Thursday, October 25, 2007

House Passes Thought Crime Prevention Bill

Lee Rogers
Rogue Government
October 25, 2007

The U.S. House of Representatives recently passed HR 1955 titled the Violent Radicalization and Homegrown Terrorism Prevention Act of 2007. This bill is one of the most blatant attacks against the Constitution yet and actually defines thought crimes as homegrown terrorism. If passed into law, it will also establish a commission and a Center of Excellence to study and defeat so called thought criminals. Unlike previous anti-terror legislation, this bill specifically targets the civilian population of the United States and uses vague language to define homegrown terrorism. Amazingly, 404 of our elected representatives from both the Democrat and Republican parties voted in favor of this bill. There is little doubt that this bill is specifically targeting the growing patriot community that is demanding the restoration of the Constitution. First let’s take a look at the definitions of violent radicalization and homegrown terrorism as defined in Section 899A of the bill.

The definition of violent radicalization uses vague language to define this term of promoting any belief system that the government considers to be an extremist agenda. Since the bill doesn’t specifically define what an extremist belief system is, it is entirely up to the interpretation of the government. Considering how much the government has done to destroy the Constitution they could even define Ron Paul supporters as promoting an extremist belief system. Literally, the government according to this definition can define whatever they want as an extremist belief system. Essentially they have defined violent radicalization as thought crime. The definition as defined in the bill is shown below.

(2) VIOLENT RADICALIZATION- The term violent radicalization’ means the process of adopting or promoting an extremist belief system for the purpose of facilitating ideologically based violence to advance political, religious, or social change.

The definition of homegrown terrorism uses equally vague language to further define thought crime. The bill includes the planned use of force or violence as homegrown terrorism which could be interpreted as thinking about using force or violence. Not only that but the definition is so vaguely defined, that petty crimes could even fall into the category of homegrown terrorism. The definition as defined in the bill is shown below.

(3) HOMEGROWN TERRORISM- The term homegrown terrorism’ means the use, planned use, or threatened use, of force or violence by a group or individual born, raised, or based and operating primarily within the United States or any possession of the United States to intimidate or coerce the United States government, the civilian population of the United States, or any segment thereof, in furtherance of political or social objectives.

Section 899B of the bill goes over the findings of Congress as it pertains to homegrown terrorism. Particularly alarming is that the bill mentions the Internet as a main source for terrorist propaganda. The bill even mentions streams in obvious reference to many of the patriot and pro-constitution Internet radio networks that have been formed. It also mentions that homegrown terrorists span all ages and races indicating that the Congress is stating that everyone is a potential terrorist. Even worse is that Congress states in their findings that they should look at draconian police states like Canada, Australia and the United Kingdom as models to defeat homegrown terrorists. Literally, these findings of Congress fall right in line with the growing patriot community.

The biggest joke of all is that this section also says that any measure to prevent violent radicalization and homegrown terrorism should not violate the constitutional rights of citizens. However, the definition of violent radicalization and homegrown terrorism as they are defined in section 899A are themselves unconstitutional. The Constitution does not allow the government to arrest people for thought crimes, so any promises not to violate the constitutional rights of citizens are already broken by their own definitions.

SEC. 899B. FINDINGS.

The Congress finds the following:

(1) The development and implementation of methods and processes that can be utilized to prevent violent radicalization, homegrown terrorism, and ideologically based violence in the United States is critical to combating domestic terrorism.

(2) The promotion of violent radicalization, homegrown terrorism, and ideologically based violence exists in the United States and poses a threat to homeland security.

(3) The Internet has aided in facilitating violent radicalization, ideologically based violence, and the homegrown terrorism process in the United States by providing access to broad and constant streams of terrorist-related propaganda to United States citizens.

(4) While the United States must continue its vigilant efforts to combat international terrorism, it must also strengthen efforts to combat the threat posed by homegrown terrorists based and operating within the United States.

(5) Understanding the motivational factors that lead to violent radicalization, homegrown terrorism, and ideologically based violence is a vital step toward eradicating these threats in the United States.

(6) The potential rise of self radicalized, unaffiliated terrorists domestically cannot be easily prevented through traditional Federal intelligence or law enforcement efforts, and requires the incorporation of State and local solutions.

(7) Individuals prone to violent radicalization, homegrown terrorism, and ideologically based violence span all races, ethnicities, and religious beliefs, and individuals should not be targeted based solely on race, ethnicity, or religion.

(8) Any measure taken to prevent violent radicalization, homegrown terrorism, and ideologically based violence and homegrown terrorism in the United States should not violate the constitutional rights, civil rights and civil liberties of United States citizens and lawful permanent residents.

(9) Certain governments, including the United Kingdom, Canada, and Australia have significant experience with homegrown terrorism and the United States can benefit from lessons learned by those nations.

Section 899C calls for a commission on the prevention of violent radicalization and ideologically based violence. The commission will consist of ten members appointed by various individuals that hold different positions in government. Essentially, this is a commission that will examine and report on how they are going to deal with violent radicalization and homegrown terrorism. So basically, the commission is being formed specifically on how to deal with thought criminals in the United States. The bill requires that the commission submit their final report 18 months following the commission’s first meeting as well as submit interim reports every 6 months leading up to the final report. Below is the bill’s defined purpose of the commission. Amazingly they even define one of the purposes of the commission to determine the causes of lone wolf violent radicalization.

(b) Purpose- The purposes of the Commission are the following:

(1) Examine and report upon the facts and causes of violent radicalization, homegrown terrorism, and ideologically based violence in the United States, including United States connections to non-United States persons and networks, violent radicalization, homegrown terrorism, and ideologically based violence in prison, individual or lone wolf’ violent radicalization, homegrown terrorism, and ideologically based violence, and other faces of the phenomena of violent radicalization, homegrown terrorism, and ideologically based violence that the Commission considers important.

(2) Build upon and bring together the work of other entities and avoid unnecessary duplication, by reviewing the findings, conclusions, and recommendations of–

(A) the Center of Excellence established or designated under section 899D, and other academic work, as appropriate;

(B) Federal, State, local, or tribal studies of, reviews of, and experiences with violent radicalization, homegrown terrorism, and ideologically based violence; and

(C) foreign government studies of, reviews of, and experiences with violent radicalization, homegrown terrorism, and ideologically based violence.

