Al Qaeda recruiting "western" fighters: CIA boss

By Alister Bull

WASHINGTON (Reuters) - Al Qaeda is training fighters that "look western" and could easily cross U.S. borders without attracting attention, CIA Director Michael Hayden said on Sunday.

The militant Islamist group has turned Pakistan's remote tribal areas along the border with Afghanistan into a safe haven, and is using it to plot further attacks against the United States, Hayden said.

"They are bringing operatives into that region for training -- operatives that wouldn't attract your attention if they were going through the customs line at Dulles (airport outside Washington) with you when you were coming back from overseas," Hayden said during an interview on NBC's television show Meet the Press.

"(They) look western (and) would be able to come into this country without attracting the kinds of attention that others might," Hayden said, without offering further details.

The United States went to war in Afghanistan after the September 11 attacks on U.S. cities in order to crush al Qaeda and hunt down its chief, Osama bin Laden, who Hayden confirmed was still believed by the United States to be hiding in the rugged Afghan border area.

The Washington Post reported on Thursday that the United States had stepped up unilateral attacks on al Qaeda targets in Pakistan because it fears the country's newly elected leaders will soon curb U.S. actions on their soil. Pakistan's pro-U.S. president, Pervez Musharraf, has been weakened by the defeat of his allies in the country's recent elections.

Hayden declined to comment directly on the Post article, but he stressed that the tribal regions were very sensitive.

"The situation along that Afghanistan/Pakistan border presents a clear and present danger to Afghanistan, to Pakistan, to the West in general and the United States in particular," Hayden said.

"It is very clear to us that al Qaeda has been able over the last 18 months or so to establish a safe haven along the Afghan/Pakistan border that they have not enjoyed before."

Asked directly whether he feared Musharraf might not be around as president for much longer to support the United States, Hayden said he did not know, but praised what the country had already delivered.

"We have not had a better partner in the war against terrorism than the Pakistani government," he said.

Treasury Secretary Paulson urges more power for Federal Reserve

In a 218-page blueprint unveiled today, Paulson calls for a massive overhaul that would eliminate some federal agencies. He emphasizes that the market must be stabilized before any big changes are made.

By Johanna Neuman, Los Angeles Times Staff Writer
11:54 AM PDT, March 31, 2008

WASHINGTON -- Treasury Secretary Henry Paulson today unveiled a 218-page blueprint for regulatory reform that would represent the largest federal overhaul since the Great Depression.

The blueprint, widely previewed before the secretary's remarks, would give the Federal Reserve more authority to oversee the markets and would create one superagency to oversee both investor protection and market stability, assuming many of the tasks of current agencies, such as the Securities and Exchange Commission and the Office of Thrift Supervision.

Conceding that many of the changes would have to await debate in the next Congress and the next administration, Paulson said that nothing in the long-range planning would prompt the Bush White House to veer from its focus on the current economic downturn.

"Our first and most urgent priority is working through this capital market turmoil and housing downturn, and that will be our priority until this situation is resolved," he said. "With a few exceptions, the recommendations in this blueprint should not and will not be implemented until after the present market difficulties are past."

Paulson acknowledged that the current system is a hodgepodge of overlapping federal and state regulations that "fosters duplicative requirements and can allow important regulatory matters to fall through the cracks." But he resisted arguments from some critics that the maze of federal regulatory agencies had contributed to the current downturn.

"I do not believe it is fair or accurate to blame our regulatory structure for the current market turmoil," he said. "I am not suggesting that more regulation is the answer or even that more effective regulation can prevent the periods of financial market stress that seem to occur every five to 10 years."

Instead, he said, "we should and can have a structure that is designed for the world we live in," more responsive to market turmoil and more agile at protecting investors, consumers and markets. "Investor protection and market stability are critical elements of competitiveness," he said. "Far from being at odds with one another, they are mutually reinforcing."

Paulson said the Treasury Department blueprint envisioned "a regulatory model based on objectives, to more closely link the regulatory structure to the reasons why we regulate." The proposed system sees three core regulatory functions -- for market stability, for financial institution soundness and for consumer and investor protection -- dictating the logic of federal bureaucracies.

Specifically, the plan recommends that the Federal Reserve gain more authority to regulate market stability across the entire financial sector, not just its current role of supervising bank holdings. "To do its job as the market stability regulator, the Fed would have to be able to evaluate the capital, liquidity and margin practices across the financial system," he said. "The Fed would have the authority to go wherever in the system it thinks it needs to go for a deeper look to preserve stability."

The second regulatory function, financial institution soundness, would assume the role of the Office of the Comptroller of the Currency. The third, to regulate business conduct affecting consumers and investors, would assume some of the responsibilities of the Securities and Exchange Commission and the Commodity Futures Trading Commission.

"Having one agency responsible for these critically important issues for all financial products should bring greater consistency to regulation where overlapping requirements currently exist," he said. "Mortgages are an example of a consumer financial product that has suffered from uneven and inadequate treatment in our current . . . regime."

Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, called Paulson's plan a "constructive step forward" but said the Federal Reserve needs even more authority.

And Sen. Christopher Dodd (D-Conn.), chairman of the Senate Banking Committee, agreed on the need to overhaul the current structure but said that regulation had little to do with the current economic turmoil.

"What we need to do immediately is deal with the foreclosure crisis," Dodd said Monday on CBS' "The Early Show." What caused the current crisis, he said, was "a failure of leadership."

Sen. Charles Schumer (D-N.Y.), calling the blueprint "a good foundation for updating the regulation of U.S. financial markets," said that Paulson was right to attempt to reform a regulatory system to compete in a global economy. "If anything, the Treasury plan does not consolidate redundant agencies enough and a single regulator may be a better approach," he said.

He also questioned Paulson's statement that the regulatory framework is not to fault for the current economic unrest.

"The unregulated corners of our economy did much to contribute to the meltdown in our housing market and the accompanying spillover to our financial markets," he said in a statement. "The havoc wrought by independent mortgage brokers, who fueled the housing bubble, and credit ratings agencies, who rubber-stamped securities with no questions asked, certainly fueled the economic crisis we have now."

In California, Assemblyman Ted Lieu (D-Torrance), who chairs the Banking and Finance Committee, warned that what he called the administration's "colossal expansion of federal powers for the Federal Reserve" must not "come at the expense of states, many of whom have led the way in strong regulatory financial reforms." Noting that states such as California and North Carolina have enacted or are considering strong consumer protections, he said the Treasury Department's proposals "will cut us off at the knees."

Fed up with the Fed

Some wonder why Paulson wants to expand the powers of an agency that sat idly by as the housing bubble took shape.

By Colin Barr, senior writer

NEW YORK (Fortune - CNN Money) -- Some people think Henry Paulson's backing the wrong horse in the race to rework financial regulation.

The Treasury secretary on Monday formally unveiled his Blueprint for a Modernized Financial Regulatory Structure. The plan, which had been in the works for almost a year, envisions an expanded role for the Federal Reserve in preserving market stability and overseeing the financial services industry. Defining those responsibilities has taken on new urgency in the wake of a credit crunch that has led to some $200 billion in writedowns by big firms and now threatens to exact a toll on the economy.

"The Federal Reserve's responsibilities would be broad, important and difficult to undertake," Paulson concedes in Treasury's blueprint. But while episodes of market instability are difficult to predict, let alone counter, "The Federal Reserve's enhanced regulatory authority along with clear regulatory responsibilities would complement and attempt to focus market discipline to limit systemic risk."

Yet Paulson's proposal leaves some observers wondering whether the Fed - which currently oversees the nation's banks as well as setting interest rate policy - is up to that task.

"The Fed as a bank regulator has done a very poor job overall," says Joseph Mason, a professor at Drexel University's LeBow College of Business in Philadelphia. "There are tremendous risks of using [the credit crunch] as an excuse ... for an umbrella regulatory structure."

Skeptics contend that under former chief Alan Greenspan, the Fed played two roles in inflating the housing bubble that has since burst with such serious consequences for the financial sector. It's well accepted that Greenspan helped to fuel the housing bubble by cutting interest rates as low as 1% back in 2003, and keeping them there even as the economy began to recover.

