Threats from everywhere in 'cyber storm'

WASHINGTON (AP) - In the middle of the biggest-ever "Cyber Storm" war game to test the nation's hacker defenses, someone quietly targeted the very computers used to conduct the exercise.

The surprising culprit? The players themselves, the same government and corporate experts responsible for detecting and fending off attacks against vital computer systems, according to hundreds of pages of heavily censored files obtained by The Associated Press. Perplexed organizers sent everyone an urgent e-mail marked "IMPORTANT!" instructing them not to probe or attack the game's control computers.

"Any time you get a group of (information technology) experts together, there's always a desire, 'Let's show them what we can do,'" said George Foresman, a former senior Homeland Security official. "Whether its intent was embarrassment or a prank, we had to temper the enthusiasm of the players."

The exercise was a big deal for all concerned.

The $3 million, invitation-only war game simulated what the U.S. describes as plausible attacks over five days in February 2006 against the technology industry, transportation lines and energy utilities by anti-globalization hackers. The government is organizing a multimillion-dollar "Cyber Storm 2," to take place in early March.

Among the mock disasters confronting officials in the previous exercise: Washington's Metro trains shut down. Seaport computers in New York went dark. Bloggers revealed locations of railcars with hazardous materials. Airport control towers were disrupted in Philadelphia and Chicago. Overseas, a mysterious liquid was found on London's subway.

The list of fictional catastrophes — which also included hundreds of people on "No Fly" lists suddenly arriving at airport ticket counters — is significant because it suggests what kind of real-world trouble keeps the White House awake at night. Railway switches failed. Planes flew too close to the White House. Water utilities in Los Angeles were compromised.

The Homeland Security Department ran the exercise, with help from the State Department, Pentagon, Justice Department, CIA, National Security Agency and others.

Imagined villains included hackers, bloggers and even reporters. In one scenario, after mock electronic attacks overwhelmed computers at the Port Authority of New York and New Jersey, an unspecified "major news network" airing reports about the attackers refused to reveal its sources to the government. Other simulated reporters were duped into spreading "believable but misleading" information that confused the public and financial markets, according to the government's documents.

The upcoming "Cyber Storm 2" in March also will simulate electronic attacks against chemical plants and communication lines, and include targets in California, Colorado, Delaware, Illinois, Michigan, North Carolina, Pennsylvania, Texas and Virginia.

"They point out where your expectations of your capabilities may be overstated," Homeland Security Secretary Michael Chertoff told the AP. "They may reveal to you things you haven't thought about. It's a good way of testing that you're going to do the job the way you think you were. It's the difference between doing drills and doing a scrimmage."

The AP obtained the Cyber Storm internal records nearly two years after it requested them under the Freedom of Information Act. The government censored most of the 328 pages it turned over, marked "For Official Use Only," citing rules against disclosing sensitive information. The government is still reviewing hundreds more documents before they can be turned over to the AP.

"Definitely a challenging scenario," said Scott C. Algeier, who runs a cyber-defense group for leading technology companies, the Information Technology Information Sharing and Analysis Center.

For the participants — including government officials from the United States, England, Canada, Australia and New Zealand and executives from technology and transportation companies — the mock disasters came fast and furious: hacker break-ins at an airline; stolen commercial software blueprints; problems with satellite navigation systems; trouble with police radios in Montana; school closures in Washington, Miami and New York; computer failures at border checkpoints.

The incidents, designed to tax responders, were divided among categories: computer attacks, physical attacks and psychological operations.

"We want to stress these players," said Jeffrey Wright, the former Cyber Storm director for the Homeland Security Department. "None of the players took 100 percent of the correct, right actions. If they had, we wouldn't have done our job as planners."

How did they do? Reviews were mixed. Companies and governments worked successfully in some cases. But key players didn't understand the role of the premier U.S. organization responsible for fending off major cyber attacks, called the National Cyber Response Coordination Group, and it didn't have enough technical experts. Also, the sheer number of mock attacks complicated defensive efforts.

The little-known Cyber Response group, headed by the departments of Justice and Homeland Security, represents the largest government departments, including law enforcement and intelligence agencies.

The 2006 exercise had no impact on the real Internet. Officials said they were careful to simulate attacks using only isolated computers, working from basement offices at the Secret Service's headquarters in downtown Washington.

U.S. slump spreading around the globe, IMF warns

HEATHER SCOFFIELD
ECONOMICS REPORTER; With files from Reuters

January 30, 2008

OTTAWA -- Financial turbulence is carrying the U.S. slump to the rest of the world, and now the global economy is in the midst of a serious slowdown, the International Monetary Fund said yesterday.

"It will be very hard for even the most effective countercyclical policy to keep any country from having some slowdown in these circumstances," said the IMF's chief economist, Simon Johnson.

"No one is exempt from a global slowdown. That is why you call it 'global.' "

He was updating the IMF's world economic outlook, which now forecasts global growth of 4.1 per cent this year, after 4.9 per cent for 2007. The forecast is gloomier than three months ago, when the IMF projected global growth of about 4.4 per cent, mainly because the United States is slowing rapidly, and faltering in Europe and Japan.

"The projections for the advanced economies have been reduced significantly," the IMF said.

To drive home its point, the IMF predicted that between the fourth quarter of 2007 and the fourth quarter of 2008, the American economy would expand by just 0.8 per cent, down from 2.6 per cent during the same period a year earlier.

Many economists have sought solace in the strength of emerging markets, but even they won't escape unscathed, the IMF said. As a group, they grew 7.8 per cent in 2007, but will slow down to 6.9 per cent in 2008.

Still, China is expected to remain strong. Growth will decelerate, but from 11.5 per cent in 2007 to 10 per cent in 2008. And that is enough to make sure commodity prices remain buoyant and supportive of reasonable growth in Canada this year, said Stephen Poloz, chief economist at Export Development Canada.

The updates issued yesterday did not go into great detail, giving forecasts only for economic regions. The reports did not mention Canada specifically, but the global and U.S. forecasts would be consistent with Canadian growth of about 2 per cent this year, or less, economists said.

"What we're seeing is the feedback of financial instability into the economy," said Richard Kelly, senior economist at Toronto-Dominion Bank.

Indeed, the IMF warned that if the subprime crisis continues to deepen, things could get a lot worse, both in the United States and in Western Europe.

"A possibly deeper economic downturn in the United States or elsewhere could also serve to widen the crisis beyond the subprime sector, as credit deteriorates more broadly," the IMF said in an update on global financial stability.

The report warned that tight credit conditions will persist, since market players are now worried about far more than structured products wrapped up in subprime loans. Investors are also concerned about the balance sheets of financial institutions and worsening economic conditions, the IMF pointed out. However, the IMF also said it was somewhat comforted by the fact that some banks were raising capital, including from sovereign wealth funds, to bolster their weakened balanced sheets.

The key for countries trying to mitigate the damage is policy, the IMF stressed. Regulators and auditors have to help rebuild confidence among banks. And central banks need to work together more to make sure the liquidity requirements of money markets are met.

"Central banks could usefully review the effectiveness of their tools to reduce market stress - and whether they work globally," the IMF said.

The Bank of Canada joined the U.S. Federal Reserve, the European Central Bank and Switzerland's central bank in injecting liquidity into term money markets in December, to smooth out markets over year-end. But that kind of co-operation has been rare, and is far from institutionalized.

US soldier suicides reach record number

Roxanne Escobales and agencies
Thursday January 31, 2008
Guardian Unlimited

The suicide rate among US soldiers has reached its highest level since records began almost 30 years ago, officials said.

Last year, 121 active members of the army took their own lives, up 20% on the previous year. Thirty-four of last year's deaths happened while the soldier was deployed in Iraq, compared to 27 in 2006.

