Thursday, June 14, 2007

The Takeover Boom, About to Go Bust

Steven Pearlstein / Washington Post | June 13, 2007

To understand why there's a credit bubble, how it's inflating the price of stocks and what it will mean for you when it bursts, let's consider the acquisition of Avaya, a large telecommunications equipment maker, announced last week by two private-equity firms, Texas Pacific Group and Silver Lake Partners.

Avaya is expected to post revenue of about $5.4 billion this year. It has virtually no debt and has $825 million in the bank. Operating earnings -- profit before counting things like interest payments, taxes, depreciation and amortization -- are expected to reach $700 million. And if that's correct, it means the price being paid for Avaya, $8.2 billion, is 12 times operating profit, making it one of this season's richest deals.

What's driving such high valuations is cheap debt, and plenty of it. We don't know yet how the all-cash purchase of Avaya will be financed, but if it follows the pattern of other recent buyouts, the new owners will take on at least $6 billion in debt. Given the junk-bond rating that has already been assigned to the deal, that is likely to work out to an average interest rate of about 8 percent, along with the obligation to pay back 1 percent of principal every year. Add it all together, and the new, improved Avaya will have to pay about $540 million more a year in debt service than it does now.

Can the company handle that? Well, consider that only three years ago, Standard & Poor's calculated that operating profits for companies involved in leveraged buyouts were typically 3.4 times debt service. Last year, the number fell to 2.4. So far this year, it is 1.7.

And the Avaya deal? It's 1.3 to 1, which, if you think about it, isn't much of a cushion if revenue suddenly falls or expenses rise more than expected. Nor would there be much cash left over for the company to increase its investment in research or pay for new plant and equipment.

In other words, a deal like this would never get financed in normal times. Bank lenders and bondholders would demand that the new owners use more of their own money and take on less debt. Or they would demand interest rates so high that the company, as presently configured, wouldn't be able to generate enough cash to cover debt service. Either way, the buyers would never have agreed to pay $8.2 billion.

But these are not normal times, and overpriced and over-leveraged deals like Avaya have been getting financed in record numbers. Back in 2004, about $275 billion in loans were issued for such highly leveraged transactions. By last year, that had risen to $490 billion. And in just the first five months of 2007, that record was broken.

At some point sanity will be restored, triggered by any number of events. A high-profile acquisition could collapse because the new owners could not secure financing. Or a deal could blow up after it is discovered that there's really not enough cash to meet the debt payments. Or interest rates could suddenly rise from their current low level, threatening the viability of recently acquired companies and making it unlikely that the new owners will be able to sell for anything close to what they paid.

In fact, over the past several weeks, all those things have begun to happen.

On the bond market, yields on the benchmark 10-year Treasury bill have increased from just under 4.5 percent to more than 5.25 percent -- a three-quarters-of-a-point jump without any action by the Federal Reserve.

And just last week, William Gross, one of the country's leading bond investors, recanted on his prediction that interest rates were headed down, warning instead that yields on 10-year Treasurys could reach 6.5 percent over the next several years.

Syndicated loans used to finance the recent purchases of the Minneapolis Star Tribune, Linens 'n Things and Freescale, a semiconductor maker, are trading at significant discounts only months after the deals were closed, after the companies reported disappointing earnings or cash flow.

Meanwhile, the Wall Street Journal reported that after a period in which lenders were throwing money at leveraged buyouts with few if any conditions, several private-equity buyers are having more trouble financing their deals. Those include KKR's $26 billion acquisition of First Data and Texas Pacific's purchase of JVC, the struggling consumer electronics giant.

It is impossible to predict when the magic moment will be reached and everyone finally realizes that the prices being paid for these companies, and the debt taken on to support the acquisitions, are unsustainable. When that happens, it won't be pretty. Across the board, stock prices and company valuations will fall. Banks will announce painful write-offs, some hedge funds will close their doors, and private-equity funds will report disappointing returns. Some companies will be forced into bankruptcy or restructuring.

But the damage won't be limited to Wall Street and its investors. For if we've learned one thing in the past 20 years, it is that what happens on financial markets, in booms and in busts, can have a big impact on the rest of the economy.

Without the billions of dollars flowing each year to financiers and corporate executives, there will be less money to trickle down to car salesmen, yacht makers, real estate agents, third-home builders and busboys at luxury resorts.

Falling stock prices will cause companies to reduce their hiring and capital spending while governments will be forced to raise taxes or reduce services, as revenue from capital gains taxes declines.

And the combination of reduced wealth and higher interest rates will finally cause consumers to pull back on their debt-financed consumption.

It happened after the junk-bond and savings-and-loan collapses of the late 1980s. It happened after the tech and telecom bust of the late '90s. And it will happen this time.

The recent decline in home prices and the meltdown in the market for subprime mortgages are the first signs that the air is coming out of the credit bubble. Already, those factors have shaved half a percentage point off the economic growth rate. And you can be sure that there will be a much larger impact on jobs and incomes from a broad decline in stock and bond prices, a sharp tightening of credit and the turmoil that both of those will create in the murky derivatives markets.

Steven Pearlstein will host a Web discussion today at 11 a.m. at washingtonpost.com. He can be reached atpearlsteins@washpost.com.

DNA of 100 under-10s on government database

Staff and agencies
Thursday June 14, 2007
Guardian Unlimited


The DNA fingerprints of more than 100 children aged under 10 are stored on a government database despite their being younger than the age of criminal responsibility, it emerged today.

In addition to the 108 under-10s, there are 883,888 records of people aged between 10 and 17 and 46 records of people aged over 90.

The Liberal Democrat home affairs spokesman, Nick Clegg, obtained the figures via a parliamentary question.

The DNA database has repeatedly been the subject of criticism by children's campaigners. Last month, activists said DNA records were turning thousands of children into lifelong suspects.

Mr Clegg said the figures showed the government saw no limits to its "invasion of privacy".

"Worse still, by harvesting the data of many people who are not even charged with an offence, let alone convicted, the fundamental principle that we are innocent until proven guilty is further undermined," he added.

"Why should anyone be on this database if they are entirely innocent of any wrongdoing?"

The shadow home secretary, David Davis, demanded the government justified the collection of DNA from young children.

"This is the latest in a long line of sinister developments associated with this database," he said.

"It is bad enough that DNA samples from a large number of innocent adults are being added by stealth. Now we find that children who, by law, cannot be held criminally responsible for a crime are on this database."

Police can take a DNA sample without consent from anyone they arrest, and can keep the record whether that person is charged with a crime or not.

The genetic "fingerprint" is then added to the database and can be cross-referenced with criminal records held on the police national computer.

The Home Office has said the national DNA database is an "invaluable intelligence tool" which has revolutionised the way in which the police can protect the public.

