This morning’s key headlines from GenerationalDynamics.com.

* Turkey prepares to invade Iraq, targeting PKK Kurds

* Bad news for Dexia is good news for investors

* Dexia’s problems make fools of European regulators

* Pakistan raises concerns about Afghanistan-India strategic deal

Turkey prepares to invade Iraq, targeting PKK Kurds

Turkey has been bombing Kurdistan Workers’ Party (PKK) camps in northern Iraq for several months, Turkish Prime Minister Recep Tayyip Erdogan has been preparing the army to follow up with a large-scale ground invasion of Iraq. Erdogan has already discussed the possible military action with both US President Barack Obama and Iran’s President Mahmoud Ahmadinejad. Fear of a civil war in Turkey is rising, but Erdogan insists he’s still seeking a negotiated solution. It’s worth pointing out that from the point of view of Generational Dynamics, Turkey is deep into a generation Crisis era, and a civil war is a real possibility (as contrasted with Syria, in a generational Awakening era, where a civil war is impossible). Spiegel

Bad news for Dexia is good news for investors

The old “bad news is good news” formula is playing out again. In 2007, whenever there was bad economic news, the markets would cheer because the bad news meant that the Fed would lower interest rates a quarter point or so, adding to liquidity that would flow into the stock market.

The threatened collapse of Belgium’s Dexia bank is a disaster of such major proportions that investors are positively ecstatic. Commentary on TV analysts on Wednesday was almost unanimous. The threatened collapse of Dexia bank will force the European Central Bank to pour out billions of euros of liquidity, in order to recapitalize the banks that are now facing financial disaster in case Greece defaults. And that money, they believe, will flow into the stock market, just as America’s TARP money all flowed into the stock market in 2009. (BBC and CNBC)

Dexia’s problems make fools of European regulators

In July, European regulators ran “stress tests” on European banks, and Dexia passed with flying colors. Out of 91 banks, Dexia came out as the 12’th safest, making it one of the safest banks in Europe. (Many commentators said in July that the stress tests were a joke, because they assumed that Greece’s bondholders would not lose money.) In 2010, Europeans conducted an earlier set of “stress tests” on banks, and Ireland’s banking system was rated one of the safest — just four months before it collapsed. I have to make the point once more that the world has changed dramatically since the 1990s, when the Silent Generation was still around. Since they’ve disappeared, the culture in America, Europe, China, and elsewhere has become a culture of fraud and extortion. You cannot believe anything that any politician, financial official, or journalist says, because they see nothing but their own ideology and don’t care who gets screwed. Financial Times (Access)

Pakistan raises concerns about Afghanistan-India strategic deal

Pakistan’s press is expressing grave concerns about a strategic partnership agreement signed on Wednesday by Afghanistan’s president Harmid Karzai and India’s Prime Minister Manmohan Singh in New Delhi. In his speech after the agreement was signed, Karzai said,

“This is to strengthen Afghanistan, this is to strengthen a brother of Pakistan. To train our police for us, to train our army for us, to train thousands of Afghan youth who are right now sitting in India, and if Pakistan and other neighbors of us want to offer the same what we have taken, we would be delighted to take it, so let us be emphatic here, that neither India nor Afghanistan intends this to be beyond the two countries. …

In all sincerity, desirous of results, we will continue to work with our brothers in Pakistan.”

However, Pakistan editorialists saw the situation differently:

“The accord means some of the worst fears of at least some elements in Pakistan have now changed into reality. The nexus that has been developing for some years between Kabul and New Delhi has already caused a great deal of trepidation, particularly in military circles, where the thinking runs along a single track: control over Kabul and the events that take place there is vital to Pakistan’s strategic assets. The notion of an ‘enemy’ country gaining charge there is difficult to stomach, and in the lexicon of the military, this essentially means that Pakistan is flanked on either side by nations who are not allies. The idea that “my enemies’ friend is my enemy” runs strong. And of course the current state of relations between Pakistan and the US adds a further dimension of angst to the situation.”

Historically, Hindus have been allied with Shia Muslims in wars against Sunni Muslims, and this is the current trend in the region. In the coming Clash of Civilizations world war, it’s expected that Pakistan will be allied with the Taliban (Pashtuns) in southern Afghanistan, and India will be allied with Iran and with the Hazaris and other Shia Muslims in northern Afghanistan. VOA and Express Tribune (Karachi)