Also on the rise are attempted suicides and self-harm. The number of soldiers who tried but failed to kill themselves or who deliberately injured themselves rose to 2,100 in 2007, up from 500 in 2002.

The Washington Post today reported on the case of Lieutenant Elizabeth Whiteside, who attempted suicide on Monday night by swallowing pills. She left a note saying: "I'm very disappointed with the army."

Whiteside had been awaiting news on a potential court martial for pulling a gun on a superior officer and then shooting herself after suffering a mental breakdown while working as a medic at an Iraqi prison.

She is now in stable condition, and the charges against her have been dropped.

The Post said studies had found that failed personal relationships, legal and financial problems and job-related stress have been the most common factors in soldiers' suicides.

With the army stretched thin by years of fighting two wars, the Pentagon last year extended normal tours of duty from 12 months to 15. Some troops have been sent back to the frontline several times.

Combat Stress, a British charity that provides care for veterans, said the most common mental illnesses it treats were depression, phobic disorders, obsessive compulsive disorder, substance abuse and post-traumatic stress disorder. It said many of the veterans it treats suffered from more than one of these conditions.

Consumer Spending Falls Off

By MICHAEL M. GRYNBAUM

Published: January 31, 2008

Consumer spending slowed in December and inflation continued to rise, the government said Thursday, leaving the Federal Reserve little leeway as it ponders policy decisions in the months ahead.

Spending by consumers, which accounts for more than two-thirds of the nation’s economic growth, rose by an anemic 0.2 percent in December after jumping 1 percent in November. Adjusted for inflation, spending was flat for the month.

Economists have predicted a significant downturn in spending as consumers grapple with record-high oil and food prices. The report from the Commerce Department reinforces the disappointing holiday sales figures that leading retail chains released in the last few weeks.

“With the labor market weakening and housing remaining a huge weight, the pace of consumer spending growth ought to remain painfully slow in the months ahead,” wrote Joshua Shapiro, an economist at MFR, a research firm.

As spending slows, prices continue to rise, a combination that has some economists suggesting the United States could face a period of stagflation. A closely watched gauge of inflation ticked up last month, to a 2.2 percent annual rate; that figure, the core personal consumption expenditures deflator, excludes prices of food and energy.

Over all, prices in December were 3.5 percent higher than they were a year ago, far above the Fed’s so-called “comfort zone” of 1 percent to 2 percent.

High inflation puts the Fed in a difficult situation. The central bank primarily sets monetary policy by changing a key interest rate. Lowering the rate stimulates growth, but also causes prices to rise, creating an increased inflation risk.

In its most recent policy statement, released Wednesday, Fed officials said they expect inflation “to moderate in coming quarters, but it will be necessary to continue to monitor inflation developments carefully.”

The Commerce Department report also showed that personal income levels rose 0.5 percent in December. Disposable income — after-tax salary adjusted for inflation — rose 2.1 percent since December 2006.A separate report from the Labor Department showed that new unemployment claims, a leading indicator of the labor market, increased by 69,000, to 375,000, in the week ended Jan. 26. It was the highest level since October 2005.

Meanwhile, a Chicago-based barometer of business activity fell in January. New orders dropped sharply to the lowest level since May 2003, and the price of production rose, underscoring the impact of high inflation on business owners.

“These numbers are not at recession levels, but they are only one bad month away,” wrote Ian Shepherdson, a London-based economist at High Frequency Economics, in a note to clients. “The manufacturing sector is coming under increasing pressure.”

The report, issued by the Chicago arm of the National Association of Purchasing Management, may not bode well for the ISM manufacturing index, a closely watched indicator of United States business activity. The index for December will be released on Friday.

Employment at Chicago-area businesses also fell this month. Over all, the index dropped to 51.5 from 56.4 in December.

U.S. missile strike in Pakistan hit al Qaeda nest

Thu Jan 31, 2008 8:55am EST

PESHAWAR, Pakistan (Reuters) - A suspected U.S. missile strike that killed up to 13 foreign militants in Pakistan's North Waziristan region this week had targeted second or third tier al Qaeda leaders, according to residents in the tribal area.

Initial reports said 10 people were killed in the attack on Monday on a house in Torkhali village near the town of Mir Ali.

An intelligence official, however, told Reuters on Thursday that based on information gleaned from tribal contacts there were seven Arabs and six Central Asians killed.

He said the attack was believed to have been carried out by a pilotless U.S. Predator aircraft flown across the nearby border with Afghanistan.

"The missile appeared to have been fired by a drone," the intelligence official said.

The Pakistani authorities have not confirmed the attack, and the Pentagon has denied taking any action, but the Defense Department does not speak for the Central Intelligence Agency, which operates Predators that the tribesmen say carried out the attack late on Monday.

Villagers saw two drones flying over the area before the attack. They didn't see the missile being fired but one heard a plane's engine before the explosion.

Intelligence officials said the area is controlled by Islamist militants and too dangerous for security forces to go. After the attack, militants surrounded the area and barred anyone from going near the house.

Ahmed Aziz, a 70-year-old resident, told Reuters that the militants also stopped villagers from attending the funerals, which was a sign that those killed were all foreigners.

"When local people die, they don't stop anyone from attending their funerals," Aziz said.

Tribesmen in the area said a deputy of Abu Laith al Libi, a senior al Qaeda leader, had been staying there and was among the dead, according to the intelligence official.

"The latest information we have from the area is that a second-in-command to al Libi was among those killed," he said.

A leading Pakistani daily, The News, reported that the strike had targeted Libi and another senior figure, Obaidah al Masri, though neither was present at the time of the attack according to a senior Taliban commander quoted by the newspaper.

Libi and Masri were promoted up the al Qaeda ranks due to successful U.S. and Pakistani operations in the past to catch or kill the guerrilla network's second tier leaders.

U.S. forces in Afghanistan have launched similar attacks on al Qaeda targets on the Pakistani side of the border several times in recent years.

If it was a U.S. drone attack, the lack of confirmation is not unusual. Pakistan says it will not tolerate violations of its territorial sovereignty and reports of such attacks are embarrassing for the U.S.-Pakistani alliance.

Fed Reduces Rate by Half-Point; 2nd Cut in 8 Days

NEW YORK TIMES

WASHINGTON — The Federal Reserve reduced short-term interest rates on Wednesday for the second time in eight days, meeting widespread expectations by investors on Wall Street for a big rate cut.

In lowering its benchmark Federal funds rate by half a point, to 3 percent, the central bank acknowledged that it is now far more worried about an economic slowdown than rising inflation, and it left open the possibility of additional rate reductions.

“Financial markets remain under considerable stress, and credit has tightened further for some businesses and households,” the central bank said in a statement accompanying its decision. In addition, it said, recent data indicated that the housing market is still getting worse and the job market appears to be “softening.”

Taken together, the back-to-back rate cuts totaling 1.25 percent amounted to the Fed’s most aggressive effort in years to head off a recession. By comparison, the Fed under Alan Greenspan reduced the overnight rate by only a half-point after the terrorist attacks on Sept. 11, 2001.

The news on Wednesday briefly sent stocks higher on Wall Street. Within minutes after the announcement, the Dow Jones industrial average, which had been down slightly in early afternoon, was up 100 points. But it gave up all those gains and closed down 37 points, or 0.3 percent.

Hours before the Fed announced its decision, the Commerce Department estimated that the nation’s economic growth slowed markedly in the fourth quarter of 2007 to an annual rate of just 0.6 percent from 4.9 percent in the third quarter.

The slowdown was sharper than the already-gloomy forecasts of most economists on Wall Street, where the consensus estimate called for fourth-quarter growth of 1.2 percent.

The Fed’s move on Wednesday came after it electrified investors on Jan. 22 with an even bigger surprise rate cut — three-quarters of a point — at a rare unscheduled meeting.

