Monday, October 06, 2008
Well, I was reading my copy of today's New York Times and I was interested to read about Barack's friends from Chicago. Turns out one of Barack's earliest supporters is a man who, according to The New York Times, and they are hardly ever wrong, was a domestic terrorist and part of a group that, quote, 'launched a campaign of bombings that would target the Pentagon and U.S. Capitol.' – Palin, off message. She forgot that the New York Times is the enemy- “not by any standard a journalistic organization.” And, she distorted the Times story, which minimized the Obama-Bill Ayers connection… as if she reads the Times!
Economy: Sustained Misery ahead:
While Americans have spent the last month transfixed by the spectacle of one financial giant after another crashing to the ground, the rest of the U.S. economy has been sinking in the muck.
By now, the process is so far advanced that, even after passage of the Bush administration's $700-billion financial rescue plan Friday, the nation's economic options span the unappealing gamut from bad to worse.
"The wheels seem to be coming off the economy right now," said Brian P. Sack, vice president of the respected forecasting firm of Macroeconomic Advisers. "It's hard to see how we avoid a recession, and it could prove a tough one to climb out of."
Even if the financial bailout plan begins to work, the nation will be lucky if all it experiences is a bad slowdown. The alternative, economists say, is something much worse -- a contraction that might go on for years.
The latest sign of trouble came Friday when the government reported that American employers sliced September payrolls by 159,000 jobs, the ninth straight month of losses and one that puts the country on track to shed a million jobs this year.
But jobs are only part of the trouble; almost every major player in the economy -- which had been growing until recently, if only slowly -- is now beating a hasty retreat:
* Consumers, who account for more than two-thirds of the nation's total economic activity and who boosted their spending earlier in the year thanks in part to more than $100 billion in government stimulus checks, have reversed course and begun cutting expenditures. Real consumption, after adjustment for inflation, slipped two-tenths of a point in June, a half-point in July and flat-lined in August, the latest month for which numbers are available, according to the government's Bureau of Economic Analysis.
* Manufacturers, many of whom had managed to profit because the weak U.S. dollar helped boost exports, have seen their business begin to dry up in recent months. New factory orders unexpectedly dropped 4% in August, the Commerce Department said Friday, the biggest decline in two years. Capital goods orders, a key indicator of companies' future investment plans, slipped 2.4%, the biggest drop in more than a year and a half.
* Governments, especially state governments, have begun making steep cuts. In all, 29 of the 50 states had already cut spending, raised taxes or tapped emergency funds to balance their budgets for the fiscal year that began July 1, said Nicholas Johnson, an analyst with the Center on Budget and Policy Priorities in Washington. But 15 of those states, including Arizona and New York, are back in the red; stalling economic growth has caused their already shrunken tax revenues to contract further.
The combination of consumers hunkering down, manufacturers losing orders and states making cuts has economists slashing their growth forecasts for the coming months and years. http://www.latimes.com/news/printedition/front/la-fi-econ5-2008oct05,0,919940.story
Other Countries: European countries looked to save their banks from imploding and despite their being linked, they’re finding cooperation isn’t so easy when national needs intrude.
Germany issued a blanket guarantee of all its consumer bank deposits on Sunday, as a group of European countries adopted emergency measures to shore up the Continent's financial system against the widening international credit crisis.
In the U.S., the Federal Reserve has taken aggressive actions in recent weeks to try to alleviate the severe pressures weighing on damaged short-term funding markets. New measures from the central bank are likely in the days ahead. It is not yet clear exactly what steps the Fed will take, but it could be aimed at commercial-paper markets, which have been damaged by skittishness among money-market funds, a big investor in this asset class. http://online.wsj.com/article/SB122322574130505585.html?mod=todays_us_page_one
The States: Not just California. Ten to 12 states may not make payroll.
The U.S. financial crisis is hampering the ability of many state and local governments to borrow cash for short-term expenses and is threatening to delay long-term road, school and airport projects, including some in the Washington area.
The most dramatic impact of the Wall Street meltdown is in California, where Gov. Arnold Schwarzenegger (R) warned Treasury Secretary Henry M. Paulson Jr. this week that his state may need an emergency federal loan of $7 billion to meet its operating expenses.
"While some states may be able to absorb a delay or obtain high-interest financing through private banks, California is so large that our short-term cash flow needs exceed the entire budgets of some states," the governor wrote in a letter Thursday.
Many states routinely rely on short-term borrowing at this time of year to cover operating costs as they balance the ebb and flow of revenue. Most rely on tax receipts that generally do not arrive until spring.
"It's not just California," said Scott Pattison, executive director of the National Association of State Budget Officers. "People will tell you publicly that they are doing okay, but state financial officers are very concerned. At the moment, there's enough cash in the bank, but by November or December, if they still can't get access to the markets to borrow money to meet payroll or other expenses, then you might have 10 to 12 states that may not be able to cover their costs."
Experts were uncertain whether congressional passage of the $700 billion rescue plan would unclog credit channels next week. http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100303486_pf.html
Bailout: How it will work: Treasury will oversee, but Wall Street pros will manage the assets, manage its own rescue. Hmmm.