'Only Hamas gunmen walk the deserted streets'

Hazem Balousha, a Gaza-based journalist, gives an eyewitness account of the hardship and danger in a city gripped by chaos

Thursday June 14, 2007
Guardian Unlimited


Hamas supporters celebrate after capturing the headquarters of the Preventative Security Force, which was loyal to the Palestinian president and Fatah leader, Mahmoud Abbas, in Gaza City.
Hamas supporters celebrate after capturing the headquarters of the Preventative Security Force, which was loyal to the Palestinian president and Fatah leader, Mahmoud Abbas, in Gaza City. Photograph: Abid Katib/Getty Images


Late this afternoon the shooting appeared to die down. It's been going on now for five days - bullets and bombs going off day and night. The most important thing is keeping my niece and nephew occupied. They have heard gunfire at weddings before, so I have told them it's just a big wedding.

They replied that it was such a big wedding that it must be the president's. If only they knew - he has other matters on his mind at the moment.

But worse than the noise of war is the noise of loudspeakers at the mosque. They are saying: "We are Hamas. We are the Izzedine al-Qassam Brigades. We will defeat Fatah. We will liberate Gaza from the collaborators and the traitors." The loudspeaker is never quiet.

We live close to the intelligence headquarters, which has been under attack. The loudspeakers call on the fighters to surrender. If they do, they will survive, if they don't they will be killed.

My apartment is on the fourth floor, but it is too exposed and dangerous so I moved to my parents' place on the ground floor, which has some cover. Since Sunday, several bullets have hit my apartment and the windows have been smashed. When the shooting stops for five or 10 minutes, I try and take a look out the window. The streets are deserted of cars and people. Only the Hamas gunmen are walking the streets. Everyone else is holed up inside.

This chaos did not come as a big surprise, so we have been stocking food. We have no bread, but my mother is trying to make some now. The electricity lasted until last night and there has been none since.

Suddenly there is a new announcement from the mosque. "Hamas have taken the intelligence headquarters." Earlier this week, it was hard to tell the fighters apart. You could see masked men wearing black T-shirts, flak jackets and camouflage trousers. They carried rifles, grenade launchers and mortar tubes. Now it's clear who is who. The Hamas fighters are kneeling in prayer, congratulating each other and greeting onlookers. The Fatah men are being led from the building, hands in the air, some stripped to the waist. It is unclear what will happen to them.

There may be a bit of quiet for a while, but it won't last. Israel will now have new excuses to attack Gaza. With Hamas in control of Gaza, no one will be able to stop Israel. Even though Fatah seem to be doing badly at the moment, they are not finished and this is not the last round.

My eldest brother is close to Hamas and he seems happy with the way things are going. My other brother is more pragmatic, he is concerned about his businesses and the future. Some are saying Gaza will be sealed off now, isolated from the world like a new Taliban state. Personally, I think this is a disaster. I might leave. I have visas for Ireland and the UK, but the border is closed.

FBI Terror Watch List 'Out of Control'

Justin Rood
The Blotter
Thursday June 14, 2007

A terrorist watch list compiled by the FBI has apparently swelled to include more than half a million names.

Privacy and civil liberties advocates say the list is growing uncontrollably, threatening its usefulness in the war on terror.

The bureau says the number of names on its terrorist watch list is classified.

A portion of the FBI's unclassified 2008 budget request posted to the Department of Justice Web site, however, refers to "the entire watch list of 509,000 names," which is utilized by its Foreign Terrorist Tracking Task Force.

A spokesman for the interagency National Counterterrorism Center (NCTC), which maintains the government's list of all suspected terrorists with links to international organizations, said they had 465,000 names covering 350,000 individuals. Many names are different versions of the same identity -- "Usama bin Laden" and "Osama bin Laden" for the al Qaeda chief, for example.

In addition to the NCTC list, the FBI keeps a list of U.S. persons who are believed to be domestic terrorists -- abortion clinic bombers, for example, or firebombing environmental extremists, who have no known tie to an international terrorist group.

Combined, the NCTC and FBI compendia comprise the watch list used by federal security screening personnel on the lookout for terrorists.

While the NCTC has made no secret of its terrorist tally, the FBI has consistently declined to tell the public how many names are on its list. Because the number is classified, an FBI spokesman told the Blotter on ABCNews.com, he was unable to comment for this story.

"It grows seemingly without control or limitation," said ACLU senior legislative counsel Tim Sparapani of the terrorism watch list. Sparapani called the 509,000 figure "stunning."

"If we have 509,000 names on that list, the watch list is virtually useless," he told ABC News. "You'll be capturing innocent individuals with no connection to crime or terror."

U.S. lawmakers and their spouses have been detained because their names were on the watch list.
Reporters who have reviewed versions of the list found it included the names of former Iraqi dictator Saddam Hussein, at the time he was alive but in custody in Iraq; imprisoned al Qaeda plotter Zacarias Moussaoui; and 14 of the 19 Sept. 11, 2001 hijackers, all of whom perished in the attacks.

"There's a reason the FBI has a '10 Most Wanted' list, right? We need to focus the government's efforts on the greatest threats. When the watch list grows to this level, it's useless as an anti-terror tool," Sparapani said.

Foreclosure Rates Climb

wall street journal

WASHINGTON -- A record number of homeowners entered the foreclosure process during the first quarter, breaking a record set in late 2006 and reflecting further stress on the housing market, according to a Mortgage Bankers Association survey released Thursday.

Soft housing prices and a wave of resetting adjustable-rate mortgages were expected to show up in foreclosure and delinquency data, but it appears the stress wasn't confined to high-risk subprime loans as other mortgages showed signed of weakening.

On a seasonally adjusted basis, 0.58% of loans entered the foreclosure process during the quarter, compared with 0.54% in the fourth quarter of 2006. Such levels are unprecedented in the 37-year history of the survey. MBA reported that foreclosure rates were much steeper in California, Florida, Arizona and Nevada than in other parts of the country.

The percentage of loans in the foreclosure process rose to 1.28%, up from 1.19% in the fourth quarter and 0.98% in the first quarter of 2006.

The association reported that troubles in states Ohio, Michigan, Indiana, California, Florida, Nevada and Arizona weighed down the housing and foreclosure numbers, with the economic problems in the Midwest combining with price movements in the other states to create a tougher environment.

"The rate of delinquencies is being driven by what is taking place in seven states," MBA chief economist Doug Duncan said in a press release.

The delinquency rate on one-to-four family properties was 4.84% for the quarter, down from 4.95% in the fourth quarter of 2006 but up from 4.42% in the first quarter of 2006.

Data varied widely from state to state. For example, California, Florida, Nevada and Arizona were the main reason that the foreclosure rate on subprime adjustable-rate mortgages jumped to 3.23% for the quarter, MBA said. In 26 other states, the foreclosure rate on subprime ARMs decreased.

The delinquency rate on prime loans rose in the first quarter to 2.58% from 2.57% in the fourth quarter. For subprime loans the delinquency rate rose to 13.77% from 13.33%. Delinquencies on prime adjustable-rate mortgages rose to 3.69% in the first quarter from 3.39% in the fourth quarter. Delinquency rates on subprime ARMs rose to 15.75% from 14.44%.

