The Big Picture

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• Why Does the U.S. Support Saudi Arabia, Sponsor of Islamic Terrorism?
• Charlie Rose: Apple’s Jony Ive & Marc Newson on Design
• Data Breaches in the U.S.
• 10 Sunday Reads
• Sugar?

Why Does the U.S. Support Saudi Arabia, Sponsor of Islamic Terrorism? Posted: 07 Sep 2014 10:30 PM PDT Why Does the U.S. Support a Country which was FOUNDED With Terrorism … and Is Still the MAIN SOURCE of Islamic Terrorism Today? America Has Sold Its Soul for Oil A U.S. congressman for 6 years,  who is now a talking head on MSNBC (Joe Scarborough) says that – even if the Saudi government backed the 9/11 attacks – Saudi oil is too important to do anything about it: This is not an isolated incident. It is a microcosm of U.S.-Saudi relations. By way of background, former MI6 agent Alastair Crooke notes that Saudi Arabia was founded with terrorism: One dominant strand to the Saudi identity pertains directly to Muhammad ibn ʿAbd al-Wahhab (the founder of Wahhabism), and the use to which his radical, exclusionist puritanism was put by Ibn Saud. (The latter was then no more than a minor leader — amongst many — of continually sparring and raiding Bedouin tribes in the baking and desperately poor deserts of the Nejd.) *** Abd al-Wahhab demanded conformity — a conformity that was to be demonstrated in physical and tangible ways. He argued that all Muslims must individually pledge their allegiance to a single Muslim leader (a Caliph, if there were one). Those who would not conform to this view should be killed, their wives and daughters violated, and their possessions confiscated, he wrote. The list of apostates meriting death included the Shiite, Sufis and other Muslim denominations, whom Abd al-Wahhab did not consider to be Muslim at all. *** Abd al-Wahhab's advocacy of these ultra radical views inevitably led to his expulsion from his own town — and in 1741, after some wanderings, he found refuge under the protection of Ibn Saud and his tribe. What Ibn Saud perceived in Abd al-Wahhab's novel teaching was the means to overturn Arab tradition and convention. It was a path to seizing power. Ibn Saud's clan, seizing on Abd al-Wahhab's doctrine, now could do what they always did, which was raiding neighboring villages and robbing them of their possessions. Only now they were doing it not within the ambit of Arab tradition, but rather under the banner of jihad. Ibn Saud and Abd al-Wahhab also reintroduced the idea of martyrdom in the name of jihad, as it granted those martyred immediate entry into paradise. *** Their strategy — like that of ISIS today — was to bring the peoples whom they conquered into submission. They aimed to instill fear. In 1801, the Allies attacked the Holy City of Karbala in Iraq. They massacred thousands of Shiites, including women and children. Many Shiite shrines were destroyed, including the shrine of Imam Hussein, the murdered grandson of Prophet Muhammad. A British official, Lieutenant Francis Warden, observing the situation at the time, wrote: "They pillaged the whole of it [Karbala], and plundered the Tomb of Hussein… slaying in the course of the day, with circumstances of peculiar cruelty, above five thousand of the inhabitants …" Osman Ibn Bishr Najdi, the historian of the first Saudi state, wrote that Ibn Saud committed a massacre in Karbala in 1801. He proudly documented that massacre saying, "we took Karbala and slaughtered and took its people (as slaves), then praise be to Allah, Lord of the Worlds, and we do not apologize for that and say: 'And to the unbelievers: the same treatment.'" In 1803, Abdul Aziz then entered the Holy City of Mecca, which surrendered under the impact of terror and panic (the same fate was to befall Medina, too). Abd al-Wahhab's followers demolished historical monuments and all the tombs and shrines in their midst. By the end, they had destroyed centuries of Islamic architecture near the Grand Mosque. *** With the advent of the oil bonanza — as the French scholar, Giles Kepel writes, Saudi goals were to "reach out and spread Wahhabism across the Muslim world … to "Wahhabise" Islam, thereby reducing the "multitude of voices within the religion" to a "single creed" — a movement which would transcend national divisions. Billions of dollars were — and continue to be — invested in this manifestation of soft power. *** It was this heady mix of billion dollar soft power projection — and the Saudi willingness to manage Sunni Islam both to