Section 899D of the bill establishes a Center of Excellence for the Study of Violent Radicalization and Homegrown Terrorism in the United States. Essentially, this will be a Department of Homeland Security affiliated institution that will study and determine how to defeat thought criminals.

Section 899E of the bill discusses how the government is going to defeat violent radicalization and homegrown terrorism through international cooperation. As stated in the findings section earlier in the legislation, they will unquestionably seek the advice of countries with draconian police states like the United Kingdom to determine how to deal with this growing threat of thought crime.

Possibly the most ridiculous section of the bill is Section 899F which states how they plan on protecting civil rights and civil liberties while preventing ideologically based violence and homegrown terrorism. Here is what the section says.

SEC. 899F. PROTECTING CIVIL RIGHTS AND CIVIL LIBERTIES WHILE PREVENTING IDEOLOGICALLY-BASED VIOLENCE AND HOMEGROWN TERRORISM.

(a) In General- The Department of Homeland Security’s efforts to prevent ideologically-based violence and homegrown terrorism as described herein shall not violate the constitutional rights, civil rights, and civil liberties of United States citizens and lawful permanent residents.

(b) Commitment to Racial Neutrality- The Secretary shall ensure that the activities and operations of the entities created by this subtitle are in compliance with the Department of Homeland Security’s commitment to racial neutrality.

(c) Auditing Mechanism- The Civil Rights and Civil Liberties Officer of the Department of Homeland Security will develop and implement an auditing mechanism to ensure that compliance with this subtitle does not result in a disproportionate impact, without a rational basis, on any particular race, ethnicity, or religion and include the results of its audit in its annual report to Congress required under section 705.’.

(b) Clerical Amendment- The table of contents in section 1(b) of such Act is amended by inserting at the end of the items relating to title VIII the following:

It states in the first subsection that in general the efforts to defeat thought crime shall not violate the constitutional rights, civil rights and civil liberties of the United States citizens and lawful permanent residents. How does this protect constitutional rights if they use vague language such as in general that prefaces the statement? This means that the Department of Homeland Security does not have to abide by the Constitution in their attempts to prevent so called homegrown terrorism.

This bill is completely insane. It literally allows the government to define any and all crimes including thought crime as violent radicalization and homegrown terrorism. Obviously, this legislation is unconstitutional on a number of levels and it is clear that all 404 representatives who voted in favor of this bill are traitors and should be removed from office immediately. The treason spans both political parties and it shows us all that there is no difference between them. The bill will go on to the Senate and will likely be passed and signed into the law by George W. Bush. Considering that draconian legislation like the Patriot Act and the Military Commissions Act have already been passed, there seems little question that this one will get passed as well. This is more proof that our country has been completely sold out by a group of traitors at all levels of government.

American kids, dumber than dirt

Mark Morford
SF Gate
October 24, 2007

I have this ongoing discussion with a longtime reader who also just so happens to be a longtime Oakland high school teacher, a wonderful guy who’s seen generations of teens come and generations go and who has a delightful poetic sensibility and quirky outlook on his life and his family and his beloved teaching career.

And he often writes to me in response to something I might’ve written about the youth of today, anything where I comment on the various nefarious factors shaping their minds and their perspectives and whether or not, say, EMFs and junk food and cell phones are melting their brains and what can be done and just how bad it might all be.

His response: It is not bad at all. It’s absolutely horrifying.

My friend often summarizes for me what he sees, firsthand, every day and every month, year in and year out, in his classroom. He speaks not merely of the sad decline in overall intellectual acumen among students over the years, not merely of the astonishing spread of lazy slackerhood, or the fact that cell phones and iPods and excess TV exposure are, absolutely and without reservation, short-circuiting the minds of the upcoming generations. Of this, he says, there is zero doubt.

Nor does he speak merely of the notion that kids these days are overprotected and wussified and don’t spend enough time outdoors and don’t get any real exercise and therefore can’t, say, identify basic plants, or handle a tool, or build, well, anything at all. Again, these things are a given. Widely reported, tragically ignored, nothing new.

No, my friend takes it all a full step — or rather, leap — further. It is not merely a sad slide. It is not just a general dumbing down. It is far uglier than that.

We are, as far as urban public education is concerned, essentially at rock bottom. We are now at a point where we are essentially churning out ignorant teens who are becoming ignorant adults and society as a whole will pay dearly, very soon, and if you think the hordes of easily terrified, mindless fundamentalist evangelical Christian lemmings have been bad for the soul of this country, just wait.

It’s gotten so bad that, as my friend nears retirement, he says he is very seriously considering moving out of the country so as to escape what he sees will be the surefire collapse of functioning American society in the next handful of years due to the absolutely irrefutable destruction, the shocking — and nearly hopeless — dumb-ification of the American brain. It is just that bad.

Now, you may think he’s merely a curmudgeon, a tired old teacher who stopped caring long ago. Not true. Teaching is his life. He says he loves his students, loves education and learning and watching young minds awaken. Problem is, he is seeing much less of it. It’s a bit like the melting of the polar ice caps. Sure, there’s been alarmist data about it for years, but until you see it for yourself, the deep visceral dread doesn’t really hit home.

He cites studies, reports, hard data, from the appalling effects of television on child brain development (i.e.; any TV exposure before 6 years old and your kid’s basic cognitive wiring and spatial perceptions are pretty much scrambled for life), to the fact that, because of all the insidious mandatory testing teachers are now forced to incorporate into the curriculum, of the 182 school days in a year, there are 110 when such testing is going on somewhere at Oakland High. As one of his colleagues put it, “It’s like weighing a calf twice a day, but never feeding it.”

But most of all, he simply observes his students, year to year, noting all the obvious evidence of teens’ decreasing abilities when confronted with even the most basic intellectual tasks, from understanding simple history to working through moderately complex ideas to even (in a couple recent examples that particularly distressed him) being able to define the words “agriculture,” or even “democracy.” Not a single student could do it.

