The Morning Brief - Lignet



Egypt: Explosion in Violence Shows Morsi’s Lack of Control
A sudden deterioration of the security situation in Egypt has become so serious that Egyptian President Mohammed Morsi was forced to call a state of emergency and put soldiers on the streets of some cities to make civilian arrests, tactics reminiscent of the Mubarak regime. Although the Egyptian opposition has tried to pressure Morsi over the outbreak of violence, the recent unrest is a product of the political vacuum in the country and restless young and poor Egyptians who appear to be hostile to all politicians.
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Mali/UK: Cameron Troop Deployment Decision Leads to Fear of Mission Creep
British Prime Minister David Cameron yesterday said the UK will send a “sizable amount” of British troops to Mali, the same day that French Prime Minister François Hollande praised advances by French and Malian troops and indicated he hopes to soon turn over offensive operations in Mali to regional African forces. Cameron said British forces will not engage in combat, but this could change if it turns out that foreign al-Qaeda commanders are directing the Islamist rebels in northern Mali, increasing the chance of the conflict becoming a guerrilla insurgency.
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Shale Gas Deal With Shell Could Make Ukraine Energy Independent
A $10 billion deal with Royal Dutch Shell has the potential to turn Ukraine into a major supplier of gas to Western Europe and free it from its reliance on Gazprom. But Gazprom may not be ready to let it go. The Russian-owned gas giant has reacted to news of the Ukraine’s deal with Shell by demanding $7 billion from a Ukrainian gas company. It will likely take other steps as well to try to keep Ukraine in its grasp, and under its control.
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Rustmann Frustrated With Clinton’s Non-Answers on Benghazi
In an exclusive LIGNET interview, Fred Rustmann, a former member of the CIA’s elite senior intelligence service, expressed serious concerns not just about Secretary of State Hillary Clinton’s refusal to provide answers to important outstanding questions about the September 11, 2012 terrorist attack on the U.S. consulate in Benghazi but also about the attack as a symptom of declining American influence in the region.
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Syria: Russia and Israel Express New Fears of Regime Collapse
New, unusually blunt warnings about the situation in Syria by Russia and Israel reflect fears by both states that a collapse of the Assad regime is growing closer. However, warnings by Israeli Prime Minister Benjamin Netanyahu probably are also in part related to political maneuvering as he strives to form a new governing coalition after the recent Knesset elections.
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Colombia: Peace Talks Threatened by New FARC Attacks
The oldest insurgency in Latin America, the band of Marxist revolutionaries known as FARC, ended its two-month-long ceasefire last week when it launched attacks on an oil outpost and engaged in direct combat with the Colombian military. The peace talks that began late last year between FARC and the Colombian government will move forward, but real progress is threatened by FARC’s unwillingness to disarm and renounce violence.
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Global GDP Growth Continues to Wane
Although inflationary momentum slowed in 2012, inflation rates remained elevated and well above target in the vast majority of major economies. As a result, GDP figures appear better than their inflation-adjusted equivalents. In this special analysis, Dr. Peter Warburton, director of London-based Economic Perspectives Ltd., looks at 2012 GDP growth using a chart that tracks 55 countries over 15 quarters.
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North Korea Likely to Test a Nuclear Device in 2013
Although bellicose rhetoric by the North Korean regime is nothing new, its recent threats against the United States and South Korea were unusually vitriolic and probably set North Korea on an unalterable path to test a nuclear device this year. Pyongyang’s threats represent a major escalation in its rhetoric and a new challenge to regional and American security. In this special analysis, LIGNET assesses the meaning of North Korea’s new threats and discusses the likely size and capabilities of its nuclear and missile stockpiles.
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UK Takes Step Towards EU Exit
Earlier this week, UK Prime Minister David Cameron announced an “in-out” referendum on British EU membership for some time between 2015 and 2017, triggering a wave of uncertainty over the country’s economic outlook. Business leaders are divided on the prime minister’s statement, with many welcoming the firm stance while others expressed concerns over how it would affect investment.
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New U.S. Special Ops Unit to Advise Mexico on War with Cartels
The Pentagon’s new special operations unit sent to help the Mexican government in its fight against the drug cartels will teach Mexico's military the tactics used to hunt down terrorists in Iraq and Afghanistan. But this education and training could take years and the U.S. special forces will be consigned to a backseat role in the fight against the cartels, forbidden to participate in armed combat.
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Jordan: Election Results a Big Win for King
With a higher than expected turnout and an overwhelming victory by loyalist candidates, this week’s elections in Jordan appear to have vindicated the reform agenda of King Abdullah II. Nevertheless, independent Islamists and leftist opposition candidates still managed to win nearly a quarter of the seats in parliament despite a boycott by the Muslim Brotherhood and will probably continue to be a thorn in the side of the government.
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China Is Creating a Dangerous New Credit Bubble

China’s astonishing pace of economic growth since 1990 has been fueled by an equally remarkable expansion of bank lending, and the recent slowing of the economy is clearly connected to the tightening of credit conditions. But while bank lending activity remains subdued, many other channels of borrowing have shown remarkable growth, allowing Chinese businesses to sidestep the official squeeze.

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