further America's interests, as it concomitantly embedded Wahhabism educationally, socially and culturally throughout the lands of Islam — thatbrought into being a western policy dependency on Saudi Arabia, a dependency that has endured since Abd-al Aziz's meeting with Roosevelt on a U.S. warship (returning the president from the Yalta Conference) until today. *** The more radical Islamist movements were perceived by Western intelligence services as being more effective in toppling the USSR in Afghanistan — and in combatting out-of-favor Middle Eastern leaders and states.Why should we be surprised then, that from Prince Bandar's Saudi-Western mandate to manage the insurgency in Syria against President Assad should have emerged a neo-Ikhwan type of violent, fear-inducing vanguard movement: ISIS? Frontline notes: Muhammad ibn Abd al-Wahhab, founder of "Wahhabism," an austere form of Islam, arrives in the central Arabian state of Najd in 1744 preaching a return to "pure" Islam. He seeks protection from the local emir, Muhammad ibn Saud, head of the Al Saud tribal family, and they cut a deal. The Al Saud will endorse al-Wahhab's austere form of Islam and in return, the Al Saud will get political legitimacy and regular tithes from al-Wahhab's followers. The religious-political alliance that al-Wahhab and Saud forge endures to this day in Saudi Arabia. By the 19th century, the Al Saud has spread its influence across the Arabian Peninsula, stretching from the Red Sea to the Persian Gulf and including the Two Holy Cities of Mecca and Medina. *** By 1945, the U.S. urgently needs oil facilities to help supply forces fighting in the Second World War. Meanwhile, security is at the forefront of King Abd al-Aziz's concerns. President Franklin Roosevelt invites the king to meet him aboard the U.S.S. Quincy, docked in the Suez Canal. The two leaders cement a secret oil-for-security pact: The king guarantees to give the U.S. secure access to Saudi oil and in exchange the U.S. will provide military assistance and training to Saudi Arabia and build the Dhahran military base. U.S. presidents have been extremely close to the Saudi monarchs ever since. The Progressive notes: "The ideology of the Saudi regime is that of ISIS even if the foreign policies differ," California State University-Stanislaus Professor Asad AbuKhalil tells The Progressive. *** "Wahhabi Islam [the official ideology of the Saudi monarchy] is fully in sync with ISIS." But instead of isolating the Saudi regime from the global mainstream, President Obama paid a visit there earlier this year, meeting with King Abdullah. He reportedly did not discuss the regime's dubious conduct. "I can't think of a more pernicious actor in the region," British-Pakistani author Mohsin Hamid told me in an interview last year. "The House of Saud has exported this very pernicious form of militant Islam under U.S. watch. Then the United States comes in repeatedly to attack symptoms of this problem without ever addressing the basic issue: Where does it all come from? Who's at the heart of this thing? It would be like saying that if you have skin rash because of cancer, the best option is to cut off your skin. It doesn't make any sense." Yet, the United States continues with this approach. Even establishment opinion is recognizing the dimensions of the Saudi problem. "It can't be exporting extremism and at the same time ask the United States to protect it," Retired General (and onetime presidential contender) Wesley Clark recently told CNN. "Al Qaeda, the Islamic State in Iraq and Syria, Boko Haram, the Shabab and others are all violent Sunni Salafi groupings," Ed Husain of the Council on Foreign Relations recently wrote in the New York Times. "For five decades, Saudi Arabia has been the official sponsor of Sunni Salafism [another term for Wahhabism] across the globe." Such entities "have been lavishly supported by the Saudi government, which has appointed emissaries to its embassies in Muslim countries who proselytize for Salafism," he adds. *** Then-U.S. Secretary of State Hillary Clinton wrote in a December 2009 leaked diplomatic cable that entities in Saudi Arabia were the "most significant source of funding to Sunni terrorist groups worldwide." *** Yet the United States keeps mum because the Saudi monarchy serves U.S. interests. Due to its pivotal role in OPEC, it makes sure that crude oil prices don't rise above a certain level. It is a key purchaser of American weapons. It invests in U.S. government bonds. And