It gets worse. My friend cites the fact that, of the 6,000 high school students he estimates he’s taught over the span of his career, only a small fraction now make it to his grade with a functioning understanding of written English. They do not know how to form a sentence. They cannot write an intelligible paragraph. Recently, after giving an assignment that required drawing lines, he realized that not a single student actually knew how to use a ruler.

It is, in short, nothing less than a tidal wave of dumb, with once-passionate, increasingly exasperated teachers like my friend nearly powerless to stop it. The worst part: It’s not the kids’ fault. They’re merely the victims of a horribly failed educational system.

Then our discussion often turns to the meat of it, the bigger picture, the ugly and unavoidable truism about the lack of need among the government and the power elite in this nation to create a truly effective educational system, one that actually generates intelligent, thoughtful, articulate citizens.

Hell, why should they? After all, the dumber the populace, the easier it is to rule and control and launch unwinnable wars and pass laws telling them that sex is bad and TV is good and God knows all, so just pipe down and eat your Taco Bell Double-Supremo Burrito and be glad we don’t arrest you for posting dirty pictures on your cute little blog.

This is about when I try to offer counterevidence, a bit of optimism. For one thing, I’ve argued generational relativity in this space before, suggesting maybe kids are no scarier or dumber or more dangerous than they’ve ever been, and that maybe some of the problem is merely the same old awkward generation gap, with every current generation absolutely convinced the subsequent one is terrifically stupid and malicious and will be the end of society as a whole. Just the way it always seems.

I also point out how, despite all the evidence of total public-education meltdown, I keep being surprised, keep hearing from/about teens and youth movements and actions that impress the hell out of me. Damn kids made the Internet what it is today, fer chrissakes. Revolutionized media. Broke all the rules. Still are.

Hell, some of the best designers, writers, artists, poets, chefs, and so on that I meet are in their early to mid-20s. And the nation’s top universities are still managing, despite a factory-churning mentality, to crank out young minds of astonishing ability and acumen. How did these kids do it? How did they escape the horrible public school system? How did they avoid the great dumbing down of America? Did they never see a TV show until they hit puberty? Were they all born and raised elsewhere, in India and Asia and Russia? Did they all go to Waldorf or Montessori and eat whole-grain breads and play with firecrackers and take long walks in wild nature? Are these kids flukes? Exceptions? Just lucky?

My friend would say, well, yes, that’s precisely what most of them are. Lucky, wealthy, foreign-born, private-schooled … and increasingly rare. Most affluent parents in America — and many more who aren’t — now put their kids in private schools from day one, and the smart ones give their kids no TV and minimal junk food and no video games. (Of course, this in no way guarantees a smart, attuned kid, but compared to the odds of success in the public school system, it sure seems to help). This covers about, what, 3 percent of the populace?

As for the rest, well, the dystopian evidence seems overwhelming indeed, to the point where it might be no stretch at all to say the biggest threat facing America is perhaps not global warming, not perpetual warmongering, not garbage food or low-level radiation or way too much Lindsay Lohan, but a populace far too ignorant to know how to properly manage any of it, much less change it all for the better.

What, too fatalistic? Don’t worry. Soon enough, no one will know what the word even means.

Merrill Lynch Reports Biggest Quarterly Loss in Its 93-Year History

Bradley Keoun
Bloomberg
October 25, 2007

Merrill Lynch & Co. reported the biggest quarterly loss in its 93-year history after taking $8.4 billion of writedowns, almost double the firm’s forecast three weeks ago.

The writedowns on subprime mortgages, asset-backed bonds and leveraged loans led to a third-quarter loss of $2.24 billion, or $2.82 a share, six times more than Merrill estimated on Oct. 5. Chief Executive Officer Stanley O’Neal said today that the New York-based firm may sell assets to shore up its balance sheet.

Merrill’s stock fell the most in five years, its credit rating was cut and the perceived risk of default on the company’s bonds rose after O’Neal said the firm misjudged the severity of the decline in debt markets since July. Investors who lauded the 56-year-old CEO for chasing higher returns as the biggest underwriter of securities backed by subprime loans now question his management. O’Neal said the firm increased the writedown after a more “conservative” analysis of its holdings.

“We’re very disappointed,” said Rose Grant, who helps manage about $2 billion at Eastern Investment Advisors in Boston, including Merrill shares. “I don’t think Stan O’Neal will step down, but you do have to look at top management and wonder why they didn’t know the extent of this loss.”

‘Startling’

Standard & Poor’s, Fitch Ratings and Moody’s Investors Service lowered their assessments of Merrill’s credit. S&P cut its rating on Merrill’s senior unsecured debt to A+ from AA-, describing the quarter’s loss as “startling” and citing “management’s miscues” that raised concern about the firm’s risk controls and business strategy.

Financial stocks sank, led by Merrill, which dropped 5.8 percent to $63.22 in New York Stock Exchange trading. Lehman Brothers Holdings Inc., the largest U.S. underwriter of mortgage bonds, declined 1.5 percent to $57.42. Bear Stearns Cos., the second-biggest, fell 2.3 percent to $113.54.

Merrill’s third-quarter revenue fell 94 percent to $577 million, as losses in the fixed-income division overshadowed gains from underwriting stocks and providing merger advice. At Merrill’s retail brokerage, the nation’s biggest with a network of 16,610 financial advisers who cater to individual investors, revenue climbed 23 percent to $3.27 billion.

O’Neal, on a conference call with analysts, said he was “continuing to resize” the firm’s balance sheet. He also said he’s weighing potential divestitures of “non-core” businesses.

BlackRock Stake

The firm owns stakes in companies including BlackRock Inc., the largest publicly traded U.S. fund manager. Merrill is also a passive minority investor in Bloomberg LP, the parent of Bloomberg News.

The BlackRock stake isn’t for sale, O’Neal said on the call. “We want to own this asset for the foreseeable future,” he said. He declined to comment on other investments.

Merrill’s compensation costs fell by 49 percent from a year earlier to $1.99 billion, indicating that the quarter’s losses may reduce year-end bonuses for some of Merrill’s 64,200 employees. The firm said today that it “remains focused on paying its best performing employees competitively.”