The foreclosure inventory of prime loans rose to 0.54% from 0.50% in the fourth quarter. For subprime loans, 5.1% were in foreclosure in the first quarter compared with 4.53% in the fourth quarter.

World oil supplies are set to run out faster than expected, warn scientists

London Independent
Thursday June 14, 2007

Comment: Peak oil is a scam designed to create artificial scarcity and jack up prices while giving the state an excuse to invade our lives and order us to sacrifice our hard-earned living standards.

Scientists challenge major review of global reserves and warn that supplies will start to run out in four years' time.

Scientists have criticised a major review of the world's remaining oil reserves, warning that the end of oil is coming sooner than governments and oil companies are prepared to admit.

BP's Statistical Review of World Energy, published yesterday, appears to show that the world still has enough "proven" reserves to provide 40 years of consumption at current rates. The assessment, based on officially reported figures, has once again pushed back the estimate of when the world will run dry.

However, scientists led by the London-based Oil Depletion Analysis Centre, say that global production of oil is set to peak in the next four years before entering a steepening decline which will have massive consequences for the world economy and the way that we live our lives.

According to "peak oil" theory our consumption of oil will catch, then outstrip our discovery of new reserves and we will begin to deplete known reserves.

Colin Campbell, the head of the depletion centre, said: "It's quite a simple theory and one that any beer drinker understands. The glass starts full and ends empty and the faster you drink it the quicker it's gone."

Dr Campbell, is a former chief geologist and vice-president at a string of oil majors including BP, Shell, Fina, Exxon and ChevronTexaco. He explains that the peak of regular oil - the cheap and easy to extract stuff - has already come and gone in 2005. Even when you factor in the more difficult to extract heavy oil, deep sea reserves, polar regions and liquid taken from gas, the peak will come as soon as 2011, he says.

This scenario is flatly denied by BP, whose chief economist Peter Davies has dismissed the arguments of "peak oil" theorists.

"We don't believe there is an absolute resource constraint. When peak oil comes, it is just as likely to come from consumption peaking, perhaps because of climate change policies as from production peaking."

In recent years the once-considerable gap between demand and supply has narrowed. Last year that gap all but disappeared. The consequences of a shortfall would be immense. If consumption begins to exceed production by even the smallest amount, the price of oil could soar above $100 a barrel. A global recession would follow.

Jeremy Leggert, like Dr Campbell, is a geologist-turned conservationist whose book Half Gone: Oil, Gas, Hot Air and the Global Energy Crisis brought "peak oil" theory to a wider audience. He compares industry and government reluctance to face up to the impending end of oil, to climate change denial.

"It reminds me of the way no one would listen for years to scientists warning about global warming," he says. "We were predicting things pretty much exactly as they have played out. Then as now we were wondering what it would take to get people to listen."

In 1999, Britain's oil reserves in the North Sea peaked, but for two years after this became apparent, Mr Leggert claims, it was heresy for anyone in official circles to say so. "Not meeting demand is not an option. In fact, it is an act of treason," he says.

One thing most oil analysts agree on is that depletion of oil fields follows a predictable bell curve. This has not changed since the Shell geologist M King Hubbert made a mathematical model in 1956 to predict what would happen to US petroleum production. The Hubbert Curveshows that at the beginning production from any oil field rises sharply, then reaches a plateau before falling into a terminal decline. His prediction that US production would peak in 1969 was ridiculed by those who claimed it could increase indefinitely. In the event it peaked in 1970 and has been in decline ever since.

In the 1970s Chris Skrebowski was a long-term planner for BP. Today he edits the Petroleum Review and is one of a growing number of industry insiders converting to peak theory. "I was extremely sceptical to start with," he now admits. "We have enough capacity coming online for the next two-and-a-half years. After that the situation deteriorates."

What no one, not even BP, disagrees with is that demand is surging. The rapid growth of China and India matched with the developed world's dependence on oil, mean that a lot more oil will have to come from somewhere. BP's review shows that world demand for oil has grown faster in the past five years than in the second half of the 1990s. Today we consume an average of 85 million barrels daily. According to the most conservative estimates from the International Energy Agency that figure will rise to 113 million barrels by 2030.

Two-thirds of the world's oil reserves lie in the Middle East and increasing demand will have to be met with massive increases in supply from this region.

BP's Statistical Review is the most widely used estimate of world oil reserves but as Dr Campbell points out it is only a summary of highly political estimates supplied by governments and oil companies.

As Dr Campbell explains: "When I was the boss of an oil company I would never tell the truth. It's not part of the game."

A survey of the four countries with the biggest reported reserves - Saudi Arabia, Iran, Iraq and Kuwait - reveals major concerns. In Kuwait last year, a journalist found documents suggesting the country's real reserves were half of what was reported. Iran this year became the first major oil producer to introduce oil rationing - an indication of the administration's view on which way oil reserves are going.

Sadad al-Huseini knows more about Saudi Arabia's oil reserves than perhaps anyone else. He retired as chief executive of the kingdom's oil corporation two years ago, and his view on how much Saudi production can be increased is sobering. "The problem is that you go from 79 million barrels a day in 2002 to 84.5 million in 2004. You're leaping by two to three million [barrels a day]" each year, he told The New York Times. "That's like a whole new Saudi Arabia every couple of years. It can't be done indefinitely."

The importance of black gold

* A reduction of as little as 10 to 15 per cent could cripple oil-dependent industrial economies. In the 1970s, a reduction of just 5 per cent caused a price increase of more than 400 per cent.

* Most farming equipment is either built in oil-powered plants or uses diesel as fuel. Nearly all pesticides and many fertilisers are made from oil.

* Most plastics, used in everything from computers and mobile phones to pipelines, clothing and carpets, are made from oil-based substances.

* Manufacturing requires huge amounts of fossil fuels. The construction of a single car in the US requires, on average, at least 20 barrels of oil.

* Most renewable energy equipment requires large amounts of oil to produce.

* Metal production - particularly aluminium - cosmetics, hair dye, ink and many common painkillers all rely on oil.

Alternative sources of power

Coal

There are still an estimated 909 billion tonnes of proven coal reserves worldwide, enough to last at least 155 years. But coal is a fossil fuel and a dirty energy source that will only add to global warming.

Natural gas

The natural gas fields in Siberia, Alaska and the Middle East should last 20 years longer than the world's oil reserves but, although cleaner than oil, natural gas is still a fossil fuel that emits pollutants. It is also expensive to extract and transport as it has to be liquefied.

Hydrogen fuel cells

Hydrogen fuel cells would provide us with a permanent, renewable, clean energy source as they combine hydrogen and oxygen chemically to produce electricity, water and heat. The difficulty, however, is that there isn't enough hydrogen to go round and the few clean ways of producing it are expensive.