it has acted in the past as proxy for covert U.S. actions, such as funneling arms and funding to the Nicaraguan contras. *** Until Saudi Arabia stops sponsoring the most reactionary brands of Sunni Islam, this U.S. ally will remain responsible for much of the mayhem in the Muslim world. The Independent headlines "Iraq crisis: How Saudi Arabia helped Isis take over the north of the country": Some time before 9/11, Prince Bandar bin Sultan, once the powerful Saudi ambassador in Washington and head of Saudi intelligence until a few months ago, had a revealing and ominous conversation with the head of the British Secret Intelligence Service, MI6, Sir Richard Dearlove. Prince Bandar told him: "The time is not far off in the Middle East, Richard, when it will be literally 'God help the Shia'. More than a billion Sunnis have simply had enough of them." *** There is no doubt about the accuracy of the quote by Prince Bandar, secretary-general of the Saudi National Security Council from 2005 and head of General Intelligence between 2012 and 2014, the crucial two years when al-Qa'ida-type jihadis took over the Sunni-armed opposition in Iraq and Syria. Speaking at the Royal United Services Institute last week, Dearlove, who headed MI6 from 1999 to 2004, emphasised the significance of Prince Bandar's words, saying that they constituted "a chilling comment that I remember very well indeed". He does not doubt that substantial and sustained funding from private donors in Saudi Arabia and Qatar, to which the authorities may have turned a blind eye, has played a central role in the Isis surge into Sunni areas of Iraq. He said: "Such things simply do not happen spontaneously." This sounds realistic since the tribal and communal leadership in Sunni majority provinces is much beholden to Saudi and Gulf paymasters, and would be unlikely to cooperate with Isis without their consent. *** Unfortunately, Christians in areas captured by Isis are finding this is not true, as their churches are desecrated and they are forced to flee. A difference between al-Qa'ida and Isis is that the latter is much better organised; if it does attack Western targets the results are likely to be devastating. *** Dearlove … sees Saudi strategic thinking as being shaped by two deep-seated beliefs or attitudes. First, they are convinced that there "can be no legitimate or admissible challenge to the Islamic purity of their Wahhabi credentials as guardians of Islam's holiest shrines". But, perhaps more significantly given the deepening Sunni-Shia confrontation, the Saudi belief that they possess a monopoly of Islamic truth leads them to be "deeply attracted towards any militancy which can effectively challenge Shia-dom". Western governments traditionally play down the connection between Saudi Arabia and its Wahhabist faith, on the one hand, and jihadism, whether of the variety espoused by Osama bin Laden and al-Qa'ida or by Abu Bakr al-Baghdadi's Isis. There is nothing conspiratorial or secret about these links: 15 out of 19 of the 9/11 hijackers were Saudis, as was Bin Laden and most of the private donors who funded the operation. *** But there has always been a second theme to Saudi policy towards al-Qa'ida type jihadis, contradicting Prince Bandar's approach and seeing jihadis as a mortal threat to the Kingdom. Dearlove illustrates this attitude by relating how, soon after 9/11, he visited the Saudi capital Riyadh with Tony Blair. He remembers the then head of Saudi General Intelligence "literally shouting at me across his office: '9/11 is a mere pinprick on the West. In the medium term, it is nothing more than a series of personal tragedies. What these terrorists want is to destroy the House of Saud and remake the Middle East.'" In the event, Saudi Arabiaadopted both policies, encouraging the jihadis as a useful tool of Saudi anti-Shia influence abroad but suppressing them at home as a threat to the status quo. It is this dual policy that has fallen apart over the last year. Saudi sympathy for anti-Shia "militancy" is identified in leaked US official documents. The then US Secretary of State Hillary Clinton wrote in December 2009 in a cable released by Wikileaks that "Saudi Arabia remains a critical financial support base for al-Qa'ida, the Taliban, LeT [Lashkar-e-Taiba in Pakistan] and other terrorist groups." *** Saudi Arabia and its allies are in practice playing into the hands of Isis which is swiftly gaining full control of the Sunni opposition in Syria and Iraq. *** For