Paulson Predicts Signs of `Slower Growth' Ahead

By Kevin Carmichael and John Brinsley

Jan. 7 (Bloomberg) -- Treasury Secretary Henry Paulson said investors remain wary of U.S. markets and that further signs of ``slower growth'' will emerge before the economy shakes off the effects of the housing crisis.

``It will take additional time for markets to regain confidence,'' Paulson said in a speech to the New York Society of Security Analysts today in New York. ``We will likely have further indications of slower growth in the weeks and months ahead.''

The comments come as the Bush administration considers ways to invigorate an economy that some economists say may be on the verge of recession. The U.S. stock market is off to its worst start since 2000 as the housing slump and credit crunch weaken job growth and manufacturing.

Paulson didn't address the prospect of an economic stimulus package directly in his prepared remarks. While acknowledging that growth ``looks to have slowed considerably'' at the end of 2007, Paulson said the economy ``remains resilient'' and that he expects it to ``continue'' to expand.

``Let me be clear that no single policy or action will undo the excesses of the last few years,'' Paulson said. ``President Bush and his administration recognize the risk we face, and the primary importance of keeping the economy as strong as possible as we weather this housing correction.''

Paulson, Federal Reserve Chairman Ben S. Bernanke and the rest of the President's Working Group on Financial Markets met with President George W. Bush on Jan. 4.

Work With Congress

After the meeting, Bush said he will work with Congress to ``do everything we can'' to ensure the economy doesn't slip into a recession. The U.S. economy likely grew at an annual rate of 1 percent in the fourth quarter, according to the median estimate of economist surveyed last month, compared with a 4.9 percent rate in the third quarter.

Paulson, the former head of Goldman Sachs Group Inc., used the speech to assess the state of various capital markets.

He said equity and Treasury markets were functioning ``well.'' The U.S. market for ``high-grade debt'' is ``performing satisfactorily,'' and the ``high yield'' market is ``impaired but operational,'' Paulson said. The asset-backed paper market is showing ``progress,'' he said.

The speech was Paulson's first since a three-state trip last month to promote his plan to ease the subprime mortgage crisis, which includes freezing interest rates on loans to some borrowers. He said he expected mortgage servicers to ``begin fat-tracking borrowers in the next few weeks.''

In the remarks today, Paulson repeated a request that Congress pass legislation toughening oversight of Fannie Mae and Freddie Mac, two government-chartered enterprises that are the country's biggest sources of mortgage financing. With a stronger regulator, Paulson said the administration would back a temporary, higher limit on the size of loans the GSEs are allowed to securitize.

Iran confirms incident with U.S. ships: agency

TEHRAN (Reuters) - Iran on Monday confirmed there was an "incident" between Iranian and U.S. ships but gave no details, an Iranian news agency reported, after Washington said Iranian vessels threatened their ships in the Strait of Hormuz.

The Pentagon said five Iranian boats made aggressive maneuvers and showed hostile intent against three U.S. Navy ships on Saturday in the narrow entrance to the Gulf, a major oil shipping route.

The Pentagon said the incident was serious. It described the Iranian actions as "careless, reckless and potentially hostile" and said Tehran should provide an explanation.

But Iran played down the incident saying it was not unusual. Foreign Ministry spokesman Mohammad Ali Hosseini said that, as in other cases, this "incident" was resolved when the two sides identified each other.

"The example that happened on Saturday was similar to previous cases and is an ordinary and natural issue," Hosseini told Iran's official IRNA news agency.

"This is an ordinary issue that happens for the two sides every once in a while and after the identification of the two sides the issue is resolved," he added without giving details.

The incident was the latest sign of tension between Washington and Tehran, at odds over a range of issues from Iran's nuclear program to U.S. allegations of Iranian support for terrorism.

U.S. President George W. Bush is due to travel to the Middle East this week on a trip he has said is partly aimed at countering Iranian influence and what he has described as Tehran's "aggressive ambitions".

"We urge the Iranians to refrain from such provocative actions that could lead to a dangerous incident in the future," White House spokesman Gordon Johndroe said.

Oil prices briefly rose on the news about the confrontation as dealers weighed the threat to oil shipments along the key shipping route. Crude futures jumped 49 cents to $98.40 a barrel before slipping back.