But beyond that, some criticize Greenspan's Fed for failing to curb a sharp decline in mortgage underwriting standards that helped fuel the price run-up, particularly in hot markets such as California and Arizona. Indeed, Greenspan appeared at times to be defending some of the high-risk loans that were being abused by lenders and mortgage brokers.

"American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage," Greenspan said in a February 2004 speech to the Credit Union National Association in Washington.

Since then, Greenspan has retired, making way for Ben Bernanke to take the reins at the Fed. But the newfangled loans remain with us, in an unpleasant reminder of regulators' laxity.

To be sure, many of the biggest issuers of aggressive, newfangled mortgages are regulated by the Office of Thrift Supervision, not the Fed. Big issuers of option adjustable rate mortgages - loans that let the borrower choose to make minimal payments in early years before the interest rate resets - include thrifts Countrywide (CFC, Fortune 500), which agreed to sell itself in January to Bank of America (BAC, Fortune 500) amid questions about its liquidity, and Washington Mutual (WM, Fortune 500).

The problems in those loans are amply illustrated by the difficulties at another thrift, Downey Financial (DSL), of Newport Beach, Calif. Downey reported two weeks ago that delinquent loans accounted for nearly 11% of the bank's assets at the end of February, up from 6% at Nov. 30.

Still, it is the Fed - along with the Securities and Exchange Commission - that shoulders the burden of being the most visible regulator. Indeed, Bernanke told Congress back in September that the Fed has been acting to protect consumers from abusive lending practices. "The Federal Reserve takes responsible lending and consumer protection very seriously," Bernanke told the House Committee on Financial Services back on Sept. 20. "Along with other federal and state agencies, we are responding to the subprime problems on a number of fronts. We are committed to preventing problems from recurring, while still preserving responsible subprime lending."

But by then billions of dollars of bad loans were already on the books. And though the contrary view wasn't popular at the time, there were those who foresaw problems in the mortgage industry even before house prices crested. Dean Baker, co-director of the Center for Economic and Policy Research in Washington, called option ARMs "the latest and most pernicious financial innovation of the current bubble" in a piece back in September 2006. "It's too bad," he wrote, "that no one in a position of authority was awake before the bubble grew to such proportions."

That observation helps to explain why Paulson's Fed plan is raising eyebrows in some quarters. Gregory Valliere, political strategist at Stanford Financial Group, told CNBC Monday that charging the Fed with maintaining market stability "is like putting Eliot Spitzer in charge of the morals division."

CIA Enlists Google For Spy Work

US intelligence agencies are using Google's technology to help its agents share information about their suspects

Jonathan Richards Times Online March 31, 2008

Google has been recruited by US intelligence agencies to help them better process and share information they gather about suspects.

Agencies such as the National Security Agency have bought servers on which Google-supplied search technology is used to process information gathered by networks of spies around the world.

Google is also providing the search features for a Wikipedia-style site, called Intellipedia, on which agents post information about their targets that can be accessed and appended by colleagues, according to the San Francisco Chronicle.

The contracts are just a number that have been entered into by Google's 'federal government sales team', that aims to expand the company's reach beyond its core consumer and enterprise operations.

In the most innovative service, for which Google equipment provides the core search technology, agents are encouraged to post intelligence information on a secure forum, which other spies are free to read, edit, and tag - like the online encyclopedia Wikipedia.

Depending on their clearance, agents can log on to Intellipedia and gain access to three levels of info - top secret, secret and sensitive, and sensitive but unclassified. So far 37,000 users have established accounts on the service, and the database now extends to 35,000 articles, according to Sean Dennehy, chief of Intellipedia development for the CIA.

"Each analyst, for lack of a better term, has a shoe box with their knowledge," Mr Dennehy was quoted as saying. "They maintained it in a shared drive or Word document, but we're encouraging them to move those platforms so that everyone can benefit."

The collection of articles is hosted by the director of national intelligence, Mike McConnell, and is available only to the CIA, the FBI, the National Security Agency, and other intelligence agencies.

Google's search technology usually rates a website's importance by measuring the number of other sites that link to it - a method that is more problematic in a 'closed' network used by a limited numbr of people. In the case of Intellipedia, pages become more prominent depending on how they are tagged or added to by other contributors.

As well as working with the intelligence agencies, Google also provides services to other US public sector organisations, including the Coast Guard, the National Highway Traffic Safety Administration, and the National Oceanographic and Atmospheric Administration.

Often, the contract is for something as simple as conducting earch within an organisation's own database, but in the case of the Coast Guard, Google also provides a more advanced version of its satellite mapping tool Google Earth, which ships use to navigate more safely.

There is no dedicated team promoting sales of Google products to the British Government, but a Google spokesperson said the company did target public sector organisations such as councils, schools and universities through the team that run AdWords, its internet advertising platform.

AG Mukasey Says IP Theft Threatens Public Safety, Fosters Terrorism

By David Kravets March 28, 2008 | 1:35:09 PM
wired.com

SAN JOSE, California -- Attorney General Michael Mukasey talked tough on intellectual property crime, telling Silicon Valley executives here Friday that the theft of their inventions poses a threat to the nation's "health and safety" and fosters terrorism.

"Every new technology we create can be abused -- whether it's a common identity thief looking for a new way to steal your bank account information, or an international terrorist looking to advance a murderous plot," the United States' top law enforcement official said here at TheTech Museum of Innovation.

The nation's 81st attorney general -- during a 20-minute speech in which he took no questions -- added that the "the continuing worldwide escalation of counterfeiting and piracy poses a threat to both our economy and public safety." He said the "mission of the Department of Justice is clear: whether it's a complex international narcotics ring, a corrupt public official abusing his office, or some scam-artist selling counterfeit software, our job is to enforce the law and bring to justice those who perpetrate these crimes."

He said "the counterfeiting of products like pharmaceuticals and medical devices, auto and airplane parts, or electronics that go into our nation’s critical infrastructure, can present a real and direct danger to the public."

Before his brief talk, he met with technology officials from Apple, Adobe and other groups. The day before, he spoke with Hollywood executives at Warner Bros. in Los Angeles.

Neil MacBride, vice president of the Business Software Alliance, said collaboration between industry and the DOJ led to the recent arrest and sentencing of two Virginia brothers who were selling millions of dollars in fake software over the internet. "As cybercriminals become more technologically sophisticated and bolder in committing illegal activities, it is even more critical for public and private collaboration," MacBride said.

The Department of Justice, the attorney general said, has deployed as many as 230 federal prosecutors around the country as part of its Computer Hacking and Intellectual Property, or CHIP, network. The DOJ has steadily increased the number of IP prosecutions, filing 217 last year, a 33 percent jump in two years, he said.

"We're devoting more resources and more personnel to IP crime, and we're sending the important message that we take these crimes seriously, and we will punish the actions of counterfeiters and pirates whenever we can," he said.

Mukasey said U.S. anti-counterfeiting authorities are coordinating with the European Union, Asia, Canada, and a host of other countries he termed "hacker havens" like China and Romania.

"FBI agents teamed up with the Royal Canadian Mounted Police in an initiative targeting the distribution of counterfeit Cisco computer networking equipment manufactured in China," he said. "So far we've had more than 400 seizures of counterfeit hardware and labels with an estimated retail value of more than $76 million -- and the investigation is still ongoing."

He said the DOJ has trained and provided technical assistance to thousands of foreign prosecutors, investigators and judges in more than a hundred countries, and urged Congress to adopt legislation "that would criminalize attempted copyright infringement, and add important investigative tools such as granting courts the authority to issue wiretap orders in criminal counterfeiting and piracy investigations."

As Jobs Vanish and Prices Rise, Food Stamp Use Nears Record

ERIK ECKHOLM
The New York Times
March 31, 2008

The number of recipients, who must have near-poverty incomes to qualify for benefits averaging $100 a month per family member, has fluctuated over the years along with economic conditions, eligibility rules, enlistment drives and natural disasters like Hurricane Katrina, which led to a spike in the South.

