Tuesday, November 06, 2007

Saudi King: We Warned U.K. Of 2005 Bombing

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Saudi King: We Warned U.K. Of 2005 Bombing
LONDON, Oct. 29, 2007
(AP) King Abdullah of Saudi Arabia accused Britain on Monday of failing to act on information the Saudis provided that might have averted London's deadly July 7, 2005, suicide bombings.

Abdullah told the British Broadcasting Corp. that Britain was not doing enough in the war on terror. He made the comments in Jeddah, Saudi Arabia, hours before arriving in London for a state visit.

"I believe that most countries are not taking this issue too seriously, including, unfortunately, Great Britain," he said through a translator. "We have sent information to Great Britain before the terrorist attacks in Britain, but unfortunately no action was taken and it may have been able to avert the tragedy."

The king did not specify what information Saudi Arabia provided. However, the BBC reported Abdullah's remark was linked to a long-held Saudi leadership claim that it gave Britain information that might have averted the 2005 attack.

Months before the July 7, 2005, attack in which four suicide bombers killed 52 people and wounded hundreds on London's transit network, Saudi Arabia told the British and U.S. governments that it had arrested a young Saudi man who confessed to raising money for a terrorist attack in crowded areas of the British capital, officials have told The Associated Press.

The Saudis obtained information that the attack would involve explosives and a Syrian contact for financing, and that at least some of the four attackers would be British citizens, according to officials in several countries with direct access to the information. They spoke on condition of anonymity because the information was classified.

The officials said at the time that the investigation had not connected any players from the July 2005 attacks to the original Saudi warning and that the information provided in December 2004 did not provide attackers' names, a date, specific location or time of attack.

But they said the information gleaned from the suspect after he was captured returning to Saudi Arabia was detailed enough to heighten British concerns about the possibility of an attack around July 2005 in crowded sections of London, including in nightclubs.

In a 2006 report, Britain's Intelligence and Security Committee, a panel of lawmakers that reports to parliament, said it had examined Saudi Arabia's claims and found "some information was passed to the (intelligence) agencies about possible terrorist planning for an attack in the U.K." The report said, "It was examined by the agencies who concluded that the plan was not credible" and there had been no relevant advance warnings about the bombings.

On another topic, the king said he believes that a forthcoming Middle East peace conference in the United States will fail unless the Palestinians' needs are taken more seriously.

International pressure is growing on Israel and the Palestinians to agree on a common vision of a final peace deal before a Middle East peace conference. The meeting is expected to take place in Annapolis, Md., in November or December.

"We are hearing that our Palestinian brethren are not very optimistic about the progress that has been achieved thus far," the king said.

"And I believe that unless a serious effort is put into this in order to reach agreements that satisfy the Palestinians, and the Arab world and the Islamic world, then I believe the conference may not be successful."

Human rights activists criticized the decision to permit Abdullah's visit - the first by a Saudi monarch in 20 years.

Kate Allen, Amnesty International's British director, said Prime Minister Gordon Brown should "make absolutely clear that the extent and severity of human rights abuses in King Abdullah's country are totally unacceptable."

The acting leader of Britain's opposition Liberal Democrats, Vince Cable, said he will boycott all ceremonial events during the king's four-day visit to protest the kingdom's human rights record and other issues.

The king's visit will include a banquet held by Queen Elizabeth II and a meeting with David Cameron, leader of the main opposition Conservative Party.

Brown's office did not say Monday whether he would raise human rights issues with the king. But it praised Saudi Arabia for recently establishing a human rights council, holding local council elections and suggesting that women may soon get the right to vote.


© MMVII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

THE RECORD ON CURVEBALL

THE RECORD ON CURVEBALL

Declassified Documents and Key Participants Show the Importance of Phony Intelligence in the Origins of the Iraq War

National Security Archive Electronic Briefing Book No. 234
Edited by John Prados

Posted - November 5, 2007

For more information contact:
John Prados - 202/994-7000


Washington, DC, November 5, 2007 - CBS News’ 60 Minutes exposure last night of the Iraqi agent known as CURVEBALL has put a major aspect of the Bush administration’s case for war against Iraq back under the spotlight.

Rafid Ahmed Alwan’s charges that Iraq possessed stockpiles of biological weapons and the mobile plants to produce them formed a critical part of the U.S. justification for the invasion in Spring 2003. Secretary of State Colin L. Powell’s celebrated and globally televised briefing to the United Nations Security Council on February 5, 2003, relied on CURVEBALL as the main source of intelligence on the biological issue.

Today the National Security Archive posts the available public record on CURVEBALL’s information derived from declassified sources and former officials’ accounts.

While most of the documentary record on the issue remains classified, the materials published here today underscore the precarious nature of the intelligence gathering and analytical process, and point to the existence of doubts about CURVEBALL’s authenticity before his charges were featured in the Bush administration’s public claims about Iraq.


Electronic Briefing Book
The CURVEBALL Affair

by John Prados

On February 5, 2003, Secretary of State Colin Powell made a dramatic presentation before the United Nations Security Council, detailing a U.S. bill of particulars alleging that Iraq possessed weapons of mass destruction that threatened not only the Middle East, but the rest of the world. Unbeknownst to the public at the time, a key part of the U.S. case—relating to biological weapons—was based on the direct knowledge of a single agent known as CURVEBALL, whose credibility had previously been cast in serious doubt.

CBS News’ 60 Minutes is now reporting the identity of the agent as one Rafid Ahmed Alwan, (Note 1) who appeared in a German refugee center in 1999 and brought himself to the attention of German intelligence. CBS News describes Alwan as “a liar … a thief and a poor student instead of the chemical engineering whiz he claimed to be.” (Note 2) If accurate, the CBS report raises even more troubling questions about the basis for the Bush administration’s decision to go to war in Iraq, as well as more general considerations about the relationship between intelligence and the policy process.

By way of background to this latest revelation, the National Security Archive is reproducing the existing public record on CURVEBALL as derived from declassified records, official inquiries and former officials’ accounts. The documents below are a small fraction of the full record, which remains almost entirely classified. The National Security Archive has filed Freedom of Information Act requests for these still-secret materials and will post them as they become available.

The public record as of this posting, while miniscule, nevertheless has an important story to tell, the centerpoint of which is Powell’s speech, which represented the Bush administration’s most powerful public argument leading to the decision to invade Iraq.

Powell’s address, modeled after Adlai Stevenson’s vivid appearance before the same body in 1962 during the Cuban missile crisis, was punctuated by a glossy slide presentation and show-and-tell devices including a vial of powder which he held up before his audience, declaring that if it were a biological weapon it would be enough to kill thousands of people. Saddam Hussein, Powell forcefully asserted, possessed stockpiles of such weapons and the infrastructure to produce them. (Note 3)

According to both of the major official U.S. investigations into Iraq’s weapons of mass destruction (WMD) programs—by the so-called Silberman-Robb Commission and the Senate Select Committee on Intelligence (Note 4)—Powell based this particular claim on data gathered by the CIA, which in turn relied principally on information it had obtained indirectly from CURVEBALL. (See excerpts from both reports below.)