With the political battle over the Bush administration's $700 billion financial rescue package at an end and the real work of rescuing the financial markets just beginning, all eyes are turning to Treasury Secretary Henry M. Paulson Jr.
The bill gave him unprecedented powers to shore up the ailing financial system. With few constraints, Paulson will make all the key decisions on who to hire, when to launch the program and perhaps most importantly how much the government will pay for troubled assets from ailing Wall Street firms. A misstep could mean hundreds of billions in losses for taxpayers or a cascade of failures for banks.
Speculation was rampant on Wall Street yesterday about who Treasury would hire to manage the assets that the government plans to buy. Industry sources say the department has asked leading Wall Street firms for feedback and that Legg Mason, Pimco, BlackRock and MKP Capital Management were recommended to Treasury.
These firms rose to the top of the list because of their expertise in mortgage-related assets. But hiring them as asset managers for the government would raise the potential for conflicts of interest, particularly because they would be managing the assets while also selling their own troubled securities to the government.
Treasury spokeswoman Michele Davis said the department plans to develop and publish guidance on "how to manage any conflicts." http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100303646_pf.html
Mental Health Parity: Long sought, it was one of the many unrelated additions to the bailout bill:
Tucked into the Wall Street bailout bill was a breakthrough for the estimated 113 million Americans suffering from mental illness - a provision making it illegal for health insurance companies to discriminate against patients suffering from psychological or behavioral disorders.
Adoption of the measure, hailed by a leading mental health advocacy group as a "great civil rights victory," marks the end of a decade-long struggle led by Senator Edward M. Kennedy of Massachusetts and his son, Representative Patrick Kennedy of Rhode Island, to ensure parity for mental illnesses in the eyes of the American healthcare system.
"The miracles of modern medicine make mental illness just as treatable today as physical illnesses," Kennedy, who is being treated for brain cancer, said in a statement. "After 10 years of debate, Congress has finally agreed to end discrimination in health insurance coverage that plagues persons living with mental illness for so long."
Kennedy added: "It will now be the law of the land that people with such illnesses deserve the same access to affordable coverage as those with physical illnesses."
The lead Republican sponsor in the Senate, Pete V. Domenici of New Mexico, singled out the Massachusetts Democrat for credit, calling his efforts remarkable. "This has been a labor of love for us," Domenici said in a statement.
The mental parity law, one of many amendments included in the legislation to broaden legislative support for the bailout package, requires health insurance companies to charge the same deductibles, copayments, and out-of-pocket expenses for mental health treatments as for all other illnesses. http://www.boston.com/news/nation/articles/2008/10/04/mental_health_parity_law_a_big_win_for_kennedys?mode=PF
Afghanistan: Karzai’s brother: No Billy Carter. He’s been linked to the heroin trade in Afghanistan and has few defenders. Ruler Karzai insists his brother is innocent…pending the presentation of evidence:
When Afghan security forces found an enormous cache of heroin hidden beneath concrete blocks in a tractor-trailer outside Kandahar in 2004, the local Afghan commander quickly impounded the truck and notified his boss.
Before long, the commander, Habibullah Jan, received a telephone call from Ahmed Wali Karzai, the brother of President Hamid Karzai, asking him to release the vehicle and the drugs, Mr. Jan later told American investigators, according to notes from the debriefing obtained by The New York Times. He said he complied after getting a phone call from an aide to President Karzai directing him to release the truck.
Two years later, American and Afghan counternarcotics forces stopped another truck, this time near Kabul, finding more than 110 pounds of heroin. Soon after the seizure, United States investigators told other American officials that they had discovered links between the drug shipment and a bodyguard believed to be an intermediary for Ahmed Wali Karzai, according to a participant in the briefing.
The assertions about the involvement of the president’s brother in the incidents were never investigated, according to American and Afghan officials, even though allegations that he has benefited from narcotics trafficking have circulated widely in Afghanistan.
Both President Karzai and Ahmed Wali Karzai, now the chief of the Kandahar Provincial Council, the governing body for the region that includes Afghanistan’s second largest city, dismiss the allegations as politically motivated attacks by longtime foes. http://www.nytimes.com/2008/10/05/world/asia/05afghan.html?_r=1&oref=slogin&ref=todayspaper&pagewanted=print
CAMPAIGN: McCain-Palin character attacks, Obama finally raises the Keating S & L crisis. Nothing short of an attack on Iran or similar is likely to change the race.
Voter Registration: The concern is racism and GOP cheating. The hope rests with knowledge that cell phone users aren’t polled and that the Obama machine has done superb voter registration. One sample of the latter: Atlanta
Secretary of State Karen Handel is on record saying that there is no giant surge of voter registration in Georgia — and in the largest context, she’s right.Newly released figures from her office show that 406,379 new voters registered between Jan. 1 to Sept. 30. Four years ago, the number was 371,932.Overall, that’s a 9 percent increase from ’04 to ’08 — hardly surprising in a presidential race with no incumbent. Barack Obama or no Barack Obama.