The Fed cut dovetailed with efforts by Congress and the White House to pass a fiscal stimulus bill that would inject at least another $160 billion into the economy this year in the form of deficit-financed tax rebates for individuals and tax breaks for businesses.

The House passed a measure earlier this week, after reaching agreement with the Bush administration. The Senate Finance Committee began work Wednesday on a bill that would add more money for unemployment benefits, food stamps and potentially other government spending programs.

Though House and Senate lawmakers are expected to haggle over the precise shape of the fiscal package, there is a broad political agreement between Democratic leaders in Congress, President Bush and the Federal Reserve on the need for a stimulus package of some kind.

Taken together, the fiscal package and the Fed’s own rate reductions would amount to a one-two punch aimed at jolting the economy enough to keep it out a recession — or at least mitigate the effects of any downturn that might develop.

Since the Fed reluctantly began reversing course in August, when credit markets abruptly froze in panic as a result of soaring default rates on subprime mortgages, the central bank has slashed the overnight federal funds rate by almost half in a total of five actions thus far.

But policy makers faced difficult questions about how deep to cut rates, and there was widespread uncertainty about whether they would reduce them by a half-percent or by only a quarter-percent.

On Wall Street, where the clamor about a recession remains at a fever pitch, investors had betting heavily on a bigger cut and were poised to send stock prices sharply lower if the Fed moved more cautiously.

Even with the Commerce Department’s preliminary estimate on Wednesday of extremely slow growth in the fourth quarter of last year, the evidence of an impending recession is mixed.

Indeed, many economists estimate that the economy may have added about 100,000 jobs in January — a big improvement from the nearly stagnant pace in December of 18,000 jobs.

Indeed, the ADP monthly survey of job creation, released on Wednesday, estimated that the nation added 130,000 private-sector jobs in January. Though the ADP survey often clashes with the Labor Department’s monthly employment report, which is due out on Friday, the results prompted many economists to raise their estimates of job growth in January.

The Commerce Department reported on Tuesday that orders for all durable goods — big-ticket items like commercial aircraft and auto parts — jumped 5.2 percent last month. Excluding orders for transportation goods, which are volatile from month to month, orders climbed 2.6 percent, the first increase since September.

Ben S. Bernanke, the chairman of the Federal Reserve, and other Fed officials are already under fire from two directions. Many analysts on Wall Street complain that the central bank has moved too slowly in response to signs of a faltering economy. They point to a plunge in housing that does not seem to have hit bottom, slowing growth in retail sales and tight credit.

But a significant minority of economists argues that policy makers have let themselves be unnecessarily alarmed by panicky swings in the stock market. If the central bank props up the economy with easy money, they warn, the result will be higher inflation in the future.

Richard DeKaser, chief economist at National City Corporation, a Cleveland bank, is skeptical that the economy is headed for a recession, despite the common assumption that it is. “Few seem to take seriously the prospect that we are not going into a recession,” said Mr. DeKaser, who cites the latest labor market data, showing fewer weekly claims for unemployment benefits and encouraging layoff numbers, which suggest to him that the nation has added a hefty number of jobs in January.

And despite the huge losses and write-offs stemming from subprime mortgages, he added, many business borrowers have yet to face a credit squeeze.

Members of the central bank’s Federal Open Market Committee, which decides interest rates, have shown clear signs of disagreement among themselves.

Fed officials acknowledged earlier this month that they had lowered their forecasts for economic growth this year, even though their previous forecast had already assumed a slowdown in the first half of this year.

Mr. Bernanke acknowledged on Jan. 10 that the housing market was still in a free fall and that the turmoil in subprime mortgage markets had shaken the broader credit markets.

When the Fed surprised investors by cutting its overnight rate at an unscheduled meeting on Jan. 22, officials left little doubt that they would lower the rate yet again at their regularly scheduled two-day policy meeting this Tuesday and Wednesday.

Fed officials acknowledge that psychology and expectations are playing an important role in the financial markets. To the extent that investors remain fearful about credit risks, markets for mortgage-backed securities are likely to remain dysfunctional and banks will be forced to write down even more of their loan portfolios.

But analysts say Mr. Bernanke faces a difficult challenge in trying to manage expectations. On the one hand, they say, the Fed wants to act decisively enough to reassure investors and the public that it will prevent the economy from sinking. On the other hand, they say, Mr. Bernanke does not want to be seen as panicking in response to a plunge in the stock market.

U.S. Stock-Index Futures Fall; MBIA, Amazon.com, Starbucks Drop

By Michael Patterson

Jan. 31 (Bloomberg) -- U.S. stock-index futures fell on concern that the Federal Reserve's interest-rate cuts will fail to rescue the economy from the collapse of the subprime mortgage market.

MBIA Inc., the largest bond insurer, tumbled after reporting a record loss that put its AAA credit rating further into jeopardy. Citigroup Inc. led banks lower after Standard & Poor's said mortgage-related writedowns at financial companies may exceed $265 billion. Futures extended declines after European markets fell and the Labor Department reported a bigger-than-forecast increase in initial jobless claims.

The S&P 500 is headed for its worst-ever January on concern credit-market losses will cause the world's largest economy to contract. S&P 500 futures expiring in March retreated 17 to 1,333.6 as of 8:55 a.m. in New York. Dow Jones Industrial Average futures decreased 130 to 12,264. Nasdaq-100 Index futures slipped 23 to 1,788.5.

``It's hard to imagine earnings rising across the board in such an environment,'' said Juergen Lukasser, who helps manage the equivalent of about $20 billion as head of equities at Constantia Privatbank AG in Vienna. ``The financial industry is in dark clouds. We're far from being out of the woods yet.''

Profit excluding some items at S&P 500 companies probably fell 18 percent in the fourth quarter, the biggest decline since 2001, according to analysts' estimates compiled by Bloomberg. For the current quarter analysts expect earnings to rise 1.2 percent.

U.S. stocks fell yesterday on concern bond insurers, which combined guarantee $2.4 trillion of debt, will lose AAA credit ratings. The S&P 500 erased a 90-minute, 1.7 percent rally that was spurred by the Federal Reserve's second rate cut in nine days.

Insurance Concern

MBIA lost $1.14 to $12.82. The fourth-quarter net loss of $18.61 a share came a day after FGIC Corp.'s insurance unit became the third company to be stripped of its AAA grade. Without a top-rating stamp, MBIA's business would be crippled and throw ratings on $652 billion of securities into doubt.

MBIA is seeking to convince Moody's Investors Service to retain the highest ranking for its insurance unit as Chief Executive Officer Gary Dunton tries to shore up capital through stock and bond sales.

S&P cut or put on review yesterday the ratings on $534 billion of bonds and collateralized debt obligations tied to home loans made to people with poor credit. Losses from the securities may exceed $265 billion as regional U.S. banks, credit unions and overseas financial institutions write down the value of holdings, S&P said.

Citigroup, the biggest U.S. bank by assets, lost 53 cents to $27.35. Merrill Lynch & Co., the largest U.S. brokerage, declined 59 cents to $55.50.

Amazon, Starbucks

Amazon.com dropped $6.24 to $67.97. Fourth-quarter profit margins contracted because of lower prices and changes in the types of products sold, Chief Financial Officer Thomas Szkutak said. The company forecast full-year operating income of between $785 million and $985 million. Eleven analysts surveyed by Bloomberg estimated operating profit of $1.18 billion.

Starbucks Corp. decreased 87 cents to $18.35. The world's biggest chain of coffee shops said it will open fewer cafes this year and forecast annual profit that trailed analysts' estimates.

Procter & Gamble Co. fell 78 cents to $64.31. The largest U.S. consumer-products company said second-quarter profit rose 14 percent on price increases and higher overseas sales. P&G also said it will separate its Folgers coffee business from the rest of the company.

Bristol-Myers Squibb Co. lost 26 cents to $23. The seller of the anti-clotting pill Plavix posted profit excluding some items that trailed analysts' estimates after taking charges on investments backed by subprime securities.

