Russia restarts Cold War patrols

Russia restarts Cold War patrols

Russia is resuming a Soviet-era practice of sending its bomber aircraft on long-range flights, President Vladimir Putin has said.

Mr Putin said the move to resume the flights permanently after a 15-year suspension was in response to security threats posed by other military powers.

He said 14 bombers had taken off from Russian airfields early on Friday.

The move came a week after Russian bombers flew within a few hundred miles of the US Pacific island of Guam.

A few days ago Moscow said its strategic bombers had begun exercises over the North Pole.

Flexing muscles

"We have decided to restore flights by Russian strategic aviation on a permanent basis," Mr Putin told reporters at joint military exercises with China and four Central Asian states in Russia's Ural mountains.

"In 1992, Russia unilaterally ended flights by its strategic aircraft to distant military patrol areas. Unfortunately, our example was not followed by everyone," Mr Putin said, in an apparent reference to the US.

"Flights by other countries' strategic aircraft continue and this creates certain problems for ensuring the security of the Russian Federation," he said.

In Washington, state department spokesman Sean McCormack played down the significance of Russia's move, saying: "We certainly are not in the kind of posture we were with what used to be the Soviet Union."

"If Russia feels as though they want to take some of these old aircraft out of mothballs and get them flying again, that's their decision," he told reporters.

One of the reasons Russia halted its flights 15 years ago was that it could no longer afford the fuel.

Today Moscow's coffers are stuffed full of oil money, says the BBC's Rupert Wingfield-Hayes in Moscow, and the Kremlin is determined to show it is still a military power to reckon with.

'Shadowed by Nato'

Russian media reported earlier on Friday that long-range bombers were airborne, and that Nato jets were shadowing them.

Itar-Tass quoted Russian air force spokesman Alexander Drobyshevsky as saying: "At present, several pairs of Tu-160 and Tu-95MS aircraft are in the air over the Atlantic and Pacific oceans, which are accompanied by Nato planes."

Nato said it was aware of the flights but had no comment on whether Nato planes were in attendance.

In last week's incident near Guam, the Russian pilots "exchanged smiles" with US fighter pilots who scrambled to track them, a Russian general said.

The US military confirmed the presence of the Russian bombers near Guam, home to a large US base.

Last month two Tupolev 95 aircraft - dubbed "bears" according to their Nato code-name - strayed south from their normal patrol pattern off the Norwegian coast and headed towards Scotland. Two RAF Tornado fighters were sent up to meet them.

Russian bombers have also recently flown close to US airspace over the Arctic Ocean near Alaska.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/europe/6950986.stm

Published: 2007/08/17 16:37:09 GMT

U.S.: Americans tracking Iranian forces in Iraq

U.S.: Americans tracking Iranian forces

Meanwhile, mortar barrage slams into Baghdad, killing 12, wounding 31

The Associated Press

Updated: 11:02 a.m. ET Aug. 19, 2007

BAGHDAD - American forces are tracking about 50 members of an elite Iranian force who have crossed the border into southern Iraq to train Shiite militia fighters, a top U.S. general said Sunday. The French foreign minister, meanwhile, arrived in Baghdad on a groundbreaking visit after years of icy relations with the United States over Iraq.

In Paris, the foreign ministry said Bernard Kouchner was in “Iraq to express a message of solidarity from France to the Iraqi people and to listen to representatives from all communities.”

Merely stepping onto Iraqi soil was a major symbol of French President Nicolas Sarkozy’s efforts to end any lingering U.S.-French animosities over the 2003 Iraq invasion.

In east Baghdad, a mortar barrage slammed into a mainly Shiite neighborhood, killing 12 and wounding 31, police said, and a major battle raged north of the capital where residents of a Shiite city were fighting what police said was a band of al-Qaida in Iraq gunmen.

Separately, Maj. Gen. Rick Lynch, whose command includes the volatile southern rim of Baghdad and districts to the south, said his troops are tracking about 50 members of Iran’s Revolutionary Guard Corps in their area — the first detailed allegation that Iranians have been training fighters within Iraq’s borders.

