MI5 Chief uses first public speech to warn Britain of Islamic threat

By Patrick Corby

Andrew Parker, Director General of the Military Intelligence section 5, also known as MI5, made his first public statement since he took office on the 8th October around the significant threat domestic terrorism poses in the UK and how information leakage can seriously harm national security.

Parker, who has been in the role for 6 months, said: “Describing the reality of the terrorism threat we face is challenging in public discourse. I’ve heard too much exaggeration at one end, while at the other there can sometimes be an alarming degree of complacency.”

Intelligence agencies administered in the UK by the Intelligence and Security Committee (ISC) receive some £2bn in funding each year from the UK HM Treasury to carry out Agency Strategic Objectives (ASO). Last year these included objectives such as counter-terrorism, cyber-security and counter-espionage; this year that remains unchanged.

Andrew Parker speaks out on the real threat terrorism is in the UK. Photo: Scroll

Andrew Parker speaks out on the real threat terrorism is in the UK. Photo: Scroll

In his speech, Mr Parker reminded the public that earlier this year three cases of domestic UK terrorism went to court, one of which was a 7/7 copy using rucksack bombs. All pleaded guilty and received 260 joint years in UK prison, the threat level of terrorism in the UK, according to the ISC, is operating under ‘substantial’ – a strong possibility for an attack – due to these and other similar cases. These domestic threats along with all terrorist activity right now are based on what US president Obama calls “soft targets” that are smaller in scale, domestic in nature and more difficult to monitor.

This was seen recently in the attacks of the Al-Qaeda Somali affiliated group, the al-Shabaab, on Nairobi’s Westgate Shopping Centre. Even though al-Shabaab’s cohesion as a group has been weakened by the Western-backed African Union in recent years, by chasing them out of Somalia’s main cities, it still poses a threat as smaller more mobile cells, which, as the Nairobi attacks show, are ready to flare.

Pakistan military in continued conflict with the FATA Pashtuns where most UK extremists receive training. Photo: Flikr – Jazeera

Pakistan military in continued conflict with the FATA Pashtuns where most UK extremists receive training. Photo: Flikr – Jazeera

In a similar light the threats to UK soil come from small cell groups that have contacted and are trained by the ready and willing groups within the Federally Administered Tribal Areas (FATA) of Pakistan; an area where custom is much more important than any higher regime wishing to gain control of the area.

Those young men who carried out the 7/7 bombings in 2005 came and went through this same region in Pakistan ultimately to the UK capital, London.

Mr Parker’s statement also highlighted Syria, which is in civil war right now, as offering a hotbed of opportunity to organise and plan attacks against Western interests. Large numbers of extremists from Europe and the UK have been attracted to the area, as they have in Pakistan, and once they return home will be ready to use their new found military prowess against whom they deem it necessary.

Addressing this concern directly, Mr Parker stated that terrorist cells in the UK have became “more diffuse, more complicated, more unpredictable,” and that “since 2000, we have seen serious attempts at major acts of terrorism in this country, typically once or twice a year”.

In regard to this new “diffused” real threat, MI5 have changed their communications interception in recent years in order to monitor the traffic of terrorists. This, Mr Parker said, is “vital to the safety of the country and its citizens,” as it provides “many of the intelligence leads on which we rely”.

“The detail of the capabilities we use against [terrorists]…. represent our margin of advantage,” he said, adding: “That margin gives us the prospect of being able to detect their plots and stop them. But that margin is under attack.”

Put this passage in context to the Guardian’s recent leaks of security information supplied by Edward Snowden, the former NSA contractor, and modern surveillance becomes something less about an act against our freedom of speech or privacy and more a counter to modern day terrorism and the access the internet affords.

Parker said that Snowden’s leaks from the UK Government Communications Headquarters (GCHQ) of some 58,000 documents have been put to use stopping multiple attacks in the UK over the last decade and “cause enormous damage, to make public the reach and limits of GCHQ techniques”.

“Unfashionable as it might seem, that is why we must keep secrets secret, and why not doing so causes such harm…. It remains the case that there are several thousand Islamic extremists here who see the British people as a legitimate target.”

Seen from this point of view, a public discourse around privacy is needed in order to constrain what can and cannot be done with the information sought out by our government but in a modern political arena where Islamic extremism is a real danger it must be recognised as playing a vital role.