Europe's Dow Jones Stoxx 600 index lost 1.8 percent, dragged down by financial shares including ING Groep NV and UBS AG. Asian stocks rose after Honda Motor Co. raised its forecast and Hyundai Heavy Industries Co. reported a record profit.

Chance of U.S. recession at least 50 pct-Greenspan

Wed Jan 30, 2008 5:51am EST

BERLIN, Jan 30 (Reuters) - The likelihood of the U.S. economy slipping into recession is at least 50 percent, former Federal Reserve Chairman Alan Greenspan was quoted on Wednesday as saying.

"I believe the probability of a recession is at least 50 percent, but up to now there are few signs that we are already in one," Greenspan said in an interview with weekly newspaper Die Zeit published in German. "In my opinion, it will probably happen but the facts suggest we are not there yet."

Asked whether central bankers and financial policymakers could head off a U.S. recession, Greenspan said: "Probably not. Global economic influences today are stronger than almost anything that monetary or fiscal policy can counter them with."

"Long-term real interest rates have significantly more influence on the core of the economy than decisions by national governments," he added. "And central banks have increasingly lost the ability to influence these long-term rates, whereas 20 or 30 years ago they still dominated there.

"So the more important question today is in which direction long-term real interest rates are heading."

The Fed is expected to cut interest rates again on Wednesday as part of its effort to offset the effects of a deep housing slump and credit crunch. This cut would follow a 75 basis point reduction last week to 3.5 percent and mark one of the deepest and fastest rate-cutting episodes since the early 1980s.

The U.S. economy grew at a 4.9 percent annual rate in the third quarter of 2007, but gloomy economic data this month -- notably a report of weak hiring in December -- suggests growth has slowed abruptly. (Reporting by Iain Rogers; editing by David Stamp)

IMF: U.S. economy will avoid a recession

IMF: U.S. economy will avoid a recession

Global economy set to slow in 2008 due to woes in U.S. housing

The Associated Press

updated 11:43 a.m. ET, Tues., Jan. 29, 2008

WASHINGTON - The world economy will slow significantly in 2008 but the United States will avoid recession, the International Monetary Fund forecast Tuesday.

The stimulus package being hashed out between Congress and the White House, along with the Federal Reserve’s recent cut of a key interest rate, should provide a modest boost to U.S. economic growth by the middle of the year, IMF officials said.

“This is actually a good combination of policies for the U.S.,” Simon Johnson, economic counselor and director of the research department at the IMF, said during a press briefing.

Slower U.S. growth and credit market turmoil stemming from U.S. housing market woes also will hinder the global economy, the IMF said.

“The five-year long global expansion has begun to moderate in response to the spreading effects of financial disruptions,” Johnson said.

Rising home foreclosures and falling home prices caused U.S. financial markets to drop steeply in recent months, as major banks such as Citigroup Inc. and Merrill Lynch & Co. Inc. have written down billions of dollars of securities that include bad home loans.

U.S. economic growth will slow to 1.5 percent in 2008, Johnson said, down from an estimated growth rate of 2.2 percent in 2007. The 2008 projection is lower than the IMF’s October 2007 prediction of 1.9 percent.

The IMF now sees world economic growth slowing to 4.1 percent this year, down from 4.9 percent in 2007.

The reduction is the second cut in a row in the IMF’s estimate of global economic growth for this year. Last July, the IMF estimated the world economy would grow 5.2 percent in 2008, and in October the estimate was reduced to 4.4 percent.

The estimates were included in an update of the IMF’s World Economic Outlook, which is issued twice a year. The next update will be issued in April.

© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/22897398/

Jobless claims tally jumps to two-year high

Jobless claims tally jumps to two-year high

Aid applications rose to a larger-than-expected 69,000 last week

Reuters

updated 8:39 a.m. ET, Thurs., Jan. 31, 2008

NEW YORK - The number of U.S. workers filing new claims for jobless aid jumped by a much larger-than-expected 69,000 last week to the highest in over two years, government data on Thursday showed, but the numbers were likely skewed by the timing of a public holiday.

The Labor Department said that initial claims for state insurance benefit totaled 375,000 in the week ending Jan. 26, the highest reading since October 2005, when claims reached 376,000. It was also the largest weekly increase since September 2005, when claims had mounted by 95,000, the Labor Department said.

Economists surveyed by Reuters had forecast 315,000 claims last week following an upwardly revised 306,000 the week before, previously reported at 301,000 claims.

Copyright 2008 Reuters. Click for restrictions.

URL: http://www.msnbc.msn.com/id/22931307/

Next round of gas hikes won’t be due to oil

Expensive additive alkylate, which replaced MTBE, is in short supply

The Associated Press

updated 4:53 p.m. ET, Wed., Jan. 30, 2008

NEW YORK - Get ready for another surge in gasoline prices.

Experts are predicting pump prices, which jumped by almost a dollar a gallon in each of the last two springs in many parts of the United States, will spike again this year as refiners and gas stations switch from winter- to summer-blended fuels.

The increases, starting as early as February in southern California, could push the average national price to a record $3.50 a gallon or more by June.

That would be 17 percent higher than today's average of just under $3 a gallon, which already is about 80 cents a gallon higher than year-ago levels thanks to the surge of crude oil that took futures prices briefly to $100 a barrel. Prices in urban areas on each coast could approach $4 a gallon.

And the reason for the spring price shocks? Analysts say it's linked to a shortage of alkylate, a little-known and expensive gasoline additive that some in the industry are calling "liquid gold." It has become a must-have ingredient since refiners stopped using MTBE two years ago when the potentially cancer-causing additive was found to be seeping into ground water.

The alkylate shortage has become the most important driver of summer gas prices, said Doug Leggate, an analyst at Citigroup Global Markets. "Supply of (alkylate) will set the price of summer gasoline — not inventory levels," he said.

Oil companies deny they are purposely limiting production of alkylate, which like gasoline, jet fuel and asphalt is a byproduct of the oil refining process. But only recently have some started studying how they can boost output, and alkylate prices today are more than 15 percent higher than spot gasoline prices. That means overall costs will jump when it is added in larger quantities to summer-blend fuel.

Without additives, gasoline doesn't burn completely, increasing tailpipe air pollution. And untreated gas evaporates more quickly in hot weather, potentially causing vapor lock when it changes from a liquid to a gas and blocks fuel lines.

The federal government long ago required refiners to boost the oxygen content of summer-blend gasoline to make it burn more completely, a problem that was solved by adding MTBE and, more recently, ethanol.

But ethanol also has a high evaporation rate, so refiners increasingly have turned to alkylate, which Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J., calls the "magic bullet" in making summer gasoline.

Alkylate and other gasoline additives don't raise the same safety issues as MTBE because they don't bond with water as effectively as MTBE did, analysts say.

Demand for alkylate changes with the seasons, falling in autumn and rising in the spring. On average, alkylate makes up about 10 percent of a gallon of gas, though that rises to as much as 15 percent in summer. But making more of it is not as simple as throwing a switch since the underlying chemical properties of oil limit how much of any one refined petroleum product can be produced.

On average, about 44 percent of each barrel of oil ends up as gasoline, 22 percent as diesel fuel and heating oil, 9 percent as jet fuel, and about 4 percent each as heavy fuel oil and liquefied petroleum gas, according to the Energy Department. The remainder is comprised of smaller products and additives.

The refining process is loud, hot and smelly. Boilers separate, or "crack," oil into new substances by subjecting it to high temperatures and pressure. As different products are boiled out, pipes carry them to other boilers or vessels where they're further refined, mixed with other substances or cleaned of pollutants and toxins.

Alkylate is made via a chemical reaction sparked when olefin fluids and isobutane — two of the smaller byproducts of the main gasoline producing unit — are mixed with acid.