“We know they’re here and we target them as well,” he said, citing intelligence reports as evidence of their presence.

He declined to be more specific and said no Iranian forces have been arrested in his territory.

“We’ve got about 50 of those,” he said, referring to the Iranian forces. “They go back and forth. There’s a porous border.”

Iran denies accusations
The military has stepped up allegations against Iran in recent weeks, saying it supplies militants with arms and training to attack U.S. forces.

Iran denies the allegations and says it supports efforts to stop the violence.

The Bush administration is moving toward blacklisting Iran’s Revolutionary Guard Corps as a “terrorist” organization, subjecting at least part of the entity to financial sanctions, U.S. officials said this week.

A decision has been made in principle to name elements of the corps a “specially designated global terrorist” group, but internal discussions continue over whether it should cover the entire unit or only the Guard’s Al-Quds force, the most elite and covert of Iran’s military branches, which has equipped and trained Muslim fighters outside Iran’s borders.

Lynch, whose mission is to block the flow of weapons and fighters into the Baghdad area, said Sunni and Shiite extremists have become increasingly aggressive this month, trying to influence the debate in Washington before a pivotal progress report on Iraq.

He singled out the Shiite extremists as being behind rising attacks using armor-piercing explosively formed penetrators, or EFPs, which he said were largely assembled in Iraq from parts smuggled in from Iran. He also noted a marked increase in Iranian-rockets that have been increasingly effective against U.S. bases.

There has been an overall decrease in attacks against U.S. and Iraqi forces, as well as civilians, south of Baghdad, but 46 percent of those were being carried out by Shiite extremists, Lynch said.

“The real difference now is we’ve got to spend as much time fighting the Shia extremists as Sunni extremists,” he said.

Suffering in heat, violence
Women and children were among the 12 victims of the mortar attack in eastern Baghdad. Some houses in the neighborhood were damaged, according to police, and witnesses said U.S. helicopters were hovering above the attack site.

Hussein Saadon, 56, an owner of a small minibus station, was soaked in blood after he drove four victims to the hospital. He said the district had been without electricity for several days and the people were suffering in the heat.

“It fills me with pain and anger to see an attack on such poor area where is no presence of police nor army bases or checkpoints,” Saadon said.

In Khalis, 50 miles north of Baghdad, police said more than 1,500 people including sheiks and dignitaries had gathered near city hall to launch the counteroffensive against al-Qaida fighters who have been regularly firing mortars into the town and kidnapping residents at illegal checkpoints. Police said five townspeople were killed in the early hours of the fighting.

In central Baghdad, gunmen driving several cars waylaid a minibus headed for Sadr City, the capital’s Shiite enclave, and abducted 15 passengers, police said.

© 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/20343131/

Domestic use of spy satellites to widen

Domestic use of spy satellites to widen

Law enforcement getting new access to secret imagery

By Joby Warrick

The Washington Post

Updated: 1:16 a.m. ET Aug. 16, 2007

The Bush administration has approved a plan to expand domestic access to some of the most powerful tools of 21st-century spycraft, giving law enforcement officials and others the ability to view data obtained from satellite and aircraft sensors that can see through cloud cover and even penetrate buildings and underground bunkers.

A program approved by the Office of the Director of National Intelligence and the Department of Homeland Security will allow broader domestic use of secret overhead imagery beginning as early as this fall, with the expectation that state and local law enforcement officials will eventually be able to tap into technology once largely restricted to foreign surveillance.

Administration officials say the program will give domestic security and emergency preparedness agencies new capabilities in dealing with a range of threats, from illegal immigration and terrorism to hurricanes and forest fires. But the program, described yesterday by the Wall Street Journal, quickly provoked opposition from civil liberties advocates, who said the government is crossing a well-established line against the use of military assets in domestic law enforcement.

Although the federal government has long permitted the use of spy-satellite imagery for certain scientific functions -- such as creating topographic maps or monitoring volcanic activity -- the administration's decision would provide domestic authorities with unprecedented access to high-resolution, real-time satellite photos.