Merrill said its holdings of so-called collateralized debt obligations, or CDOs, along with other securities and loans linked to subprime mortgages, lost $7.9 billion of their value in the quarter. CDOs are bonds created from pools of debt securities and loans.

The size of the writedown increased from $5 billion after Merrill conducted “additional analysis” since the firm’s Oct. 5 announcement, O’Neal said on the conference call.

‘Remaining Impact’

“We expect market conditions for subprime mortgage-related assets to continue to be uncertain and we are working to resolve the remaining impact from our positions,” he said in the company statement.

Merrill also wrote down the value of leveraged buyout loans the firm couldn’t sell to investors by $463 million, after underwriting fees.

Taken together, the charges are the biggest ever by a Wall Street firm, said Charles Geisst, a finance professor at Manhattan College in Riverdale, New York.

“It’s safe to say this is the largest writedown” by a U.S. securities firm, said Geisst, the author of “100 Years of Wall Street.” “The only other time we had such big losses was the third-world debt crisis in the 1980s. Even then, the losses didn’t match this one.”

Merrill’s writedown exceeded Citigroup Inc.’s $6.5 billion and increased to more than $30 billion the total third-quarter cost for bad loans and trading losses reported by the world’s biggest securities firms and banks.

Worst Performer

Slumping credit markets have led to the dismissal of industry executives including UBS AG Chief Executive Officer Peter Wuffli and Bear Stearns Co-President Warren Spector, and resulted in Lehman Brothers Holdings Inc., E*Trade Financial Corp., Citigroup and Merrill losing more than 20 percent of their stock market value.

Merrill said it reduced its inventory of CDOs comprised of asset-backed securities by 53 percent during the quarter to $15.2 billion. The firm also whittled down the size of its LBO loan commitments to $31 billion, 42 percent less than at the end of the second quarter. Short-term borrowings climbed 80 percent from the second quarter and shareholders’ equity declined 9.6 percent.

The company’s shares dropped as low as $61.40 today in New York trading, the biggest decline since Sept. 17, 2001, according to Bloomberg data.

The stock is the worst performer among the five biggest U.S. securities firms this year, followed by Bear Stearns, where two hedge funds lost $1.6 billion of clients’ money. Merrill has dropped about 32 percent, and Bear Stearns has fallen 30 percent.

Investors Flee

Goldman Sachs Group Inc., the biggest securities firm by market value, has gained 13 percent. No. 2 Morgan Stanley is down 7 percent. All the companies are based in New York.

Credit-default swaps tied to Merrill Lynch bonds rose 5 basis points to 95 basis points, according to Phoenix Partners Group in New York. That’s more than double where they were two weeks ago and almost six times the spread at the beginning of the year. The cost of the swaps, which are contracts protecting payments on bonds, rises as the perception of credit quality worsens.

Merrill, the third-biggest securities firm, is the only one of Wall Street’s five largest to report a loss from the credit contraction. Investor flight from subprime mortgage bonds and related debt left the company with inventories of loans and securities that had to be written down to depressed market prices.

‘Serious Embarrassment’

“If you can’t guide toward a reasonable expectation over two weeks, clearly you’ve got bigger problems,” said William Fitzpatrick, a financial-services analyst at Johnson Asset Management in Racine, Wisconsin, which oversees $1.7 billion and does not own Merrill shares.

Goldman reported a 79 percent increase in profit for the three months ended Aug. 31 after betting on a drop in prices of securities tied to home loans. Morgan Stanley said profit from operations fell 7 percent in the quarter.

Earlier this month, Merrill fired Osman Semerci, the head of its fixed-income trading division, as well as Dale Lattanzio, one of Semerci’s top U.S. deputies. Merrill also severed ties with Dow Kim, its former co-head of trading and investment-banking, who oversaw fixed-income trading until May, when he left to start his own hedge fund.

“This is a serious embarrassment for O’Neal,” said James Ellman, president of San Francisco-based Seacliff Capital in San Francisco, which oversees more than $200 million.

Skeletons

Merrill said in an Oct. 5 statement that it also had to write off $100 million related to First Franklin Financial Corp., a home-lending company that it bought for $1.3 billion on Dec. 30.

Investors’ refusal to finance mortgages with a high risk of default has made subprime lending unprofitable, forcing more than 110 companies to close, file for bankruptcy or put themselves up for sale since the beginning of 2006. Current and former clients of San Jose, California-based First Franklin say the unit is now barely taking loan applications.

“We’ve got more skeletons to find out about, because the credit cycle has yet to play out,” said Jon Fisher, who helps oversee $22 billion at Fifth Third Asset Management and doesn’t own Merrill shares. “This isn’t over in just a year.”

US home sales hit fresh lows, unsold properties flood market

Brisbane Times
October 25, 2007

Sales of US homes and apartments tumbled a hefty 8.0 percent in September extending one of the nation’s worst housing slumps in decades, an industry group said Wednesday.

The National Association of Realtors (NAR) said in a monthly snapshot that sales of existing homes and apartments fell to a seasonally adjusted rate of 5.04 million units in September from 5.48 million in August.

The drop was worse than expected. Most economists had only expected sales to decline to around 5.25 million. August sales were revised lower from an original tally of 5.50 million homes.

Stripping out apartment turnover, sales dived to their lowest level since January 1998.

Analysts said the grim news boosts the odds that the Federal Reserve will cut interest rates for the second time in as many months at a policy meeting next Wednesday.

The depth of the housing depression was underlined by an annual reading which showed sales of homes and apartments across the United States have plummeted a dramatic 19.1 percent from September 2006.

The sales slowdown has pushed home prices lower in many cities in the past 12 months in a market downturn which has also forced many mortgage lenders out of business.

The national median existing-home price for all housing types fell 4.2 percent from a year ago to 211,700 US dollars.

The glut of unsold homes swamping the market rose 0.4 percent at the end of September to 4.40 million, marking a 10.5-month supply at the current sales pace.

Excluding apartments, the number of unsold homes flooding the market has spiked to its highest level since February 1988.