"As opposed to the (gasoline unit) that cracks big components into small, this one takes two components and basically combines them," said Mark Fligner, director of planning and economics at Valero Energy Corp.'s refinery in Paulsboro, N.J., across the Delaware river and just south of Philadelphia.

Owners of about two-thirds of U.S. refineries have invested the $100 million or more it takes to add an alkylate unit. The rest have to buy alkylate on the spot market if they want to use it as additive in their gasoline supplies.

Refiners aren't gaming the system, purposely limiting alkylate production to boost gas prices, said John Auers, senior vice president at Turner Mason & Co., a Dallas consultancy. "They're not because they can't," he said. "You can't make more alkylate than you have feedstocks."

But there are tradeoffs that every refiner must weigh. For example, olefins and isobutane are in high demand for use in producing other lucrative products like plastics. Refiners can tweak their main gasoline producing unit to make more olefins and isobutane, but that would cut the gasoline output.

Alkylate prices have jumped from 77 cents a gallon in the summer of 2001 — when MTBE was still in use — to nearly $3 a gallon at points over the past two summers. Wednesday's price on the spot market was $2.72 a gallon, 40 cents more than the spot price of gasoline, according to Platts. Retail prices for gas are higher because things like state and federal taxes are added. In recent summers, that spot market differential has jumped as high as 60 cents.

Refiners place the blame for spring gas price increases on crude costs, environmental regulations that have increased the overall cost of refining, and their inability to expand or build new refineries fast enough to keep up with gasoline demand.

John Pickering, vice president and general manager at the Paulsboro refinery, said Valero makes enough alkylate to meet its needs, but concedes that there is a national shortage of the additive in the spring and summer.

Other refiners contacted by The Associated Press said they are reluctant for competitive reasons to talk about how they blend gasoline, or whether they face alkylate shortages.

What is known, however, is that refiners are hiring companies such as UOP LLC of Des Plaines, Ill., to determine whether they can increase the capacity of their existing alkylation units. "In the last year or so, there has been a significant uptick (in business)," said Ashis Banerji, director for refining at UOP, which licenses alkylation technology to refiners.

And the 36 percent of domestic refineries that don't have alkylation units are looking at adding them.

"Our impression is that refineries are moving as fast as they possibly can to add alkylation capacity," said Jim Pawloski, business director at UOP competitor DuPont Clean Technologies, a unit of DuPont Co. He said his unit's business has jumped five-fold over the past five years and will likely double again this year.

The steep jump in summer alkylate prices has also caught the attention of at least two companies that used to produce MTBE. Enterprise Products Partners LP and Texas Petrochemicals Inc., both of Houston, say they're closely studying whether to convert idled MTBE plants into alkylate factories.

That also highlights the conundrum that is alkylate: If too many refiners decide to spend big bucks to crank up production, the premium prices now enjoyed by alkylate makers could disappear.

Refiners have to weigh the cost of such an investment against the incremental cost of simply buying the extra alkylate they need. "I'm not sure that it would be economical," said Jeff Hazle, technical director at the National Petrochemical and Refiners Association.

But if production doesn't rise, American motorists will be faced with big jumps in spring gas prices for years to come.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/22919642/page/2/

Peacekeepers 'deface ancient art'

Peacekeepers 'deface ancient art'

UN peacekeepers in the disputed African territory of Western Sahara have vandalised ancient rock paintings, a UN official has told a UK newspaper.

The Times has published pictures of the paintings, some 6,000 years old, showing them defaced with spray paint.

Julian Harston, the UN official responsible for Western Sahara, said he had been shocked by the vandalism.

He said funds would now be sought from the UN cultural organisation, Unesco, to remove the graffiti.

Western Sahara has been at the centre of a bitter dispute since former colonial power Spain pulled out in 1975 and neighbouring Morocco invaded.

UN peacekeepers were deployed in 1991 to monitor a ceasefire between Morocco and the Algerian-backed Polisario Front, which has been seeking independence for the territory.

'Tragedy'

Graffiti, including the spray-painting of UN personnel's names, can been seen at Lajuad, an important archaeological site, Mr Harston said.

According to The Times, an area there known as Devil Mountain is regarded by the local Sahrawi people as a place of great cultural significance.

"I was appalled. You'd think some of them would know better. These are officers, not squaddies," Mr Harston said.

Nick Brook, a climate scientist who runs the Western Sahara Project, has written a blog about his findings which show pictures of graffiti more than a metre high on granite rocks.

He says the vandalism at Lajuad is not the first example of the deliberate vandalism of an archaeological site by the UN.

"It is a tragedy that UN personnel tasked with resolving one of the world's longest running military and political conflicts are engaging in the wilful destruction of important archaeological sites that have much to teach us about the prehistory of a part of the world that is virtually unknown to the international research community," he writes on his Sand and Dust blog.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/africa/7219297.stm

Published: 2008/01/31 10:41:29 GMT

Regional Monetary Integration

A CFR Book. Cambridge University Press
248 pages

ISBN 9780521711500
$24.99

Overview

This book surveys the prospects for regional monetary integration in various parts of the world. Beginning with a brief review of the theory of optimal currency areas, it goes on to examine the structure and functioning of the European Monetary Union, then turns to the prospects for monetary integration elsewhere in the world—North America, South America, and East Asia. Such cooperation may take the form of full-fledged monetary unions or looser forms of monetary cooperation. Regional Monetary Integration emphasizes the economic and institutional requirements for successful monetary integration, including the need for a single central bank in the case of a full-fledged monetary union and the corresponding need for multinational institutions to safeguard the bank’s independence and assure its accountability. The book concludes with a chapter on the implications of monetary integration for the United States and the U.S. dollar.

• Reviews & Endorsements
• The Author

Reviews & Endorsements

“Impending euro-zone expansion and dreams of monetary integration in East Asia have raised the serious prospect of a world with far fewer currencies than we have today. In this well-informed and timely book, Peter Kenen and Ellen Meade review the theory of monetary integration, the euro zone’s experience since its launch in 1999, the likelihood of large regional currency areas in Latin America and East Asia, and the implications for America’s central role in the international monetary system. Anyone interested in the interplay between globalization and regionalism, or simply in the future of the world economy, must read this book.”
—Maurice Obstfeld, University of California, Berkeley

“In Regional Monetary Integration, two leading economists provide an outstanding review of theoretical issues and empirical experiences in monetary integration. They start with an excellent summary of theoretical approaches to currency unions. This is followed by an exceptionally clear and concise survey of the European experience. The volume is rounded out by a consideration of the performance of historical and contemporary monetary unions, and by an analysis of the prospects for future unions in the Americas and East Asia. Regional Monetary Integration is an authoritative overview of economic issues in monetary integration, and of its likely future.”
—Jeffry Frieden, Harvard University

“This book provides a clear and balanced account of the analytics, historical record, current state, and future outlook for countries adopting some form of regional monetary integration, ranging from a currency board system through de jure dollarization to a single currency area, such as the euro zone. Given the practical and political importance of the subject, the clarity of presentation (no thickets of equations), and the wisdom of the authors, this is a book that should be very widely read, by students, practitioners, and policy makers, as well as by other academics.”
—Charles Goodhart, London School of Economics

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The Author

Peter B. Kenen is adjunct senior fellow in international economics at the Council on Foreign Relations and Walker professor of economics and finance, emeritus, at Princeton University. Professor Kenen’s publications include The International Economy (2000, Cambridge University Press), Economic and Monetary Union in Europe (1995, Cambridge University Press), The International Financial Architecture, and International Economic and Financial Integration. He was a member of President Kennedy’s Task Force on Foreign Economic Policy and the economic advisory panel of the Federal Reserve Bank of New York. Professor Kenen has served as consultant to the Council of Economic Advisers, the Office of Management and Budget, the Federal Reserve, the U.S. Treasury, and the International Monetary Fund.