Secretary Powell was concerned that in his Security Council briefing he use only completely authentic data. To ensure this, he conducted an extensive — and unprecedented—review of each data element that might be included in the U.N. speech. This process took days and was performed on a continuous basis in a conference room at CIA headquarters in Langley, Virginia. Powell relied upon his chief of staff, Lawrence Wilkerson, and a team from the State Department during this process. Participating CIA officers were provided by agency Director George J. Tenet or his deputy, John E. McLaughlin, with substantive specialists presenting relevant items in their fields of expertise. These meetings have usually been presented from the perspective of White House officials, especially vice-presidential aide I. Lewis (“Scooter”) Libby and Deputy National Security Adviser Stephen Hadley, who were reported as being intent on inserting a particular menu of charges into the Powell speech. But the decision to include the CURVEBALL information was also made here. (Note 5)

This process began on January 29, the day after President George W. Bush’s State of the Union address, which had also included the claim that Iraq possessed mobile biological weapons plants. Unknown to the State Department reviewers, CIA officers elsewhere were simultaneously in an uproar over the CURVEBALL material. (Note 6) In answer to queries from CIA manager Margaret Henoch, the German intelligence service, which had Alwan in their charge, refused to certify the CURVEBALL data and denied CIA access to the original transcripts recording the conversations. Thus, the agency never had direct contact with CURVEBALL, who in fact had only been seen once by an American, an official of the Defense Intelligence Agency (DIA), who had harbored doubts about the man. The CIA was working strictly from DIA translations of German texts. Henoch feared using third-hand information that contained transliteration problems. Her suspicions were further aroused after it became clear the German service itself doubted CURVEBALL’s reliability.

The intelligence backstory needs a brief sketch here because it bears on the question of CURVEBALL’s veracity. Alwan arrived in Munich from North Africa in November 1999, requesting political asylum. That automatically led to interviews with authorities and vetting by the German foreign intelligence service Bundesnachrichtendienst (BND). It was the BND to whom he told his tale of Iraqi weapons plants. That service in turn shared its reporting with the DIA in the Spring of 2000. The DIA subsequently shared the information with CIA.

The CIA’s Directorate of Operations is responsible for all intelligence collection of this type, and the presence of this source in Germany placed responsibility with the European Division chief, Tyler Drumheller. In his memoir, Drumheller recounts that he first heard of CURVEBALL in the fall of 2002 and made inquiries with the German liaison representative in Washington, who privately warned him of doubts about the source. Both John McLaughlin and George Tenet, in statements made after publication of the Drumheller memoir, deny that anyone made them aware of BND doubts on CURVEBALL in late September or October, when the division chief asserts that this exchange took place. Tenet in his own memoir adds that the BND representative, asked several years later about his 2002 meeting with Drumheller, denied having called CURVEBALL a fabricator, simply warning that he was a single source whose information could not be verified. (Note 7)

According to various sources, by late December the CIA was making official inquiries of the BND as to whether the U.S.—and the White House—could use the material. Drumheller’s aide, Margaret Henoch, expressed her own concerns in an e-mail circulated within CIA headquarters. Deputy Director of Central Intelligence John McLaughlin ordered subordinates to meet and reconcile their positions on CURVEBALL and his information. Analysts at CIA’s prime analytical unit in this area, the Weapons, Intelligence, Nonproliferation, and Arms Control Center (WINPAC) criticized the Directorate of Operations for questioning this information. WINPAC had already used it for its contributions to the October 2002 National Intelligence Estimate on Iraqi weapons programs and by now had a stake in CURVEBALL’s veracity. (Note 8) The meeting resulted in an impasse between CIA officers from the different units.

On December 20 a cable from the CIA station chief in Berlin arrived at headquarters. It contained a letter to Director Tenet from BND President August Henning saying that CURVEBALL refused to go public himself, and reiterating that BND would not permit direct American access to the source. According to Tenet, the cable went to Drumheller and was never forwarded to the CIA director. The station chief’s requests for a reply went unanswered. Tenet writes, “I had never seen the German letter but had simply been told that the German BND had cleared our use of the Curve Ball material.” (Note 9)

Division chief Drumheller raised the CURVEBALL credibility issue again in January after seeing a draft of the Bush State of the Union address with its claim of Iraqi mobile weapons plants. According to his account, he spoke to colleagues at the CIA’s Counterproliferation Division, wondering what data other than the exile’s reporting WINPAC might have to back such a claim, only to be assured there was none. Drumheller had Henoch prepare an e-mail for McLaughlin’s executive assistant summarizing the problems with the CURVEBALL information, and notes that McLaughlin later queried WINPAC’s senior analyst on this subject about the questions raised. Drumheller indicates that the CIA deputy director received “robust assurances.” (Note 10) Drumheller also told the Silberman-Robb Commission that he had attempted to delete the passage about the mobile weapons plants from the State of the Union speech.

According to Drumheller, he asked to see McLaughlin directly. “To my astonishment,” Drumheller recounts, “he appeared to have no idea that there were any problems with Curveball. ‘Oh my! I hope that’s not true,’ he said, after I outlined the issues and said the source was probably a fabricator.” (Note 11) McLaughlin, in his statement in response (see below), repeatedly declares that “no one stepped forward” to object, and that “I am equally at a loss to understand why they [CIA officers] passed up so many opportunities in the weeks prior to and after the Powell speech” to warn about CURVEBALL. McLaughlin did not say anything in his statement about a specific meeting with Drumheller, and he told the Silberman-Robb Commission that he was not aware of the CIA meeting that discussed CURVEBALL’S bona fides even though it was called by his own executive assistant, chaired by that officer, and though the executive assistant afterwards wrote a memorandum summarizing the meeting that was circulated to participants. McLaughlin says he never saw a meeting record. He also did not recall seeing Drumheller, and apparently no meeting with Drumheller was noted on McLaughlin’s daily calendar. Other CIA officials, however, recall hearing the result of the meeting at the time, and apparently exchanges of emails involved more than one of McLaughlin’s assistants. And McLaughlin told the Silberman-Robb Commission that he did meet the WINPAC analyst to hear her assurances. (Note 12)

The sessions at CIA headquarters where the Powell speech itself was vetted involved both John McLaughlin and George Tenet, as well as McLaughlin’s executive assistant, who is recorded at one point asking for more assurances from CIA’s Berlin station chief on the CURVEBALL material. Throughout the period, Berlin’s responses were instead cautionary.

Finally it all came down to the night before Powell’s speech. Powell and Tenet were already in New York engaging in final rehearsals. That night there was a phone call between Tenet and Drumheller. Both individuals at least agree that a conversation took place, though Tenet remembers an evening call where he merely asked for a phone number, while Drumheller says he specifically warned Tenet against using the CURVEBALL material and the director replied something like, “yeah, yeah.” (Note 13) The next day Powell went ahead with the allegations. Tenet had not taken any of CURVEBALL’s claims out of the speech.

At the CIA’s Counterproliferation Division, where officers sat rapt before the television watching Powell speak, with Tenet seated behind him, there was dismay on several counts. One of them was CURVEBALL. Valerie Plame Wilson recounts, “Although an official ‘burn notice’ . . . did not go out until June 2004, it was widely known that CURVEBALL was not a credible source and that there were serious problems with his reporting.” (Note 14)

Whatever else may be the case, it is clear that questions were raised about CURVEBALL—and they surfaced before his information was used to buttress the case for war with Iraq. The statements by CIA senior officers Tenet and McLaughlin are difficult to reconcile with the other evidence. At a minimum they failed to resolve questions regarding CURVEBALL’s authenticity, and permitted Powell to step onto a world stage with flimsy evidence.

Worse, more doubts about this intelligence were expressed immediately after the Powell speech that are also not reflected by the Tenet and McLaughlin statements in 2005. Furthermore, Tenet presided over the publication of a “white paper” in May 2003, written jointly by the CIA and DIA, which claimed that mobile weapons laboratories had actually been found in Iraq. That paper was demonstrably false on the basis of purely technical observations, (Note 15) and the attribution to CURVEBALL and several other hearsay sources was the same as in Powell’s speech. Within days the State Department’s Bureau of Intelligence and Research objected to the characterization of the trailers found as weapons labs, and they would be proved right. Tenet specifically denies learning anything about the discrepancies in CURVEBALL’s claims until early 2004.