But recent rises in many states appear to be resulting mainly from the economic slowdown, officials and experts say, as well as inflation in prices of basic goods that leave more families feeling pinched. Citing expected growth in unemployment, the Congressional Budget Office this month projected a continued increase in the monthly number of recipients in the next fiscal year, starting Oct. 1 — to 28 million, up from 27.8 million in 2008, and 26.5 million in 2007.

The percentage of Americans receiving food stamps was higher after a recession in the 1990s, but actual numbers are expected to be higher this year.

Federal benefit costs are projected to rise to $36 billion in the 2009 fiscal year from $34 billion this year.

“People sign up for food stamps when they lose their jobs, or their wages go down because their hours are cut,” said Stacy Dean, director of food stamp policy at the Center on Budget and Policy Priorities in Washington, who noted that 14 states saw their rolls reach record numbers by last December.

Read entire article

UN Could Lead New 9/11 Investigation, Says Japanese MP

Paul Joseph Watson
Prison Planet
Monday, March 31, 2008

Japanese member of Parliament Yukihisa Fujita told the Alex Jones Show yesterday that a potential new investigation of the 9/11 cover-up could be led by global parliamentarians he has been in contact with, or even by the United Nations itself.

Fujita, an MP for the Japanese Democratic Party, and a member of the House of Councillors in the Diet (national legislature), presented evidence which contradicted the official 9/11 story during a widely publicized Japanese Defense and Foreign Affairs Committee meeting in January of this year.

Following Fujita’s presentation in the Japanese Diet, he also took part in a 9/11 truth conference at the EU Parliament in Brussels on February 26th which was hosted by Italian MEP Giullietto Chiesa (both presentations can be viewed at the end of this article).

"This is something Parliamentarians of various countries could ask - I was in Europe meeting with European MP’s and they are also thinking about asking the UN to investigate, so these kind of efforts need to be done internationally," said Fujita, adding that he had visited eleven different European countries in an attempt to garner support for the move.

Fujita said the reaction to his presentation of the evidence during a session of the Japanese Parliament was encouraging, adding that several members of his party were already aware of some of the issues surrounding the incredulity of the official story.

The Japanese MP said that he first began researching 9/11 around two years ago after watching documentaries and looking at evidence online.

9/11 Truth Conference at EU Parliament in Brussels, February 26th, 2008.
Yukihisa Fujita’s 9/11 Presentation to the Japanese Defense and Foreign Affairs Committee, January 11th, 2008.

"At the beginning I thought I couldn’t believe, this can’t be true, but then last year when I heard more about various facts and photos of the collapse of the seven building (WTC 7) and the put options conducted before 9/11 - I began to see that there was serious evidence that a cover-up might have been involved," Fujita told the Alex Jones Show.

The MP personally visited the former President of Germany’s Bundesbank (presumably Ernst Welteke), who admitted that suspicious insider trading on American and United Airlines did take place immediately before 9/11.

Fujita said the deaths of 24 Japanese citizens during as a result of the attack in New York spurred him to ask why no cause of death had been properly ascertained by the Japanese government as would be routine, and why no DNA records had been recovered.

Fujita said he was currently engaged in a back and forth question and answer process with the Japanese Prime Minister in an attempt to get questions about 9/11 answered.

The MP said that people had warned him to be careful about asking questions about 9/11 because it could put his life in danger.

Fujita will today report back on his meetings in Europe and Sydney to fellow members of his party in an attempt to achieve further momentum in attaining consensus for a comprehensive investigation of 9/11 led by independent global Parliamentarians and not by Bush administration cronies, as was the case with the 9/11 Commission.

Dollar Heads for Biggest Quarterly Loss Against Euro Since 2004

By Kim-Mai Cutler

March 31 (Bloomberg) -- The dollar headed for its biggest quarterly loss against the euro since 2004 after inflation accelerated in the common-currency bloc, giving the region's central bank more reason to keep interest rates unchanged while the Federal Reserve lowers borrowing costs.

The dollar earlier fell to near a record low after a preliminary European Union report showed consumer-price growth quickened to the fastest pace in almost 16 years in March. European Central Bank policy maker Erkki Liikanen said today inflation threats are growing. The pound fell to an all-time low against the euro, posting its largest-ever quarterly decline, after U.K. house prices dropped for a sixth month.

``The market wants to push the euro higher,'' said Stephen Jen, the London-based head of foreign-exchange research at Morgan Stanley. ``Given the circumstances, the ECB has no choice: it will not ease. There aren't convincing signs euroland is slowing and inflation pressures remain high and are accelerating.''

The dollar was at $1.5797 per euro by 7:30 a.m. in New York, from $1.5796 on March 28, after earlier slipping to $1.5834. The European common currency has gained 8.2 percent this quarter, the most since December 2004. The euro may rise to $1.64, before declining to around $1.40 once the 15-nation economy slows and the ECB reduces interest rates, Jen predicted.

The yen declined to 99.69 per dollar, from 99.23 at the end of last week, and to 157.46 per euro from 156.79.

Europe's single currency advanced to 79.68 pence against the pound and traded at 79.67 pence after research company Hometrack Ltd. said the average cost of a home in England and Wales declined 0.2 percent this month. Other high-yielding currencies such as the Australian and New Zealand dollars also declined as stocks dropped.

ECB, Fed

The ECB has kept its key refinancing rate at a six-year high of 4 percent since June, while the Fed has slashed its target rate 3 percentage points since September to prevent the economy tipping into a recession. Investors increased bets the Fed will cut its target rate for overnight lending between banks by half a percentage point to 1.75 percent on April 30, futures on the Chicago Board of Trade showed.

Consumer prices in the euro area rose 3.5 percent in March, the highest rate since June 1992, the EU's statistics office in Luxembourg said. Economists surveyed by Bloomberg News had expected 3.3 percent.

``While the outlook for growth has become more subdued, inflation in the euro area has gathered pace,'' said Liikanen, who is also governor of the Bank of Finland, in a statement today in Helsinki. ``Inflation expectations have also hardened.''

`Deep Recession'

Conditions ``in favor of the euro over the dollar have been unprecedented,'' said Michael Klawitter, a currency analyst in Frankfurt at Dresdner Kleinwort, who says the euro may rise above its all-time high versus the dollar this week. ``We are seeing a deep recession in the U.S. which took a while for the market to realize and then we had sharp monetary easing by the Fed.''

The Institute for Supply Management will say tomorrow its factory index fell to 47.5 this month, the lowest level since April 2003, according a Bloomberg survey of economists. A reading below 50 signals contraction. On April 2, the U.S. Commerce Department will report factory orders in February dropped 0.8 percent, a separate survey showed.

``The state of the U.S. economy exposes the dollar to selling pressure,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``The subprime loan problem is deep- rooted and damaging for sentiment.''

Dollar Index

The U.S. Dollar Index traded on ICE futures in New York, which tracks the currency against those of six trading partners, has lost 6.6 percent this year, dropping to a record 70.69 on March 17. It traded at 71.64 today, from 71.68 on March 28.

The slide in the dollar to record lows has fueled speculation that Arab Gulf nations may drop their pegs against the U.S. currency as they battle to contain inflation.

Gulf central bank governors will hold the first of two meetings this year in Doha, Qatar, on April 6-7 to discuss monetary and currency policy.

The yen fell against the dollar as banks in Japan sold mutual funds focused on overseas assets, following the currency's biggest quarterly gain since 1999.

Finance companies are seeking to raise the equivalent of $3.3 billion on the last day of the fiscal year for funds focused on stocks and bonds in Brazil, Russia, India, China and Thailand, data compiled by Bloomberg show. Japan's benchmark interest rate of 0.5 percent has encouraged investors to buy higher-yielding assets overseas, after the yen's 12 percent gain this quarter.

``There's interest to sell yen for the mutual funds being launched,'' said Tokichi Ito, deputy general manager of foreign exchange in Tokyo at Trust & Custody Services Bank Ltd., a unit of Japan's second-largest publicly traded lender. ``There's consistent demand for overseas assets in Japan.''