Ellen E. Meade is associate professor in the department of economics at American University. She was guest scholar at the Brookings Institution (2004–2005), senior research fellow at London School of Economics (2001–2004), senior economist for the Council of Economic Advisers (1994–5), and senior economist, Federal Reserve Board of Governors (1984–99). Professor Meade has published in the Journal of Economic Perspectives and the Journal of Money, Credit, and Banking, among others, and has taught economics courses in the central banks of Syria and Bosnia/Herzegovina.

CFR Climate Change Report

• 
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  • DOWNLOAD THE FULL TEXT OF THE REPORT HERE (138K PDF)

  "While not all of the costs of climate risk reduction will ultimately have to be
  shouldered by the government, some public resources will be needed, even if these are
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Chance of recession at least 50 percent: Greenspan

Reuters
Wednesday January 30, 2008

The likelihood of the economy slipping into recession is at least 50 percent, former Federal Reserve Chairman Alan Greenspan was quoted on Wednesday as saying.

"I believe the probability of a recession is at least 50 percent, but up to now there are few signs that we are already in one," Greenspan said in an interview with weekly newspaper Die Zeit published in German. "In my opinion, it will probably happen but the facts suggest we are not there yet."

Asked whether central bankers and financial policymakers could head off a U.S. recession, Greenspan said: "Probably not. Global economic influences today are stronger than almost anything that monetary or fiscal policy can counter them with."

"Long-term real interest rates have significantly more influence on the core of the economy than decisions by national governments," he added. "And central banks have increasingly lost the ability to influence these long-term rates, whereas 20 or 30 years ago they still dominated there.

"So the more important question today is in which direction long-term real interest rates are heading."

The Fed is expected to cut interest rates again on Wednesday as part of its effort to offset the effects of a deep housing slump and credit crunch. This cut would follow a 75 basis point reduction last week to 3.5 percent and mark one of the deepest and fastest rate-cutting episodes since the early 1980s.

The U.S. economy grew at a 4.9 percent annual rate in the third quarter of 2007, but gloomy economic data this month -- notably a report of weak hiring in December -- suggests growth has slowed abruptly.

Dollar eases ahead of Fed decision

Peter Garnham
Financial Times
Wednesday January 30, 2008

The dollar drifted lower on Wednesday as traders awaited the Federal Reserve’s decision on US interest rates later in the session.

Markets were pricing in an 85-per-cent chance that the Fed would follow up last week’s emergency 75 basis-point cut in its Fed funds rate with another 50 basis-point move to 3 per cent after its policy meeting at 19.15GMT.

The dollar eased 0.2 per cent to $1.4810 against the euro, lost 0.1 per cent to Y106.95 against the yen and fell 0.1 per cent to $1.9920 against the pound.

However, analysts said the spectre of the Fed’s decision should dampen volatility on the currency markets.

“The Fed interest rate decision is the key event today and markets are likely to tread water ahead of the decision,” said Mitul Kotecha at Calyon.

He said he expected the central bank to cut its Fed funds rate by 50 basis points, which could give market sentiment a boost since it was not fully priced into the market.

However, Mr Kotecha said he continued to believe that the dollar was unlikely to weaken much further from current levels.

“Much has been debated about the impact of a recession on the dollar but based on past evidence it is not clear that it weakens when the economy is in recession,” he said.

However, Derek Halpenny at Bank of Tokyo Mitsubishi-UFJ said the collapse in the US housing market could have a profound effect effect on US household wealth and consumer spending.

“The Fed needs to act aggressively again this evening and at some point the erosion of yield will prompt a more concerted bout of dollar weakness,” he said.

Elsewhere, the pound rose 0.2 per cent to £0.7433 against the euro.

Full article here.

Return of 'sus' laws as police are given powers to stop and search without giving reason

UK Daily Mail
Wednesday January 30, 2008

Police are to be given back the power to stop and search suspects without giving a reason.

Gordon Brown is to allow officers to carry out random checks in the streets in an attempt to tackle gun and knife crime.

The "sus laws" were scrapped in 1984 in the wake of riots such as Brixton amid claims from black and Asian youths that they were being unfairly targeted by racist police.

Details of the plans will be given to MPs next week by Home Secretary Jacqui Smith amid rising concern about gang-related violence.

By apparent coincidence, Tory leader David Cameron today announced his own plans to restore stop and search as a mainstay of inner-city policing.

The Government's plans include:
• Giving borough commanders powers to designate areas as "stop and search zonesî where anybody can be frisked.
• Getting rid of a foot-long form which has to be filled in every time people are stopped by officers.
• Giving police digital tape recorders to take down details of a search.

Mr Cameron said the 27 deaths of London teenagers in shootings and stabbings last year proved the need for action, even if it was controversial.

"We are never going to deal with it unless we free the police to do far more stopping and far more searching," he said.

"I am quite clear the current rules have to go."

Government sources said Gordon Brown, who announced moves towards next week's announcement in the autumn, was equally clear that stop and search needs to be used more.

The cross-party consensus means there is likely to be an easy ride for legislation-despite the reservations of many black and Asian leaders who recall the intense unpopularity of stop and search when the powers were blamed for straining police and community relations.

Under current laws a police officer must have "reasonable suspicion" that an offence has been committed and tell a suspect what they are looking for.

Full article here.

US government, FEMA, implicated in poisoning Katrina victims

Youtube
Wednesday January 30, 2008

We need Ron Paul to help remove the federal government from running these types of operations!

Bush Issues Signing Statement On Defense Act, Waiving Ban On Permanent Bases In Iraq

Think Progress
Wednesday January 30, 2008

President Bush yesterday signed the 2008 National Defense Authorization Act after initially rejecting Congress’s first version because it would have allegedly opened the Iraqi government to “expensive lawsuits.”

Even though he forced Congress to change its original bill, Bush’s signature yesterday came with a little-noticed signing statement, claiming that provisions in the law “could inhibit the President’s ability to carry out his constitutional obligations.” CQ reports on the provisions Bush plans to disregard:

One such provision sets up a commission to probe contracting fraud in Iraq and Afghanistan. Another expands protections for whistleblowers who work for government contractors. A third requires that U.S. intelligence agencies promptly respond to congressional requests for documents. And a fourth bars funding for permanent bases in Iraq and for any action that exercises U.S. control over Iraq’s oil money.

In his “Memorandum of Justification” for the waiver, Bush cited his Nov. 26 “Declaration of Principles for a Long-Term Relationship of Cooperation and Friendship” between Iraq and the United States. This agreement has been aggressively opposed by both Republicans and Democrats in Congress as not only unprecedented, but also potentially unconstitutional because it was enacted without the agreement of the legislation branch.

Today on CNN, Rep. Bill Delahunt (D-MA) voiced concern that this declaration may indefinitely commit U.S. troops to fighting Iraq’s civil wars:

Involved in those declaration of principles, there is an implicit potential for the United States military forces, years from now, being involved in a full-blown civil war in Iraq. And I don’t believe that’s where the American people want us and I don’t think that’s in the best interest of our national security.

Earlier this month, Rep. Rosa DeLauro (D-CT) introduced legislation requiring the Bush administration “to consult with Congress before moving forward with any agreement that could lead to long term security arrangements and other major economic and political commitments.”

Throughout his presidency, Bush has issued more than 151 signing statements challenging 1149 provisions of laws.

Bicyclist tased when he runs for minor infraction

ChicoER
Wednesday January 30, 2008

HAMILTON CITY -- A man riding a bicycle with improper lighting equipment was shot with a Taser stun gun Wednesday night as he ran from a deputy who tried to stop him for the infraction.
After repeated attempts, Glenn County sheriff's deputy Cale Smith said he finally got the attention of the rider on Sierra Street, who jumped from the bike and began running.