Al- Qaeda may be diffused and depleted as one large organisation but the Salafi Jihadist view of the world against Western interests are still an ever posing threat on UK soil, with a real danger of becoming a severe national threat.

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Investors dash for Royal Mail shares before privatisation

By Patrick Corby

Royal Mail shares are expected to appreciate 20% due to demand on their first day of trading when the company’s shares are floated in what Vincent Boland calls a “good old-fashioned privatisation.” The strength of the demand is being felt in intermediaries dealing with the sale. IG Group Plc, an English financial derivatives group, had their mid-price increase by 9% since the 3rd October.

The government range for the share price was expected to be around 300p to 330p per share on Friday, by Monday the shares had already hit the 392p to 412p within IG Group Plc.

Royal Mail after 370 years is being privatised. Photo: Martin Weyer

Royal Mail after 370 years is being privatised. Photo: Martin Weyer

The high demand of the shares will mean that investors will certainty not receive all shares applied for and instead be allocated according to government process.

The British government is looking to sell 40.1% to 52.2% of the total shares and a further 7.8% if demand is high. Those 150,000 who work for the Royal Mail will be allocated an additional 10% of all shares for free at an estimated value of £2,200 each.

After the price is officially announced and all shares orders allocated on 8th October, shares will begin conditional trading on Friday 11th when the Royal Mail begins its flotation after 370 years of being a public service.

The increasing popularity of the Initial Public Offering (IPO) has began a political debate as to whether Conservative/ Liberal Democrat Coalition is selling off shares too cheaply.

City estimates the undervaluation to be possibly worth around £1Bn due to property values of some of the Royal Mail sites, such as the London based Mount Pleasant, which have not been considered in the initial valuation of the company. Alex Johnson, the former Labour Business Secretary, has said: “There is a vast difference between pricing Royal Mail shares conservatively and undervaluing them by £1billion. This is ripping off the taxpayer on an epic scale.” Labour has also raised concerns that hedge funds and speculators will make massive short-term profits off the arbitrage of the shares before serious public investments are made on the 15th.

This means that all profit to be made through finding the price equilibrium of the company shares, through the buying and selling of shares over those three conditional days, will go to companies and be missed by the English public. Potential investors have the choice of one of the 44 companies which are acting as intermediaries in the IPO or directly through the government at the website.

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Gambia quits the British Commonwealth

By Patrick Corby

The Republic of Gambia has announced that it will secede from the 54–member British Commonwealth in a statement released by the West African nation.

Gambia has left the British Commonwealth, the country’s president revealed in a surprise statement. Photo: AFP/Getty

Gambia has left the British Commonwealth, the country’s president revealed in a surprise statement. Photo: AFP/Getty

“The government has withdrawn its membership of the British Commonwealth and decided that the Gambia will never be a member of any neo-colonial institution and will never be a party to any institution that represents an extension of colonialism,” said the unexpected statement on Wednesday.

The Republic of Gambia is the smallest mainland African state on the western coast of sub-Saharan Africa. A military coup d’état displaced the then-elected government and instated Lieutenant Yahya Jammeh as president of the country in 1994.

Yahya Jammeh, in widely criticised processes, has been elected four more times through his Alliance for Patriotic Reorientation and Construction party since the political overthrow.

When president Jammeh came to power he immediately suspended the separation of the legislative, executive and judicial powers which had been put in place to protect the Gambian state’s democratic constitution in 1970. Through establishing a Constitution Review Commission (CRC), he then concentrated all power within an authoritarian regime under his control by 1996.

President Jammeh only lifted the ban on the formation of other political parties in 2001 but has since then actively segregated parties through reform and arrests so that no opposition can contest his state.

Right now there are no restrictions in place on how many terms the president can govern for: another main pillar of the democratic process. In January 2012 former information minister Amadou Janneh was sentenced to life in prison after distributing T-shirts with the slogan ”An End to Dictatorship”.

In sub-Saharan Africa the average corporate tax rate for a medium sized business is 57.8%, while in Gambia alone it is the second highest rate after the Democratic Republic of Congo at 283.5% of profits per year according to the World Bank.

Summarising his thoughts on any foreign involvement in his government, Jammeh said in a speech at the United Nations General Assembly in 2012: “Present day Africans cannot be hoodwinked anymore and we are determined to defend our independence and dignity, and take control of our natural resources at any cost and by any means necessary.”