all his gargantuan mistakes, Maliki's failings are not the reason why the Iraqi state is disintegrating. What destabilised Iraq from 2011 on was the revolt of the Sunni in Syria and the takeover of that revolt by jihadis, who were often sponsored by donors in Saudi Arabia, Qatar, Kuwait and United Arab Emirates. Again and again Iraqi politicians warned that by not seeking to close down the civil war in Syria, Western leaders were making it inevitable that the conflict in Iraq would restart. "I guess they just didn't believe us and were fixated on getting rid of [President Bashar al-] Assad," said an Iraqi leader in Baghdad last week. *** Saudi Arabia has created a Frankenstein's monster over which it is rapidly losing control. The same is true of its allies such as Turkey which has been a vital back-base for Isis and Jabhat al-Nusra by keeping the 510-mile-long Turkish-Syrian border open. As we've extensively documented, the Saudis and the U.S. backed the radical "madrassas" in which Islamic radicalism was spread. Indeed, the U.S. is backing the most radical Muslim terrorists in the world: the Salafis, who are heavily concentrated in Saudi Arabia, while overthrowing the more moderate Arabs. Postscript: And you know the barbaric beheadings by ISIS? The Saudis do that in spades. In the first half of August, there were 19 beheadings, including one for "sorcery". The 345 reported executions between 2007 and 2010 were all carried out by public beheading. Sometimes, Saudi courts order the accused to be beheaded … and then have the severed body be crucified.

Charlie Rose: Apple’s Jony Ive & Marc Newson on Design Posted: 07 Sep 2014 04:00 PM PDT On “Charlie Rose,” a conversation with Apple Senior Vice President for Industrial Design Jony Ive and designer Marc Newson in New York ahead of their nonprofit RED auction taking place at Sotheby’s. Source: Bloomberg

Data Breaches in the U.S. Posted: 07 Sep 2014 09:00 AM PDT Source:Bloomberg

10 Sunday Reads Posted: 07 Sep 2014 05:00 AM PDT Good Sunday morn. Start your day out with some “After” reads: • The Case for Sticking With Stocks—No Matter the Price (WSJ) but see also Shiller says ‘We saw this before the Wall St crash, the dot-com bubble and the credit crunch” (This Is Money UK) • Q&A with Pimco Chief Economist Paul McCulley (Time) • The four most useless things financial advisors tell you (MarketWatch) • Howard Marks: Risk and why most investors get it wrong (Oaktree) • Buying Insurance After a Disaster Strikes (A Wealth of Common Sense) • Too Much Thrift? (Barron’s) • An unequal world is an uncharted economic threat (FT) • 7 problems with Politico Magazine's hit piece on Glenn Greenwald (Washington Post) see also Has Politico hit peak strawman? (Washington Post) • A probabilistic analysis of human influence on recent record global mean temperature changes (Science Direct) • Obamacare Effect Linked to Lower Medical Cost Estimates (Bloomberg View) What’s for brunch ?   ECB’s Move Causes Euro to Plunge Source: WSJ

Sugar? Posted: 07 Sep 2014 03:30 AM PDT Sugar? David R. Kotok September 6, 2014   We have been thinking about the healthcare crisis, underfunding of long-term healthcare liabilities, Obamacare controversies, and lack of solutions from a fiscal and regulatory standpoint. This morning on CNN, Michael Smerconish discussed Sarah Palin's "death panel" label for end of life counseling, Medicare funding and he noted that one fourth of the Medicare budget is spent on services for the final year of a patient's life.  This year at Cumberland we continued to witness long time clients morph from extensive and invasive critical care to palliative care, hospice and passage.  After more than 4 decades of personalized asset management in separate accounts, my Cumberland colleagues and I have observed this transition many times. So for this weekend's missive, we want to take a different approach to addressing these issues.  At the risk of being a preacher, here goes. It seems to me that the political wrangling over Obamacare is somewhat misfocused. The handwringing over underfunded health and retirement benefits is heavy on opinion about money and mostly ignores personal responsibility. The funding and budgetary issues are huge and seemingly intractable. There are associated problems with taxation, spending levels, drug costs, regulations about hospital care, and a myriad of additional details. Those are valid public concerns. And they introduce the politician to the quick fix solution while under the corrupting influence of money or power. All of these concerns drive policy makers to make decisions that seek to address the challenges – without confronting their underlying causes. The US is currently spending approximately 17% a nearly $18 trillion GDP on healthcare. End of decade projected spending levels range from $4.5 to $5.5 trillion.  