‘More robust access’
They could also have access to much more. A statement issued yesterday by the Department of Homeland Security said that officials envision "more robust access" not only to imagery but also to "the collection, analysis and production skills and capabilities of the intelligence community."

The beneficiaries may include "federal, state, local and tribal elements" involved in emergency preparedness and response or "enforcement of criminal and civil laws." The "tribal" reference was to Native Americans who conduct semiautonomous law enforcement operations on reservations.

"These systems are already used to help us respond to crises," Charles Allen, the chief intelligence officer for the Department of Homeland Security, said in a telephone interview. "We anticipate that we can also use it to protect Americans by preventing the entry of dangerous people and goods into the country, and by helping us examine critical infrastructure for vulnerabilities."

Domestic security officials already have access to commercial satellite imagery, including the high-definition photographs available from Google and other private vendors. But spy satellites offer much greater resolution and provide images in real time, said Jeffrey T. Richelson, an expert on space-based surveillance and a senior fellow with the National Security Archive in Washington.

"You also can get more coverage more often," Richelson said. "These satellites will cover during the course of their orbits the entire United States. They will be operating 24 hours a day and using infrared cameras at night."

Other nonvisual capabilities can be provided by aircraft-based sensors, which include ground-penetrating radar and highly sensitive detectors that can sense electromagnetic activity, radioactivity or traces of chemicals, military experts said. Such radar can be used to find objects hidden in buildings or bunkers.

One possible use of the technology would be to spot staging areas along smuggling routes used to transport narcotics or illegal immigrants, officials said. In a handful of cases, security officials have requested -- and obtained -- similar help, but only on a case-by-case basis.

Allen said the agreement with the DNI grew out of the general impetus for wider intelligence-sharing in the aftermath of the Sept. 11, 2001, terrorist attacks, when administration and intelligence officials began examining the possibility of increasing officials' access to secret data as a means of strengthening the nation's defenses.

The program was formally authorized in May in a memo by Director of National Intelligence Mike McConnell to Homeland Security Secretary Michael Chertoff. The two officials have been coordinating for months, as recommended in a 2005 study headed by Keith Hall, then the director of the National Reconnaissance Office.

Hall's group cited an "urgent need" for expanding sharing of remote sensing data to domestic groups other than scientific researchers. "Opportunities to better protect the nation are being missed," the report said.

Under the new program, the DHS will create a subordinate agency to be known as the National Applications Office. The new office, which has gained the backing of congressional intelligence and appropriations committees, is responsible for coordinating requests for access to intelligence by civilian agencies. Previously, an agency known as the Civilian Applications Committee facilitated access to satellite imagery for geologic study.

‘Big Brother in the sky’
Oversight of the department's use of the overhead imagery data would come from officials in the Department of Homeland Security and from the Office of the Director of National Intelligence and would consist of reviews by agency inspectors general, lawyers and privacy officers. "We can give total assurance" that Americans' civil liberties will be protected, Allen said. "Americans shouldn't have any concerns about it."

But civil liberties groups quickly condemned the move, which Kate Martin, director of the Center for National Security Studies, a nonprofit activist group, likened to "Big Brother in the sky." "They want to turn these enormous spy capabilities, built to be used against overseas enemies, onto Americans," Martin said. "They are laying the bricks one at a time for a police state."

Steven Aftergood, director of the Project on Government Secrecy for the Federation of American Scientists, said that the data could be useful but that oversight for the program was woefully inadequate. Enhanced access "shouldn't be adopted at all costs because it comes with risk to privacy and to the integrity of our political institutions," he said.

© 2007 The Washington Post Company

URL: http://www.msnbc.msn.com/id/20290145/

NYPD warns of homegrown terrorists

NYPD warns of homegrown terrorists

Analysis describes a path to violence for disaffected Muslim youth

MSNBC News Services

Updated: 4:24 p.m. ET Aug. 15, 2007

NEW YORK - Average citizens who quietly band together and adopt radical ways pose a mounting threat to American security that could exceed that of established terrorist groups like al-Qaida, a new police analysis has concluded.