High-yielding currencies such as the New Zealand and Australian dollars declined. New Zealand's currency slipped 1.2 percent to 78.82 U.S. cents after a report also showed business confidence dropped to a 17-year low in March. The Australian dollar weakened 0.5 percent to 91.26 U.S. cents.

To contact the reporter on this story: Kim-Mai Cutler in London at kcutler@bloomberg.net

Government Plan Would Give Fed More Power

Critics Wonder Whether Homeowners Are Receiving the Help They Need

By DAVID MUIR, LIZ SINTAY AND IMAEYEN IBANGA
ABC NEWS
March 31, 2008

In an effort to better police the market and prevent the current type of mortgage meltdown that has many homeowners teetering on the brink of foreclosure, Treasury Secretary Henry Paulson will unveil a new proposal today that will keep a closer eye on bankers and borrowers.

The 200-page plan is the largest financial regulation overhaul since the Great Depression and would give the Federal Reserve greater power, including more oversight to watch over the kind of deal making that led to the nation's credit crunch.

It also would designate the Fed as a "market stability regulator" and give it the power to examine the books of any financial institution, not just banks, that might pose a threat to the stability of the financial system, according to The Associated Press.

But critics wonder what the government plans to do for consumers facing a credit crisis now, especially since the bailout of Bear Stearns after its colossal collapse.

Some believe federal moves may come too late for those who may need it the most, like Gayle Midaugh.

The Jacksonville, Ark., resident bought her home three years ago, and even though she was told at the time she'd be able to refinance her adjustable rate mortgage long before the rates jumped and never has missed a payment, Midaugh has been unable to refinance.

"I can't get anyone to give me a mortgage," said Midaugh, who recently was laid off. "It's frightening to not know what's going to happen in the next year."

Now Midaugh is preparing to see her mortgage rate jump drastically and can't get out of the increase.

Critics had argued before the current mortgage troubles that lenders were eager to hand out loans without explaining the fine print.

The legal jargon may be difficult for some potential home buyers to understand.

Mortgage papers can read like, "if a default shall have occurred and be continuing, the lender may declare the entire principal amount of the note then unpaid, and the interest accrued thereon to be due and payable immediately, and upon such declaration such principal and interest shall forthwith become and be due and payable, as fully and to the same effect as if the date of such declaration were the date originally specified for the maturity of the unpaid balance of the note."

"In the future when someone goes to get a mortgage they'll be very clear. 'You're paying so much a month and if interest rates change they could rise by so much,' and you'll understand that clearly," said Dean Baker, of the Center for Economic and Policy Research.

The Bush administration now is reportedly considering a plan that would help homeowners who owe more than their home is worth by allowing them to refinance into a more affordable mortgage backed by the government.

Also, the mortgage lenders would have to forgive portions of those loans and one economist said the government is trying to do two things at once.

"One is fight a fire. Help people who have mortgages that can't be refinanced, and prevent the next fire by reorganizing the financial regulatory network, which is enormously complicated and doesn't make any sense anymore," said Wall Street Journal economics editor David Wessel.

Fed's 'Supercop' Role May Give It Headaches

By GREG IP
March 31, 2008; Page A1
WALL STREET JOURNAL

The Federal Reserve, criticized for regulatory lapses that allegedly aggravated the credit crisis, emerges at first glance as the big winner in Treasury Secretary Henry Paulson's proposed overhaul of financial regulation.

But Mr. Paulson's plan to make the Fed a supercop in charge of keeping the financial system stable is also problematic for the Fed and its chairman, Ben Bernanke. The Fed is being asked to do a job that may be beyond anyone's ability: Identify and avoid a crisis in advance.

"Supervising the very complex derivative products of the banks and of the rest of the financial system would be an enormous technical challenge," said Harvard University economist Martin Feldstein, a prominent Republican adviser who has criticized the Fed's supervision of banks leading up to the current crisis. "The institutions themselves -- paying very high salaries and having their own survival at risk -- got it wrong. Would the Fed get it right?"

Another issue for Fed officials is whether they lose authority even as they gain responsibility. Bank regulation is now spread among four agencies including the Fed, which alone oversees bank-holding companies such as Citigroup Inc., and shares supervision of state-chartered banks. Mr. Paulson says that's too messy, and wants to consolidate bank regulation in a single agency separate from the Fed.

Fed officials fear that without the continuous insight into banks' activity that comes from directly supervising them, they would lose a useful tool in managing crises.

The Fed was formed in 1913 in response to destabilizing bank panics. Among its primary tools is the ability to lend to banks from its discount window. Because that puts public money at risk, the Fed got a big role overseeing those banks.

Past Efforts

The Fed has fought off past efforts to wrest away that supervisory role, most recently during the Clinton administration. Instead, the Fed's authority has expanded. Sensing a new threat, Mr. Bernanke and other Fed officials have recently re-asserted the importance of maintaining their role in bank oversight.

Fed officials are not of one mind on the plan, and some sympathize with Mr. Paulson's broad aim of simplifying oversight. While they have misgivings about parts of the blueprint, Fed officials don't want a public spat over them, believing that the united front they have maintained with Treasury recently has been important to investor confidence. A Fed spokeswoman called the plan "an important first step" in modernizing regulation and said it "presents a timely and thoughtful analysis." For its part, Treasury appears to have responded to some Fed concerns, by for example punting the question of whether, in the intermediate term, it would lose oversight of state-chartered banks to a study.

Under the Paulson plan, which is unlikely to be adopted as proposed, the Fed would retain, for now, authority to write consumer-protection rules on things such as credit-card disclosures and the terms of high-cost mortgages -- despite accusations from consumer groups and Democrats that its failure to do so allowed many homeowners to get subprime mortgages they couldn't afford.

In Mr. Paulson's "optimal" scenario, the Fed eventually would surrender its supervision of state-chartered banks and bank-holding companies to the new agency and become a "market stability regulator." The Fed, Mr. Paulson said in an interview Saturday, "would have broad powers so they could go anywhere in the system they needed to go to preserve that authority."

In that role, it would be able to lend to any important institution while seeking information from them, which Mr. Paulson considers more reflective of a financial system spread among brokerages and other nonbanks as well as traditional, commercial banks.

Mr. Paulson had always envisioned this new role for the Fed, but events in the past month, including the near-collapse of Bear Stearns Cos., made it especially germane. For months, Bear Stearns had faced questions about its reliance on short-term funding and heavy exposure to risky mortgage-backed securities. Three weeks ago, other firms and investors suddenly became reluctant to do business with it.

That forced the Federal Reserve Bank of New York to extend Bear Stearns a loan via J.P. Morgan Chase & Co. on March 14, the first such loan in Fed history. On March 16, worried that a similar loss of confidence would engulf other firms, the Fed offered the same access to all investment banks.

The blueprint says the Fed should have the power to get information from and inspect investment banks that borrow from it.

New Mission

Yet it isn't clear if those tools are adequate to fulfill the Fed's proposed new mission of forestalling threats to the financial system's stability.

Neither Bear Stearns nor its regulator, the Securities and Exchange Commission, apparently foresaw the seriousness of the company's situation until it was less than 24 hours from a bankruptcy filing. It is unlikely the Fed, even with the additional access to information Mr. Paulson would grant it, would have known sooner. In 1998, the Fed was taken by surprise at the exposure of some banks it supervised to Long Term Capital Management, the giant hedge fund.

In the latest turmoil, it's not clear whether the Fed foresaw the severe strains faced by Citigroup, which has been forced to collect more than $20 billion in fresh capital from Middle Eastern and other investors. Citigroup suffered losses on mortgage-related investments and was forced to absorb liabilities of related entities that were formerly off its balance sheet. The Fed oversees the Citigroup holding company, while the Treasury's Office of the Comptroller of the Currency oversees its bank and the SEC oversees its investment bank.