Biofuels

Ethanol from corn and maize has become a popular alternative to oil. However, studies suggest ethanol production has a negative effect on energy investment and the environment because of the space required to grow what we need.

Renewable energy

Oil-dependent nations are turning to renewable energy sources such as hydroelectric, solar and wind power to provide an alternative to oil but the likelihood of renewable sources providing enough energy is slim.

Nuclear

Fears of the world's uranium supply running out have been allayed by improved reactors and the possibility of using thorium as a nuclear fuel. But an increase in the number of reactors across the globe would increase the chance of a disaster and the risk of dangerous substances getting into the hands of terrorists.

It’s Official The Crash of the U.S. Economy has begun

Richard C. Cook
Global Research
Thursday June 14, 2007

It’s official. Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite.

Pearlstein’s column was titled, “The Takeover Boom, About to Go Bust” and concerned the extraordinary amount of debt vs. operating profits of companies currently subject to leveraged buyouts.

In language remarkably alarmist for the usually ultra-bland pages of the Post, Pearlstein wrote, “It is impossible to predict when the magic moment will be reached and everyone finally realizes that the prices being paid for these companies, and the debt taken on to support the acquisitions, are unsustainable. When that happens, it won't be pretty. Across the board, stock prices and company valuations will fall. Banks will announce painful write-offs, some hedge funds will close their doors, and private-equity funds will report disappointing returns. Some companies will be forced into bankruptcy or restructuring.”

Further, “Falling stock prices will cause companies to reduce their hiring and capital spending while governments will be forced to raise taxes or reduce services, as revenue from capital gains taxes declines. And the combination of reduced wealth and higher interest rates will finally cause consumers to pull back on their debt-financed consumption. It happened after the junk-bond and savings-and-loan collapses of the late 1980s. It happened after the tech and telecom bust of the late '90s. And it will happen this time.”

Samuelson’s column, “The End of Cheap Credit,” left the door slightly ajar in case the collapse is not quite so severe. He wrote of rising interest rates, “As the price of money increases, borrowing and the economy might weaken. The deep slump in housing could worsen. We could also discover that the long period of cheap credit has left a nasty residue.”

Other writers with less prestigious platforms than the Post have been talking about an approaching financial bust for a couple of years. Among them has been economist Michael Hudson, author of an article on the housing bubble titled, “The New Road to Serdom” in the May 2006 issue of Harper’s. Hudson has been speaking in interviews of a “break in the chain” of debt payments leading to a “long, slow economic crash,” with “asset deflation,” “mass defaults on mortgages,” and a “huge asset grab” by the rich who are able to protect their cash through money laundering and hedging with foreign currency bonds.

Among those poised to profit from the crash is the Carlyle Group, the equity fund that includes the Bush family and other high-profile investors with insider government connections. A January 2007 memorandum to company managers from founding partner William E. Conway, Jr., recently appeared which stated that, when the current “liquidity environment”—i.e., cheap credit—ends, “the buying opportunity will be a once in a lifetime chance.”

The fact that the crash is now being announced by the Post shows that it is a done deal. The Bilderburgers, or whomever it is that the Post reports to, have decided. It lets everyone know loud and clear that it’s time to batten down the hatches, run for cover, lay in two years of canned food, shield your assets, whatever.

Those left holding the bag will be the ordinary people whose assets are loaded with debt, such as tens of millions of mortgagees, millions of young people with student loans that can never be written off due to the “reformed” 2005 bankruptcy law, or vast numbers of workers with 401(k)s or other pension plans that are locked into the stock market.

In other words, it sounds eerily like 2000-2002 except maybe on a much larger scale. Then it was “only” the tenth worse bear market in history, but over a trillion dollars in wealth simply vanished. What makes today’s instance seem particularly unfair is that the preceding recovery that is now ending—the “jobless” one—was so anemic.

Neither Perlstein nor Samuelson gets to the bottom of the crisis, though they, like Conway of the Carlyle Group, point to the end of cheap credit. But interest rates are set by people who run central banks and financial institutions. They may be influenced by “the market,” but the market is controlled by people with money who want to maximize their profits.

Key to what is going on is that the Federal Reserve is refusing to follow the pattern set during the long reign of Fed Chairman Alan Greenspan in responding to shaky economic trends with lengthy infusions of credit as he did during the dot.com bubble of the 1990s and the housing bubble of 2001-2005.

This time around, Greenspan’s successor, Ben Bernanke, is sitting tight. With the economy teetering on the brink, the Fed is allowing rates to remain steady. The Fed claims their policy is due to the danger of rising “core inflation.” But this cannot be true. The biggest consumer item, houses and real estate, is tanking. Officially, unemployment is low, but mainly due to low-paying service jobs. Commodities have edged up, including food and gasoline, but that’s no reason to allow the entire national economy to be submerged.

So what is really happening? Actually, it’s simple. The difference today is that China and other large investors from abroad, including Middle Eastern oil magnates, are telling the U.S. that if interest rates come down, thereby devaluing their already-sliding dollar portfolios further, they will no longer support with their investments the bloated U.S. trade and fiscal deficits.

Of course we got ourselves into this quandary by shipping our manufacturing to China and other cheap-labor markets over the last generation. “Dollar hegemony” is backfiring. In fact China is using its American dollars to replace the International Monetary Fund as a lender to developing nations in Africa and elsewhere. As an additional insult, China now may be dictating a new generation of economic decline for the American people who are forced to buy their products at Wal-Mart by maxing out what is left of our available credit card debt.

About a year ago, a former Reagan Treasury official, now a well-known cable TV commentator, said that China had become “America’s bank” and commented approvingly that “it’s cheaper to print money than make cars anymore.” Ha ha.

It is truly staggering that none of the “mainstream” political candidates from either party has attacked this subject on the campaign trail. All are heavily funded by the financier elite who will profit no matter how bad the U.S. economy suffers. Every candidate except Ron Paul and Dennis Kucinich treats the Federal Reserve like the fifth graven image on Mount Rushmore. And even the so-called progressives are silent. The weekend before the Perlstein/ Samuelson articles came out, there was a huge progressive conference in Washington, D.C., called “Taming the Corporate Giant.” Not a single session was devoted to financial issues.

What is likely to happen? I’d suggest four possible scenarios:

Acceptance by the U.S. population of diminished prosperity and a declining role in the world. Grin and bear it. Live with your parents into your 40s instead of your 30s. Work two or three part-time jobs on the side, if you can find them. Die young if you lose your health care. Declare bankruptcy if you can, or just walk away from your debts until they bring back debtor’s prison like they’ve done in Dubai. Meanwhile, China buys more and more U.S. properties, homes, and businesses, as economists close to the Federal Reserve have suggested. If you’re an enterprising illegal immigrant, have fun continuing to jack up the underground economy, avoid business licenses and taxes, and rent out group houses to your friends.