After a half-block chase and several warnings from Smith that he would use the Taser, he did.

Sgt. Scott James said only one probe struck the man, identified as Omar Herrada Rivera, 39, and he received no shock.

Smith caught up with him near the garage of a home, and took him into custody after a brief struggle.

James said Smith was fully justified in firing his Taser, because Rivera was running toward a home, and could have endangered people inside.

"We consider the Taser as being at the same level of force as other weapons, including pepper spray and batons," James said.

He added that deputies don't deploy Tasers against subjects who are driving or riding a bike because of the risk factor.

Rivera was transported to Glenn Medical Center, where he was cleared for booking into the Glenn County Jail on suspicion of resisting arrest, riding a bicycle without proper lighting, riding under the influence of alcohol and use of false citizenship/government documents.

More than 1m people could lose homes in credit crunch, warns City watchdog

BECKY BARROW
UK Daily Mail
Wednesday January 30, 2008

More than 1million families are in danger of losing their home over the next 18 months, Britain's financial regulator warned yesterday.

It fears that huge mortgages and other debts will prove a lethal cocktail during the global credit crunch.

As banks become more wary, many coming out of a fixed-rate term on their home loan will find they cannot switch to another cheap deal.

Even the smallest increase in bills or repayments will tip some over the edge, according to the Financial Services Authority (FSA).

In the bleak forecast, it said that nearly one-fifth of those who took out a mortgage between April 2005 and September 2007 risk having their property repossessed.

This group of 1million includes those who took out their first home loan, and those who remortgaged from one deal to another.

All these customers, who borrowed during a time when property prices were soaring, have two or more of the FSA's three "high-risk" factors.

The factors are: putting down a deposit of 10 per cent or less on a home; taking a mortgage for longer than 25 years; or borrowing more than 3.5 times the customer's annual salary.

The FSA is particularly worried about 150,000 who have all three high-risk factors. They are the most likely to have their homes repossessed, the regulator said yesterday in its annual Financial Risk Outlook.

This would be double the previous record of 75,540 repossessions in the dark days of 1991, according to the Council of Mortgage Lenders.

The other 890,000 homeowners are at risk of "financial difficulty".

Full article here.

First-episode controversy: The vaccine-autism link

By Janet Kornblum, USA TODAY

The premiere episode of Eli Stone, in which a mother wins a $5.2 million lawsuit charging her son got autism from a vaccine, is stirring controversy before it airs.

The American Academy of Pediatrics is calling on ABC to cancel the show, saying in a statement that it leaves audiences "with the destructive idea that vaccines do cause autism."

ABC Entertainment rejected the request in a statement Monday, reminding viewers that the show is fictional: "The story line plays on topical issues for dramatic effect, but its purpose is to entertain."

Still, the academy, an organization of 60,000 pediatricians, is "alarmed that this program could lead to a tragic decline in immunization rates," said president Renée Jenkins in a letter to Anne Sweeney, president of Disney-ABC Television Group.

The letter — and an article criticizing that letter posted Sunday night and circulating Monday on huffingtonpost.com — is rekindling the emotional debate about vaccines and autism.

Some advocacy groups believe the preservative thimerosal, which contains mercury and once was routinely used in childhood vaccinations, is linked to autism or other brain deficits.

But several medical studies have concluded there is no link. A large study reported in September in the New England Journal of Medicine found no link between babies' exposure to the controversial vaccine preservative and the development of problems in language, behavior or intelligence.

Jenkins says even a fictional show might frighten parents away from immunizations, which routinely save lives. In the letter, she said ABC "will bear responsibility for the needless suffering and potential deaths of children from parents' decisions not to immunize based on the content of the episode."

David Kirby, author of the Huffington blog post and of the book Evidence of Harm: Mercury in Vaccines and the Autism Epidemic: A Medical Controversy, criticizes the letter, saying in his the post that it "borders on near-hysteria over a fictional television entertainment."

"I don't have all the answers," he adds in an interview, "and my job is to keep asking questions. Definitely the jury is very much out" on any autism-vaccine link.

But the jury is not out, counters Paul Offitt, chief of the Division of Infectious Diseases at Children's Hospital of Philadelphia. There have been more than a dozen epidemiological studies and none proves a link, he says. "I only hope that people see this as the fantasy that it is."

ABC says it will refer viewers to the website for the Centers for Disease Control and Prevention at the end of the program.

British PM Wants to Build a "New World Order"

Ann Shibler
JBS
Tuesday January 29, 2008

Gordon Brown wants to shake things up in the UN Security Council in order to create a "new world order" and "global society."

Follow this link to the original source: "Brown's secret talks on 'new world order'"

During a two-day trip to India (with another two days in China), British Prime Minister Gordon Brown revealed his agenda for altering the UN’s power structure. Twice he underscored India’s bid for a permanent place on what he proposes to be an expanded UN Security Council, thereby assuring “India’s rightful place” in a new world order.

More must be done, Brown said, "to make our global institutions more representative." And, "I support changes to the IMF, World Bank, and the G8 that reflect the rise of India and Asia," he continued. Citing India’s explosive economic growth — due in large part to bad U.S. foreign trade policies — he said, "dramatic and seismic shifts in economy, culture and communication are coming to revolutionise the global distribution of wealth, status, power and influence and creating the world anew."

According to the New Zealand Herald, "Brown has begun secret talks with other world leaders on far-reaching reform of the United Nations Security Council as part of a drive to create a ‘new world order’ and ‘global society’." He is proposing that the UN Security Council’s original five countries be augmented with the addition of India, Germany, Japan, Brazil and one or two African nations not yet specified. His proposal, reportedly under intense discussion with leaders from both India and China, would not include veto power for the newly added countries — at least initially.

Under the pretext of promoting peace and stability he also unveiled a plan for the UN to spend £100 million ($257 million) a year on setting up a "rapid reaction force" to stop "failed states" sliding back into chaos after a peace deal has been reached. "There is limited value in military action to end fighting if law and order does not follow," he said when justifying his plan. "So we must do more to ensure rapid reconstruction on the ground once conflicts are over and combine traditional humanitarian aid and peace-keeping with stabilisation, recovery and development."

While that sounds good, it is important to have a clear-eyed view of the UN. Since its inception, the world has not been a peaceful place. Yet, the organization’s founders and its subsequent supporters have maintained that the purpose of the world body is to eliminate war and promote peace. At this it has manifestly failed. Yet people like the British prime minister suggest that the solution is to give the organization more power and control. Decades of experience, however, strongly suggest the opposite course of action: A peaceful world would be one without the UN.

Big Brother tapping our phones and emails 1,000 times a day

NICK MCDERMOTT
UK Daily Mail
Tuesday January 29, 2008

Britain is closer to becoming a Big Brother society after it was revealed the security services and other agencies requested permission to carry out almost 1,000 bugging operations a day.

In total, the intelligence services, plus police forces, local authorities and agencies such as the serious fraud office made 253,500 requests for phone taps, the interception of emails or post in the final nine months of 2006.

Those being bugged range from suspected terrorists to potential illegal flytippers who are being monitored by councils using increasingly sophisticated surveillance to catch them breaking the law.

The report, by the Interception of Communications Commissioner Sir Paul Kennedy - a former appeal court judge - found that more than 1,000 bugging operations had been flawed.

In some instances, innocent people had their phones tapped due to administrative errors.

With Britain already possessing the highest density of CCTV cameras per person anywhere in the world, Labour MP David Winnick, a member of the Commons home affairs committee, said greater legal protection is needed to prevent abuse of surveillance powers.

He said: "Most of these operations are needed and done for good reasons, but the numbers do raise concerns about the safeguards we have put in place to protect people from constant intrusion."

Communications data has provided crucial evidence which has led to the arrest and conviction of kidnappers, rapists and paedophiles, helped prevent murders and gather intelligence on terrorism at home and abroad, the report stated.