Oil Hits $97

Associated Press
November 6, 2007

Crude Prices Soar Past $97 a Barrel on Middle East Bombings, Government Demand Expectations

NEW YORK (AP) — Oil futures jumped to a new record above $97 a barrel Tuesday after bombings in Afghanistan and an attack on a Yemeni oil pipeline compounded the supply concerns that have driven crude prices higher in recent weeks.

Those concerns were further fed by a government prediction on Tuesday that domestic oil inventories will fall further this year while consumption rises.

Oil was already up before news of the blasts in northern Afghanistan that killed 64 people and the attack in Yemen. Severe weather forecasts for the North Sea, expectations that domestic crude supplies fell last week and the weak dollar all contributed to the latest move upward.

While Afghanistan doesn’t produce much oil, traders watch for the possibility that any escalation in the conflict there between U.S. armed forces and Islamic militants could spill over into other countries, disrupting oil supplies out of the Middle East.

John Kilduff, vice president of risk management at MF Global UK Ltd., noted that the attack in Yemen “has disrupted a pipeline that carries 155,000 barrels a day of crude.”

Meanwhile, investors believe crude supplies are declining in the U.S. Analysts surveyed by Dow Jones Newswires predict, on average, that crude oil inventories fell by 1.6 million barrels last week. The Energy Department’s Energy Information Administration will issue its weekly inventory report on Wednesday. Oil futures’ rise above $90 a barrel has been fueled in part by two weeks of unexpected declines in inventories.

On Tuesday, the EIA predicted oil consumption will rise in the fourth quarter and next year despite higher prices, and that inventories will fall.

“Strong demand, limited surplus capacity, falling inventories and geopolitical concerns continue to weigh on the market,” the EIA said in its monthly Short-Term Energy Outlook.

The weak dollar, which fell to a new low against the euro Tuesday, is also lifting oil prices. Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.

Light, sweet crude for December delivery rose $2.63 to $96.61 a barrel on the New York Mercantile Exchange Tuesday after earlier rising as high as $97.07, a new trading record.

Other energy futures also rose Tuesday. December gasoline futures jumped 5.52 cents to $2.4363 a gallon on the Nymex, while December heating oil futures added 6.46 cents to $2.6085 a gallon.

Natural gas for December delivery fell 13.8 cents to $7.861 per 1,000 cubic feet on the Nymex on predictions for mild temperatures next week in the Midwest and Northeast, and expectations that inventories, already at record levels, will continue to rise.

In London, Brent crude rose $2.59 to $93.08 a barrel on the ICE Futures exchange. A number of North Sea oil platforms were being evacuated Tuesday in advance of expected severe weather.

At the pump, meanwhile, gas prices continued to rise, following oil’s 39 percent price jump since August. The national average price of a gallon of gas jumped 2 cents overnight to $3.024 a gallon, according to AAA and the Oil Price Information Service.

Separately, the EIA reported that diesel fuel prices reached a national average of $3.303 a gallon, a new record.

On Wednesday, analysts also expect the EIA to report that gasoline inventories rose by 200,000 barrels during the week ended Nov. 2, while supplies of distillates, which include heating oil and diesel fuel, fell by 500,000 barrels.

The analysts expect that refinery use grew by 0.8 percentage point to 87 percent of capacity.

Oil inventories likely fell due to a suspension of output at Mexico’s state oil company Petroleos Mexicanos, a major crude exporter to the United States, which temporarily shut its ports last week due to severe weather.

“The oil market is really supported by the tight inventories in the U.S. market and the general expectations for the inventory report this week are that the crude inventories will likely fall,” said Victor Shum of Purvin & Gertz Inc. in Singapore.

Crude prices are within the range of inflation-adjusted highs set in early 1980. Depending on the how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.

Associated Press Writers Pablo Gorondi in Budapest and Gillian Wong in Singapore contributed to this report.

The Worst Economy of Our Lifetime

Hale Stewart
HuffingtonPost
November 6, 2007

From The Washington Post:

Concern about the economy, the war in Iraq and growing dissatisfaction with the political environment in Washington all contribute to the lowest public assessment of the direction of the country in more than a decade. Just 24 percent think the nation is on the right track, and three-quarters said they want the next president to chart a course that is different than that pursued by Bush.

Dissatisfaction with the war in Iraq remains a primary drag on public opinion, and Americans are increasingly downcast about the state of the economy. More than six in 10 called the war not worth fighting, and nearly two-thirds gave the national economy negative marks. The outlook going forward is also bleak: About seven in 10 see a recession as likely over the next year.

Yet last week the economic news was upbeat. The U.S. economy grew 3.9 percent and the economy added 166,000 jobs. Shouldn’t people be happy about those developments?

The answer is no they shouldn’t. As I noted in the first installment in this series, job and wage growth for this expansion is poor at best. Simply put, if you hadn’t had a meaningful raise for the duration of “greatest story never told” you’d be frustrated, too. But that poor job and pay growth only tell part of the story. The bottom line is the underpinnings of the Bush economy are terrible — and they are starting to come home to roost in a big way.

Before I move forward I’d like to address a point brought up in the first article in this series. Several people commented that the recession of the early 1980s was in fact the worst economy of our lifetime. I will admit that I was alive and well during that time, although I was just starting high school. While I would love to tell you I was economically aware at that time, the truth is I was more interested in playing guitar (stealing licks, playing in bands) going to parties and in general being a high school kid. I have no economic recollection of that early 1980s. So for people who were alive and, well, struggling during that time it may have been the worst economic period of their lives. But for me, watching friends struggle with getting by while being told everything is great in Republican-land for the last seven years has lead me to the conclusion that the current expansion is a cruel joke played on the vast majority of Americans. As the poll numbers indicate, I am far from alone; most Americans feel that way.

The question is, why? One of the primary reasons is the financial underpinnings of this expansion are poor. But let’s back-up to 2001. According to the Bureau of Economic Analysis, the personal savings rate was .46 percent in the fourth quarter of 2001. Another way to state this statistic is Americans were spending 99.5 percent of their personal income in the fourth quarter of 2001. Now, let’s look at the Census Bureau’s median income statistics. Here is a chart from their latest national income report.


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Notice how the median national income has stagnated? Yet over the duration of this expansion, personal consumption expenditures have increased 18.34 percent in chained (inflation-adjusted) dollars. So, at the beginning of this expansion people were already spending everything they made on a weekly basic. Over the last seven years income has stagnated, yet people have increased their purchases by 18.34 percent. Where did all this new money come from?

Tons of debt. Here is a chart compiled from information from the Federal Reserve’s Flow of Funds Report.




Let’s put some figures on that chart. In the fourth quarter of 2001, total household debt outstanding totaled $7.680 trillion dollars. In the second quarter of 2007, total household debt outstanding increased to $13.331 trillion — a 73.56 percent increase.Let’s place those figures in perspective.In the fourth quarter of 2001, total household debt was 75.10 percent of GDP. In the second quarter of 2007 it was 96.82 percentIn the fourth quarter of 2001, total household dent was 102 percent of disposable income at the national level. In the second quarter of 2007 it was 129.62 percent of personal income at the national level.Now, there is no economic magic line that says “debt above this level is bad.” However, let’s look at some recent headlines from the financial services industry to see where this debt has gotten us.From Bloomberg:

Stocks fell in Europe and Asia after Citigroup Inc.’s announcement of as much as $11 billion in writedowns suggested financial companies may face more losses. U.S. index futures retreated.