Times of economic crisis produce international tension and politicians tend to go to war rather than face the economic music. The classic example is the worldwide depression of the 1930s leading to World War II. Conditions in the coming years could be as bad as they were then. We could have a really big war if the U.S. decides once and for all to haul off and let China, or whomever, have it in the chops. If they don’t want our dollars or our debt any more, how about a few nukes?

Maybe we’ll finally have a revolution either from the right or the center involving martial law, suspension of the Bill of Rights, etc., combined with some kind of military or forced-labor dictatorship. We’re halfway there anyway. Forget about a revolution from the left. They wouldn’t want to make anyone mad at them for being too radical.

Could there ever be a real try at reform, maybe even an attempt just to get back to the New Deal? Since the causes of the crisis are monetary, so would be the solutions. The first step would be for the Federal Reserve System to be abolished as a bank of issue and a transformation of the nation’s credit system into a genuine public utility by the federal government. This way we could rebuild our manufacturing and public infrastructure and develop an income assurance policy that would benefit everyone.

The latter is the only sensible solution. There are monetary reformers who know how to do it if anyone gave them half a chance.

Data retention laws do not cover Google searches

OUT-LAW.COM
Thursday June 14, 2007

Google is not bound by the Data Retention Directive when it comes to search engine logs, Europe's data protection committee has said. Google has used the Directive to justify keeping data, but OUT-LAW has learned that the law does not apply.

Google has come under increasing pressure in Europe to anonymise its server data, but the company says that it will wait until 18–24 months have passed before anonymising. Among its reasons for this was the Data Retention Directive.

However, a senior European data protection official told OUT-LAW today that Google cannot rely on that law as justification for its retention.

"The Data Retention Directive applies only to providers of publicly available electronic communications services or of public communication networks and not to search engine systems," said Philippos Mitletton. Mitletton works for the European Commission's Data Protection Unit, which itself is represented on the Article 29 Working Party, the committee of Europe's data protection authorities.

"Accordingly, Google is not subject to this Directive as far as it concerns the search engine part of its applications and has no obligations thereof," he said.

Google offers other services that will be caught by the Directive – notably its email service, Gmail, and its internet telephony service, Google Talk. If Google's search function were caught by the Directive, it could alarm operators of any site with a search function – i.e. most large websites – because potentially they would be similarly caught and therefore need to store details of every search conducted and the addresses of the computers that instruct each search.

The Working Party had taken issue with Google's policy of only anonymising data after 18–24 months. Google this week conceded some ground, saying that it would anonymise data after 18 months, but could extend that back to 24 months if laws anywhere in the world required them to do that.

Google had argued that the Retention Directive required it to keep the data for up to two years.

"The Data Retention Directive requires all EU Member States to pass data retention laws by 2009 with retention for periods between 6 and 24 months," said Google global privacy counsel Peter Fleischer in a letter to the Working Party this week.

"Google is therefore potentially subject (both inside and outside the EU) to legal requirements to retain data for a certain period. Since not many member states have implemented the Directive thus far, it is too early to know the final retention time periods, the jurisdictional impact, and the scope of applicability. Because Google may be subject to the requirements of the Directive in some member states, under the principle of legality, we have no choice but to be prepared to retain log server data for up to 24 months," said Fleischer.

The news that European data protection officials do not consider search queries to be covered by the legislation undermines one of Google's main justifications for keeping the data.

The company said that the information is useful to it in a business sense. It said that other people's search queries allow it to help a user refine their search and fix spelling errors. It also said that logs helped it guard against fraud.

"We believe that our decision to anonymize our server logs after 18 to 24 months complies with data protection law, and at the same time allows us to fulfill other critical interests, such as maintaining our ability to continue to improve the quality of our search services; protecting our systems and our users from fraud and abuse, and complying with possible data retention requirements," said Fleischer's letter.

NRA, Democrats Team Up To Pass Gun Bill

After Virginia Tech Shootings, House Passes Bill To Strengthen National Background Check System
CBS

Thursday June 14, 2007

After 52 years in Congress, John Dingell knows it sometimes takes a "rather curious alliance," such as between the National Rifle Association and the House's most fervent gun control advocate, to move legislation.

That's what took place Wednesday when the House, by voice vote, passed a gun control bill that Rep. Dingell, D-Mich., helped broker between the NRA and Rep. Carolyn McCarthy, D-N.Y.

With the NRA on board, the bill, which fixes flaws in the national gun background check system that allowed the Virginia Tech shooter to buy guns despite his mental health problems, has a good chance of becoming the first major gun control law in more than a decade.

"We’ll work with anyone, if you protect the rights of law-abiding people under the second amendment and you target people that shouldn't have guns," NRA chief Wayne LaPierre told CBS News Correspondent Sheryl Atkisson

"As the Virginia Tech shooting reminded us, there is an urgent national need to improve the background check system" to keep guns out of the hands of those barred from buying them, House Speaker Nancy Pelosi said.

The measure would require states to automate their lists of convicted criminals and the mentally ill who are prohibited under a 1968 law from buying firearms, and report those lists to the FBI's National Instant Criminal Background Check System, or NICS.

Seung-Hui Cho, who in April killed 32 students and faculty at Virginia Tech before taking his own life, had been ordered to undergo outpatient mental health treatment and should have been barred from buying the two guns he used in the rampage. But the state of Virginia never forwarded this information to the national background check system.

The House action came as a panel ordered by President Bush to investigate the Virginia Tech shootings issued its findings, including a recommendation that legal and financial barriers to NICS submissions be addressed.

Mr. Bush, in a statement, said the report made clear that better information sharing between federal and state authorities "is essential in helping to keep guns out of the wrong hands and to punish those who break the law." He said he was "closely following legislative efforts to strengthen the instant background check system."

The panel also urged federal agencies to expand programs to prevent school violence and said the Health and Human Services Department should focus on college students in its mental health public education campaign.

Virginia Tech President Charles Steger said the report disclosed "the deep complexities of the issues facing college campuses today" and would advance government scrutiny of issues related to safety vs. personal freedoms.

The House bill next moves to the Senate, where gun control advocate Sen. Charles Schumer, D-N.Y., says he is talking to NRA ally Sen. Larry Craig, R-Idaho, and there is a "very strong" chance of passage.

"When the NRA and I agree on legislation, you know that it's going to get through, become law and do some good," says Schumer.

The legislation requires state and federal agencies to transmit all relevant disqualifying records to the NICS database. It also provides $250 million a year over the next three years to help states meet those goals and it imposes penalties — including cuts in federal grants under an anti-crime law — on states that fail to meet benchmarks for automating their systems and supplying information to the NICS.

Virginia's Democratic Gov. Tim Kaine said Wednesday that in ordering state executive branch agencies to upgrade background check reporting last month he found that Virginia was one of only 22 states reporting any mental health information to the NICS. He said the House bill was “significant action to honor the memories of the victims who lost their lives at Virginia Tech.”