To be sure, the Fed compares well to other supervisors, particularly Britain's, who last year experienced the first run on a British bank in over a century. No major U.S. bank has yet fallen below its minimum capital, much less failed. And Fed officials, led by New York Fed President Timothy Geithner, actively pressed firms to strengthen risk management before the crisis hit.

Fed officials believe banks' current problems stemmed not from a lack of oversight, since regulators knew the state of bank balance sheets intimately. Rather, both regulators and firms failed to realize how dramatically the value and ability to sell mortgage-related investments could evaporate and how banks' own funding needs could be impaired by general market turmoil.

Good Times

Even if regulators had perceived such risks, it's unclear they could have done much. "When times are good...it is very difficult for bank supervisors to convince bankers to heed warnings that they need to behave differently," Kansas City Fed President Thomas Hoenig said recently. When regulators urged banks to take more care with commercial real-estate lending in 2006, banks sent thousands of protest letters and Congress held hearings.

One question about Mr. Paulson's plan is what powers the Fed would have if it perceived a systemic risk. Once it is removed from day-to-day supervision of banks, it would have to consult with other regulators before ordering a bank to do something. The plan doesn't say whether the Fed could demand that a firm it considers a threat to the financial system increase the size of its capital cushion.

Is an International Financial Conspiracy Driving World Events?

Richard C. Cook
Global Research
March 30, 2008

"They make a desolation and call it peace." -Tacitus

Was Alan Greenspan really as dumb as he looks in creating the late housing bubble that threatens to bring the entire Western debt-based economy crashing down?

Was something as easy to foresee as this really the trigger for a meltdown that could destroy the world’s financial system? Or was it done, perhaps, "accidentally on purpose"?

And if so, why?

Let’s turn to the U.S. personage that conspiracy theorists most often mention as being at the epicenter of whatever elite plan is reputed to exist. This would be David Rockefeller, the 92-year-old multibillionaire godfather of the world’s financial elite.

The lengthy Wikipedia article on Rockefeller provides the following version of a celebrated statement he allegedly made in an opening speech at the Bilderberg conference in Baden-Baden, Germany, in June 1991:

"We are grateful to the Washington Post, the New York Times, Time magazine, and other great publications whose directors have attended our meetings and respected their promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during these years. But the world is now more sophisticated and prepared to march towards a world government which will never again know war, but only peace and prosperity for the whole of humanity. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in the past centuries."

This speech was made 17 years ago. It came at the beginning in the U.S. of the Bill Clinton administration. Rockefeller speaks of an "us." This "us," he says, has been having meetings for almost 40 years. If you add the 17 years since he gave the speech it was 57 years ago—two full generations.

Not only has "us" developed a "plan for the world," but the attempt to "develop" the plan has evidently been successful, at least in Rockefeller’s mind. The ultimate goal of "us" is to create "the supranational sovereignty of an intellectual elite and world bankers." This will lead, he says, toward a "world government which will never again know war."

Just as an intellectual exercise, let’s assume that David Rockefeller is as important and powerful a person as he seems to think he is. Let’s give the man some credit and assume that he and "us" have in fact succeeded to a degree. This would mean that the major decisions and events since Rockefeller gave the speech in 1991 have probably also been part of the plan or that they have at least represented its features and intent.

Therefore by examining these decisions and events we can determine whether in fact Rockefeller is being truthful in his assessment that the Utopia he has in mind is on its way or has at least come closer to being realized. In no particular order, some of these decisions and events are as follows:

The implementation of the North American Free Trade Agreement by the Bill Clinton and George W. Bush administrations has led to the elimination of millions of U.S. manufacturing jobs as well as the destruction of U.S. family farming in favor of global agribusiness.

Similar free trade agreements, including those under the auspices of the World Trade Organization, have led to export of millions of additional manufacturing jobs to China and elsewhere.

Average family income in the U.S. has steadily eroded while the share of the nation’s wealth held by the richest income brackets has soared. Some Wall Street hedge fund managers are making $1 billion a year while the number of homeless, including war veterans, pushes a million.

The housing bubble has led to a huge inflation of real estate prices in the U.S. Millions of homes are falling into the hands of the bankers through foreclosure. The cost of land and rentals has further decimated family agriculture as well as small business. Rising property taxes based on inflated land assessments have forced millions of lower-and middle-income people and elderly out of their homes.

The fact that bankers now control national monetary systems in their entirety, under laws where money is introduced only through lending at interest, has resulted in a massive debt pyramid that is teetering on collapse. This "monetarist" system was pioneered by Rockefeller-family funded economists at the University of Chicago. The rub is that when the pyramid comes down and everyone goes bankrupt the banks which have been creating money "out of thin air" will then be able to seize valuable assets for pennies on the dollar, as J.P. Morgan Chase is preparing to do with the businesses owned by Carlyle Capital. Meaningful regulation of the financial industry has been abandoned by government, and any politician that stands in the way, such as Eliot Spitzer, is destroyed.

The total tax burden on Americans from federal, state, and local governments now exceeds forty percent of income and is rising. Today, with a recession starting, the Democratic-controlled Congress, while supporting the minuscule "stimulus" rebate, is hypocritically raising taxes further, even for middle-income earners. Back taxes, along with student loans, can no longer be eliminated by bankruptcy protection.

Gasoline prices are soaring even as companies like Exxon-Mobil are recording record profits. Other commodity prices are going up steadily, including food prices, with some countries starting to experience near-famine conditions. 40 million people in America are officially classified as "food insecure."

Corporate control of water and mineral resources has removed much of what is available from the public commons, and the deregulation of energy production has led to huge increases in the costs of electricity in many areas.

The destruction of family farming in the U.S. by NAFTA (along with family farming in Mexico and Canada) has been mirrored by policies toward other nations on the part of the International Monetary Fund and World Bank. Around the world, due to pressure from the "Washington consensus," local food self-sufficiency has been replaced by raising of crops primarily for export. Migration off the land has fed the population of huge slums around the cities of underdeveloped countries.

Since the 1980s the U.S. has been fighting wars throughout the world either directly or by proxy. The former Yugoslavia was dismembered by NATO. Under cover of 9/11 and by utilizing off-the-shelf plans, the U.S. is now engaged in the military conquest and permanent military occupation of the Middle East. A worldwide encirclement of Russia and China by U.S. and NATO forces is underway, and a new push to militarize space has begun. The Western powers are clearly preparing for at least the possibility of another world war.

The expansion of the U.S. military empire abroad is mirrored by the creation of a totalitarian system of surveillance at home, whereby the activities of private citizens are spied upon and tracked by technology and systems which have been put into place under the heading of the "War on Terror." Human microchip implants for tracking purposes are starting to be used. The military-industrial complex has become the nation’s largest and most successful industry with tens of thousands of planners engaged in devising new and better ways, both overt and covert, to destroy both foreign and domestic "enemies."

Meanwhile, the U.S. has the largest prison population of any country on earth. Plus everyday life for millions of people is a crushing burden of government, insurance, and financial fees, charges, and paperwork. And the simplest business transactions are burdened by rake-offs for legions of accountants, lawyers, bureaucrats, brokers, speculators, and middlemen.

Finally, the deteriorating conditions of everyday life have given rise to an extraordinary level of stress-related disease, as well as epidemic alcohol and drug addiction. Governments themselves around the world engage in drug trafficking. Instead of working to lower stress levels, public policy is skewed in favor of an enormous prescription drug industry that grows rich off the declining level of health through treatment of symptoms rather than causes. Many of these heavily-advertised medications themselves have devastating side-effects.

This list should at least give us enough to go on in order to ask a hard question. Assuming again that all these things are parts of the elitist plan which Mr. Rockefeller boasts to have been developing, isn’t it a little strange that the means which have been selected to achieve "peace and prosperity for the whole of humanity" involve so much violence, deception, oppression, exploitation, graft, and theft?

In fact it looks to me as though "our plan for the world" is one that is based on genocide, world war, police control of populations, and seizure of the world’s resources by the financial elite and their puppet politicians and military forces.