But this is far from the whole story. Those same numbers show that 164,859 of those new voters are African-American. And 176,570 of those new voters are white. That’s a 27 percent increase in new voter registration for African-Americans over ’04, and a 13.7 percent decrease in new voter registration for whites over ’04.This is significant given that, overall, blacks make up 29 percent of Georgia’s 5.5 million voters. http://www.ajc.com/metro/content/shared-blogs/ajc/politicalinsider/entries/2008/10/04/more_on_an_obama_surge_black_g.html
Negative Campaigning: The McCain campaign does the predictable, as they have nothing to offer. It’s not going to work:
The McCain campaign has now shifted virtually 100 percent of his national ad spending into negative ads attacking Obama, a detailed breakdown of his ad buys reveals.
By contrast, the Obama campaign is devoting less than half of his spending on ads attacking McCain. More than half of its spending is going to a spot that doesn't once mention his foe. http://tpmelectioncentral.talkingpointsmemo.com/2008/10/mccain_campaigns_ad_spending_n.php
While the Obama campaign both attacks the attack ads and presses the health care issue, as McCain’s “plan” is lousy health care and lousy economics:
John McCain talks about a five-thousand dollar tax credit for health care. But here's what he's not telling you: McCain would make you pay income tax on your health insurance benefits, taxing health benefits for the first time ever. And that tax credit? McCain's own website said it goes straight to the insurance companies, not to you. Leaving you on your own to pay McCain's health insurance tax. Taxing healthcare instead of fixing it. We can't afford John McCain." http://my.barackobama.com/page/content/prescription_ad/
Troopergate: Republicans had asked an Alaskan judge to block the investigation into Palin's abuse of power scandal but the judge denied the request; a report on the probe is due at the end of the week.
Seven Alaska state employees have reversed course and agreed to testify in an abuse-of-power investigation against Republican vice presidential nominee Sarah Palin.
There is no indication, however, that Palin or her husband will do the same.
Palin, a fist-term Alaska governor, is the focus of a legislative inquiry into whether she abused her office by firing Public Safety Commissioner Walt Monegan. Monegan says he was dismissed because he wouldn't fire the governor's former brother-in-law.
Lawmakers subpoenaed seven state employees to testify in the inquiry but they challenged those subpoenas. A judge rejected that challenge last week. Because of that ruling, Alaska Attorney General Talis Colberg says the employees have decide to testify. http://www.nytimes.com/aponline/washington/AP-Palin-Troopergate.html?_r=1&oref=slogin&pagewanted=print
Debate Follow-up: There’s an understandable dismissal of the debate in general as VP debates rarely matter. But, it’s useful to note how regardless of how low the bar was set, Palin’s presentation was truly bizarre, more befitting a sorority presidential campaign or a Ms. America contest; Imagine Geraldine Ferraro or Hillary Clinton winking. It’s not surprising that her support from women has plummeted.
Gwen Ifill was not a stellar moderator; perhaps the ‘working the refs’ that was done prior to quieted her. Afterwards she noted that Palin “blew me off.” Indeed: without Ifill following up, we heard only nonspecific, tangential, rambling answers. http://thinkprogress.org/2008/10/05/palin-ifill/
-R
Thursday, October 02, 2008
Recession, Credit Squeeze
Industrial and material stocks led more Wall Street falls on Thursday as concerns heightened that the intensifying credit squeeze was spreading beyond the financial sector.
“The reality is setting in that every day that they can’t fix this crisis is a day that a company can’t get funding,” said Marc Pado, market strategist at Cantor Fitzgerald. “People just didn’t think it was going to [happen] this quick.” http://www.ft.com/cms/s/0/8aa1dd8a-9079-11dd-8abb-0000779fd18c.html
Fallout: China Supreme: David Gow:
While the western delegates at the World Economic Forum's summer conference in the coastal port city that serves as the maritime entry to Beijing were confused, bemused and hyperanxious about the financial crisis and its impact on the global economy, the Chinese were magisterially assured. Certain that they are the new masters of the universe – now or very soon.
Wen Jiabao, the Chinese premier, made plain that his country's economy is not immune from the crisis. But, unlike the US and Europe, which are heading for recession or in it, China had put in place the monetary and regulatory measures to ensure continued growth.
It won't be the 11.9% of last year but still, at 8 or 9% in 2008 and the same in 2009, a boost to global trade. Inflation, which peaked at more than 8% in February, has been brought down to 4.9%. And, if Chinese exports – enjoying a €170bn (£130bn) surplus with the EU alone last year – are already experiencing slower growth and even heading for a decline, Wen promised to continue the shift towards domestic consumption and to open up the economy further.