But Sir Paul said telephone taps and other 'intercept' material should not be used in court cases, with any benefits of a change in the law 'heavily outweighed' by the disadvantages.

The Conservatives and other groups including civil rights group Liberty have argued that permitting intercept evidence in court would help convict more terrorists, as well as other serious criminals.

But the security services oppose the move because they fear it could expose their spying techniques and capabilities.

In the nine months to the end of 2006, 122 councils sought to obtain private communications in more than 1,600 cases.

Full article here.

Bush: US will 'confront' Iran if necessary

Ynet News
Tuesday January 29, 2008

WASHINGTON - US President George W. Bush warned Iran Monday that the United States will "confront those who threaten our troops" and defend its allies and interests in the Gulf.

In his last State of the Union before a hostile, Democratic-led Congress eager for the end of his term next January, Bush also urged Tehran to suspend its uranium enrichment program, embrace political reforms, and "cease your support for terror abroad."

"But above all, know this: America will confront those who threaten our troops, we will stand by our allies, and we will defend our vital interests in the Persian Gulf," he said.

Bush's ability to rally international support against Iran has been diminished by a US Intelligence report that Tehran abandoned its nuclear weapons program in 2003.

Turning his attention to the Israeli-Palestinian peace process, Bush said, "We are also standing against the forces of extremism in the Holy Land, where we have new cause for hope. Palestinians have elected a president (Mahmoud Abbas) who recognizes that confronting terror is essential to achieving a state where his people can live in dignity and at peace with Israel. Israelis have leaders who recognize that a peaceful, democratic Palestinian state will be a source of lasting security.

"This month in Ramallah and Jerusalem, I assured leaders from both sides that America will do, and I will do, everything we can to help them achieve a peace agreement that defines a Palestinian state by the end of this year," he said. "The time has come for a Holy Land where a democratic Israel and a democratic Palestine live side-by-side in peace."

On Iraq, Bush was in a better position than a year ago, when he implored skeptical Americans to embrace his plan to send thousands more troops to Iraq.

"Our enemies in Iraq have been hit hard," he said. "They have not been defeated, and we can still expect tough fighting ahead."

He announced no new troop reductions despite continuing calls from Democrats for a withdrawal timetable, something polls show most Americans want as well.

Bush's seventh State of the Union speech was a chance to set the tone for his waning months in the White House and try to salvage his frayed legacy before he leaves in January 2009.

Full article here.

Russia Air, Ground Forces to conduct joint drills in April

RIA Novosti
Tuesday January 29, 2008

Units of Russia's Air Force and Ground Forces will conduct a joint exercise in the country's Caspian region in April 2008, a senior military official said on Tuesday.

"The exercise will focus on rehearsing command and control of an Air Force and Air Defense Forces combined-arms formation" in what the military terms the Central Asian strategic sector, said Lt. Gen. Valery Stytsenkov, head of the Air Force Combat Training Directorate.

He said units will also practice interoperability and teamwork with aviation, missile defense, antiaircraft, and electronic warfare assets of the Air Force, the Air Defense Forces, and the Ground Forces.

The general said preparations were under way, exercise grounds were being tested and reconnoitered, and that relevant paperwork was being processed.

He said the exercise will cover an extensive area, including the Kapustin Yar and Ashuluk training grounds, both in south Russia's Astrakhan region near the Caspian Sea.

Stytsenkov said the first such exercise was conducted in 2007 after a long hiatus.

Buchanan: McCain win would mean war with Iran

David Edwards and Muriel Kane
Raw Story
Tuesday January 29, 2008

Says McCain would provoke new wars, 'he's in everybody's face'

"More wars" could prove to be the oddest of all presidential campaign slogans. Especially if it works.

Presidential candidate John McCain shocked observers on Sunday when he told a crowd of supporters, "There's going to be other wars. ... I'm sorry to tell you, there's going to be other wars. We will never surrender but there will be other wars."

MSNBC's Joe Scarborough asked old-line conservative Pat Buchanan about McCain's remarks, saying, "He talked about promising that more wars were coming. ... Is he so desperate to get off the economic issue?"

Pat Buchanan replied that McCain never used the word "promise" but simply said there would be more wars, and that from McCain's point of view, "that is straight talk. ... You get John McCain in the White House, and I do believe we will be at war with Iran."

"That's one of the things that makes me very nervous about him," Buchanan went on. "There's no doubt John McCain is going to be a war president. ... His whole career is wrapped up in the military, national security. He's in Putin's face, he's threatening the Iranians, we're going to be in Iraq a hundred years."

"So when he says more war," Scarborough commented, "he is promising you, if he gets in the White House, we'll not only be fighting this war but starting new wars. Is that what conservative Republicans want?

"I don't say he's starting them," Buchanan answered. "He expects more wars. ... I think he's talking straight, because if you take a look at the McCain foreign policy, he is in everybody's face. Did you see Thad Cochran's comment when he endorsed Romney? He said, look, John McCain is a bellicose, red-faced, angry guy, who constantly explodes."

"Not a happy message," commented Scarborough. "Not Reaganesque."

This video is from MSNBC News Live, broadcast January 28, 2008.

Ban music thieves from web, says U2 manager

TELEGRAPH

Music fans who repeatedly download songs illegally should have their internet connections severed, the manager of U2 has said.

Paul McGuinness, who has managed the best-selling group for 30 years, attacked internet service providers for failing to clamp down on illegal file-sharing.

He said the refusal of internet firms to punish those who download music without paying was "the single biggest failure in the digital music market".

He called on them to adopt a "three strikes and you're out" enforcement policy under which illegal downloaders would have to start paying for music or face having their ISP subscriptions terminated.

"We must shame them into wanting to help us. Their snouts have been at our trough feeding free for too long," Mr McGuinness said at the Midem music industry conference in Cannes.

"For ISPs in general, the days of prevaricating over their responsibilities for helping protect music must end. The ISP lobbyists who say they should not have to 'police the internet' are living in the past - relying on outdated excuses from an earlier technological age."

His call follows a report last week which showed that while worldwide sales of digital music grew by 40 per cent last year, they were still not enough to offset a sharp fall in CD sales.

The International Federation of the Phonographic Industry, which represents record companies across the world, warned that the "crisis" in the music industry would deepen unless ISPs took action against the millions of people who illegally download music.

Many ISPs have been reluctant to police the illegal activities of their customers, preferring to rely on record labels to bring cases against them.

But Mr McGuinness said it was time to challenge the belief that ISPs should not be held accountable for their customers' behaviour.

"If you were publishing a magazine that was advertising stolen cars, processing payments for them and arranging delivery of them you'd expect to get a visit from the police wouldn't you?" he said, in a speech titled The Online Bonanza: Who is Making All The Money and Why Aren't They Sharing It?

"What's the difference? With a laptop, a broadband account, an MP3 player and a smartphone you can now steal all the content, music, video and literary in the world without any money going to the content owners.

"On the other hand, if you get caught stealing a laptop in the computer store or don't pay your broadband bill there are obvious consequences. You get nicked or you get your access cut off."

A survey last year by Quantum Markets in Australia found that of the 2.8 billion people who regularly download illegally, 75 per cent said they did not believe they were hurting the music industry.

When asked why, the vast majority said they did not feel at risk of being punished for downloading songs for free.

Mr McGuinness called on the Government to follow the lead of Nicolas Sarkozy, the French President, and introduce legislation if voluntary talks with ISPs failed to produce a commitment to disconnect file-sharers. A spokesman for the Internet Service Providers' Association said its members preferred self regulation to legislation.

"We do not support abuses of copyright and intellectual property theft. However, ISPs cannot monitor or record the type of information passed over their networks," he said.

"ISPs are no more able to inspect and filter every single packet passing across their network than the Post Office is able to open every envelope."