From Reuters:

Merrill Lynch & Co Inc (MER.N: Quote, Profile , Research) reported $7.9 billion in net write-downs for the third quarter on Wednesday as shaky risk management and bad bets on subprime mortgages and collateralized debt obligations triggered the company’s first quarterly loss in six years.

….

Merrill was the only big Wall Street firm to post a third-quarter loss. And its write-downs — before hedges — was bigger than the combined $3.6 billion in write-downs and charges recorded by rivals Goldman Sachs Group Inc (GS.N: Quote, Profile , Research), Bear Stearns Cos Inc (BSC.N: Quote, Profile , Research), Morgan Stanley (MS.N: Quote, Profile , Research) and Lehman Brothers Holdings Inc (LEH.N: Quote, Profile , Research).

And as this chart from the IMF shows, we have at least another three years of resets to go through before we’re in the clear:

The problem with this debt is we have now partially crippled our economy going forward. The U.S. economy relies on the credit markets for a host of necessary economic activities. But those markets are not functioning smoothly right now. And the chart from the IMF indicates they won’t function smoothly for some time into the future. As a result, the U.S. economy will limp alone for the foreseeable future as the credit markets work-out their self-imposed problems. And that’s not good for anyone.

Stock Market Mayhem and Bush’s Moral Swamp

Mike Whitney
Information Clearinghouse
November 5, 2007

“It’s scary out there—there’s blood on the streets” anonymous Wall Street trader

Last Wednesday, the Federal Reserve dropped its benchmark interest rate by 25 basis points to 4.5% citing ongoing weakness in the housing sector. As expected, the stock market rallied and the Dow Jones Industrial Average soared 137 points. Unfortunately, Bernanke’s “low interest” stardust wasn’t enough to buoy the markets through the rest of the week.

On Thursday, the hammer fell. The Dow plummeted 362 points in one afternoon on increasing fears of inflation, a slowdown in consumer spending, a steadily weakening dollar and persistent problems in the credit markets. By day’s end, the Fed was forced to dump another $41 into the banking system to forestall a major breakdown. This is the most money the Fed has pumped into the financial system since 9-11 and it shows how dire the situation really is.

Why do the banks need such a massive infusion of credit if they are as “rock solid” as Bernanke says?

As most people now realize, the mortgage industry is on life-support. Many of the ways that the banks were generating profits have vanished overnight. The “securitization” of debt (mortgages, car loans, credit card debt etc) has ground to a halt. What had been a booming multi-billion dollar per-year business is now a dwindling part of the banks’ revenues. Investors are steering clear of anything even remotely associated to real estate.

Additionally, the banks are holding an estimated $200 billion in mortgage-backed securities and derivatives for which there is currently no market. This is compounded by $350 billion in “off balance sheets” operations—which are collateralized with dodgy long-term mortgage-backed securities—that provide funding for “short-term” asset-backed commercial paper. ASCP has shriveled by $275 billion in the last 10 weeks leaving the banks with gargantuan liabilities. Bernanke was forced to add $41 billion to keep the banking system from slipping beneath the salty brine.

This shows how powerless the Fed really is when it comes to changing the overall direction of the markets. Sure, Bernanke and his buddies in the Plunge Protection Team can goose the market by buying-up futures and boosting the day’s results. But that’s just a short-term fix. In the long run, the Fed has less chance of stopping the market from correcting than it does of stopping a runaway truck by standing in its path. Besides, the Fed cannot purchase the banks bad investments (CDOs, MBSs, or CP) nor can it reflate the multi-trillion dollar the housing bubble. All it can do is provide more cheap credit and hope the problems go away.

So far, the lower rates haven’t even decreased the price of the 30-year mortgage or made refinancing any cheaper. All they’ve done is postpone the inevitable day of reckoning. In truth, they’re just a desperate attempt to perpetuate consumer borrowing while the banks figure out how to offload their enormous debts. That’s what Paulson’s $80 billion “Banker’s Bankruptcy Fund” is really all about; it’s just the repackaging of subprime junk so it can be passed off to credulous investors. Fortunately, the public has “wised up” and isn’t buying into this latest fraud. As a result, the banks have taken another blow to their already-flagging credibility.

In the last two months, the pool of qualified mortgage applicants has contracted, as has the market for massive merger and acquisition deals (private equity). So the banks are probably doing more with the Fed’s $41 billion injection than just beefing up their reserves and issuing new loans. The market analysts at Minyanville.com summed it up like this:

“Banks are taking the liquidity the Fed is forcing out there through the discount window and repos. After using it to shore up the declining value of their assets, they have excess to lend out. Finding no traditional borrowers that want to buy a house or build a factory, the new rules the Fed has set forth allows the banks to pass this liquidity onto their broker dealer subsidiaries in much greater quantities. These broker dealers are lending thus to hedge funds and margin buyers who are speculating in stocks. Remember, the Fed is powerless unless it can find people to borrow the credit it wants them to spend. By definition, the last ones willing to take that credit are the most speculative.”

This is a likely scenario given the fact that the stock market continues to fly-high despite the surge of bad news on everything from the falling dollar to the geopolitical rumblings in the Middle East. Last month, the Fed modified its rules so that the banks could provide resources to their off-balance sheets operations (SIVs and conduits). If the Fed is willing to rubber-stamp that type of monkey-business; then why would they mind if the money was stealthily “back-doored” into the stock market via the hedge funds?This might explain why the hedge funds account for as much as 40 to 50% of all trading on an average day. It also explains why the stock market overheating.

The charade, of course, cannot go on forever. And it won’t. Rate cuts do not address the underlying problem which is bad investments. The debts must be accounted for and written off. Nothing else will do. That doesn’t mean that Bernanke will suddenly decide to stop savaging the dollar or flushing hundreds of billions of dollars down the investment bank toilet. He probably will. But, eventually, the blow-ups in the housing market will destabilize the financial system and send the banks and over-leveraged hedge funds sprawling. Bernanke’s low interest “giveaway” will amount to nothing.

Bloomberg News ran a story last week which shedsmore light on the jam the banks now find themselves in:

“Banks shut out of the market for short-term loans are finding salvation in a government lending program set up to revive housing during the Great Depression.

Countrywide Financial Corp., Washington Mutual Inc., Hudson City Bancorp Inc. and hundreds of other lenders borrowed a record $163 billion from the 12 Federal Home Loan Banks in August and September as interest rates on asset-backed commercial paper rose as high as 5.6 percent. The government-sponsored companies were able to make loans at about 4.9 percent, saving the private banks about $1 billion in annual interest.”

Whoa. So, now that the credit markets have frozen over, the banks are going to the government with begging bowl in hand? So much for “moral hazard”.

Commercial paper is short-term notes that businesses use for daily operations. Because much of this CP is backed by mortgage-backed securities; the banks have been having trouble rolling it over. (Refinancing) So–unbeknownst to the public–various banks have been borrowing from the government-sponsored Federal Home Loan Banks (FHLB) so they can cut their losses (or stay afloat?) The FHLB has extended $163 billion of loans to them, which means that the risks that are inherent in supporting “dodgy banks that make bad bets” has been transferred to FHLB’s investors. The danger, of course, is that—when investors find out that FHLB is mixed up with these shaky banks—they are liable to sell their shares and trigger a collapse of the system. This is a good example of the dim-witted strategies that are being used to bail out the banks. There are probably many similar scams underway just beyond the publics’ view.

Citi’s Woes

Over the weekend, Citigroup’s CEO Chuck Prince got the axe. Citigroup, which boasts more than 300,000 staff worldwide, has lost more than 20% of its market value from bad bets in sub-prime mortgages. According to the Times Online: “The Securities and Exchange Commission may investigate whether it improperly juggled its books to hide the full extent of the problem.”