But will this happen? Will Wen deliver on his oft-repeated promise to reform China's capital markets? As Stephen Roach, Asia chairman of Morgan Stanley, told delegates, Chinese consumer spending is, at around 35% of GDP, less than half that of the US where the "binge" of the last 14 years has come to an end, leaving the US consumer "toast, done, finished". The US, he added gloomily, "will have its version of Japan's lost decade". http://www.guardian.co.uk/business/2008/oct/02/creditcrunch.china
ProsecutorsGate: “White House Involvement”
In 18 months of searching, Justice Department Inspector General Glenn A. Fine and Office of Professional Responsibility chief H. Marshall Jarrett have uncovered new e-mail messages hinting at heightened involvement of White House lawyers and political aides in the firings of nine federal prosecutors two years ago.
But they could not probe much deeper because key officials declined to be interviewed and a critical timeline drafted by the White House was so heavily redacted that it was 'virtually worthless as an investigative tool,' the authorities said. . . .
The standoff is a central reason that Attorney General Michael B. Mukasey on Monday named a veteran public-corruption prosecutor, Nora R. Dannehy, to continue the investigation, directing her to give him a preliminary report on the status of the case in 60 days.
But lawmakers who helped expose irregularities in the ouster of the prosecutors say they are concerned about more delays. http://www.washingtonpost.com/wp-dyn/content/article/2008/09/30/AR2008093002623.html
…Rove isn’t cooperating:
Karl Rove shows up most nights these days as a commentator on Fox News and offers up political insights in columns for the Wall Street Journal and Newsweek. But when Justice Department investigators tried to ask him about his role in the mass firings of U.S. attorneys, the former White House political chief would say nothing, refusing to be questioned at all. . . .
Rove and his attorney, Robert Luskin, did not respond to repeated request for comment. Rove and Miers had previously refused to answer questions from Congress about the firings, citing White House claims of executive privilege. But as inspector general Glenn Fine noted in the report, the claim of executive privilege did not apply in this instance, since the Justice Department is part of the executive branch itself-one key reason, the report says, that the White House counsel's office 'encouraged' current and former employees to cooperate with the probe. (The White House refused, however, to turn over its own internal emails about the U.S. attorney firings as well as a full copy of a special internal memo, prepared for White House counsel Fred Fielding last year about the firings, citing what it called 'confidentiality interests of a very high order.') http://www.newsweek.com/id/161524
Nuke Deal with India: Either a strengthening of an alliance or an undermining of nuclear non-proliferation and a tonic for a nuclear arms race. If the presidential race and the Bailout were not dominating the news, this would be a big deal!
The Senate last night approved a historic agreement that opens up nuclear trade with India for the first time since New Delhi conducted a nuclear test three decades ago, giving the Bush administration a significant foreign policy achievement in its final months.
The bill, which passed 86 to 13, goes to President Bush for his signature, handing the chief executive a rare victory that both advocates and foes say will reverberate for decades. Bush and Secretary of State Condoleezza Rice, who conceived of the deal, have pushed hard for it from the earliest weeks of the president's second term.
The agreement, which sparked fierce opposition from nuclear proliferation experts, acknowledges India as a de facto nuclear power, even though it has never signed the Non-Proliferation Treaty designed to prevent the spread of nuclear weapons. India until now has been barred from worldwide nuclear trade, leaving its homegrown industry hobbled and short of uranium fuel to run its reactors. . . .
Daryl G. Kimball, executive director of the Arms Control Association, blasted the deal as a 'nonproliferation disaster.' India, along with Pakistan and Israel, has never signed the Non-Proliferation Treaty. India conducted nuclear tests in 1974 and 1998, despite international outrage, and continues to produce fissile material. Kimball said the deal 'does not bring India into the nonproliferation mainstream' because it “creates a country-specific exemption from core nonproliferation standards that the United States has spent decades to establish." http://www.washingtonpost.com/wp-dyn/content/article/2008/10/01/AR2008100100533.html
In response:
Pakistan demanded the United States give it civilian nuclear technology on Thursday, after American lawmakers voted to overturn a three decade-ban on atomic trade with rival India.
Pakistan, which like India has a nuclear arsenal, has long opposed efforts by U.S. President George W. Bush to push through the deal, which opponents say could risk an atomic arms race in Asia.
"Now Pakistan also has the right to demand a civilian nuclear agreement with America,” Prime Minister Yousaf Raza Gilani told reporters. “We want there to be no discrimination. Pakistan will also strive for a nuclear deal and we think they will have to accommodate us." http://www.iht.com/articles/ap/2008/10/02/asia/AS-Pakistan-US-Nuclear.php
Zardari flirts with Palin?:
Muslim leaders in Pakistan have issued a fatwa against the country's new president for allegedly flirting with U.S. Republican vice presidential candidate Sarah Palin at the United Nations General Assembly in New York last week.
A radical prayer leader in Pakistan said Asif Ali Zardari shamed the nation for "indecent gestures, filthy remarks, and repeated praise of a non-Muslim lady wearing a short skirt."
At the meeting between the pair, Zardari smiled, shook Palin's hand and engaged in a conversation with her. http://www.haaretz.com/hasen/spages/1025965.html
CAMPAIGN: Obama’s lead holding, improving his position so much that McCain is giving up on Michigan while reinforces his staff in Virginia; McCain is looking increasingly testy, most notably with the Des Moines Register.