"Millions of criminal records are not accessible by NICS," said McCarthy, sponsor of the bill.

"I came to Congress in 1997, in the wake of my own personal tragedy, to help prevent gun violence," said McCarthy, who ran for office after her husband was gunned down on a Long Island commuter train in 1993. "Ten years later, I am more committed than ever to this cause."

McCarthy has been among the leaders in the largely futile efforts to legislate gun controls during the past dozen years of GOP control. The last major gun control bill, to ban some assault weapons, passed in 1994, the last year of a Democratic majority. In 1996, domestic violence offenders were added to the list of those barred from buying guns. However, a 1999 effort to close the gun show loophole on background checks after the Columbine school shootings was unsuccessful.

The NRA worked closely with Dingell, a gun rights proponent and senior House member, in crafting the new bill. The NRA insisted it was not gun control legislation because it does nothing to restrict legal rights to buy guns.

The NRA has supported the NICS since its inception in 1993, said Wayne LaPierre, the organization's executive vice president. “We've always been vigilant about protecting the rights of law-abiding citizens to purchase guns, and equally vigilant about keeping the guns out of the hands of criminals and the mentally defective and people who shouldn't have them.”

The NRA did win concessions.

The bill would automatically restore the purchasing rights of veterans who were diagnosed with mental problems as part of the process of obtaining disability benefits. LaPierre said the Clinton administration put about 80,000 such veterans into the background check system.

It also outlines an appeals process for those who feel they have been wrongfully included in the system and ensures that funds allocated to improve the NICS are not used for other gun control purposes.

That wasn't enough for the Gun Owners of America, which said on its Web page that it was the only national pro-gun organization to oppose the McCarthy bill. "There are some seemingly pro-gun congressmen who are driven to get anything passed, just so they can say they did something about Virginia Tech," it said.

On the other side, Paul Helmke, president of the Brady Campaign to Prevent Gun Violence, said his group supported the legislation, noting that the Virginia Tech shootings "tragically demonstrated the gaps in the system that allowed a dangerous person to be armed."

He said he hoped Congress and the gun lobby would go a step further and extend background checks to all gun sales, not just those by licensed dealers covered by current law.

U.S. official Samarra attack may have been inside job



CNN Downplays Second-False Flag Bombing of Golden Mosque in Follow-up Story-- the Update Obscures the Previous 'Inside Job' Report by Replacing the Link & Killing the Story

Jones Report
Thursday June 14, 2007

COMMENT: Now CNN has changed the damning 'inside job' headline (see SCREEN SHOT) to a more disguised story that downplays significance. CNN replaced the link and effectively killed the story that this is the 2nd FALSE-FLAG bombing of the Golden mosque (see Feb 2006)-- one of Iraq's most holy places. Both were believed to have been carried out in part by Iraqi forces and directed by Western intelligence. Such self-inflicted violence is only used as a tool to enrage the opposition and further perpetuate the Iraq War. Of course, it just came out that the U.S. is arming Sunni insurgents 'to fight al-Qaeda'-- further evidence that the West seeks to extend the war. Naturally, the bombing has already led to retaliation-- a desired and planned response.

BAGHDAD, Iraq -- Authorities have evidence that Wednesday's bombing of Al-Askariya Mosque in Samarra was an inside job, and 15 members of the Iraqi security forces have been arrested, a U.S. military official said.

The attack Wednesday destroyed two towers, referred to as minarets, at the revered Shiite shrine, police said. It was a repeat of the 2006 bombing that sparked Iraq's current wave of deadly sectarian violence.

There was no immediate word on casualties in the city north of Baghdad.

The U.S. military official, Maj. Gen. Benjamin Mixon, told CNN's Karl Penhaul that he believes members of the Iraqi security forces who were guarding the site either assisted or directly took part in helping al Qaeda insurgents place and detonate explosives at the mosque's minarets.

"He told me there was no evidence at all that this was an attack using mortars or anything of the like and said, in his words, that this was an inside job," Penhaul told CNN's "American Morning."

Mixon said an additional Iraqi army brigade will be sent to Samarra. So far, there have been no reports of sectarian clashes in the city.

Within hours of the attacks, Iraqi state television announced that Prime Minister Nuri al-Maliki had imposed a curfew for Baghdad until further notice.

A U.S. military official in northern Iraq told The Associated Press that Samarra appeared calm by Wednesday afternoon.

The explosions rocked the town and blew billowing dust clouds into the air, store owner Imad Nagi told the AP.

"After the dust settled, I couldn't see the minarets anymore," Nagi told the AP. "So I closed the shop quickly and went home."

The blast followed clashes between gunmen and Iraqi National Police, who were guarding the holy site. During the firefight, the insurgents entered the mosque, also known as the Golden Dome, planted explosives around the minarets and detonated them.

Iranian Foreign Ministry spokesman Mohammad Ali Hosseini called the bombing a "criminal and anti-Islamic action," characterizing it as the "continuation of spiteful attacks of enemies of Iraqi national unity," according to Iran's Islamic Republic News Agency.

Hosseini also referred to the "negligence of occupiers to guarantee security in holy sites." Iran, which borders Iraq, is predominantly Shiite. Around 60 percent of Iraqis are Shiite as well.

Radical Shiite cleric Muqtada al-Sadr called for three days of mourning to mark the destruction of the minarets, according to a statement.

"Let the next three days be mourning days, where we spread the black banners and a call to prayer and shouting God is great in our mosques, whether they are Sunnis or Shiites, and to organize peaceful demonstrations and sit-ins in order for everyone to witness that the only enemy of Iraq is the occupation and therefore everyone must demand its departure or a timetable of its occupation."

The anti-American cleric also said no rival Sunni Arab could have been responsible for the bombing, calling the development a "cursed American-Israeli scenario that aims to spread the turmoil and plant the hatred among the Muslim brethren."

The U.S. ambassador to Iraq and the top U.S. military commander in the country issued a joint condemnation saying that this "brutal action on one of Iraq's holiest shrines is a deliberate attempt by al Qaeda to sow dissent and inflame sectarian strife among the people of Iraq."

"It is an act of desperation by an increasingly beleaguered enemy seeking to obstruct the peaceful, political and economic development of a democratic Iraq," said Ambassador Ryan C. Crocker and Gen. David Petraeus in a statement.

"We share in the outrage of the Iraqi people against this crime, and we call on all Iraqis to reject this call to violence. We cannot allow these terrorists to work against the interests of the Iraqi people who are seeking peace and prosperity for all."
advertisement

During the February 2006 strike on the mosque, attackers dressed as Iraqi police commandos bombed and heavily damaged the shrine, collapsing the top half of the dome.

Although Samarra is a predominantly Sunni city, Askariya is one of the four major Shiite shrines in Iraq. Iraq's other major Shiite sites are in the holy cities of Najaf and Karbala. The fourth is in the Baghdad district of Kadhimiya.