“Existing homes sales fell sharply in September,” said Stephen Gallagher, an economist at Societe Generale.

“Potential buyers, those without credit obstacles, had plenty of reason to wait and see hoping for greater supply or declining prices,” Gallagher said.

Economists are worried that the housing slowdown could put a brake on US economic growth.

“Until the federal government takes affirmative steps to rebuild the mortgage and bond markets with meaningful reforms, home prices will continue weak, and the economy will remain at risk,” said Peter Morici, an economist at the University of Maryland.

“Tipping from 1.5 percent growth into recession is easily done. It takes no more than a sneeze from the Middle East or some kind of currency crisis,” Morici said, referring to his forecast for fourth-quarter growth.

The Fed slashed borrowing costs last month and many economists expect the central bank to implement a fresh cut in its federal funds short term interest rate, presently pegged at 4.75 percent, next week.

US Treasury Secretary Henry Pauslon warned last week that the housing woes could see over one million homes repossessed this year as many Americans fail to meet their mortgage payments.

Tens of thousands of Americans with poor finances were sold “subprime” mortgages during the housing boom which ran out of steam in early 2006.

Such mortgages were often marketed with low “teaser” rates, many of which are due to reset to higher rates in the coming year. Economists fear already over-stretched borrowers are at risk of losing their homes because they will not be able to meet increased mortgage payments.

The depression is also taking a toll on corporate America.

Merrill Lynch, the giant Wall Street investment bank, disclosed Wednesday it had been forced to writeoff 7.9 billion US dollars in losses largely stemming from soured mortgage investments.

Other banks have also sustained big losses from mortgage-backed securities.

And America’s biggest mortgage lender, Countrywide Financial, said Tuesday it was offering new terms to tens of thousands of customers to stave off the risk of foreclosures, with loans totalling around 16 billion US dollars.

Home sales fell the most in the northeast of the country, dropping 10 percent in September, followed by lesser declines in the West, Midwest and South.

Rate fears undermine dollar

Peter Garnham
Financial Times
Thursday October 25, 2007

The dollar remained on the back foot on Thursday as the prospect of further cuts in US interest rates continued to weigh on the currency.

Analysts said weak US housing figures released on Wednesday, combined with poor third-quarter results from Merrill Lynch, the US banking group, had added to the gloom surrounding the prospects for the US economy.

Lee Hardman, currency economist at the Bank of Tokyo-Mitsubishi UFJ, said although markets were now fully pricing a 25 basis-point cut at the Federal Reserve’s meeting on October 31, the potential for a 50 point cut should not be ruled out given the rapidly deteriorating conditions in the housing market and dislocated financial market conditions.

“In an environment pointing to a pronounced slowdown in US economic growth and additional monetary easing in the US, the dollar is likely to come under further downward pressure,” he said.

The dollar eased 0.1 per cent to $1.4277 against the euro, within a cent of the record low around $1.4350 it hit against the single currency on Monday.

The euro was also supported as the German Ifo index of business sentiment fell by less than expected in September.

“The survey supports our view that, while the German recovery has passed its peak, growth remains relatively healthy for now,” said Jennifer McKeown at Capital Economics.

The dollar also dropped 0.2 per cent to SFr1.1695 against the Swiss franc and 0.2 per cent to C$0.9667 against the Canadian dollar.

However, the pound eased 0.1 per cent to $2.0480 against the dollar and fell 0.2 per cent to £0.6969 against the euro after the Bank of England warned that the UK financial system remained vulnerable to new shocks from the global credit squeeze.

Hans Redeker at BNP Parisbas said the report suggested that the UK economy was more vulnerable than recent speeches by member of the central bank’s monetary policy committee and various third-quarter UK economic data releases might have suggested.

Full article here.

Terror watch list swells to more than 755,000

Mimi Hall
USA TODAY
Thursday October 25, 2007

WASHINGTON — The government's terrorist watch list has swelled to more than 755,000 names, according to a new government report that has raised worries about the list's effectiveness.

The size of the list, typically used to check people entering the country through land border crossings, airports and sea ports, has been growing by 200,000 names a year since 2004. Some lawmakers, security experts and civil rights advocates warn that it will become useless if it includes too many people.

"It undermines the authority of the list," says Lisa Graves of the Center for National Security Studies. "There's just no rational, reasonable estimate that there's anywhere close to that many suspected terrorists."

The exact number of people on the list, compiled after 9/11 to help government agents keep terrorists out of the country, is unclear, according to the report by the Government Accountability Office (GAO). Some people may be on the list more than once because they are listed under multiple spellings.

Senate Homeland Security Committee Chairman Joe Lieberman, D-Conn., who plans a hearing on the report today, says "serious hurdles remain if (the list) is to be as effective as we need it to be. Some of the concerns stem from its rapid growth, which could call into question the quality of the list itself."

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About 53,000 people on the list were questioned since 2004, according to the GAO, which says the Homeland Security Department doesn't keep records on how many were denied entry or allowed into the country after questioning. Most were apparently released and allowed to enter, the GAO says.

Leonard Boyle, director of the FBI's Terrorist Screening Center, which maintains the list, says in testimony to be given today that 269 foreigners were denied entry in fiscal 2006.

The GAO report also says:

•The Transportation Security Administration (TSA) could not specify how many people on its no-fly list, which is a small subset of the watch list, might have slipped through screening and been allowed on domestic flights.

•TSA data show "a number of individuals" on the no-fly list passed undetected through screening and boarded international flights bound for the United States. Several planes have been diverted once officials realized that people named on the watch lists were on board.

•Homeland Security has not done enough to use the list more broadly in the private sector, where workers applying for jobs in sensitive places such as chemical factories could do harm.

Boyle also urges that the list be used by for screening at businesses where workers could "carry out attacks on our critical infrastructure that could harm large numbers of persons or cause immense economic damage."

But the sheer size of the watch list raised the most alarms.

"They are quickly galloping towards the million mark — a mark of real distinction because the list is already cumbersome and is approaching absolutely useless," said Tim Sparapani of the American Civil Liberties Union.