And, the Palin-Biden debate: VP debates have never made a difference, so Palin getting through the session without duplicating her idiocy w/ previous interviews would at least temporarily halt the McCain campaign from its gradual fade. Although she had plenty of odd moments and didn’t answer many a question, since she didn’t replicate the Couric interview, talk of her leaving the ticket will cease and the focus will go back to McCain v Obama, i.e. the dynamics / trajectory of the race is unaffected.
Paul Newman, regular guy: Touching piece by Dahlia Lithwick:
The Hole in the Wall Gang Camp opened in Connecticut in 1988 to provide a summer camping experience—fishing, tie-dye, ghost stories, s'mores—for seriously ill children. By 1989, when I started working there as a counselor, virtually everyone on staff would tell some version of the same story: Paul Newman, who had founded the camp when it became clear his little salad-dressing lark was accidentally going to earn him millions, stops by for one of his not-infrequent visits. He plops down at a table in the dining hall next to some kid with leukemia, or HIV, or sickle cell anemia, and starts to eat lunch. One version of the story has the kid look from the picture of Newman on the Newman's Own lemonade carton to Newman himself, then back to the carton and back to Newman again before asking, "Are you lost?" Another version: The kid looks steadily at him and demands, "Are you really Paul Human?"
Newman loved those stories. He loved to talk about the little kids who had no clue who he was, this friendly old guy who kept showing up at camp to take them fishing. While their counselors stammered, star-struck, the campers indulged Newman the way they'd have indulged a particularly friendly hospital blood technician. It took me years to understand why Newman loved being at the Hole in the Wall Gang Camp. It was for precisely the same reason these kids did. When the campers showed up, they became regular kids, despite the catheters and wheelchairs and prosthetic legs. And when Newman showed up, he was a regular guy with blue eyes, despite the Oscar and the racecars and the burgeoning marinara empire. The most striking thing about Paul Newman was that a man who could have blasted through his life demanding "Have you any idea who I am?" invariably wanted to hang out with folks—often little ones—who neither knew nor cared. http://www.slate.com/id/2201116/
-R
Tuesday, September 30, 2008
Senate leaders scheduled a Wednesday vote on a $700 billion financial bailout package after agreeing to add tax breaks and a higher limit for insured bank deposits in a bid to attract enough votes to reverse a shocking defeat in the House and send legislation to President Bush by the end of the week.
After a day of behind-the-scenes maneuvering, top lawmakers said the Senate proposal would include a tax package as well as a plan endorsed on Tuesday by both major presidential candidates and the Bush administration to raise government coverage for bank deposits.
“It has been determined, in our judgment, this is the best thing to move forward,” said Senator Harry Reid, Democrat of Nevada and the majority leader, in announcing the surprise move. “This is good for the country.”
The senators issued no details of their proposal and said none would be available until Wednesday. The lawmakers were gambling that the tax breaks for businesses and alternative energy would appeal to lawmakers who helped sink the measure in the House on Monday, without driving off Democrats who have opposed extending the tax incentives without offsetting spending cuts elsewhere.http://www.nytimes.com/2008/10/01/business/01bailout.html?_r=1&hp=&oref=slogin&pagewant
James Galbraith:
In short, as I said at the beginning, the bill is a vast improvement over the original Treasury proposal. Given the choice between approving or defeating the bill as it stands, I would urge supporting the bill. I do so without illusions. There need be no pretense that it will solve our underlying financial and economic problems. It will not. The purpose, in my view, is to get the financial system and the economy through the year, and into the hands of the next administration. That is a limited purpose, but a legitimate purpose. And it may be the most that can be accomplished for the time being. http://www.prospect.org/cs/articles?article=how_much_will_it_cost_and_will_it_come_soon_enough
Brits Fear ‘worst downturn since post WWII period:
The British economy was facing a mild recession even before the financial maelstrom of the last three weeks. But some pundits think the economy could be facing a slump comparable with anything the country has seen in the postwar period.
Britain's excessive dependency on the fortunes of the City, the booming housing market and rapid growth in public spending is coming back to haunt it now that house prices are in freefall and the City is imploding, they say.
Figures out yesterday show the extent to which the consumer is feeling the squeeze. The amount of money people saved in the second quarter of the year fell to its lowest for 50 years even as consumer spending fell for the first time in 13 years. http://www.guardian.co.uk/business/2008/oct/01/economics.marketturmoil
Lula Criticizes 1st World Countries
The Brazilian president has accused wealthy nations of being responsible for the global financial crisis, saying their "irresponsibility" could destroy fiscal progress made in the developing world.
Luiz Inacio Lula da Silva said rich countries "need to take responsibility" because growing economies that "have done everything to have good fiscal policy ... can't be turned into victims of the casino erected by the American economy."
Brazil's Ibovespa stock index plunged 9.4 per cent on Monday following news that the US congress had rejected a $700bn bail-out plan to aid financial firms hit by the crisis.
Leaders of nations such as Brazil have expressed concern over the global financial crisis amid fears that foreign investment could fall.