Bush Approval at Record Low in NBC/WSJ Poll

Bush Approval at Record Low in NBC/WSJ poll

Bush job rating hits record low in NBC/WSJ poll
Reuters

WASHINGTON

WASHINGTON - President George W. Bush's approval rating has dropped to 29 percent in an NBC News/Wall Street Journal poll released on Wednesday, his lowest mark ever in that survey, which also found only 23 percent approved of the job Congress was doing.

Bush's approval rating slid 6 points from 35 percent in April, NBC said, citing a decline in support within his own Republican Party. Sixty-six percent said they disapproved of Bush's job performance.

In the poll, 62 percent of Republicans approved of Bush's job performance, down from 75 percent in April. Thirty-two percent of Republicans in the latest poll disapproved of Bush's performance, up from 21 percent in April.

NBC tied the drop in Republican support to Bush's efforts to promote an immigration reform measure that many conservative Republicans oppose. Polls have also shown a decline in Bush's popularity due to the war in Iraq.

The latest poll also found Americans growing more discontented with the Democratic-led Congress, with 64 percent disapproving of Congress' job performance. Only 23 percent approved, down 8 points since April.

Sixty-eight percent believe the United States is on the wrong track. Only 19 percent believe the country is headed in the right direction -- the lowest number in nearly 15 years, NBC said.

The poll of 1,008 adults conducted from Friday to Monday had a margin of error of 3.1 percentage points.

Copyright 2007 Reuters News Service. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Copyright © 2007 ABC News Internet Ventures

BBC NEWS | Asia-Pacific | Mass rescue of 'slaves' in China

BBC NEWS | Asia-Pacific | Mass rescue of 'slaves' in China

Mass rescue of 'slaves' in China
More than 200 people, including 29 children, have been rescued after working as "slaves" in brick kilns in central China, state media reports.

Tens of thousands of police moved in on the kilns in Henan province, arresting 120 people, Xinhua news agency said.

They acted after media reports claimed that children were being forced to work in kilns in neighbouring Shanxi province, Xinhua said.

Photos of distraught parents were also published.

Xinhua said that, following the reports of clhild labour, some 35,000 police were despatched to the 7,500 kilns in Henan.

They reportedly rescued 217 people, including 29 children.

Xinhua said the victims had been "enticed or sent by human traffickers to the kilns", where they were "beaten, starved and forced to work long hours without payment".

Henan's police governor Qin Yuhai vowed to "do everything we can to fight human trafficking and rescue those held captive".

Dirty and disorientated

There have similar case in a neighbouring province received national media coverage after parents of the children launched an online campaign to find them.

On Wednesday, 400 men from Henan made an online appeal for help in their bid to rescue their children from brickworks hidden deep in the mountains of Shanxi.

They said they had "risked their lives" to rescue about 40, but believed at least 1,000 children had been kidnapped for sale to traffickers.

"We were shocked by what we saw," they were quoted by Chinese media as saying.

"Some children had been isolated from the outside world for seven years, and some were beaten and maimed because they tried to escape, and the backs of some were burnt by supervisors with burning red bricks."

Last week, 31 disorientated workers were rescued from a brickwork factory in Shaanxi.

They were reported to have been duped into working at the factory, and faced a harsh regime in which they worked unpaid for 20 hours a day with only bread and water in return.

Police said that when they raided the works they discovered foul-smelling workers, who had been wearing the same clothes for a year.

Eight were reported to be so traumatised by their experiences that they were only able to remember their names.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/asia-pacific/6752507.stm

Published: 2007/06/14 12:29:03 GMT

© BBC MMVII

Efforts to Avert Sectarian Reprisals After Shrine Attack - New York Times



Efforts to Avert Sectarian Reprisals After Shrine Attack - New York Times

June 14, 2007
Efforts to Avert Sectarian Reprisals After Shrine Attack
By JOHN F. BURNS

BAGHDAD, June 13 — Two explosions on Wednesday that appeared to have been set by Sunni extremists with links to Al Qaeda toppled the twin golden minarets that were most of what remained of one of Iraq’s most revered Shiite shrines after a devastating bombing by Al Qaeda last year.

That bombing 16 months ago proved a watershed, engulfing the country in a wave of sectarian killing that pushed Sunnis and Shiites toward civil war. With American and Iraqi forces unable to restrain soaring levels of killing that saw as many as 3,000 Iraqi civilians dying every month by the end of 2006, President Bush ordered nearly 30,000 additional American troops deployed here, aimed at pulling the country back from the abyss.

But after Wednesday’s renewed attack on the shrine at Samarra, 75 miles north of Baghdad, appeals for calm by Shiite political and religious leaders, as well as by moderate Sunni politicians and the top two American officials in Iraq, appeared to have headed off the risk of a new sectarian convulsion, at least for now.

By nightfall, with emergency curfews in Baghdad and several other cities, and Iraqi forces moving in to protect mosques across the country, there were only scattered reports of reprisal attacks.

The new attack on the shrine came at what American commanders acknowledged to be a now-or-never point in the war here, with only months for the fresh troops deployed here to begin driving down insurgent attacks. Without significant progress by September, when the top American military commander here is to report to the president and Congress, the generals appear to have little prospect of holding off pressure at home for withdrawal.

The Samarra bombing appeared to be aimed at derailing the American hopes for a turnaround by setting off renewed Shiite reprisals and refocusing the conflict on sectarian tensions, away from recent infighting between Sunni tribal groups and the Sunni insurgents who have links to Al Qaeda in Mesopotamia.

The explosions that destroyed the 120-foot-high minarets of the Askariya shrine occurred about 9 a.m. A statement by the American military command, quoting the Iraqi police, said that they “did not see any attackers in the vicinity,” suggesting that the bombings were an inside job.

Suspicion fell immediately on the guards protecting the shrine, a unit of a few dozen local men, almost all Sunnis, the population group that predominates in Samarra and has controlled the shrine since it was built in 1905. American and Iraqi commanders in the area had suspected the guard force of harboring Qaeda sympathizers.

Iraqis shopping in a local market said they heard the explosions, ran to look toward the shrine and saw as a cloud of dust and debris cleared that the minarets, used traditionally as the place from which Muslims are called to prayer, had vanished.

The bombings left the shrine, its soaring golden dome destroyed in the initial attack in February last year, with little left of its former grandeur but rubble overlooked by a blue-tiled archway and a golden clock tower. The mosque is located atop what is said to have been the burial site, in the 9th-century A.D., of two of the 12 imams, the apostles of the Shiite faith.

Prime Minister Nuri Kamal al-Maliki, a Shiite who heads a fractious and increasingly dysfunctional coalition government of Shiites, Sunnis and Kurds, said in a hastily prepared television address from Baghdad that he had ordered the arrest of “all officials who were responsible for guarding the holy shrine.” Reports from Samarra said that at least 15 members of the guard force, most of them nominally employees of the Interior Ministry, were detained.