”Juggled” is not a word that is taken lightly on Wall Street where traders are now bracing for another massive sell-off of financial stocks. Mr. Prince won’t be alone in the unemployment line either. He’ll be accompanied by Merrill Lynch’s former boss, Stanley O’ Neal who got the boot last week when his firm reported $8.4 billion in write-downs. Deutsche Bank analysts now “predict that Merrill may write off another $10 billion of losses related to its portfolio of sub-prime debts”. (Times Online) That would wipe out 8 full quarters of earnings and represent the largest loss in Wall Street history.

The news is bleak, bleak, bleak. The systemic rot is appearing everywhere presaging ongoing losses for the financial giants and a long-downward spiral for the markets. The banks are currently under-regulated, over-leveraged and under capitalized. And now the sh** is about to hit the fan.

Former Fed chief Paul Volcker summarized the overall economic situation last week at the second annual summit of the Stanford Institute for Economic Policy Research. In his speech he said:

“Altogether, the circumstances seem as dangerous and intractable as I can remember….Boomers are spending like there is no tomorrow. Homeownership has become a vehicle for borrowing and leveraging as much as a source of financial security….. As a Nation we are consuming…about 6% more than we are producing. What holds it all together? - High consumption - high leverage - government deficits - What holds it all together is a really massive and growing flow of capital from abroad. A flow of capital that today runs to more than $2 Billion per day.” The nation is facing “huge imbalances and risks.”

Volcker is right. The country is in a bigger pickle than any time in its 230 year history. The credit storm that was engineered at the Federal Reserve has swept across the planet and is now descending on commercial real estate, credit card debt, and the plummeting bond insurers industry. These are the next shoes to drop and the tremors will be felt throughout the broader economy.

THE DARK AGES?

As this article is being written, Reuters is reporting that Citigroup may be forced to write-down as much as $11 billion in subprime mortgage-related losses!

Reuters: “Citigroup announced today significant declines since September 30, 2007 in the fair value of the approximately $55 billion in U.S. sub-prime related direct exposures in its Securities and Banking (S&B) business. Citi estimates that, at the present time, the reduction in revenues attributable to these declines ranges from approximately $8 billion to $11 billion (representing a decline of approximately $5 billion to $7 billion in net income on an after-tax basis).”

Citigroup’s statement indicates a willingness on its part to come clean with its investors but, in fact, they know that the situation is fluid and there’ll be hefty losses in the future. Mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs) will continue to be downgraded as time goes by. According to the Financial Times, one banker was having so much difficulty getting a bid on subprime securities; he found the only way he could get rid of them was through “barter. He resorted to using a tactic more normally associated with third world markets than the supposedly sophisticated arena of high finance. ‘Barter is the only thing that works,’ he chuckled, ‘It’s like the Dark Ages’” The article continues:

“Never mind the fact that the risky tranches of subprime-linked debt have fallen 80 per cent since the start of the year; in a sense, such declines are only natural for risky assets in a credit storm. Instead, what is really alarming is that the assets which were supposed to be ultra-safe - namely AAA and AA rated tranches of debt - have collapsed in value by 20% and 50% odd respectively. This is dangerous, given that financial institutions of all stripes have been merrily leveraging up AAA and AA paper in recent years, precisely because it was supposed to be ultra-safe and thus, er, never lose value.” (Financial Times; Gillian Tett)

AAA and AA assets—the top-graded tranches— have already been downgraded by 20% to 50%!?! And the prices are bound to fall even more because there is no market for mortgage-backed securities. This is a banks worst nightmare; an asset that loses value and requires greater capital reserves EVERY DAY. In fact, AAA rated MBSs have dropped 14% in one month. It is truly, death by a thousand cuts.

The US financial system is now buckling beneath the weight of its own excesses. The subprime contagion—which can trace its origins to the massive expansion of credit at the Federal Reserve—has devastated the housing market generating an unprecedented number of foreclosures, record inventory, and a massive multi-trillion dollar equity bubble which is now catastrophically deflating and wiping out much of the mortgage industry in its path. Its effects on the secondary market have been even more devastating where pension funds, insurance companies, hedge funds and foreign banks are left holding hundreds of billions of dollars of complex, mortgage-backed securities and subprime-related derivatives which are now destined to be downgraded to pennies on the dollar ravaging once-robust portfolios. The subprime meltdown has been equally damaging to myriad European investment banks and brokerage houses. We’ve seen a wave of bank closings in France, Germany and England which has left investors shell-shocked; triggering capital flight from American markets and supplanting confidence in the US financial system with growing suspicion and rage. Where are the regulators?

According to Bloomberg News, ”European and Asian investors will avoid most US mortgage-backed securities for years without guarantees from government-linked entities creating an enormous drag on the US housing market” Foreign investors believe they were hoodwinked by bonds that were deliberately mis-rated to maximize profits for the investment banks. This may explain why $882 billion has been diverted into Chinese and Indian stock markets in the last month alone.

The biggest losers of all, however, are the financial giants that created most of the abstruse, debt-instruments that are now devouring the system from within. The productive and “wealth creating” components of the economy have been subordinated to a finance-driven model which suddenly derailed due to the abusive expansion of debt. Inevitably, some of the banks that took the greatest risks will be shuttered and trillions of dollars in market capitalization will disappear. They are the victims of their own scam.

Is it possible that anyone with a pulse and a minimal ability to reason couldn’t see the inherent problems of building a humongous financial edifice on the prospect that millions of first-time homeowners with “a bad credit history and no collateral” would pay off there mortgages in a timely and responsible manner?

No. It is not possible. It was completely crazy…..and foreseeable! The real reason that the subprime swindle mushroomed into a humongous economy-busting monster is that the markets are no longer policed by any agency that believes in intervention. The pervasive “free market” ideology rejects the notion of supervision or oversight, and as a result, the markets have become increasingly opaque and unresponsive to rules that may assure their continued credibility or even their ability to function properly.

The “supply side” avatars of deregulation have transformed the world’s most vital and prosperous markets into a huckster’s street-corner shell-game. All regulatory accountability has vanished along with trillions of dollars in foreign investment. What’s left is a flea-market for dodgy loans, dubious over-leveraged equities and “securitized” Triple A-rated garbage.

Let’s hear it for the Reagan Revolution.

What is striking is how the new “structured finance” paradigm replicates a political system which is no longer guided by principle or integrity. It is not coincidental that the same flag that flies over Guantanamo and Abu Ghraib flutters over Wall Street as well. Nor is it accidental that the same system that peddles bogus, subprime tripe to gullible investors also elevates a “waterboarding advocate” to the highest position in the Justice Department. Both phenomena emerge from the same fetid moral swamp—Bush’s America.

FBI will have anyone you call a terrorist detained

Cory Doctorow
Boingboing
November 6, 2007

A man in Sweden didn’t like the way his son-in-law was acting, so he sent a note to the FBI accusing the guy of being an Al Qaeda operative just before he took a trip to the USA. When he landed, the DHS held him in a cell for 11 hours, then deported him. Can’t be too safe, dontcha know.

Man angry with son-in-law fingers him as terrorist to FBI
Agence France Presse
November 2, 2007

STOCKHOLM (AFP) - A man in Sweden who was angry with his daughter’s husband has been charged with libel for telling the FBI that the son-in-law had links to al-Qaeda, Swedish media reported on Friday.

The man, who admitted sending the email, said he did not think the US authorities would stupid enough to believe him.

The 40-year-old son-in-law and his wife were in the process of divorcing when the husband had to travel to the United States for business.

The wife didn’t want him to travel since she was sick and wanted him to help care for their children, regional daily Sydsvenska Dagbladet said without disclosing the couple’s names.