"We know this crisis is serious, we know that it's going to reduce worldwide credit, but we're sure that our exports will continue going well, our industry will continue growing," he said.
Al Jazeera's Teresa Bo said Lula's view was widespread across South America where the financial crisis was being seen as the failure of the US free-market system. http://english.aljazeera.net/news/americas/2008/09/200893006218621.html
ELSEWHERE:
Pirates: Yes, Pirates. Somalis seize ship / hostages An ongoing saga that is a bona fide international incident:
Russia has dispatched a frigate to the scene of an increasingly tense stand-off between the US Navy and pirates who have seized a tanker laden with tanks and weapons in the Indian Ocean off Somalia.
The tussle over the fate of the Soviet-designed tanks captured off a failed African state has developed into an international incident worthy of a James Bond novel. Pirates are demanding a $20m (£11m) ransom and governments in the region are denying any knowledge of the arms shipment, amid fears of a new civil war in Sudan.
Russia has seized upon the crisis to send the missile frigate The Intrepid, prompting speculation that it might attempt to free hostages in another public projection of its military power.
American helicopters and warships from the 5th Fleet have surrounded the Ukraine-flagged Faina after Somali pirates boarded her six days ago and seized a cargo which includes 33 T-72 battle tanks, ammunition and heavy weapons such as rocket launchers. http://www.independent.co.uk/news/world/africa/cold-war-standoff-over-pirates-weapons-ship-947429.html
Iraq: The long-term security agreement is still pending between the Maliki government and the Administration. The thorny issue: Civil jurisdiction over U.S. troops.
Nouri al-Maliki tells AP that (a) a security agreement with the United States is critical, and (b) legal jurisdiction is the biggest remaining hurdle:
The most important hanging issue here is the immunity or the legal jurisdiction over the American troops because certain powers, political powers inside Iraq are getting ready to use this issue once it's — if it's — approved, as a vehicle to overthrow, to destabilize the entire political system in Iraq, to destabilize the government. They would use it as a vehicle to re-ignite public feelings inside the country.
We have proposed that the legal jurisdiction would be on one hand, on one side, with the Americans ... when the troops are performing military operations. When they are not performing a military operation, they are outside their camps, the legal jurisdiction would be in the hands of the Iraqi judiciary.
Translation: if we don't get civil jurisdiction over U.S. troops, the government will fall. It's too much of a hot button issue for guys like, oh, Muqtada al-Sadr, just to pick a name out of a hat. http://www.motherjones.com/kevin-drum/2008/09/sofa_update.html
Debt: People are beginning to appreciate its size
With no fanfare and little notice, the national debt has grown by more than $4 trillion during George W. Bush's presidency.
"It's the biggest increase under any president in U.S history.
"On the day President Bush took office, the national debt stood at $5.727 trillion. The latest number from the Treasury Department shows the national debt now stands at more than $9.849 trillion. That's a 71.9 percent increase on Mr. Bush's watch."
And that's without the bailout. "Buried deep in the hundred pages of bailout legislation is a provision that would raise the statutory ceiling on the national debt to $11.315 trillion." http://www.cbsnews.com/blogs/2008/09/29/couricandco/entry4486228.shtml
ProsecutorsGate:
In light of massive obstruction by the White House (which brazenly refused to turn over internal documents) and other "key witnesses," (including Karl Rove, Harriet Miers, Monica Goodling, Pete Domenici, and Domenici's chief of staff, Steven Bell), the gist of the IG's investigation—done in conjunction with the Office of Professional Responsibility—was that somebody with the authority to compel testimony and the release of documents seriously needs to do an investigation.
Still, 392 pages on, the document itself makes for some great reading. It concludes that there is "significant evidence that political partisan considerations were an important factor in the removal of several US Attorneys." It paints former U.S. Attorney General Alberto Gonzales and his former deputy Paul McNulty as having been totally checked out, having "abdicated their responsibility to adequately oversee the process" while underlings like Kyle Sampson merrily consulted a "dog-eared" chart he was constantly revising, destroying, and re-creating. While the report does not unearth any criminal wrongdoing, it finds that "the most serious allegation that we were not able to fully investigate related to the removal of David Iglesias, the U.S. Attorney for New Mexico, and the allegation that he was removed to influence voter fraud and public corruption prosecutions. We recommend that a counsel specially appointed by the Attorney General assess the facts we have uncovered, work with us to conduct further investigation, and ultimately determine whether the evidence demonstrates that any criminal offense was committed with regard to the removal of Iglesias." http://www.slate.com/id/2201156/
Privatization: Many a state looks to the private sector to deal with their crumbling infrastructure:
The consortium behind the world’s biggest toll road privatisation on Tuesday night pulled out of the deal, delivering a blow to efforts to bring further private-sector money into the US’s crumbling road system.