In particular, could there be a better way to accomplish all this than what appears to be a concentrated plan to remove from people everywhere in the world the ability to raise their own food? After all, genocide by starvation may be slow, but it is very effective. Especially when it can be blamed on "market forces."

And can it be that the "us" which is doing all these things, including the great David Rockefeller himself, are just criminals who have somehow taken over the seats of power? If so, they are criminals who have done everything they can to watch their backs and cover their tracks, including a chokehold over the educational system and the monopolistic mainstream media.

One thing is certain: The voters of America have never knowingly agreed to any of this.

Fed May Nationalize Banks

Ambrose Evans-Pritchard
UK Telegraph
March 30, 2008

The Fed has been criticised for its rescue of Bear Stearns, which critics say has degenerated into a taxpayer gift to rich bankers.

A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis from 1991 to 1993, which brought the region’s economy to its knees.

It is understood that Fed vice-chairman Don Kohn remains very concerned by the depth of the US crisis and is eyeing the Nordic approach for contingency options.

Scandinavia’s bank rescue proved successful and is now a model for central bankers, unlike Japan’s drawn-out response, where ailing banks were propped up in a half-public limbo for years.
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While the responses varied in each Nordic country, there a was major effort to avoid the sort of “moral hazard” that has bedevilled efforts by the Fed and the Bank of England in trying to stabilise their banking systems.

Norway ensured that shareholders of insolvent lenders received nothing and the senior management was entirely purged. Two of the country’s top four banks - Christiania Bank and Fokus - were seized by force majeure.

Read entire article

Al-Maliki Will Fall

Michael S. Rozeff
LRC Blog
March 30, 2008

The attack by al-Maliki on al-Sadr is very important. He attacked without knowledge of the U.S. Al-Sadr is not defeated and cannot be if he plays his 4th generation cards right, and he is. For he is withdrawing where under attack, but not surrendering, and he did not order a full-scale counterattack. Combine that with his months-old cease-fire and he retains the moral high ground. Al-Maliki becomes the aggressor. Any sustained efforts at bombing the slums and civilian districts where Sadr has his followers only weakens the bombers, the U.S. and Brits if they are still around, and Maliki who instigated this. Sadr is a de-centralist (at present), and thus the enemy of the Iraq centralizers.

Maliki’s impulsive attack and non-victory have a good chance of bringing his government entirely down. The U.S. then is further away than ever from stabilizing Iraq either as one state or as several.

Maliki’s attack shows in high-definition that the U.S. presence (it is held hostage by events beyond its control) is pointless. But Bush will not withdraw, and now is even less likely to withdraw. Any plans Bush may have had have just evaporated. The U.S. will scramble to deal with this new situation.

The attacks on the Green Zone signal a change as well.

Bush booed as he throws inaugural pitch at Nationals home opener

Raw Story | March 31, 2008

President Bush met with a mixed reception this evening as he threw the 2008 inaugural pitch at the new Nationals Park, built for the Washington Nationals baseball team.

With a quick introduction and a wave, Bush makes a high pitch to Nationals manager Manny Acta and proceeds to shake his hand. The boos reignite as Bush waves once more and exits.

Video of the pitch, as broadcast on ESPN, is available below.

John Cusack on Military-Industrial Complex: ‘The gig is up’

David Edwards and Chris Tackett / Raw Story | March 30, 2008

John Cusack was on HBO’s Real Time with Bill Maher and spoke about his upcoming film, War. Inc., which according to Cusack focuses on the military-industrial complex.

The film, says Cusack, differs from other films inspired by the wars in Iraq and Afghanistan because, it “has a much more absurdist take on [war].”

Cusack added, “some things are so vicious if you didn’t look at them through a different lens you couldn’t get out of bed. And certainly the war profiteering, immorality and illegality of this disastrous, free-market Utopian enterprise out there is certainly well-documented.”

While explaining that the film shares similar themes as those found in Naomi Klein’s book, The Shock Doctrine, Cusack said, “the very core things that make up our government like wars or interrogation or border patrol, jailing, any of those types of things that you would think would be sacred things that would happen with the state are now being turned into for-profit enterprises. And if you want all these things to be, if you want corporate ethics to be our national interest, then you have the situation we’re in now. But right now, when you think that we’ve out sourced everything to interrogation, which means torture is a cost-plus enterprise, I think you can see a complete spiritual bankruptcy to this whole neo-con movement. It’s a nightmare beyond anything you can really imagine.”

Maher asked if these issues were just a result of a neo-conservative movement and Bush administration or evidence of a “rot in America itself that is a lot deeper.”

Cusack responded, “Yeah, I do think the issue goes deeper, a lot deeper.”

Adding later, “Some of these truths are so horrible you don’t want to think about that, but it’s just — I mean the gig’s up. If guys who are statesmen on CNN are also sitting on the board and are shareholders in some of the most profitable defense contractors in the world and they publicly make the case to go to war, got to war, then create a new market with the war, come back and speak evangelically about free markets that aren’t free, these aren’t particularly subtle fact and the stock prices jump 145% and their companies are awarded $2.3 billion contract. After a while you have to expose and shame and indict and hopefully convict the participants in this illegal immoral ideology.”

The full interview can be seen in the video below.

Are We Heading Into a Depression?

'Automatic' Economic Recovery Isn't Certain, Says Economist Robert Parks

By DAVID R. FRANCIS
columnist

March 29, 2008—

When economist Robert Parks predicted early last week that there was more than a 60 percent probability the current financial meltdown in the United States would lead to the "Bush depression," his phone began ringing like crazy with calls from the media.

Only last fall, most economists were forecasting a modest slowdown. Now, a good majority of them see a slump big enough to qualify as a recession.

But a depression?

Nah! Most number crunchers are counting on the Federal Reserve to stop any failure on Wall Street from cascading to other financial institutions and leaving them falling down like dominoes.

The Fed, under Chairman Ben Bernanke, has taken several orthodox and unorthodox monetary actions to prevent the credit freeze-up from spreading and damaging further the basic economy.

Last Tuesday, for instance, the Fed dropped short-term interest rates another 0.75 percentage points to 2.25 percent, hoping to revive financially squeezed banks and encourage consumers to borrow and spend.

Mr. Parks, however, doubts the cuts will do much to boost the economy. Rather, he sees a further steep fall in housing prices, continued major deficits in the federal budget and in the international trade balance, a tumbling dollar, and a weak stock market leading to a genuine depression with 30 to 35 percent unemployment, greater poverty, more loss of homes, plunging bond and stock prices, even some starvation. Parks, now a Pace University finance professor (for years he was chief economist at three Wall Street firms), says he has never predicted a depression before. His e-mail to press acquaintances sparked a lot of interest, as Parks was daring to express publicly the financial community's worst nightmare.

What prompted Parks's pessimism is his assumption that the "right-wing ideology" prevalent in the White House will keep Washington from acting to ward off a major depression. A fan of famed British economist John Maynard Keynes, who called for major government spending programs to remedy the Great Depression of the 1930s, Parks would like the federal government to step up outlays to fix rickety bridges, repair pot-holed roads, improve schools, and more to provide more jobs, more income, and thus more spending to cure any economic downturn.

As Parks sees it, Washington and Wall Street are mostly counting on Fed additions to the money supply to revive the free market and right the economy.

"Automatic recovery is in no way a reliable concept," he warns, especially if deflation (falling prices) has begun. He recalls warning of the economic damage that the bursting real estate and stock market bubbles would wreak in Japan: That nation suffered stagnation from 1990 to 2001. Today's financial crisis has revived the debate over the role of government in stopping a slump.

If the economy doesn't improve soon, says Ed Yardeni, president of Yardeni Research in Great Neck, N.Y., the United States might want to consider doing what Sweden did in 1991: Inject government capital into a troubled financial market. The Swedish economy bounced back quickly.

"This is the worst credit crisis we have ever had" in the postwar US, Mr. Yardeni reckons. He praises the Fed for breaking historical precedents and being creative in its steps to prevent a credit meltdown. But actions by Treasury Secretary Henry Paulson to stem the troubles are "pretty lame," he holds.