Sen. Susan Collins, R-Maine, says "creating and maintaining a comprehensive terrorist watch list is an enormous endeavor fraught with technical and tactical challenges."

The report, she says, "underscores the need to make the watch lists more accurate, to improve screening procedures at airports and the ports of entry, and to provide individuals with the ability to seek redress if they believe they have been wrongfully targeted."

Buffett sees dollar weakness

Angela Moon
Reuters
Thursday October 25, 2007

Billionaire investor Warren Buffett said on Thursday he expected the dollar to weaken further, adding that South Korean stocks offered better value than other world markets.

Buffett, worth $52 billion according to Forbes magazine in March, said his Berkshire Hathaway (BRKa.N: Quote, Profile, Research) company is still on the hunt for bargains as the U.S. subprime mortgage crisis plays out.

"We are still negative on the dollar. We bought stocks in companies that are earning their money in other currencies," he told reporters during a visit to Berkshire's Korean cutting tool maker subsidiary, TaeguTec.

Berkshire Hathaway, which owns more than 70 businesses and has some $100 billion of stock and bond investments, has a stake in only one listed South Korean company, the world's fourth-biggest steelmaker POSCO (005490.KS: Quote, Profile, Research). Berkshire said in March it held a 4 percent stake in POSCO as of the end of 2006.

"We are gaining foreign currency exposure that we like," said the veteran investor, known as the "Oracle of Omaha" for his astute investments.

The U.S. currency has lost 23 percent against the South Korean won since the end of 2003, hit by accumulating current account surpluses in South Korea and a steady inflow of portfolio investment into the country's financial markets.

International Monetary Fund Managing Director Rodrigo Rato said on Monday the U.S. currency was still overvalued and that there was room for further depreciation.

Full article here.

Bill Clinton Speech Interrupted By 9/11 Truthers

Kare 11
Thursday October 25, 2007

Comment: Clinton is right - 9/11 wasn't an inside job, and Bill never had sex with that woman.

Former President Bill Clinton predicted Tuesday that his wife, Hillary Rodham Clinton, is likely to have a more difficult time winning the Democratic presidential nomination than she would the general election.

"I wouldn't be surprised if the primary is tougher than the general," the former president said at a Minneapolis fundraiser for his wife's campaign, arguing that she's more immune to attacks from Republicans because "they don't have anything new to say about her."

Because of the current political climate, Clinton said Democrats are in prime position to reclaim the presidency.

"I think we can run anybody and win if we run a smart campaign," Clinton said. That gives Democrats the opportunity to pick the most qualified candidate for the job, he said, making the pitch that Hillary Clinton is that candidate.

Clinton's 50-minute speech, which started about an hour behind schedule, was derailed briefly by several hecklers in the audience who shouted that the 2001 terrorist attacks were a fraud. Rather than ignoring them, Clinton seemed to relish a direct confrontation.

"A fraud? No, it wasn't a fraud," Clinton said, as the crowd cheered him on. "I'll be glad to talk to you if you shut up and let me talk."

When another heckler shouted that the attacks were an "inside job," Clinton took even greater umbrage.

"An inside job? How dare you. How dare you. It was not an inside job," Clinton said. "You guys have got to be careful, you're going to give Minnesota a bad reputation."

Bush Budget Request Raises Fears Of Iran Strike, Increases Funding For ‘Massive’ ‘Bunker Buster’

Think Progress
Thursday October 25, 2007

In light of the administration’s increasingly threatening rhetoric on Iran, CQ reports that members of Congress are worried by Bush’s recent budget proposal. In particular, they cite his request to equip B-2 “stealth” bombers with a new 30,000-pound bunker buster as a “sign of plans for an attack on Iran“:

Buried in the $196.4 billion supplemental war spending proposal that Bush submitted to Congress on Oct. 22 is a request for $88 million to modify B-2 bombers so they can drop a Massive Ordnance Penetrator, or MOP, a conventional bomb still in development that is the most powerful weapon designed to destroy targets deep underground.

A White House summary accompanying the supplemental spending proposal said the request for money to modify �B-2s to carry the bombs came in response to “an urgent operational need from theater commanders.” […]

Previous statements by the Defense Department and the program’s contractors, along with interviews with military experts, suggest the weapon is meant for the kind of hardened targets found chiefly in Iran.

The B-2 bomber and MOPs are reportedly choice weapons for strikes against Iranian nuclear facilities. In January, the BBC reported that the administration had drawn up plans for “long range B2 stealth bombers” to “drop ‘bunker-busting‘ bombs” in an effort to penetrate, for example, the Natanz enrichment facility in Iran.

The MOP has been in development for several years. After its completion, a U.S. military officer proudly described the destructive power of the bunker buster, specifically saying it could be used against Iran:

The U.S. has a 14-ton super bomb more destructive than the vacuum bomb just tested by Russia, a U.S. general said Wednesday.

The statement was made by retired Lt. General McInerney, chairman of the Iran Policy Committee, and former Assistant Vice Chief of Staff of the Air Force.

McInerney said the U.S. has “a new massive ordnance penetrator that’s 30,000 pounds, that really penetrates … Ahmadinejad has nothing in Iran that we can’t penetrate.”

Mike Kuykendall

This post was submitted through our Blog Fellows program. Make your own contribution — and get paid for it — by clicking here.

U.S. "undoubtedly in recession": Jim Rogers

Reuters
Thursday October 25, 2007

The United States has entered a recession, according to highly-regarded investor Jim Rogers, who told Britain's Daily Telegraph newspaper on Wednesday he was switching out of the dollar and into yen, the yuan and the Swiss franc.

The veteran investor, who predicted the 1999 commodities rally, also said he was still bullish about surging Chinese stock markets despite worries over a bubble.

Fears are growing over the health of the U.S. economy after the fallout from the subprime mortgage market crisis and the global credit crunch it triggered.

The U.S. Federal Reserve has already slashed borrowing costs by 50 basis points to 4.75 percent to try and shore up the world's biggest economy and is widely expected to lower interest rates again next week.

"The US economy is undoubtedly in recession," Rogers told the Telegraph in Hong Kong in an article published on its Website.