Here at the Logictank we apply strict economic analysis to incoming news and give it straight to you to intellectually digest in a readable form. That means you, the reader, will always be up to date on the latest trends layered with straight facts.

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US government begins shutdown over healthcare

By Patrick Corby

The US government has started to democratically breakdown for the first time since 1996 due to conflicting opinions over healthcare funding measures in the US, which left the government starting a new fiscal year without a plan. The US government has now partially shut down for an indefinite period.

The US government failed on Monday night to negotiate a fiscal policy to overcome the US’s budget deficits when Republican healthcare proposals to suspend the implementation of Obamacare for another year were rejected by the Democratic Senate.

The US has failed to reach an agreement on how to structure its finances, leaving it on the brink of default. Photo:Caters

The US has failed to reach an agreement on how to structure its finances, leaving it on the brink of default.
Photo:Caters

The government budget will now take the hit and be reduced to free up funds to pay debts without accumulating more debt. Government agencies are now to be shut with an overall 800,000 government labourers to be sent home on temporary leave or delayed pay.

The Health Department will be the worst hit with 52% of its workforce put on temporary leave or delayed pay along with several programmes which will be put on hold. For instance, the Food and Drug Administration which regulates the safety of food and drug products will be “unable to support” its operations in monitoring imports.

The Environmental Protection Agency will see 15,000 of its 16,000 employees on unpaid leave. Even NASA has seen 97% of its workforce sent home until further notice leaving only 549 out of 18, 250 to continue operations.

The shutdown has highlighted the ever nearing default of the government in relation to its the debt ceiling talks. The government has until the end of October to find a solution to its financing or face $30Bn and $70Bn in principle and coupon payments on US Treasury bondholders, due on 17th and the 24th October.

Republicans have said they also refuse to negotiate with Obama on the debt ceiling without concessions, which could lead to further strain on the US political system. Failure to solve this will lead to further stripping of government bodies as the Treasury finds funds to pay its debts and the eventual default of the government on its loans.

The shutdown in 1997 during the Clinton administration lasted a little under three weeks but until some form of negotiation is worked out the US is on the brink of default for the first time in its history.

Here at the Logictank we apply strict economic analysis to incoming news and give it straight to you to intellectually digest in a readable form. That means you, the reader, will always be up to date on the latest trends layered with straight facts.

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One fifth of high street stores forecast to close within five years

By Patrick Corby

The Centre for Retail Research (CRR) has forecast that the number of retail stores in the UK could fall by 62,000 by 2015.

Currently online consumption of retail goods is approximately 12.7% and is likely to surge towards 22% over the next five years.

Caption: UK high street retail set to be squeezed out by the internet and rising inflation. Image: Reuters

Caption: UK high street retail set to be squeezed out by the internet and rising inflation. Image: Reuters

The sharp reduction in stores comes from the effect of businesses shifting online, a process which is being hurried along by the recessionary environment in which rising costs are reducing profit margins for small and medium sized companies.

In November 2012 the Bank of England (BoE) released their quarterly Inflation Report announcing that three in ten stores within the UK were making a loss. The BoE stated that low interest rates were keeping unhealthy companies within the margin of sustaining their operations until recessionary adjustments were made.

Sir Mervyn King, BoE governor, has stated that “obviously, this cannot continue indefinitely”, and added how “policy can only smooth, not prevent, the ultimate adjustment”.

Right now prices are being inflated at around 21% to increase output short term but profits are only rising at 12% and with this pressure the technological shift of the internet is occurring rapidly.

The report estimates that closures will be concentrated across pharmacy, health and beauty stores as well as music, books, gifts and DIY stores. This announcement has been pre-empted by such closures as HMV and Jessops early this year. As many as 316,000 jobs could be lost due to the process.

Professor Joshua Bamfield, the author of the report, said: “Retail stores will remain an important, although smaller, part of the shopping process as online retail continues to grow.”

The shift will mostly affect Wales and the North West of England, which are seen as the weakest margin stores and therefore would take the brunt with as many as 29% of stores closing in Wales.

According to the Financial Services Authority (FSA), hedge funds are already positioning themselves for the risks UK closures expose their investments to by shorting the shares they believe are most exposed. Shorting involves borrowing shares and then waiting for them to fall to buy them back cheap and locking the profit.

Their biggest concerns right now are WH Smith, which has 63% of its shares being shorted, the Home Retail Group – which owns Argos and Homebase – which has more than 20% of shares being shorted, and Halfords which has an enormous 90% of its shares bet on a sharp fall in value.