(Reporting by Hossein Jaseb and Zahra Hosseinian; writing by Edmund Blair; editing by Sami Aboudi)

IMF warns of economic doom

Story by JEFF OTIENO - DAILY NATION Publication Date: 1/7/2008

The International Monetary Fund Sunday warned that Kenya was facing an economic catastrophe if the current post-general election standoff is not addressed. IMF managing director Dominique Strauss-Kahn also said the institution was concerned that supply disruptions due to violence in the country was affecting other countries in the region. Some of the countries that are already feeling the pinch of the post-election violence are Uganda and Rwanda which heavily depend on the port of Mombasa for imports like petroleum, machinery and other products. As a growing regional economic hub, Kenya is the transit point for one quarter of the GDP of Uganda and Rwanda, and one third that of Burundi. “I very much hope that the political leaders in Kenya will quickly and peacefully resolve the current dispute over the election results. This would open the way to further progress toward economic prosperity which could benefit all Kenyans,’’ said Mr Strauss-Kahn. Economic reform The fund was ready to support Kenya in its economic reform efforts. The concerns were supported by economic analyst, Dr David Ndii, who said the political violence experienced in Kenya will be felt for a long time. “It is important that there be political stability and confidence in the government of the day for the eroded investor confidence to be restored,” said Dr Ndii. He said the notion that calm would restore investor confidence as argued by some politicians was misplaced. Dr Ndii added that transit trade was a leading foreign exchange earner, apart from tourism and agriculture. “With the chaos that has been witnessed in the country it will not be surprising if the landlocked countries look for alternatives other than wholly relying on Kenya for their essential commodities,” he added. He said influential people who took part in the election fraud had done harm not only to the country but also to their businesses. “Investor confidence will be fully restored once Kenya holds another election that is deemed to be free and fair, whether it is next month or after five years,” Mr Ndii added. He said the cost of insuring buildings and infrastructure from political risks will skyrocket following the violence witnessed. Mr Strauss-Kahn said the Bretton Woods institution had noted with sadness the violence that has caused the deaths of many innocent Kenyans in the aftermath of the December 27 elections. “I offer my condolences to the families who have lost their loved ones to the violence and pay tribute to the people of Kenya who exercised their democratic and constitutional rights to vote. I note with concern that supply disruptions emanating from the developments in Kenya are affecting other countries in the region,’’ he said. The IMF and local economists concerns come a few days after a statement issued by the donor community which said the country was losing Sh2 billion daily. The joint statement, issued last week by the World Bank, Canada, Denmark, the European Commission, France, Norway, Sweden, the United Kingdom and the United States, warned that the gains made in the past few years could dissipate due to the ongoing destruction. Business confidence “At stake is the pre-election Gross Domestic Product (GDP) growth rate of seven per cent, rising business confidence, increasing tourism, measurable progress in firm level productivity, significant gains in democratic development and the lifting of over two million Kenyans out of poverty,” said the statement. The donor community said Sh40 billion–about five per cent of market capitalisation– was wiped off the value of shares when business resumed at the Nairobi Stock Exchange after the elections.

Pentagon Says Iran Boats Provoked US Warships in Strait of Hormuz

By VOA News 07 January 2008

U.S. officials say five Iranian naval boats provoked three American warships in the strategic Strait of Hormuz on Sunday.

Military officials said Monday that the American ships prepared to fire after the Iranian military speedboats acted aggressively, charging the U.S. boats before veering away and dropping boxes in the water.

Pentagon officials say the Iranians used an open radio frequency to warn the U.S. ships that they would blow up after a couple of minutes.

The White House called the incident "provocative" and warned Tehran to refrain from such actions that could lead to a "dangerous incident in the future."

The Strait of Hormuz between Iran and the United Arab Emirates is a key shipping route for oil. Both the Iranian and the U.S. navies patrol the waterway.

Jesuits gather in Rome to elect new "black pope"

By Philip Pullella

ROME (Reuters) - There won't be any white smoke to tell the world he has been elected, but another sort of secret conclave began in Rome on Monday -- to chose the worldwide Jesuit leader who is known as the "the black pope".

At Jesuit headquarters a block from the Vatican, 225 delegates from around the world will choose a new superior general to run the largest and perhaps most influential, controversial and prestigious Catholic clerical order.

Their leader is traditionally known as "the black pope" because of the colour of the simple cassock he wears and because -- like the pope who dresses in white -- he has worldwide influence and usually keeps the position for life.

But this year's general congregation, as the meeting is known, is different. The current superior general, Father Peter-Hans Kolvenbach, 79, received permission from Pope Benedict to retire for reasons of age.