The New York Police Department report released Wednesday describes a process in which young men — often legal immigrants from the Middle East who are frustrated with their lives in their adopted country — adopt a philosophy that puts them on a path to violence.

The report was intended to explain how people become radicalized rather than to lay out specific strategies for thwarting terror plots. It calls for more intelligence gathering, and argues that local law enforcement agencies are in the best position to monitor potential terrorists.

“Hopefully, the better we’re informed about this process, the more likely we’ll be to detect and disrupt it,” Police Commissioner Raymond Kelly said during a briefing with private security executives at police headquarters.

Internet stokes 'wandering mind'
The study is based on an analysis of a series of domestic plots thwarted since the Sept. 11 terrorist attacks, including those in Lackawanna, N.Y.; Portland, Ore.; and Virginia. It was prepared by senior analysts with the NYPD Intelligence Division who traveled to Hamburg, Madrid and other overseas spots to confer with authorities about similar cases.

The report found homegrown terrorists often were indoctrinated in local “radicalization incubators” that are “rife with extremist rhetoric.”

Instead of mosques, those places were more likely to be “cafes, cab driver hangouts, flop houses, prisons, student associations, non-governmental organizations, hookah bars, butcher shops and bookstores,” the report says.

The Internet also provides “the wandering mind of the conflicted young Muslim or potential convert with direct access to unfiltered radical and extremist ideology.”

“The Internet is the new Afghanistan,” Kelly said. “It is the de facto training ground. It’s an area of concern.”

Four stages to radicalization
The report identified the four stages to radicalization as pre-radicalization, self-identification, indoctrination, and jihadization, and said the Internet drove and enabled the process.

Radicalization could be triggered by such things as the loss of a job, the death of a close family member, alienation, discrimination, and international conflicts involving Muslims, said the report by senior NYPD intelligence analysts.

“Much different from the Israeli-Palestinian equation, the transformation of a Western-based individual to a terrorist is not triggered by oppression, suffering, revenge or desperation,” it said.

“Rather, it is a phenomenon that occurs because the individual is looking for an identity and a cause and unfortunately, often finds them in extremist Islam,” said the report “Radicalization in the West: The Home-grown Threat.”

The threat posed by homegrown extremists — from “eco-terrorist” groups to neo-Nazis — has long been a top concern for federal counterterror officials.

While economic opportunities in the United States are better and the country’s Muslims are more resistant to Islamist extremism, they are “not immune to the radical message,” the report says. “The powerful gravitational pull of individuals’ religious roots and identity sometimes supersedes the assimilating nature of American society.”

Recently, authorities have taken a closer look at radicalization happening in U.S. prisons, where a study last year by George Washington University and the University of Virginia found that Islamic extremists were turning jail cells into terrorist breeding grounds by preaching violent interpretations of the Quran to their fellow inmates.

Additionally, the Justice Department last year indicted 28-year-old Adam Gadahn, who was raised on a farm in southern California, with treason and supporting terrorism for serving as an al-Qaida propagandist.

Gadahn is believed to have tried to recruit supporters through videos and messages posted on the Internet.

Critics: Report ‘plays into extremists’ plans’
The NYPD report warns that more intelligence gathering is needed since most potential homegrown terrorists “have never been arrested or involved in any kind of legal trouble,” the study says.

They “look, act, talk and walk like everyone around them,” the study adds. “In the early stages of their radicalization, these individuals rarely travel, are not participating in any kind of militant activity, yet they are slowly building the mind-set, intention and commitment to conduct jihad.”

Kareem Shora, legal adviser for the American-Arab Anti-Discrimination Committee, called the findings faulty and potentially inflammatory.

Police “paint such a broad brush,” Shora said. “It plays right into the extremists’ plans because it’s going to end up angering the community.”

A recently released National Intelligence Estimate concluded that Osama bin Laden’s network had regrouped and remains the most serious threat to the United States.