Imagine, the United States may be devoting one of each five dollars of GDP to healthcare. We spend a higher percentage on healthcare than other mature economies do. We spend large sums on redundant efforts and defensive structures that are aimed at deflecting litigation against practitioners. We squander massive resources. Most of us who have personally experienced encounters with our healthcare system and have acquired our own versions of substantiation. Meanwhile, we continue to evolve a population of obese and sick people as we ratchet up the amount we spend on healthcare. So projections that indicate we will spend over 20% of GDP within a decade seem reasonable.  Maybe we will reach 20% sooner. Do we ever stop and examine the real underlying causes of our healthcare problem? Might it be possible to do things differently and thereby reduce this massive and growing expenditure and huge political controversy? Perhaps, the answer is yes. Over the past four months, I paid careful attention to the eating habits of my fellow Americans as I traveled to multiple cities and regions throughout the US. I kept some logs.  During some stretches of the trip I ate no sugar-laden foods, drank no liquids jacked up with fructose, and carefully watched my caloric intake, diminished sugar consumption and the composition of what I ate. I tried to eat thoughtfully, mindfully and healthfully. At other times I would fall into the unhealthy behaviors I saw around me. The 300 calorie coffee cake washed down with sweetened coffee is a prime example.  A snack other than nuts or a banana on an airplane is easily obtained from the flight attendant and it is loaded with poisons.  Two minutes of reading the label is all the research one needs to perform the screening. After two to four days of "being bad," I found that I experienced more fatigue and a change in health-related indicators such as the acuteness of arthritic symptoms. When I changed my diet back to one that was more thoughtful, a reversal occurred within two to four days – I would find myself with more energy and get better sleep. I would be more attentive, productive, and constructive when I had a purposeful lower intake of sugar and a higher intake of fiber and vegetables with natural fats and proteins that were not prepared in a factory. I became my own case study of one. I began to talk about this with others. I found that they had experienced similar results. Some had changed their eating habits because they wanted to live better and healthier. They tended to experience positive results quickly, so they persisted and got even healthier.  Others tried but had difficulty persisting and lapsed back to old habits. I consulted Christine Schlesinger, a geriatric nurse practitioner and specialist in diabetes education and nutrition.  She helped direct me to the YouTube presentations you're about to see if you take the time to get to the bottom of this email. She has a large library of them. They discuss diet, nutrition, and mindful eating. With her help I was able to winnow the video presentations to the four that are at the bottom of this missive. There were many to choose from. After viewing them, I decided to scrap the large task of accumulating all the anecdotes I have personally amassed over the last few months into a data set. The data set is already there for you to see. The first video features Dr. Terry Wahls, a multiple sclerosis survivor who was able to effect a dramatic recovery through dietary changes. She tells her story as a physician, patient and illustrates a successful outcome due to dietary change.  The purpose of starting with her presentation is to demonstrate that people can achieve a new level of understanding and act upon it to change behaviors for the betterment of their health and wellbeing. Obviously, Dr. Wahl's experience is anecdotal, and it is certainly true that complex and chronic diseases, like MS, cannot always be cured by an improved diet. What is key for this conversation is that this is a case study of a very determined person, and it shows us that such positive outcomes are possible. The second presentation, by CNN's Dr. Sanjay Gupta, is a short excerpt from 60 Minutes. It discusses the toxicity of sugar. The third presentation examines the quantity of sugar in our diets, how it is measured, and how our behavior has eroded over time through consuming it. (Note that the measurements of sugar intake are performed on people eating so-called "healthy" and "recommended" diets.) The fourth presentation is especially powerful. I believe it will appeal to my colleagues and friends in the financial markets and data-related professions. Economists are data driven.  