So far, Yardeni expects only a "modest recession" in the US, with the "basic capitalism and materialistic instincts" of Americans coming back soon.

Economist Dean Baker figures that more of Wall Street's "big boys"  financial firms like Bear Stearns  will be pushed to the edge, "victims of excessive greed and really bad judgment." The co-director of the Center for Economic Policy and Research in Washington sees the financial system as biased toward pushing income to the already wealthy. So he wants any necessary federal intervention to keep troubled banks alive in a way that doesn't rescue managers or shareholders but merely keeps the institutions running under new management.

Economist A. Gary Shilling, like Parks, is also pessimistic. He predicts a 25 percent drop in house prices by 2010 from their 2005 peak. The result: All homeowners with mortgages will see, on average, nearly all their personal equity in their houses disappear  a $2 trillion drop in total wealth.

Mr. Shilling, a consulting economist in Springfield, N.J., also sees a major retrenchment in consumer spending. And he worries about a "wild card"  the financial crisis spreading as those in the investment community try to unwind their leveraged investments. Many hedge funds and investment banks have borrowed as much as 40 times their own capital to invest, seeking a high return.

Unlike Parks, Shilling expects a deep slump to urge Congress, regardless of party, to respond with rescue measures  say, Federal Housing Administration guarantees of mortgages and a moratorium on foreclosures. He's not sure if it will happen this year or wait for a new administration.

Copyright © 2008 ABC News Internet Ventures

Spy drones in demand by U.S. police departments, but approval pending

Tom Brown
Reuters
Friday, March 28, 2008

The Miami police could soon use cutting-edge flying drones to help fight crime.

A small pilotless vehicle manufactured by Honeywell International, capable of hovering and "staring" using electro-optic or infrared sensors, is expected to be introduced soon in the skies over the Florida Everglades.

If use of the drone wins U.S. Federal Aviation Administration approval after tests, the Miami-Dade Police Department will start flying the 14 pound, or 6.35 kilogram, drone over urban areas with an eye toward full-fledged employment in crime fighting.

"Our intentions are to use it only in tactical situations as an extra set of eyes," said Detective Juan Villalba, a police department spokesman.

"We intend to use this to benefit us in carrying out our mission," he added, saying the wingless Honeywell aircraft, which fits into a backpack and is capable of vertical takeoff and landing, seems ideally suited for use by SWAT teams in hostage situations or dealing with "barricaded subjects."

And the Miami-Dade police are not alone. Taking their lead from the U.S. military, which has used drones in Iraq and Afghanistan for years, law enforcement agencies across the United States have voiced a growing interest in using drones for domestic crime-fighting missions.

Known in the aerospace industry as unmanned aerial vehicles, or UAVs, drones have been under development for decades in the United States.

Full article here.

The 9/11 Stand Down in 2 Minutes

George Washington's Blog
Friday, March 28, 2008

NORAD, responsible for intercepting errant aircraft over the U.S., has a standard operating procedure for scrambling planes for interception which takes less than 15 minutes

They did this successfully (on time) 129 times in 2000 and and 67 times between September 2000 and June 2001.

Yet, on September 11th, they failed to do their job 4 times in a single day:

• NORAD, once notified of the off-course aircraft, failed to scramble jets from the nearest bases

• Once airborne, interceptors failed to reach their targets because they flew at small fractions of their top speeds

• Fighters that were airborne and within interception range of the deviating aircraft were not redeployed to pursue them

You might think that the military couldn't find the hijacked planes because the hijackers turned off the transponders. However, a former air traffic controller, who knows the flight corridor which the two planes which hit the Twin Towers flew "like the back of my hand" and who handled two actual hijackings says that planes can be tracked on radar even when their transponders are turned off (also, listen to this interview).

As a former senior air force colonel said:

"If our government had merely [done] nothing, and I say that as an old interceptor pilot�I know the drill, I know what it takes, I know how long it takes, I know what the procedures are, I know what they were, and I know what they�ve changed them to�if our government had merely done nothing, and allowed normal procedures to happen on that morning of 9/11, the Twin Towers would still be standing and thousands of dead Americans would still be alive. [T]hat is treason!"

Norad's stand down on 9/11 was so blatant that Norad has been forced to give 3 entirely different versions of what happened that day, as each previous version has been exposed as false. When someone repeatedly changes his testimony after being caught in lies, how believable is he? The falsity of Norad's explanations were so severe that even the 9/11 Commission considered recommending criminal charges for the making of false statements.

NKorea raises stakes in nuke dispute with missile launches

AFP
Friday, March 28, 2008

North Korea raised the stakes Friday in its nuclear disputes with South Korea and the United States, test-firing several missiles and warning it may slow down work to disable atomic plants.
The actions come one day after the communist state expelled South Korean officials from a joint industrial estate, in protest at the new conservative government's tougher policy towards Pyongyang.

Presidential spokesman Lee Dong-Kwan described the missile launches as part of a regular military exercise. "I believe North Korea will not sour relations with South Korea," he said.

But one analyst said it was "highly possible" the situation would worsen.

"We may see naval clashes (in disputed waters) in the Yellow Sea," said Yang Moo-Jin of the University of North Korean Studies, adding that the North seeks to sway the outcome of the April 9 parliamentary election.

Yonhap news agency said three or four missiles were fired into the Yellow Sea. It said they were Russian-designed Styx ship-to-ship missiles with a range of 46 kilometres (29 miles).

There were several similar launches last summer.

After a decade-long "sunshine" rapprochement policy under liberal presidents, the new Seoul administration is linking long-term economic aid to nuclear disarmament.

It says it will also raise Pyongyang's human rights record. On Thursday in Geneva, Seoul voted for a UN Human Rights Council resolution expressing deep concern at that record.

Full article here.

Call For New 9/11 Investigation Reaches Crescendo

Public figures increasingly speaking out while media ignores professionals and experts
Paul Joseph Watson
Prison Planet
Friday, March 28, 2008

Calls for a new 9/11 inquiry are reaching a crescendo, with well-respected authorities and celebrities alike adding their voices to the cause, as the official 9/11 story crumbles under the weight of revelations of White House ties to the 9/11 Commission, and other cover-ups on behalf of authorities staffed with investigating the attacks.

The corporate media's insistence on ignoring hundreds of professional experts who are calling for a new 9/11 investigation has spurred many celebrities to use their public platforms to speak out, knowing that the press will at least have to address the issue.

The latest to do so is top comedian Margaret Cho, who told the Alex Jones Show yesterday that the public were going to become very angry when it was fully disclosed that the attacks were a conspiracy, concurring with fellow comedian George Carlin who also questioned the official story last year.

The path was trailblazed by Charlie Sheen in March 2006 when he spoke of his doubts about the official story and questioned the collapse of WTC Building 7. Sheen was endlessly smeared for weeks after but he prompted a national debate about 9/11 and the 9/11 Truth Movement enjoyed what many consider to be its most productive year.

In September 2006, former Governor, actor and wrestling star Jesse Ventura questioned 9/11 during an on-camera interview with Alex Jones and also cited Operation Northwoods and the Gulf of Tonkin as examples of how the government has planned and carried out staged war provocations in the past.

In July 2007, popular film maker Michael Moore told WeAreChange.org reporters that he had many more questions about 9/11 than at the time of making Fahrenheit 9/11 and did not believe the public had been told "half the truth" about what really happened.

Martin Sheen echoed his son's comments in October 2007 along with rising actor Mark Ruffalo, following in the footsteps of Rosie O'Donnell, who caused shockwaves when she brought 9/11 truth to national prominence during her stint as The View host.

The View was also used as a platform for actor James Brolin to raise 9/11 truth, who questioned the official version of events in the same week that acclaimed director David Lynch spoke out.

Lynch told Dutch television he thought WTC Building 7 was brought down via controlled demolition and that the Pentagon and Pennsylvania crash sites were suspicious due to the absence of evidence that a plane crashed at either location.

Other notable public figures speaking out at the same time included Ed Asner, Matthew Bellemy of Muse and director Richard Linklater.