Kelly insisted the NYPD report made no effort to provide a “cookie-cutter” profile for terrorists. He also argued that the NYPD report “doesn’t contradict the National Intelligence Estimate — it augments it.”

The Associated Press and Reuters contributed to this report.

URL: http://www.msnbc.msn.com/id/20278590/

U.S. to move on Iran’s Revolutionary Guard

U.S. to move on Iran’s Revolutionary Guard

Administration will designate group as ‘global terrorist’

By Robin Wright

The Washington Post

Updated: 1:13 a.m. ET Aug. 15, 2007

The United States has decided to designate Iran's Revolutionary Guard Corps, the country's 125,000-strong elite military branch, as a "specially designated global terrorist," according to U.S. officials, a move that allows Washington to target the group's business operations and finances.

The Bush administration has chosen to move against the Revolutionary Guard Corps because of what U.S. officials have described as its growing involvement in Iraq and Afghanistan as well as its support for extremists throughout the Middle East, the sources said. The decision follows congressional pressure on the administration to toughen its stance against Tehran, as well as U.S. frustration with the ineffectiveness of U.N. resolutions against Iran's nuclear program, officials said.

The designation of the Revolutionary Guard will be made under Executive Order 13224, which President Bush signed two weeks after the Sept. 11, 2001, attacks to obstruct terrorist funding. It authorizes the United States to identify individuals, businesses, charities and extremist groups engaged in terrorist activities. The Revolutionary Guard would be the first national military branch included on the list, U.S. officials said -- a highly unusual move because it is part of a government, rather than a typical non-state terrorist organization.

The order allows the United States to block the assets of terrorists and to disrupt operations by foreign businesses that "provide support, services or assistance to, or otherwise associate with, terrorists."

Growing tensions
The move reflects escalating tensions between Washington and Tehran over issues including Iraq and Iran's nuclear ambitions. Iran has been on the State Department's list of state sponsors of terrorism since 1984, but in May the two countries began their first formal one-on-one dialogue in 28 years with a meeting of diplomats in Baghdad.

The main goal of the new designation is to clamp down on the Revolutionary Guard's vast business network, as well as on foreign companies conducting business linked to the military unit and its personnel. The administration plans to list many of the Revolutionary Guard's financial operations.

"Anyone doing business with these people will have to reevaluate their actions immediately," said a U.S. official familiar with the plan who spoke on the condition of anonymity because the decision has not been announced. "It increases the risks of people who have until now ignored the growing list of sanctions against the Iranians. It makes clear to everyone who the IRGC and their related businesses really are. It removes the excuses for doing business with these people."

For weeks, the Bush administration has been debating whether to target the Revolutionary Guard Corps in full, or only its Quds Force wing, which U.S. officials have linked to the growing flow of explosives, roadside bombs, rockets and other arms to Shiite militias in Iraq and the Taliban in Afghanistan. The Quds Force also lends support to Shiite allies such as Lebanon's Hezbollah and to Sunni movements such as Hamas and the Palestinian Islamic Jihad.

Although administration discussions continue, the initial decision is to target the entire Guard Corps, U.S. officials said. The administration has not yet decided when to announce the new measure, but officials said they would prefer to do so before the meeting of the U.N. General Assembly next month, when the United States intends to increase international pressure against Iran.

Business ties
Formed in 1979 and originally tasked with protecting the world's only modern theocracy, the Revolutionary Guard took the lead in battling Iraq during the bloody Iran-Iraq war waged from 1980 to 1988. The Guard, also known as the Pasdaran, has since become an powerful political and economic force in Iran. Iranian President Mahmoud Ahmadinejad rose through the ranks of the Revolutionary Guard and came to power with support from its network of veterans. Its leaders are tied to many mainstream businesses in Iran.

"They are heavily involved in everything from pharmaceuticals to telecommunications and pipelines -- even the new Imam Khomeini Airport and a great deal of smuggling," said Ray Takeyh of the Council on Foreign Relations. "Many of the front companies engaged in procuring nuclear technology are owned and run by the Revolutionary Guards. They're developing along the lines of the Chinese military, which is involved in many business enterprises. It's a huge business conglomeration."