When the husband refused to stay home, his father-in-law wrote an email to the FBI saying the son-in-law had links to al-Qaeda in Sweden and that he was travelling to the US to meet his contacts.

He provided information on the flight number and date of arrival in the US.

The son-in-law was arrested upon landing in Florida. He was placed in handcuffs, interrogated and placed in a cell for 11 hours before being put on a flight back to Europe, the paper said.

The FBI contacted Swedish intelligence agency Saepo, which discovered that the email tipping off the FBI had been sent from the father-in-law’s computer.

The father-in-law has been charged with aggravated libel.

He has admitted sending the email, but said he didn’t think “the authorities were so stupid that they would believe anything. But apparently they are.”

He said he “couldn’t help the US authorities’ paranoid reaction”.

Mukasey Is (Much) Worse Than Gonzales

John Nichols
The Nation
November 4, 2007

George Bush’s nominee to replace disgraced former Attorney General Alberto Gonzales, retired Federal Judge Michael B. Mukasey, must be rejected by the Senate Judiciary Committee for the same reason that Gonzales should have been rejected in 2005.

Like Gonzales, Mukasey refuses to accept that the president of the United States must abide by the laws of the land, beginning with the Constitution. In fact, the nominee to replace the worst Attorney General since Calvin Coolidge forced Harry Micajah Daugherty to quit rather than face impeachment is actually takes a more extreme position in defense of an imperial presidency than did Gonzales.

When questioned by Judiciary Committee chair Patrick Leahy, D-Vermont and Constitution sub-committee chair Russ Feingold, D-Wisconsin, during the key hearing on his nomination, Mukasey embraces an interpretation of presidential authority so radical that it virtually guarantees more serious abuses of power by the executive branch.

There is no question that one of the ugliest manifestations of that expansion of authority involves the Bush-Cheney administration’s embrace of extraordinary rendition and torture as tools for achieving its ends. But those who focus too intensely on Mukasey’s troubling dance around the waterboarding question make a mistake. Even if the nominee were to embrace the Geneva Conventions — not to mention the 8th Amendment to the U.S. Constitution — and condemn all forms of torture as the cruel and unusual punishment that they are, he would still be an entirely unacceptable choice to serve as the nation’s chief law-enforcement officer.

And while some Democrats on the Judiciary Committee have made their peace with Mukasey — shame on New York’s Chuck Schumer and California’s Dianne Feinstein — the fight to block this nomination cannot be abandoned. Mukasey’s critics on the committee, led by Leahy and Feingold, should do everything in their power to re-frame the debate to focus on the broader question of whether a president can break the law — and on the nominee’s entirely unacceptable answers to it. They should pressure Schumer and Feinstein to reconsider, and they should reach out, aggressively, to “Republicans who know better” such as Pennsylvania Senator Arlen Specter.

That Mukasey has made the case against his conformation in undebatable.

For instance, he has defended the administration’s attempts to dramatically expand the definition of executive privilege, telling the Judiciary Committee that it would be inappropriate for a U.S. attorney to press for contempt charges against a White House official who claimed to be protected by a grant of executive privilege. Under this reading of the law, U.S. attorneys would cease to be independent defenders of the rule of law and become mere extensions of the White House.

As such, Mukasey accepts a politicization of U.S. Attorneys far more extreme than that attempted by Gonzales and former White House political czar Karl Rove when they sought to remove U.S. Attorneys who failed to fully embrace the administration’s electoral and ideological goals.

But Mukasey does not stop there.

Under questioning from Feingold, Mukasey endorsed the administration’s argument that congressional attempts to define appropriate surveillance strategies and techniques could infringe inappropriately on presidential authority.

When pressed by Feingold, Mukasey refused to say whether he thought the president could order a violation of federal wiretapping rules. Feingold’s response was measured. “I find your equivocation here somewhat troubling,” said the senator.

In fact, everything about Mukasey’s testimony suggested that he would as Attorney General be more of a threat to Constitutional governance than the inept and frequently inarticulate Gonzales. Mukasey gives every indication that he is as enthusiastic as was Gonzales about helping the president to bend and break they law. The scary thing is that Mukasey appears to be a good deal abler when it comes to cloaking lawlessness in a veneer of legal uncertainty.

Consider the nominee’s suggestion that the president can ignore any law, including the Foreign Intelligence Surveillance Act, if he and his lawyers determine that the law impinges on his authority as commander in chief during wartime.

“The president is not putting somebody above the law; the president is putting somebody within the law,” Mukasey explained, with a response that employed legalese at levels not heard in Washington since Richard Nixon boarded that last plane for San Clemente. “The president doesn’t stand above the law. But the law emphatically includes the Constitution.”

Leahy said after that “troubling” statement by the man who would be the nation’s chief law enforcement officer: “I see a loophole big enough to drive a truck through.”

The Judiciary Committee chair is right. It’s the truck carrying the trappings of an imperial presidency. And Mukasey should not be handed the keys.

Like Sacrificial Lambs Slain on the Altar of Globalization

Barbara Peterson
OpEdNews
November 5, 2007

Inmates of the dystopia prepare to voluntarily cull themselves off at the “Carousel” extermination ceremony, from the 1976 scifi film Logan’s Run

Are you ready to sacrifice your standard of living on the altar of globalization? That is what is happening at an alarming rate. We the people are being asked to squeeze our belts until it hurts so that the global elite can continue their lavish lifestyle all at our expense. Woodstoves are being regulated out of existence, older cars are on the chopping block, and we are instructed to use mass transit or ride a bike. Wouldn’t you like to see Dick Cheney or Condi Rice riding a bike to the White House? I would. The likelihood of that happening? Don’t hold your breath.

Now don’t get me wrong, I am for doing as much as we can to eliminate pollution and help stop global warming, but pinching the little guy for all he’s worth is not the solution. Targeting the major corporations as well as governmental agencies and suicidal policies responsible for most of the crud in our environment would seem to be the solution. Soon the older cars that the poorer among us drive will be outlawed due to smog issues. Sorry, but if you cannot afford to get a new car, you will have to walk. Yet, businessmen take airplanes everyday for their corporate masters. Billionaires burn thousands of gallons of fuel daily just for fun. These same people blame the average Joe for global warming and force us into untenable positions while gluttonously consuming petrol and traveling the world to educate the masses regarding the ethical use of fossil fuel products. Their mantra of “stop using the oil so we can use it” is beating us to death. Why don’t the super-rich decide to not fly for one day. I am sure that the emission savings will be sufficient to allow thousands of regular people to go to work, get to the store for groceries, and take their parents to the hospital without putting a dent in the ozone. Is that too much to ask? Evidently so. The great unwashed do not count in the grand scheme of things except as pawns for the “greater good.” But just whom are we sacrificing for? That is the million-dollar question.

In searching for a new enemy to unite us, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like would fit the bill…The real enemy, then, is humanity itself….Bring the divided nation together to face an outside enemy, either a real one or else one INVENTED for the purpose…(The First Global Revolution: A Report by the Council of Rome) (Aftermath News, 2007).

To the global elite, we are the enemy. Therefore, it becomes necessary to manufacture a common enemy that will take our minds off the target, and redirect our energies into fighting a strawman - a manufactured enemy that does not exist. It doesn’t matter if the enemy is real or manufactured. Do we need to cut down on pollution? Yes. Do we need to be concerned about our planet? Yes – we always have. Are we the people the primary polluters? No. Yet we are asked to fight the strawman so that big business can continue to pollute with impunity while we pay the price.

Do your part! The masses are more ready and willing to sacrifice themselves to “save the Earth” than the elites, just as planned (Aftermath News, 2007).