Pennsylvania Transportation Partners, led by Citigroup and Abertis, a Spanish toll road operator, pulled out of the deal to take a 75-year lease over the Pennsylvania Turnpike because of problems winning approval in the state legislature. http://www.ft.com/cms/s/0/afb69262-8f36-11dd-946c-0000779fd18c.html
Chicago Midway on Tuesday became the first big US airline hub to be put up for privatisation in a $2.5bn deal with a consortium including Canada’s Vancouver airport.
The price was equivalent to more than 28 times earnings before interest, tax, depreciation and amortisation, making it one of the most highly valued global airport deals behind the record sale of Budapest airport to BAA of the UK in 2005. (Budapest was subsequently sold to Germany’s Hochtief.) http://www.ft.com/cms/s/e5f23536-8f39-11dd-946c-0000779fd18c,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fe5f23536-8f39-11dd-946c-0000779fd18c.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fafb69262-8f36-11dd-946c-0000779fd18c.html
Environment: Global Warming (bad) news
The rise in global carbon dioxide emissions last year outpaced international researchers' most dire projections, according to figures being released today, as human-generated greenhouse gases continued to build up in the atmosphere despite international agreements and national policies aimed at curbing climate change.
In 2007, carbon released from burning fossil fuels and producing cement increased 2.9 percent over that released in 2006, to a total of 8.47 gigatons....This output is at the very high end of scenarios outlined by the Intergovernmental Panel on Climate Change (IPCC) and could translate into a global temperature rise of more than 11 degrees Fahrenheit by the end of the century, according to the panel's estimates. http://www.washingtonpost.com/wp-dyn/content/article/2008/09/25/AR2008092503989.html
CAMPAIGN: Obama ‘steady’- a vivid contrast with:
McCain: He continues his erratic ways, clearly the modus operandi for the balance of the campaign. His holding multiple, contradictory positions has become the norm, but the last two days have been particularly striking. He now can utter in consecutive sentences: Obama and the Democrats injected “unnecessary partisanship into the process…” and “This is not the time to fix the blame; it’s time to fix the problem.” Then the next day, he denies that he blamed Obama and the Democrats while an ad is released by his campaign that damns Obama and the Democrats.
The above was preceded by his crowing for much of Monday that he had helped the legislation get through Congress, then within the hour of its failure, began the cycle of blame and denial. http://www.latimes.com/news/printedition/asection/la-na-campaign30-2008sep30,0,5060234,print.story
Palin: Amidst calls for her to get off the ticket (it won’t happen), she heads into the non-debate Debate (very favorable rules demanded by McCain campaign) with oodles of tape from the sit-downs with Katie Couric:
Couric: You made a funny comment, you've said you have been listening to Joe Biden's speeches since you were in second grade.
Palin: It's been since like '72, yah.
Couric: You have a 72-year-old running mate, is that kind of a risky thing to say, insinuating that Joe Biden's been around awhile?
Palin: Oh no, it's nothing negative at all. He's got a lot of experience and just stating the fact there, that we've been hearing his speeches for all these years. So he's got a tremendous amount of experience and, you know, I'm the new energy, the new face, the new ideas and he's got the experience based on many many years in the Senate and voters are gonna have a choice there of what it is that they want in these next four years. http://www.cbsnews.com/video/watch/?id=4490056n
Her political partner is, she should recall, 6 years older than Biden. Obama is an energetic new face.
And, when Couric asked her what specific newspapers and magazines she reads:
“All of ‘em; any of ‘em that’s been in front of me. I have a vast variety of sources.”
-R
Sunday, September 28, 2008
"The decision to give the federal government the ability to nationalize almost every bad mortgage in America interrupts this basic truth of our free market economy. . . . Before you vote, ask yourself why you came here and vote with courage and integrity to those principals [sic]. If you came here because you believe in limited government and the freedom of the American marketplace, vote in accordance with those convictions…" - Mike Pence, (R-IN)
Bailout Update: Agreement to be voted on during Monday. The House Republicans (above) remain a ‘problem.’ Note that Paulson, the Bush appointee who thought the financial system was in fine shape as recently as June, still has gross, if no longer unchecked, power. (see bolded, below).
The $700 billion Wall Street bailout bill released by Congress this afternoon gives Treasury Secretary Henry M. Paulson Jr. and his successor sweeping powers to bolster the U.S. financial system.
The Democrat-controlled Congress added layers of oversight and accountability to Paulson's original draft, and won curbs on executive compensation, which were not included in the original.
"The administration's original proposal was a non-starter," Sen. Chris Dodd (D-Conn.) said this afternoon. "They wanted a blank check and we couldn't give it to them."
At the same time, Paulson will get direct hiring authority for building the staff that will carry out the bailout, the ability to set regulations, and the power to designate financial institutions as agents of the government.
The bill creates the Troubled Asset Relief Program, or "TARP," which empowers the secretary to buy "toxic" assets from financial institutions with taxpayer money. By removing such assets from the balance sheets of crippled companies, the bill's architects hope to reduce pressures on the credit market, thereby making it easier for Americans to get mortgages and other types of loans.
Once the economy improves and the assets increase in value, the government would sell them back to the private market. Earlier today, Sen. Judd Gregg (N.H.), one of the GOP's point men on the negotiations over the legislation, said he believed taxpayers would eventually make a profit on their $700 billion.