The Revolutionary Guard Corps -- with its own navy, air force, ground forces and special forces units -- is a rival to Iran's conventional troops. Its naval forces abducted 15 British sailors and marines this spring, sparking an international crisis, and its special forces armed Lebanon's Hezbollah with missiles used against Israel in the 2006 war. The corps also plays a key role in Iran's military industries, including the attempted acquisition of nuclear weapons and surface-to-surface missiles, according to Anthony Cordesman of the Center for Strategic and International Studies.

The United States took punitive action against Iran after the November 1979 takeover of the U.S. Embassy in Tehran, including the breaking of diplomatic ties and the freezing of Iranian assets in the United States. More recently, dozens of international banks and financial institutions reduced or eliminated their business with Iran after a quiet campaign by the Treasury Department and State Department aimed at limiting Tehran's access to the international financial system. Over the past year, two U.N. resolutions have targeted the assets and movements of 28 people -- including some Revolutionary Guard members -- tied to Iran's nuclear program.

China an obstacle
The key obstacle to stronger international pressure against Tehran has been China, Iran's largest trading partner. After the Iranian government refused to comply with two U.N. Security Council resolutions dealing with its nuclear program, Beijing balked at a U.S. proposal for a resolution that would have sanctioned the Revolutionary Guard, U.S. officials said.

China's actions reverse a cycle during which Russia was the most reluctant among the veto-wielding members of the Security Council. "China used to hide behind Russia, but Russia is now hiding behind China," said a U.S. official familiar with negotiations.

The administration's move comes amid growing support in Congress for the Iran Counter-Proliferation Act, which was introduced in the Senate by Gordon Smith (R-Ore.) and in the House by Tom Lantos (D-Calif.). The bill already has 323 House co-sponsors.

The administration's move could hurt diplomatic efforts, some analysts said. "It would greatly complicate our efforts to solve the nuclear issue," said Joseph Cirincione, a nuclear proliferation expert at the Center for American Progress. "It would tie an end to Iran's nuclear program to an end to its support of allies in Hezbollah and Hamas. The only way you could get a nuclear deal is as part of a grand bargain, which at this point is completely out of reach."

Such sanctions can work only alongside diplomatic efforts, Cirincione added.

"Sanctions can serve as a prod, but they have very rarely forced a country to capitulate or collapse," he said. "All of us want to back Iran into a corner, but we want to give them a way out, too. [The designation] will convince many in Iran's elite that there's no point in talking with us and that the only thing that will satisfy us is regime change."

Staff researcher Madonna Lebling contributed to this report.

© 2007 The Washington Post Company

URL: http://www.msnbc.msn.com/id/20269253/page/2/

Communist Dictator Mugabe: A Big Fan Of Bush's Wiretapping Program

Paul Joseph Watson
Prison Planet
Monday, August 13, 2007

The Communist dictatorship of Robert Mugabe's Zimbabwe has sought to justify its draconian new wiretapping law by citing the US and the UK as bedfellow nations that also engage in domestic eavesdropping and surveillance. Should we be concerned, or should we instead just ignore it and talk to our friends about Lindsay Lohan's rehab?

"Communications Minister Christopher Mushowe said Zimbabwe is not unique in the world in passing such legislation, citing electronic eavesdropping programs in the United States, the United Kingdom and South Africa, among other countries," reports VOA news.

Robert Mugabe's Zimbabwe is widely renowned as one of the most corrupt, inhumane hellholes on earth, a total police state ruled with an iron fist amidst a backdrop of societal meltdown, 85% unemployment rates, life expectancy under 40, and widespread starvation.

Mugabe's regime was characterized by the infamous land redistribution campaign, which began in 2000, a genocide perpetrated against white farmers that caused a mass exodus and the crippling of the agricultural industry and access to basic commodities.

Mugabe himself, whose enforcers are ordered to make dissidents rape their own children at gunpoint, has been in power for no less than 20 years having rigged numerous elections and intimidated recalcitrants by force to vote for him.