A lawsuit, filed in New York’s federal district court using a common law public-nuisance petition, alleges that the corporations it names are “the five largest emitters of carbon dioxide in the US and are among the largest in the world.” These five - the energy firms American Electric Power, Southern Company, Xcel Energy, Cinergy and the Tennessee Valley Authority - emit approximately 10 per cent of the US’s annual carbon dioxide emissions. These emissions contribute directly to climate change, which, the suit alleges, could lead to severe environmental and health impacts, including a doubling of heat-related deaths in Los Angeles. The suit claims that the melting of the snows that feed California’s water supply could lead to water shortages that would “harm residents, hurt agriculture, disrupt other businesses, cut the source of hydroelectric power and significantly increase the damage caused by wildfires.” The suit points out that means for reducing carbon dioxide emissions are both affordable and available (Red Pepper, 2004).

This does not even take into account the amount of fuel wasted on corporate/government junkets. Here is a 22 page document posted on USA Today that outlines the 2004 corporate plane usage by federal government officials. One would think that our government officials would take heed to the global warming problem and use these planes for important official business in order to save fuel and help protect the environment. Notice that while perusing the document “fund raising” and “campaign” trips comprise the majority of these flights.

And by all means let’s let Mexican trucks roll right through our country courtesy of NAFTA.

In 2005, the California Air Resources Board (CARB) published a report on Mexican truck traffic in regards to the first phase of the trucking provision. Their findings report the following air pollution concerns: an extra 50 tons of NOx and 2.5 tons of particulate matter a day will be added to California’s South Coast Air Basin 66% of Mexican trucks are older (pre-1993) diesel models and do not have electronic fuel injection 25% are diesel trucks older than 1979 having extremely high emissions of NOx and particulate matter unlike the US, Mexico does not require trucks to use ultra-low sulfur diesel fuel (The Airzone Blog, 2007)

Are you feeling like a sacrificial lamb yet? Can you justify squeezing the last drop of dignity from our nation’s poor as we limit their ability to own a vehicle, heat their homes with wood, and provide for their families just so the corporations as well as our corporate-owned government officials don’t have to limit their gluttonous use of fossil fuels? I cannot. I am sickened by it. The system is broken. We are like sacrificial lambs slain on the altar of globalization.

References:

Aftermath News. (2007). Retrieved from: http://aftermathnews.wordpress.com/category/social-engineering/
Red Pepper. (2004). Retrieved from: http://www.redpepper.org.uk/article232.html
The Airzone Blog. (2007). Retrieved from: http://www.cleanairsys.com/airzone-blog/2007/09/diesel-long-haul-trucks-from-mexico.html
USA Today. (2004). Retrieved from: http://www.usatoday.com/plane_rides/2004v3.pdf?loc=interstitialskip

Spambots Don’t Send Imaginary Cash

Paul Joseph Watson
Prison Planet
Tuesday, November 6, 2007

Ron Paul’s presidential campaign received a whopping $4.2 million in donations over 24 hours yesterday, eclipsing any of the other Republican candidates and putting debunkers to shame who had attempted to discredit the campaign by suggesting Paul’s support was imaginary, inflated and exaggerated as a result of Internet spamming.

Here’s some news for the scoffers and the establishment talking heads who have engaged in a propaganda assault to try and hoodwink Americans into thinking Paul is not a frontrunner - $4.2 million doesn’t grow on trees and it isn’t plucked out of cyberspace without real people being behind it.

The Texas Congressman has now raised over $7 million since October 1st, putting him well on track to achieve a goal of $12 million by the end of the year.

“Paul’s total deposed Mitt Romney as the single-day fundraising record holder in the Republican presidential field,” reports the Associated Press. “When it comes to sums amassed in one day, Paul now ranks only behind Democrats Hillary Rodham Clinton, who raised nearly $6.2 million on June 30, and Barack Obama.”

Paul’s campaign raised over 5 million in the third quarter and had over 5 million cash on hand at the start of this quarter, figures that initially baffled those in the mainstream media who completely underestimated the reach and power Ron Paul’s campaign of freedom and limited government had, before engaging in a deliberate smear policy in order to dismiss his chances.

The liars who claimed that Ron Paul’s success was a result of “spambots”, as was inferred by a recent article, or that his entire support base was a complete hoax, as was ludicrously announced by a Murdoch owned newspaper, are looking very stupid today as debunkers are forced to eat their words and accept the fact that Ron Paul’s popularity is wildly accelerating.

The “spambots” claim took another battering today as it was confirmed that the source of the emails was not Ron Paul’s office, and was most likely a deliberate attempt to discredit his campaign on behalf of a rival, according to PC World experts who analyzed the e mails.

The concept for the November 5th “money bomb” which was responsible for the surge in donations yesterday originates from the movie V For Vendetta, the 2005 cult dystopian hit which grasped the imaginations of many with its extreme relevance to modern day politics in America. It was organized in large part through a specially constructed website at http://www.thisnovember5th.com/

Another donation day is scheduled for Veterans Day, this Sunday, November 11.

The meteoric success of Ron Paul’s campaign thus far is also reflected in figures we highlighted this weekend, revealing the websites of all the other presidential candidates to be flat and floundering, attracting no new visitors whatsoever. In contrast www.ronpaul2008.com has seen an 80+% rise in hits over the past three months.

U.S. Plan Envisioned Nuking Iran, Syria, Libya

Spencer Ackerman
TPM Muckraker
November 5, 2007

Despite years of denials, a secret planning document issued by the U.S. military’s nuclear-weapons command in 2003 ordered preparations for nuclear strikes on countries seeking to acquire weapons of mass destruction, including Iran, Saddam Hussein-era Iraq, Libya and Syria.

A briefing (pdf) on the document obtained by the Federation of American Scientists, showed that the document itself was created to flesh out a 2001 Bush administration revision of long-standing nuclear-weapons policy, known as the Nuclear Posture Review. That review was a Defense Department-led attempt to wean nuclear policy off a Cold-War focus on Russia and China, but the shift raised questions about what purpose nuclear forces would serve apart from deterring an attack. In March 2002, leaks indicated that the review would recommend preparations for nuclear attacks against WMD-aspirant states. Arms Control Today pointed out at the time that planning to attack non-nuclear states that were signatories to the nuclear Non-Proliferation Treaty reversed decades of U.S. nuclear policy.

The administration’s response was to deny that the review moved the U.S. from deterrence to a first-strike posture. After the leaks, the Defense Department issued a statement in March 2002 saying cryptically, “This administration is fashioning a more diverse set of options for deterring the threat of WMD. … A combination of offensive and defensive, and nuclear and non-nuclear capabilities is essential to meet the deterrence requirements of the 21st century.” Speaking to CNN around the same time, General Richard Myers, then the chairman of the Joint Chiefs of Staff, said the Nuclear Posture Review was “not a plan, it’s not an operational plan. It’s a policy document. And it simply states our deterrence posture, of which nuclear weapons are a part.” Vice President Dick Cheney said at the time that the notion that the review paved the way for “preemptive nuclear strikes” was “a bit over the top.”

But that now looks to be an explanation too clever by half. Perhaps the review itself didn’t contain operational plans. But guidance documents created to flesh it out did.

One such document is known as OPLAN 8044 Revision 03. That document is an update of the basic nuclear-weapons plan, formerly known as the Single Integrated Operational Plan. It was created by the U.S. Strategic Command (Stratcom), which has responsibility for nuclear-weapons planning, doctrine and maintenance. Using the Freedom of Information Act, the Federation of American Scientists obtained a briefing on how Stratcom’s OPLAN 8044 Revision 03 changed the nuclear-policy paradigm. For the first time in U.S. nuclear history, plans for nuclear attack on regional targets around the world were included in the basic nuclear war planning document.