A soft-spoken Dutchman with white hair and a goatee, Kolvenbach has been in the job since 1983 and has won widespread praise for steering the Jesuits through one of their most difficult periods in their 468-year history.

Kolvenbach's charismatic predecessor, a Basque named Pedro Arrupe, had several conflicts with Benedict's predecessor, Pope John Paul, who believed the order had become too independent, leftist and political, particularly in Latin America.

When Arrupe suffered a stroke in the early 1980s Pope John Paul appointed a personal delegate to run the order to make sure it would not drift further leftwards, a move some Jesuits at the time resented as "papal martial law".

Kolvenbach, by contrast, has been credited with re-establishing good relations with the Vatican over the past 25 years while dealing with issues such as declining vocations and the future of the order founded by St Ignatius Loyola in 1540.

DECLINING VOCATIONS

In the 1960s, the all-male order officially known as the Society of Jesus peaked with some 36,000 members worldwide. It now has about 19,200 members involved in education, refugee help and other social services.

The election of Kolvenbach's successor is expected to take place in mid-January after days of prayer and what is known in Latin as "murmuratio", or murmurings, among the delegates about who might make a good superior general.

While politicking for the post is strictly banned -- delegates are obliged to 'turn in' anyone who actively seeks the top job -- some names have already circulated in religious media.

One is Father Lisbert D'Sousa of India, and some Jesuits have said it is time for the top job to go to someone from the developing world.

"This (the developing world) is not only the new center of gravity for the Society of Jesus but for the Church," Father James Martin wrote in America, the weekly of the U.S. Jesuits.

"And an election of a developing world general would be interesting as a possible bellwether for the next papal conclave, whenever that will be," he wrote.

The new Jesuit leader is elected by a secret ballot. After he is chosen, the delegates are not allowed to leave the room until Pope Benedict is informed, in keeping with a centuries-old tradition that the "white pope" be the first to know who the new "black pope" is.

But unlike a conclave to elect the real pope, a Jesuit general congregation can continue for weeks or even months after the new head has been elected in order to discuss the order's future challenges and priorities

Pope Benedict Calls for Global Commitment to Security

By VOA News 07 January 2008

Pope Benedict has given his annual "state of the world" speech, calling for a global commitment to security.

Pope Benedict XVI waves as he leaves St. Peter's square, 31 Dec 2007

In Vatican City Monday the Roman Catholic leader urged the world to prevent terrorists from obtaining weapons of mass destruction. He called for diplomatic efforts over Iran's nuclear program, which the United States fears will be used to build nuclear weapons. Tehran says its nuclear program is peaceful.

Pope Benedict also appealed for peace in many of the world's troubled regions, mentioning Burma, the Middle East, Kenya, and Sudan's Darfur region.

And he praised the agreement made by Israeli and Palestinians leaders in November to try to reach a peace deal by 2008. He urged the world to support that effort.

Israel to brief George Bush on options for Iran strike

Uzi Mahnaimi
London Times
Monday January 7, 2007

ISRAELI security officials are to brief President George W Bush on their latest intelligence about Iran’s nuclear programme - and how it could be destroyed - when he begins a tour of the Middle East in Jerusalem this week.

Ehud Barak, the defence minister, is said to want to convince him that an Israeli military strike against uranium enrichment facilities in Iran would be feasible if diplomatic efforts failed to halt nuclear operations. A range of military options has been prepared.

Last month it was revealed that the US National Intelligence Estimate report, drawing together information from 16 agencies, had concluded that Iran stopped a secret nuclear weapon programme in 2003.

Israeli intelligence is understood to agree that the project was halted around the time of America’s invasion of Iraq, but has “rock solid” information that it has since started up again.

While security officials are reluctant to reveal all their intelligence, fearing that leaks could jeopardise the element of surprise in any future attack, they are expected to present the president with fresh details of Iran’s enrichment of uranium - which could be used for civil or military purposes - and the development of missiles that could carry nuclear warheads.

In an interview with the Israeli newspaper Yediot Aharonot this weekend, Bush argued that in spite of the US intelligence assessment, Iran still posed a threat.

“I read the intelligence report carefully,” Bush said. “In essence, what the report said was that Iran had a secret plan to develop nuclear weapons.

“I’m saying that a state which adopted a nontransparent policy and had a secret plan for developing nuclear weapons could easily develop an alternative plan for the same purpose. So to conclude from the intelligence report that there is no Iranian plan to develop nuclear weapons will be only a partial truth.”