"Many parts of industry are actually in a state worse than recession. If it were not for (Federal Reserve Chairman Ben) Bernanke putting huge amounts of money into the market, the stock market would probably be down much more than it is."

Rogers, who co-founded the Quantum Fund with billionaire investor George Soros in the 1970s, said it made sense to desert the dollar.

"All other things being equal during the next six months, that's the way I will go," he said. "But if the Swiss franc goes through the roof, I probably won't put money into the Swiss franc."

And he dismissed worries for now that surging Chinese equities had formed a bubble.

Full article here.

FBI agents shoot dead 'arsonist' as police reveal California fires were started deliberately

UK Daily Mail
Thursday October 25, 2007

A suspected arsonist was shot dead by police as FBI agents revealed several of the fires that have forced one million people from their homes in southern California had been started deliberately.

Police said officers killed a man during a chase as he tried to escape when challenged in the city of San Bernardino.

A motorcyclist who police say set a small fire in the foothills of the San Bernardino Mountains was arrested but investigators said they did not know whether he was connected to any of the larger fires.

FBI agents confirmed that a huge fire in the town of Santiago in Orange County that destroyed 10 homes was started on purpose in two different places.

A £35,000 reward was offered for information to trace the arsonists today as a break in the weather finally allowed firefighters to make progress after virtually conceding defeat to the series of wildfires that have been fanned by fierce winds.

President Bush arrived in California after declaring the country's worst nightmare since Hurricane Katrina a "major disaster".

Insurance companies estimated that property worth more than £600 million has been destroyed in four days of fires.

More than 1,500 homes and more than 700 square miles of land have been scorched across five counties, from Ventura in the north all the way down to Mexico. The office of emergency services said 28,000 homes were still threatened.

Many residents along the coastline from Malibu to San Diego, through the inland canyons to the mountain playgrounds of Lake Arrowhead and Running Springs, returned home last night to find just burning rubble.

Thousands more waited anxiously in makeshift evacuation camps, not knowing if they had lost everything they own.

The improving weather has allowed for a greater aerial assault on the flames with helicopters and air tankers dropping tons of water.

Just one death has been directly attributed to the fires, a man who refused to leave his home, although six others died during the evacuations and about 50 people have been injured, including 20 firefighters.

Police to get power to spy without warrant

Andrew Clennell
Sydney Morning Herald
Thursday October 25, 2007

POLICE and other investigative bodies will be able to bug or track people for up to five days without needing a warrant, under legislation the State Government describes as "the biggest ever shake-up of surveillance laws in NSW law enforcement history".

Under the Surveillance Devices Bill police will also be given warrants to use the listening and tracking devices and hidden cameras for 90 days, instead of 21, to "cut red tape", the Premier, Morris Iemma, said in Parliament yesterday.

The president of the NSW Council of Civil Liberties, Cameron Murphy, said the legislation would provide the sort of powers that "allowed police corruption in this state to grow".

"This is about reducing oversight," he said. "Where is the evidence this is necessary? Police have been quite easily able to obtain warrants."

Police would be able to call for a "retrospective warrant" if there was an "imminent threat of serious violence to a person or substantial damage to property", Mr Iemma said.

They could use the devices for five days before applying to a judge for a warrant, he said.

The legislation would cover "listening devices, optical devices, data surveillance used to record and monitor information on a computer, and tracking devices which monitor the location of a person or object", he said.

Some new technology that has been unregulated will fall under the changes, which affect the police, Police Integrity Commission, Independent Commission Against Corruption and NSW Crime Commission.

Yesterday the Attorney-General, John Hatzistergos, referred to the use of isotopes.

"Apparently, with the technology now, you can have isotopes sprayed on the person of someone and, under this legislation, you're able to have that authorised for tracking purposes," Mr Hatzistergos said.

"That's a new technology. It's just one of the examples [where] a person's movement is able to be tracked … a lot of this kind of material is particularly familiar to the Crime Commission."

Warrants for installing listening and monitoring devices will be simplified so police can use several devices under one warrant. At present a warrant is required for each device.

The laws will allow the use of surveillance devices on vehicles, containers and boxes that might be moved in a drug operation, and on people, and will allow someone to be monitored if they move interstate.

Mr Iemma said yesterday: "Crooks are getting smarter and technology is getting more advanced, and these laws guarantee police will remain ahead of the game.

"All other Australian states and territories are signing up to these laws. This means that law enforcement agencies in every state and territory will be working off the same book.

"All other warrants [other than emergency warrants] will also go to the Supreme Court except tracking devices, which police will be able to obtain from a magistrate."

Mr Iemma mentioned investigations in which listening devices had helped in drug raids and arrests for murder.

Mr Murphy said some of the technology was "frightening" and asked why police would need a warrant for 90 days.

A spokeswoman for the Attorney-General said the bill had yet to be finalised and would be introduced in a fortnight.

A Ban on Ron Paul Supporters

Kate Phillips
New York Times
Thursday October 25, 2007

The right-leaning side of the blogosphere, and especially some of the leading Repub-blogs, have been ablaze over the decision by RedState.com to bar comments and diaries from those enthusiastically Web-savvy and driven backers of Representative Ron Paul.

To recap first of all, Leon Wolfe over at RedState, under a headline that included “Life Is Really Not Fair,” wrote on Monday:

Effective immediately, new users may *not* shill for Ron Paul in any way shape, form or fashion. Not in comments, not in diaries, nada. If your account is less than 6 months old, you can talk about something else, you can participate in the other threads and be your zany libertarian self all you want, but you cannot pimp Ron Paul. Those with accounts more than six months old may proceed as normal.

Now, I could offer a long-winded explanation for *why* this new policy is being instituted, but I’m guessing that most of you can probably guess. Unless you lack the self-awareness to understand just how annoying, time-consuming, and bandwidth-wasting responding to the same idiotic arguments from a bunch of liberals pretending to be Republicans can be. Which, judging by your comment history, you really don’t understand, so allow me to offer an alternate explanation: we are a bunch of fascists and we’re upset that you’ve discovered where we keep the black helicopters, so we’re silencing you in an attempt to keep you from warning the rest of your brethren so we can round you all up and send you to re-education camps all at once.