So here it is. Pediatric endocrinologist Dr. Robert H. Lustig's 1.5-hour presentation is backed up by solid data. He is an excellent presenter who shares his political opinions and develops assertions about policy. The clarity of his presentation is outstanding. He demonstrates one alternative route to solving what sometimes seems to be an impossible healthcare-related fiscal and behavioral problem. We strongly suggest watching the presentation offered by Dr. Lustig – or at the least the first 40 minutes of it. All the data needed to reach good decisions about healthcare policy and personal behavior is presented there. The information we need to improve our health and reduce our healthcare costs, both personally and as a society, is at hand. The only thing that is left is some personal and political decision making and action. Ask someone who is diabetic if that is a preference.  The answer is no. Ask one who is overweight if that is a desired condition.  The answer is no.  Some are determined to do something about it.  Others wait for one reason or another. It seems to me that most of the people I know would prefer to be healthier. Why do so many of us persist in unhealthy behaviors until some medical shock occurs or we just gradually become debilitated? What are the triggers for positive change?  It took a medical shock for me to wake up.  Maybe that is the only way.  Maybe there is a survivor bias in the data of the mindful and healthful.  The others are dead. We don't know.  But we do know that there are answers right in front of us if we make the effort to know. If we did, we could make this healthcare problem more manageable. If we don't solve the problem, the trend is apparent. My fear is that the US will end up spending over 20% of its hard-earned income on healthcare. Our nation will become fatter, less healthy, and more sugar-addled. Our politicians will go on protecting certain sectors of the agricultural community at the expense and health of the entire nation. We will not raise taxes on toxic foods nor reduce our consumption of them. If we continue to subsidize them, we will get an unhealthy result. We will cram ourselves into airplanes and be increasingly uncomfortable, demanding that the seats get bigger! And all the while we will find our good health and quality of life slipping away, and we will say goodbye to loved ones years too soon. We are on a present course that is unhealthy, unsustainable, and demoralizing. The problem is not limited to funding sources, deficits, and budgets reflecting more than a trillion dollars a year spent to treat lifestyle-related diseases. The link takes you to a NY Times story about it.  The problem is also about the quality of our individual lives. Sensitize the American population, change eating habits, and we'll get healthier. The fiscal issues will begin to solve themselves. To summarize, the present course is a failed one. More government rules. More money spent. More insurance cost. More lawyers engaged. Less personal responsibility.  Less knowledge. And finally, more poor health. I'm afraid that I tend to be cynical and don't expect the American public to change its habits overnight. More likely, we will get sicker, more obese, and demand more from politicians who will promise us what they can't deliver. But I also argue that better personal and societal health is within our reach if we make the effort. Lastly, we can't expect much help from the mainstream media, dominated as it is by advertising from those who would sell us sugar and manufactured food. Yet the truth of our situation is available, free of charge. Here are the four videos. Bon appétit! http://tedxtalks.ted.com/video/TEDxIowaCity-Dr-Terry-Wahls-Min https://m.youtube.com/watch?v=ELTldYccY1U https://m.youtube.com/watch?v=GkOJUMt6xSk https://m.youtube.com/watch?v=dBnniua6-oM ~~~ David R. Kotok, Chairman and Chief Investment Officer

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