules for its own banks–another example of the strong interpenetration of politics and economics.

The Internet began as a US Department of Defense program shortly after the moon landing in 1969.  Since that time the Internet Corporation for Assigned Names and Numbers (ICANN) has organized domain names for the internet.  From the beginning, the US government has had a central role in supporting ICANN but that authority lapsed today.  The organization of internet addresses will now be controlled by a private corporation representing various constituencies in the world.  The change will not be noticeable nor will it likely lead to any significant changes in the running of the internet.

Not only has the cease-fire in Syria collapsed, it now appears that American policy in Syria has collapsed as well.  The Russians are stepping up the bombing of Aleppo, apparently free from any diplomatic constraints.  The Russians have decided that the US has no policy in Syria, and that is also has no back-up plan.  There is no evidence for what has happened, but a safe bet would be that President Obama has decided that Russia now owns Syria and that it will have to clean up the mess it has created. Obama’s withdrawal leaves the people of Syria without any options other than to accept President Assad, and there are many in Syria that will not accept that outcome.  Syria seems condemned to a perpetual civil war.

Posted October 1, 2016 by vferraro1971 in World Politics

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