American icon Willie Nelson threw his hat in the ring last month, when he told The Alex Jones Show that he thought the twin towers were imploded like condemned Las Vegas casino buildings.

Nelson's comments were almost universally blackballed by the corporate media, who had patently learned from the Sheen controversy that smear campaigns were only leading to more people being exposed to the information and beginning the wake-up process.

Of course, the really important advocates of 9/11 truth are the hundreds of architects, scholars, engineers and other expert professionals who are demanding a fresh inquiry, but they are habitually ignored by the media as the 9/11 Truth Movement is smeared as a fringe interest fad populated by kooks and imbeciles.

In reality, doubts about the official 9/11 story are shared by a myriad of well-respected figures.

The Japanese Parliament were recently a captive audience to a 9/11 truth presentation by Fujita Yukihisa - a member of the House of Councillors in the Diet.

Andreas von Buelow, the former German Defense Secretary, was perhaps the first most prominent individual to go on the record back in 2004, when he blamed the CIA for orchestrating the attacks.

He was followed by former environment minister in Tony Blair's government Michael Meacher, who questioned the stand down of NORAD on 9/11 and dismissed the entire war on terror as a hoax.

Veteran CIA agent and respected geopolitical expert Robert Baer said that "all the evidence points to" 9/11 having had elements of an inside job during a radio apperance in June 2006.

Late last year, former Italian President Francesco Cossiga told Italy's most respected newspaper that the attacks were run by the CIA and Mossad and that this was common knowledge amongst global intelligence agencies.

Former Wall Street Journal editor, U.S. Treasury Secretary and founder of Reaganomics Paul Craig Roberts questioned the susupicious collapse of the twin towers and Building 7 in February 2006.

Headed up by Richard Gage, the Architects and Engineers for 9/11 Truth organization lists hundreds of experts in their field who all concur that the implosion of the buildings is not consistent with the official story and needs to be investigated.

Scholars For 9/11 Truth & Justice, headed by Professor Steven Jones, counts amongst its ranks hundreds of physicists, scientists and academic professionals who all share doubts about 9/11.

Another website, Patriots For 9/11 Truth, lists hundreds more former government, military, air force, and navy officials who have all spoken out about 9/11.

With the impartiality of the 9/11 Commission having been blown wide open by revelations of White House ties with Philip Zelikow, allied to the fact that the Pentagon knowingly lied to the Commission during testimony, the call for a new independent inquiry, armed with subpoena powers, is amplifying to a crescendo.

Allegations of a cover-up in regard to the organization responsible for investigating the collapse of the twin towers on behalf of FEMA this week also increased the pressure.

The more prominent figures that add their voice to that call, be they captains of culture or respected authorties in their discipline, can only increase the eventual likelihood of a new investigation.

The Rising of the Mehdi Army: Basra Erupts

PATRICK COCKBURN
Counterpunch
Thursday, March 27, 2008

The Iraqi army is fighting the Mehdi Army Shia militia in the streets of Basra after the government launched its most serious offensive to gain control of the southern oil city.

Clouds of dark smoke rose over Basra 340 miles south of Baghdad as Iraqi soldiers tried to take control of the main roads while black-clad militiamen fought back from the alleyways. "There are clashes in the streets," said Jamil, a resident of the city. "Bullets are coming from everywhere and we can hear the sound of rocket explosions."

The fighting was spreading across Shia areas of Iraq as the radical cleric Muqtada al-Sadr, the leader of the Mehdi Army, called for a campaign of civil disobedience in which shops, businesses, schools and universities would close down.

In the Sadrist stronghold of Sadr City, home to two million people in Baghdad, police and army checkpoints were simply abandoned and militiamen took over. In a statement read out by a senior aide yesterday, Mr Sadr called on Iraqis to stage sit-ins all over the country and added that he would declare "a civil revolt" if attacks by US and Iraqi security forces continued. Civil disobedience is different in Iraq from most countries, since most protesters are armed or have weapons available.

The Iraqi Prime Minister, Nouri al-Maliki, has moved to Basra, where he is said to be supervising the operation, in which 22 people have been killed and over 100 wounded so far. It is unlikely, however, that the Iraqi army assault would have been launched without the support of the American military, whose jets and helicopters are providing air support.

The Sadrist headquarters in the Shia holy city of Najaf has ordered the Mehdi Army field commanders to be on maximum alert and prepare "to strike the occupiers", which means attacking US forces. If they do so it would mean the end of the ceasefire declared by Mr Sadr on 29 August last year and renewed in February.

It is this truce which US commanders have said contributed significantly to the fall in violence in Iraq over the past six months. Rockets fired from Shia areas of Baghdad pounded the American-protected Green Zone yesterday.

Basra has been increasingly controlled by Shia militias since the fall of Saddam Hussein in 2003. British forces were never able to establish their authority over the city and finally handed over security control to Iraq on 16 December last year, saying that the British presence was provoking rather than reducing violence.

Mr Maliki has declared that the government is intending to restore law and order in Basra but the Sadrist movement, the most powerful Shia mass movement, will see the offensive as an attempt by its Shia rivals in the Islamic Supreme Council of Iraq to displace them. If there is an all-out confrontation, the Iraqi army might well look to support from the United States and Britain, initially through air strikes. So far British forces have not been involved in the fighting.

The US has been eager for the central government to regain control of Basra, which sits on top of Iraq's oil reserves and is also close to the American army's main supply line that runs west of the city up the main highway from Kuwait to Baghdad. Basra has hitherto been run by competing local warlords, each of whom has been seeking to gain control of valuable local concessions and rackets such as fuel and the ports of Basra and Umm Qasr. One Iraqi businessman who dispatched a container from Umm Qasr port to Arbil in Iraqi Kurdistan says he paid $500 (£250) in transport costs and $3,000 in bribes to ensure safe passage.

Mr Sadr has been keen to avoid an all-out military confrontation with the US army or Iraqi units backed by the Americans ever since he fought the US Marines in Najaf in 2004. Although his Mehdi Army militiamen suffered heavy losses because of the American force's superior arms, they showed that they were prepared to fight to the end. In the warren of slums in Basra, they could do the same and they could also spread the fighting across the overwhelmingly Shia south of Iraq.

Dollar Heads for Biggest Weekly Drop Against Euro in a Month

Agnes Lovasz and Kosuke Goto
Bloomberg
Friday, March 28, 2008

The dollar headed for its biggest weekly decline in a month against the euro as traders raised bets the Federal Reserve will cut interest rates to avert a recession.

The currency was also poised to drop versus the British pound and the Swiss Franc before a U.S. government report today that will probably show growth in consumer spending slowed. The yen fell against the Australian and New Zealand dollars as gains in Asian stocks prompted traders to increase holdings of higher- yielding assets funded with loans from Japan.

``There are further declines ahead for the dollar,'' said Antje Praefcke, a Frankfurt-based currency strategist at Commerzbank AG, Germany's second-largest lender. ``The U.S. is probably facing a recession and the Fed will cut rates further. There are ongoing problems with the financial sector. All of this is not good news for the dollar.''

The dollar traded at $1.5812 per euro at 7:15 a.m. in New York, from $1.5779 yesterday and $1.5431 a week ago. The U.S. currency rose to 99.97 yen, from 99.65 yesterday and 99.58 at the end of last week. Japan's currency weakened to 158.10 per euro, from 157.21 yesterday and 153.55 on March 21.

The dollar, which dropped 2.4 percent this week, will trade in the $1.5750 to $1.58 range today before falling to a record $1.60 within the next two weeks, Praefcke predicted.

New Zealand's dollar advanced after a statistics bureau report showed the nation's economic growth in the fourth quarter accelerated at the fastest annual pace in three years. The currency rose to as high as 80.68 U.S. cents, before trading at 80.54 cents, from 80.35 cents. It also gained 0.6 percent to 80.56 yen. The Australian dollar strengthened 0.6 percent to 92.40 U.S. cents and 0.9 percent to 92.41 yen.

Full article here.