It’s not entirely easy to tell from the planning document what WMD-desiring countries are listed as targets for a possible U.S. nuclear attack. (See page 11 for all the redactions on this crucial point.) But the FAS hazards an educated guess based on photography included in the briefing document: Iran, Iraq, Libya, North Korea and Syria.

The briefing document also references a “target base” for prospective elimination with nuclear weapons. However, the actual document redacts what that target base might be. FAS contends it probably refers to either the stockpiles of WMD themselves or the command center for any state seeking to deploy WMD. And that’s a further sign of specific planning for a full-blown nuclear conflict, the FAS writes: “The creation of a ‘target base’ indicates that the planning went further than simple retaliatory punishment with one or a few weapons, but envisioned actual nuclear warfighting intended to annihilate a wide range of facilities in order to deprive the states the ability to launch and fight with WMD.”

It’s difficult to tell whether OPLAN 8044 Revision 03 is still in place. A further revision of the plan, known as Revision 05, was still in effect as recently as July. “Presumably,” writes FAS, Revision 05 carries with it planning for nuclear strikes on Iran, North Korea and Syria.

The new glimpse of OPLAN 8044 Revision 03 comes at an awkward time for the Bush administration. Just last week, a State Department official at an international arms conference met with rebuke for suggesting that U.S. nuclear forces weren’t on “hair-trigger alert,” even though the U.S. nuclear arsenal is known to experts to be capable of launching within minutes of an order. Certainly Iran, North Korea, and Syria are wondering at whom those weapons are currently aimed.

Crash is coming, warns top investor

Jason Dowling and Peter Weekes
The Age
November 4, 2007

THE man responsible for investing $41 billion of the State’s money has warned mum-and-dad investors to prepare for a massive sharemarket crash.

He says a dramatic downturn is inevitable as the rapid rate of investment is unsustainable, and the repercussions of the $300 billion subprime lending crisis in the US are yet to be felt fully.

State Treasury has revealed that Victoria looks set to lose just $1.9 million directly from the subprime fiasco.

But the chief investment officer of the Victorian Funds Management Corporation, Leo de Bever, is taking no chances, telling The Sunday Age that he is managing the risk of further losses “as best as humanly possible” by shifting investments to safer options.

Mr de Bever’s comments come after last week’s running stoush in Parliament between Opposition Leader Ted Baillieu and Premier John Brumby over Victoria’s exposure to the US financial crisis.

Mr Baillieu warned that millions of dollars of taxpayers’ money was at risk and accused the Premier of failing to come clean about potential losses.

“We know hospitals and local governments have been exposed, we know there is a level of exposure to the VFMC, and John Brumby won’t even provide a basic reporting process,” Mr Baillieu told The Sunday Age.

Mr Brumby told Parliament that he had not received any advice regarding the exposure of government investments and agencies to the US subprime market but reiterated that the state had a “wide range of requirements in place” concerning investments.

However, Mr de Bever — who oversees the investment of money from entities including the Royal Children’s Hospital, the Royal Women’s Hospital, the National Gallery of Victoria, the University of Melbourne and the Transport Accident Commission — described the subprime debacle as being “the least of our concerns”. It was the “roaring bull” market that kept him awake at night, he said.

The boom of the past five years could not be sustained and mum-and-dad investors stood to lose if they did not act now.

“Nobody wants to leave the party when markets are doing what they are doing, people want to enjoy it to the fullest … (but) it’s time to buckle down.”

While market experts suggest moving investments into safer options — such as buying government bonds, gold or shares in consumer staples — could prove prudent, they are not predicting the downturn will be so drastic.

Shane Oliver, chief economist and head of strategic investments at AMP Capital Investors, agreed that after the strong run, the Australian sharemarket was due for a correction, but said, despite the more volatile market and further expected problems in the US financial system, he believed “the conditions are just not there for a crash”.

But some key US banks are already in trouble, with reports that regulators are investigating Merrill Lynch for trying to hide the extent of its losses.

And The Guardian newspaper has reported that another British bank, thought to be Barclays, has received an emergency loan from the Bank of England.

Supermodel 'rejects dollar pay'

Gisele Bündchen
The model reportedly demanded euros for a Pantene advert
bbc
The world's richest model has reportedly reacted in her own way to the sliding value of the US dollar - by refusing to be paid in the currency.

Gisele Bündchen is said to be keen to avoid the US currency because of uncertainty over its strength.

The Brazilian, thought to have earned about $30m in the year to June, prefers to be paid in euros, her sister and manager told the Bloomberg news agency.

However, Ms Bündchen, 27, declined to comment on her pay arrangements.

Last week the dollar hit long-term lows against the euro, the British pound and the Canadian dollar.

According to Brazil's weekly magazine Veja, when Ms Bündchen signed a deal to represent Pantene hair products, she demanded that the brand owner, Procter & Gamble (P&G), paid her in euros.

P&G was reported as saying that it could not comment on details of the contract.

There are also reports that she will be paid in euros for a deal with Dolce & Gabanna to promote its The One fragrance.

"Contracts starting now are more attractive in euros because we don't know what will happen to the dollar," Patricia Bündchen told Bloomberg.

'Still negative'

Last month, billionaire investor Warren Buffett said that he was not confident about the strength of the dollar.

"We are still negative on the dollar relative to most other currencies so we bought stocks in companies that earn their money in other currencies," he said of his Berkshire Hathaway investment vehicle.

And Jim Rogers, a former investor partner of George Soros, told the BBC that if he was buying currency now it would be the Chinese renminbi, the Japanese yen and the Swiss franc and not the US dollar.

The dollar has slipped amid US interest rate cuts which have been trimmed to 4.5% after standing at 5.25% in September.

This means that investors are looking to buy other currencies that will give a higher rate of return.

Myth of ‘thousands’ of UNIPCC climate scientists

Scoop
6 November 2007

Press Release: New Zealand Climate Science Coalition
Debunking the myth of ‘thousands’ of UNIPCC climate scientists

“The time is well overdue to destroy the myth that there are ‘thousands’ of scientists supporting claims of catastrophic global warming,” says Owen McShane, chair of the policy panel of the New Zealand Climate Science Coalition.

“One of our people, John McLean, of Melbourne, has just completed an extensive analysis of the recent report of Working Group 1 of the Fourth Assessment Report by the UN Intergovernmental Panel on Climate Change (IPCC). He found in the critical Chapter 9, there were only five reviewers, none of whom had impeccable credibility, who explicitly endorsed the claim that humans have a significant influence on climate.

“John’s comprehensive analysis is available on the coalition’s website:
LINK

“It should be read by everyone who has been misguided into fears for the future of our planet, and those who will have to meet the costs of the unnecessary carbon charges that are about to inflate the costs of so many of the necessities of modern life.

“Especially, it should be read by politicians, news media editors and zealots like Jim Footner of Greenpeace,” said Mr McShane.

Pakistanis lose rights to free speech, assembly, property rights, lawyers

Raw Story
November 5, 2007

The Associated Press took a look at some of the restrictions of rights suspended by President George W. Bush’s key terrorism ally General Pervez Musharraf Sunday. They follow.

  • Protection of life and liberty.
  • The right to free movement.
  • The right of detainees to be informed of their offense and given access to lawyers.
  • Protection of property rights.
  • The right to assemble in public.
  • The right to free speech.
  • Equal rights for all citizens before law and equal legal protection.
  • Media coverage of suicide bombings and militant activity is curtailed by new rules. Broadcasters also face a three-year jail term if they “ridicule” members of the government or armed forces.