Israeli security officials believe the only way to prevent uranium enrichment to military grade is to destroy Iranian installations. Many Israelis are eager to know whether America would give their country the green light to attack, as it did last September when Israel struck a mysterious nuclear site in Syria.

China Communists sacked for having too many children: state media

AFP
Monday January 7, 2007

Authorities in a central China province have expelled hundreds of people from the Communist Party or their government posts for having more than one child, state media said Monday.

At least 93,084 people in Hubei province last year had more children than they were allowed under the policy of one per family, Xinhua news agency said quoting the provincial family planning commission.

They included 1,678 officials or party members, it added, saying about 500 had been expelled from the party and 395 stripped of their official posts.

Previous reports said the officials had also been fined.

The violators included seven national and local lawmakers or political advisors, Xinhua added.

"More party members, celebrities and well-off people are violating the policies... which has undermined social equality," commission director Yang Youwang was quoted as saying.

No information was given as to the punishments meted out to the more than 90,000 other people in Hubei who violated the "one-child" policy last year.

China's family planning policy began in the late 1970s as a way to control the world's largest population, now at 1.3 billion people.

Generally, urban families can have one child and rural families can have two if the first is a girl. About 400 million births have been averted thanks to the policy, the government has said.

But in recent years the policy has been routinely ignored in rural areas, while increasing numbers of China's urban new rich have been able to afford the requisite fines for violating the rules.

Chinese parents have traditionally favoured large families -- and sons, in particular -- to support them in their old age.

The policy has been notorious from the start for the harsh punishments and brutal methods used to enforce it, such as forced late-term abortions and the sterilisation of women.

Several areas of the poor southern province of Guangxi erupted in riots last year after officials launched a harsh crackdown to enforce the policy, with residents saying forced abortions were among the methods used by authorities.

Double Agent Gadahn Threatens Bush In Neo-Con Stunt

Jewish Zionist who once called Muslims "bloodthirsty terrorists" helps Giuliani's flagging numbers before New Hampshire primary

Paul Joseph Watson
Prison Planet
Monday, January 7, 2008

Adam Pearlman, the Jewish Mossad agent who once wrote stinging essays condemning Muslims as "bloodthirsty terrorists", has once again popped up as an "Al-Qaeda spokesman" to boost the Neo-Con's imperial agenda by threatening George Bush on the eve of his trip to the middle east.

In a new videotape, Pearlman, now calling himself Adam Gadahn, states, "The occupied territories are awaiting their first visit by the crusader Bush and the mujahideen are also waiting for him," reports ABC News.

According to the tape, Gadahn promises to welcome Bush "with bombs and traps."

Gadahn's appearance is also perfectly timed to boost the flagging poll numbers of Rudy Giuliani and other establishment Republican candidates who have invoked the imaginary threat of terror for political points scoring before the New Hampshire primary tomorrow.

But who is the mysterious Adam Yehiye Gadahn?

The FBI lists Gadahn's aliases as Abu Suhayb Al-Amriki, Abu Suhayb, Yihya Majadin Adams, Adam Pearlman, and Yayah.

Adam Pearlman is his real name and his grandfather is none other than the late Carl K. Pearlman; a prominent Jewish urologist in Orange County. Carl was also a member of the board of directors of the Anti-Defamation League, which was caught spying on Americans for Israel in 1993. Mike Rivero has the scoop at WhatReallyHappened.com.

Israel's Mossad intelligence agency was caught in 2002 creating a phony Al-Qaeda group to justify attacks on Palestinians.

Pearlman has a knack of releasing his tapes at the most politically opportune time for Bush, having first burst onto the scene shortly before the 2004 presidential election and then again right after Katrina when the President's approval rating was tanking fast.

Even more mainstream publications, like the Los Angeles City Beat, have dismissed Pearlman before as nothing more than "cartoonish propaganda."

Pearlman had a hippy upbringing, a brief but intense flirtation with death metal and before a sudden transformation, once referred to Muslims as “bloodthirsty, barbaric terrorists.” Pearlman was a hardcore Jewish Zionist and wrote essays and screeds bashing the Muslim faith. He even got into fights at mosques and beat up Muslim worshippers.

Pearlman, the hardcore Jewish Zionist who trashed Muslims and beat them up, grows a beard and suddenly becomes an "Al-Qaeda spokesman" - nothing suspicious here, move along!