(Early this year, RedState, which features several bloggers, was bought by Eagle Publishing, a company that also owns Regnery Publishing and Human Events, among other ventures that cater to conservative Republicans.)

Full article here.

I, Podhoretz: Mr. World War 4 Tutors Giuliani

Jason Horowitz
NY Observer
Thursday October 25, 2007

Norman Podhoretz believes that America needs to go to war soon with Iran. As far as he knows, Rudy Giuliani thinks the same thing.

“I was asked to come in and give him a briefing on the war, World War IV,” said Mr. Podhoretz, a founding father of neoconservatism and leading foreign policy adviser to Mr. Giuliani. “As far as I can tell there is very little difference in how he sees the war and how I see it.”

During a long interview this week in his bookcase-lined East 81st Street home, Mr. Podhoretz, 77, explained the very straightforward proposition he has been proposing to Mr. Giuliani from the start of the campaign: “The choice before us is either bomb those nuclear facilities or let them get the bomb.”

In the apartment, a Presidential Medal of Freedom awarded by President Bush was displayed next to records of Bach and Beethoven, tin African sculptures and Japanese furniture. A picture of his son, John Podhoretz, the new editor of Commentary, which he himself edited for decades, was stuck to the refrigerator. Two of his grown Israeli grandchildren, one in a tank top, the other in an Atari T-shirt, watched television in John’s old room.

In July, Mr. Giuliani named Mr. Podhoretz a senior adviser on a foreign policy team subsequently stockpiled with more neoconservatives, including Middle East historian Daniel Pipes and Paul Wolfowitz acolyte Michael Rubin.

To Mr. Podhoretz’s obvious admiration, the Giuliani campaign seems to have become something of a lifeboat for neoconservatives shipwrecked after the Bush administration’s failures in Iraq.

“Well, I’m not finished,” said Mr. Podhoretz, who has just come out with a new book titled World War IV: The Long Struggle Against Islamofascism.

Full article here.

Iraqi blood is 'on your hands,' anti-war protester tells Condi

David Edwards and Nick Juliano
Raw Story
Wednesday, October 24, 2007

Condoleezza Rice appeared agitated but generally unfazed when an anti-war protester waved blood-red hands in her face, accusing the secretary of state of being a "war criminal."

"Blood of millions of Iraqis is on your hands," the protester told Rice, who was President Bush's national security adviser when he decided to invade Iraq.

"War criminal! ... War Criminal!" the black-clad, "blood"-soaked protester screamed as authorities dragged her from a hearing room on Capitol Hill. "Take her to the Hague."

Rice was testifying to the House Foreign Relations Committee Wednesday, where she continued what some critics see as the Bush administration's drumbeat to war with Iran.

"We are very concerned that the policies of Iran constitute perhaps the single greatest challenge to American security interests in the Middle East and around the world," Rice said.

Although video of Wednesday's hearing shows only one protester getting in Rice's face, Capitol Police quickly removed several members of the anti-war group Code Pink who appeared to have caused no disturbance. (Code Pink members have disrupted administration officials' testimony in the past.)

"Stop, you're hurting me, what are you doing," one of the women yelled as she was forced from the Congressional hearing.

Peace activists denied entry to try again

KAREN MATTHEWS
Globe and Mail
Wednesday, October 24, 2007

NEW YORK — U.S. anti-Iraq war activists Ann Wright and Medea Benjamin were outraged when they learned they were denied entry to Canada because their names were on an FBI crime database meant to track potential terrorists, fugitives and violent felons.

They were told that they would have to apply for “criminal rehabilitation” and pay $200 if they ever wanted to visit again.

Now the two peace activists say they will try again to enter Canada on Thursday.

The activists and their supporters presented petitions at Canadian consulates in several U.S. cities on Tuesday demanding that Canada, a country that welcomed American draft resisters during the Vietnam War, reverse the policy that is keeping foes of the Iraq war from visiting there.

“The Bush administration has convinced the Canadian government to do its dirty work, to deny entry to people who are dissenting against Bush administration policies,” said Ms. Wright, a retired U.S. Army colonel and diplomat who was turned back at the border with Benjamin, a member of the anti-war group Code Pink.

Ms. Wright gave petitions that she said were signed by 15,000 people to an official at the Canadian consulate in Manhattan on Tuesday. Activists left copies of the petitions at Canadian consulates in Washington, Chicago, San Francisco and Los Angeles as well.

The two women walked into Canada at Niagara Falls on Oct. 3 and were turned back.

Ms. Wright said the policy appears to be new, as she has travelled to Canada twice in recent years without incident.

FULL STORY: CLICK HERE

China says U.S. missile shield threatens global stability

RIA Novosti
Wednesday, October 24, 2007

HARBIN (China), October 24 (RIA Novosti) - The placement of U.S. missile defenses in Europe will not ease global security concerns but will undermine the global strategic balance, the Chinese foreign minister said Wednesday.

Washington insists that the deployment of a radar in the Czech Republic and a missile interceptor base in Poland will protect the U.S. and its NATO allies from potential missile attacks coming from Iran or North Korea, despite Russia's objections.

Speaking at a news conference after a meeting between foreign ministers of China, Russia and India, Yang Jiechi expressed hope that a new concept of global security, characterized by mutual trust and equal rights, could be established in the future.

The Harbin meeting is the third stand-alone meeting of the foreign ministers from the three countries. New Delhi hosted the previous two meetings, which some experts and media said could be aimed at setting up a military-political alliance to counter the influence of the United States in the region.

Russia's Foreign Minister Sergei Lavrov said at the news conference in Harbin that Russia has no plans to form a military union with India and China.

He said Moscow is developing dialogue with the two Asian countries through bilateral as well as trilateral formats, within the framework of the Shanghai Cooperation Organization and other structures.

"We are striving to jointly resolve key issues of security through multilateral dialogue, primarily by political and diplomatic means," Lavrov said.

"There is no alternative to a multi-polar and equal-rights cooperation in the world if we want to respond effectively to the existing threats," he said.