Mr. Maliki later flew to the site aboard an American military helicopter accompanied by Lt. Gen. Raymond T. Odierno, the second-ranking American commander in Iraq.

A statement by Ambassador Ryan C. Crocker and Gen. David H. Petraeus, the top American officials in Iraq, described the attack as a new effort by Al Qaeda to provoke sectarian conflict. Putting a positive construction on an event that appeared to have shaken the Americans more than any event in recent months, the two officials said, “It is an act of desperation by an increasingly beleaguered enemy seeking to obstruct the peaceful political and economic development of a democratic Iraq.”

Across the main war zones, American formations bolstered by the troop increase are reaching full operational readiness for what the commanders have described as a summer offensive against Qaeda-linked insurgents and Shiite death squads. But the commanders have spoken of intelligence reports pointing to plans by Al Qaeda for a “catastrophic” attack similar to the one at Samarra last year, setting off a new round of mass sectarian killings, driving a deeper wedge between Sunnis and Shiites and thwarting American hopes for greater stability.

The insurgents appeared to have chosen a target that was relatively accessible, but less powerful in its potential impact on Iraq’s majority Shiite population than a strike on one of the major shrines elsewhere.

Apart from the Samarra site, Iraq’s Shiites have shrines of transcending significance in the Baghdad district of Kadhimiya and in Karbala and Najaf. All have been the targets of foiled attacks this year.

One attack, on April 28, killed 58 people and wounded nearly 170 only a few hundred yards from the Imam Abbas shrine in Karbala. Two weeks before that, another car bomb in Karbala exploded near the Imam Hussain shrine, killing 36 people and wounding nearly 170. There have been dozens of other attacks on lesser Shiite shrines, killing scores.

On Wednesday Shiite leaders called for restraint — a plea that went largely unheeded last year after the first bombing at the shrine. Grand Ayatollah Ali al-Sistani, Iraq’s most revered Shiite religious leader, asked Shiites to “stay calm and avoid any retaliatory actions that target the innocent and the sacred places of others.”

Perhaps equally important, the young Shiite cleric who has been a turbulent force in Iraqi politics, Moktada al-Sadr, issued a statement calling on Shiites not to strike back. His followers were implicated in many of the reprisal attacks after the first bombing. Characteristically, he based his appeal on an interpretation of the latest attack that made villains not of the Sunnis, but of the United States and Israel, whom he accused or organizing the bombing. “The Iraqi people should know that there is no Sunni, and no Muslim, who would attack a shrine that is the burial place of our two imams,” he said.

The authorities imposed indefinite curfews in several major cities, including Baghdad, the southern oil hub of Basra, the mixed Sunni-Shiite city of Hilla in south-central Iraq and Karbala and Najaf.

American troop reinforcements requested by Prime Minister Maliki effectively sealed off Samarra, and the police fired in the air to disperse Shiite demonstrators gathered near the shrine in the aftermath of the bombing. Witnesses reported American fighter jets roaring low over rooftops, a tactic often used when American commanders, lacking enough troops to dominate a trouble spot, need to deter potential attacks.

Within hours of the bombing, there were reports of scattered attacks on Sunni mosques in Baghdad, Basra and other cities. In Baghdad, the police said Shiite gunmen set fire to a Sunni mosque in the Baya district, and they reported attacks on three other neighborhood mosques.

In Basra, with a heavy Shiite majority, police said three Sunni mosques came under sporadic fire from groups of masked gunmen. In Khalis, a town in Diyala Province about 40 miles north of Baghdad, the police reported the bombing of a small Shiite shrine.

Reporting was contributed by Alissa J. Rubin, Damien Cave, Ali Adeeb, Khalid al-Ansary and Karim Hilmi from Baghdad, and Iraqi employees of The New York Times from Samarra, Hilla and Basra.

BBC NEWS | Europe | Anger over day release for Nazi

BBC NEWS | Europe | Anger over day release for Nazi

Anger over day release for Nazi
Jewish groups and Italian politicians have expressed anger at the decision to grant day release to a convicted Nazi criminal under house arrest in Rome.

Erich Priebke, 93, is serving a life sentence for the murder of 335 people at the Ardeatine Caves outside Rome.

The 1944 massacre was a reprisal ordered by Adolf Hitler after partisans killed a patrol of 33 German soldiers.

The judge's decision also outraged the capital's mayor who said the city would never forget the massacre.

"At this time the city of Rome's solidarity goes out to all the victims of the Nazi-Fascist barbarity," Walter Veltroni said.

Priebke was one of several officers present during the killing of over 300 men and boys, 75 of whom were Jewish, at the caves south of Rome.

He spent most of his life in Argentina before being extradited to Italy in 1994, where he was allowed to serve his life sentence under house arrest due to his age and health problems.

'No mercy'

He will now be allowed to leave his flat, lent to him by a lawyer who campaigned for his freedom, during the day.

The decision allows him to go to his lawyer's office "every day, freely" and also to "go out to satisfy, at nearby places and for the time strictly necessary, the indispensable necessities of life".

His lawyer, Paolo Giachini, said that since his arrest Priebke had been writing a book and would probably use the time to consult documents and continue research.

The head of the Union of Italian Jewish Communities said the move was another concession to a man who did not deserve it.

"This is clearly another act of leniency towards a man who showed no mercy in killing 335 innocent civilians and has shown no remorse since," Renzo Gattegna told the German news agency Deutsche Presse-Agentur.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/europe/6748357.stm

Published: 2007/06/13 13:10:32 GMT

Afghanistan: Iran not arming Taliban - Focus on Afghanistan - MSNBC.com

Afghanistan: Iran not arming Taliban - Focus on Afghanistan - MSNBC.com

Afghanistan: Iran not arming Taliban
Defense minister dismisses claim by top U.S. State Department official
The Associated Press
Updated: 6:19 a.m. ET June 14, 2007

BRUSSELS, Belgium - Afghanistan’s defense minister on Thursday dismissed claims by a top U.S. State Department official that there was “irrefutable evidence” that the Iranian government was providing arms to Taliban rebels.

“Actually, throughout we have had good relations with Iran and we believe that the security and stability of Afghanistan are also in the interests of Iran,” Abdul Rahim Wardak told The Associated Press.

On Wednesday, Undersecretary of State Nicholas Burns said in Paris that Tehran was directly supplying weapons to the Taliban. He told CNN there was “irrefutable evidence” that arms shipments were coming from Iran’s government.

The State Department later appeared to step back from Burns’ assertion, but stressed that the United States has proof that weapons from Iran were reaching Taliban fighters in Afghanistan.

Tehran has denied the accusations. Wardak, who is attending a NATO defense ministers’ meeting in Brussels, also played down suggestions that Iranian authorities were sending arms shipments to the Taliban.

“There has been evidence of weapons, but it is difficult to link it to Iran. (They) might be from al-Qaida, from the drug mafia or from other sources,” Wardak said.

© 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/19219412/