Lloyds Banking Group share price reaches the breakeven rate

By Patrick Corby

The share price in the state-backed Lloyds Banking Group reached the breakeven price on Friday, solidifying the view that the bank may again be privatised to partially return the  public funds spent in bailing the bank out.

Lloyds Banking Group share price reaches the breakeven rate

Lloyds Banking Group share price reaches the breakeven rate

The banking group has had a 39% public stake since it was bought up by the UK government in the shadow of the financial crisis in 2008. A sum of £20.5bn in public money was spent in an attempt to sure up the company and stop it from becoming insolvent on its deposit liabilities.

Lloyds Bank was the top performer of the Financial Times Stock Exchange (FTSE) 100 last year. On Friday its share price rose 2.5%, passing the 61.2p per share targeted breakeven rate set by George Osborne, the UK chancellor.

City analysts had previously believed that the breakeven rate on the stake would be set at 72.3p, the average price paid for the shares by the government in 2008. Instead this in-the-money price has been targeted downwards to 61.2p. This price is based on the price the shares were trading at on the day the UK government bought the stake in the company rather than the 72.3p actually paid.

Banks analyst at Investec, Ian Gordon said: “Having missed the chance to sell some of its stake in September 2010 when the shares peaked at 77p – and subsequently collapsed to 21p by November 2011, it would be prudent to commence a disposal without delay.”

Mike van Dulken, head of research at Accendo Markets, said: “It’s a big trade-off between returning the shares to the markets as quickly as possible (well before the 2015 election anyway), and taking the opportunity to make up for some of the costs taxpayers incurred via forced bailouts.”

Presently the UK is also sitting on a £9.2 billion loss from its Royal Bank of Scotland (RBS) stake. Public money was used again in 2008 to inject a sum of £45bn at 502p a share but the equivalent target price for RBS is 407p, which would again present a loss to the public. RBS shares are currently trading around the 336p mark.

The chancellor has yet to announce any plans or strategies to sell off the 39% stake in Lloyd’s Banking Group or the 81% stake in the Royal Bank of Scotland.

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Leading Pakistani politician shot dead outside her home

By Patrick Corby

On Saturday night Zahra Shahid Hussain, a senior Pakistani politician associated with the Imran Khan party, was shot dead in the financial centre of Pakistan, Karachi.

Hussain was ambushed by two individuals on motorcycles while standing outside her home in the upper-class district of Clifton. “The assailants opened fire on Zahra, 60, as soon as she reached the gate of her residence. Apparently they were there to target her only,” said one official.

Pakistan ElectionThe female politician was killed hours before 43 polling stations were re-opened in her state of Karachi due to suspected intimidation and fraud in the general election a week ago.

Karachi was just one of several states opened for re-polling after wide accusations by the Imran Khan party of rigging and security issues by the Muttahida Quami Movement (MQM), a dominant political force in Karachi.

Mr Khan accused senior MQM member Altaf Hussain of the killing, whilst also condemning the UK for failing to heed public threats from MQM. Altaf Hussain was exiled from Pakistan due to an accusation of murder, and currently leads the MQM party from within the UK where he was given asylum in the 1990s.

Mr Hussain, in reaction to the rigging accusations, made a statement that has been called an open threat of violence by Mr Khan, in which he referenced protests taking place near the Three Swords roundabout in Karachi.

He said:  “those people who are protesting – and grandstanding – near Three Swords [a well know monument] – I don’t want to fight or quarrel, but if I order my supporters now, they will go to Three Swords and turn them into a reality.”

In response Mr Khan retorted: “I hold Altaf Hussain directly responsible for the murder as he openly threatened PTI workers and leaders through public broadcasts…. I also hold the British government responsible as I had warned them about British citizen Altaf Hussain after his open threats.”

The accusations will refocus attention on the running of the financial centre of Karachi by Altaf Hussain from his current dwellings on Edgware High Street in London. One Karachi-based Pakastani citizen said: “If he wants to run Karachi he should come and live here.”

The killing is just the latest in a series of national attacks throughout the Pakistani democratic election. Last Saturday on May 11th a victory was securely won by Nawaz Sharif and the Pakistan Muslim League-Nawaz (PML-N).

You can learn more than this and how economics can be applied to current affairs in our archive here or the Upcoming’s Archive here.

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