The House is expected to take up the bill on Monday with the Senate following shortly thereafter. If it passes both chambers, the bill would then be sent to President Bush for his signature. There will be no further adjustments to the bill, House Speaker Nancy Pelosi (D-Calif.) said today, calling it "frozen." http://www.washingtonpost.com/wp-dyn/content/article/2008/09/28/AR2008092800064_pf.html
Many still are discomforted or worse by the bail-out. Even those who don’t oppose it warn that significant economic dangers and an unpredictable amount of pain have not been avoided.
A funny thing happened in the drafting of the largest-ever U.S. government intervention in the financial system. Lawmakers of all stripes mostly fell in line, but many of the nation's brightest economic minds are warning that the Wall Street bailout's a dangerous rush job.
President Bush and his Treasury secretary, former Goldman Sachs chief executive Henry Paulson, have warned of imminent economic collapse and another Great Depression if their rescue plan isn't passed immediately.
Is that true?
"It's more hype than real risk," said James K. Galbraith, a University of Texas economist and son of the late economic historian John Kenneth Galbraith. "A nasty recession is possible, but the bailout will not cure that. So it's mainly relevant to the financial industry."
The Paulson plan will get some bad assets off the balance sheets of troubled Wall Street institutions and commercial banks. That may help thaw the lending freeze.
But it wouldn't reduce the crush of homes in or near foreclosure, said Simon Johnson, a professor at the Massachusetts Institute of Technology. That's a problem that will surely grow worse if the U.S. economy enters recession, leading to greater job losses, which feed a vicious downward spiral of even more foreclosures and defaults on car loans and credit-card debt. http://www.mcclatchydc.com/227/story/53107.html
Pakistan-U.S. Tensions: Exchanging Fire Hard to be casual about this development:
Pakistani and American ground troops exchanged fire along the border with Afghanistan on Thursday, a top American military official said, ratcheting up tensions as the United States increases its attacks against militants in Pakistan’s restive tribal areas.
The clash started after the Pakistanis fired shots or flares at two American helicopters that Pakistan says had crossed its border.
The two American OH-58 Kiowa reconnaissance helicopters were not damaged and no casualties were reported.
But American and Pakistani officials agreed on little else about what happened. http://www.nytimes.com/2008/09/26/world/asia/26military.html?_r=2&hp=&oref=slogin&pagewanted=print
Pakistan: Finances In the debate, McCain mistaken termed 1999 Pakistan as a “failed state.” But, they’re closer to that condition now than nine years ago.
International efforts are under way to stop Pakistan from defaulting on its debts after its foreign reserves dropped to just $3bn.
With about $1bn a month needed to provide its people with basic requirements there are fears that Pakistan could run out of money before the end of the year. http://english.aljazeera.net/news/asia/2008/09/200892885733125929.html
Iraq: Concern re “deteriorating security” And, if the 100,000 Sunnis start feeling less satisfied by those $300/month payments…
Five bomb attacks struck Baghdad on Sunday, three of them aimed at civilians who were out holiday shopping and strolling. Security sources said at least 27 people had been killed and 84 wounded.
The bombings reinforced fears among a growing number of residents that the security situation in Baghdad was deteriorating, even though over all it remained at the most stable level since the American-led invasion in 2003, according to data measured by the United States military command. http://www.nytimes.com/2008/09/29/world/middleeast/29iraq.html?hp=&pagewanted=print
Israel-Iran-U.S.- Radar System 
Team of 120 members to man first permanent presence of U.S. military personnel in Israel
The U.S. Army's European Command deployed an early-warning radar system in Israel last week along with a 120-member support team, the weekly Defense News reported.
The move marks the first permanent presence in Israel of American military personnel. The high-powered radar system is meant to augment Israel's defenses against Iranian ground-to-ground missiles.
According to Defense News, more than a dozen transport aircraft delivered the radar, its ancillary systems, equipment and technicians, as well as maintenance and security specialists to the Nevatim Air Force Base in the Negev. It has not yet been made operational. http://www.haaretz.com/hasen/spages/1024888.html
Russia Signs Pact with Venezuela: It gets headlines since the Georgia struggle has added a sense of threat. But the military piece of this was expected, as Admiral Mullin observed:
Russia continued its international muscle-flexing on Friday, strengthening its ties to Venezuela through a $1 billion military loan and a new oil consortium as it announced an upgrade of its own military focusing on nuclear deterrence and permanent combat readiness.
After a military exercise on Friday in the southern city of Orenburg, near the border with Kazakhstan, the Russian president, Dmitri A. Medvedev, declared that by 2020 Russia would construct new types of warships, including nuclear submarines carrying cruise missiles and an unspecified air and space defense system.
The moves point to continuing tension between Russia and the West after the five-day war in Georgia. Response in Washington was muted, as officials weighed whether the moves were merely a restatement of existing initiatives or should be interpreted as one early sign of a new, if slow-motion, arms race. Secretary of State Condoleezza Rice