Pearlman's personal history and the highly suspicious nature in which he suddenly professed his conversion to Islam in a single Internet posting and later appeared on the scene as a spokesman for "Al-Qaeda" are all the ingredients needed to draw the conclusion that Pearlman is working as a double agent and most likely for Mossad.

The new tape is once again the work of As Sahab, Al-Qaeda's alleged media arm and was released by the U.S. government affiliated IntelCenter organization.

The previous Pearlman tape, released at the end of May last year, was also obtained by the IntelCenter group, a U.S. government contractor, and its head Ben Venzke gave the tape credence in media interviews concerning the story, as he has done again on this occasion.

It also emerged that Gadahn was the scriptwriter for the September 11, 2007 Bin Laden tape in which segments of Bin Laden's previous statements were hastily slapped together and the contrast altered to make his dubious beard appear darker, an attempt to hoodwink viewers into thinking the tape was new material.

In our previous groundbreaking expose, we unveiled the ties between Intelcenter, a group that regularly 'obtains' Al-Qaeda tapes and the Pentagon. Intelcenter is an offshoot of IDEFENSE, which was staffed by a senior military psy-op intelligence officer Jim Melnick, who has worked directly for Donald Rumsfeld.

Intelcenter were behind the October 2006 release of the "laughing hijackers" tape that showed Mohammad Atta and Ziad Jarrah allegedly attending a 2000 Al-Qaeda meeting and reading their last will and testament.

Segments of the video that were interspersed with footage of the "laughing hijackers," Jarrah and Atta, showing Bin Laden giving a speech to an audience in Afghanistan on January 8 2000, were culled from what terror experts described as surveillance footage taken by a "security agency."

News reports at the time contained the admission that the U.S. government had been in possession of the footage since 2002, while others said it was found when the United States invaded Afghanistan in 2001, and yet it was still bizarrely reported that the tape, bearing all the hallmarks of having been filmed and edited by undercover US intelligence and having admittedly been in US possession for five years, was released over the weekend of September 31/October 1 by Al-Qaeda.

The video also contained segments that were first broadcast in a British documentary called The Road to Guantanamo, which was originally aired in March 2006. The context of the corresponding scene in the dramatized documentary featured U.S. interrogators attempting to coerce Gitmo detainees into confessing Al-Qaeda membership by showing them fake videos where their likeness had been computer generated to appear as if they were in attendance during Bin Laden's January 8 2000 speech.

The new Pearlman/Gadahn propaganda tape will no doubt be seized upon by bellicose Neo-Cons who desperately yearn for another terror attack like junkies yearn for their next hit. Unfortunately for them, crass videotapes presented by discredited intelligence double agents don't have nearly the same impact they did before masses of people started waking up to the fact that the entire war on terror is a complete fraud propped up by crude smoke and mirror stunts which manage to fool only the dumbest of Americans.

Sean Hannity on the run

Sean Hannity retreating to his hotel after protesters rallied outside of a restaurant he was visiting in Manchester, New Hampshire.

U.S. says Iran gunboats harassed warships

Officials describe incident as a 'significant provocative act'

BREAKING NEWS

By Jim Miklaszewski

Chief Pentagon correspondent

NBC News

updated 8:47 a.m. ET, Mon., Jan. 7, 2008

WASHINGTON - Iranian Revolutionary Guard gunboats harassed three U.S. Navy warships in the Strait of Hormuz Sunday, in what the U.S. military considers a "significant provocative act."

Military officials told NBC News that two U.S. Navy destroyers and one frigate were heading into the Persian Gulf through the international waters of the Strait of Hormuz when five armed "fast boats" of the Iranian Revolutionary Guard approached a high speed, darting in and out of the formation.

At one point a radio message from one of the Iranian boats warned, "You are going to blow up within minutes."

The Navy warships went into defensive mode, radioed the usual warnings to steer clear, and in the end no shots were fired. U.S. military warships believe the Revolutionary Guard boats were "testing our defenses," the officials said.

The United States expressed concern when the Revolutionary Guard forces took over Iranian naval operations in the Persian Gulf and Strait of Hormuz from the regular navy more than five months ago.

However, Sunday’s incident was the first significant act of provocation since then.

Revolutionary Guard forces also briefly took a number of British sailors into custody even though the British claim they were operating in international waters off the coast of Iraq.

Jim Miklaszewski is the NBC News Chief Pentagon Correspondent.

URL: http://www.msnbc.msn.com/id/22537199/