Should we be concerned that the tyrannical regime of Zimbabwe, one of the most brutal dictatorships on the planet, cites the U.S. as a benchmark on how to conduct government policy on privacy of telecommunications?

Should we be concerned that the rhetoric they use to justify unchecked spying mirrors almost exactly similar pronouncements by the Bush administration?

Consider this statement from the Zimbabwe Defense Forces director for communications, Colonel Livingstone Chineka.

"The mobile service providers have their own international gateway system, and from a security point of view, this is dangerous to the state because we need to monitor traffic coming in and outside, but at the moment we can not."

Would that seem out of place if it had been said by Gen. Michael Hayden or George W. Bush?

Mugabe is warmly greeted by former UK Foreign Secretary Jack Straw.

As America and other western countries sink deeper into overt despotism, it should naturally follow that they will more closely resemble totalitarian autocracies that are already in existence.

A London Independent report today provides us with another example - though long denied, "Germany's Stasi archive has revealed one of the last dark secrets of the former Communist east: the politburo order to shoot to kill anyone attempting to breach the Iron Curtain to freedom," writes Allan Hall.

"The Stasi directive went: "Do not hesitate with the use of a firearm, including when the border breakouts involve women and children, which the traitors have already frequently taken advantage of." Dated 1 October 1973, the document is described as "explosive" by Andreas Schulze, a spokesman for the Magdeburg-based archive where it was found."

Though the report fails to mention it, the UK Metropolitan Police adopted a shoot to kill policy in 2003, a directive that came to the fore in July 2005, when innocent electrician Jean Charles de Menezes was brutally gunned down in London despite having no connection to terrorism, before a cover-up went into high gear to hide the real reasons for his assassination.

The UK has adopted a policy that is borrowed from the Communist Stasi while America is lauded by Communist dictator Mugabe for spying on its own citizens. Should this be a worry or is it safe to slump back on the couch, loosen our belts, crack open a 6-pack and watch America's Got Talent?

Should we be concerned?

Video Surfaces of Cheney, in 1994, Warning That An Invasion of Iraq Would Lead to 'Quagmire'

Editor & Publisher
Monday Aug 13, 2007

NEW YORK It's not the first time that citizen "investigative journalists" have uncovered some embarrassing, or telling, nugget from the past that apparently remained buried for years. But it has happened again with the posting of a now wildly popular video on YouTube that shows Dick Cheney explaining in 1994 that trying to take over Iraq would be a "bad idea" and lead to a "quagmire."

The people who put it up come from a site called Grand Theft Country, the on-screen source appears to be the conservative American Enterprise Institute, and the date on the screen is April 15, 1994. That looks right, by the age of Cheney.

Posted on Friday, it had received over 100,000 hits by this morning, after being widely-linked around the Web. The transcript of this segment is below.

Cheney had helped direct the Gulf War for President George H.W. Bush. That effort was later criticized for not taking Baghdad and officials like Cheney had to explain why not, for years. Some have charged that this led to an overpowering desire to finish the job after Cheney became vice president in 2001.

Here is the transcript. The YouTube address is at the end.
*

Q: Do you think the U.S., or U.N. forces, should have moved into Baghdad?

A: No.

Q: Why not?

A: Because if we'd gone to Baghdad we would have been all alone. There wouldn't have been anybody else with us. There would have been a U.S. occupation of Iraq. None of the Arab forces that were willing to fight with us in Kuwait were willing to invade Iraq.

Once you got to Iraq and took it over, took down Saddam Hussein's government, then what are you going to put in its place? That's a very volatile part of the world, and if you take down the central government of Iraq, you could very easily end up seeing pieces of Iraq fly off: part of it, the Syrians would like to have to the west, part of it -- eastern Iraq -- the Iranians would like to claim, they fought over it for eight years. In the north you've got the Kurds, and if the Kurds spin loose and join with the Kurds in Turkey, then you threaten the territorial integrity of Turkey.

It's a quagmire if you go that far and try to take over Iraq.

The other thing was casualties. Everyone was impressed with the fact we were able to do our job with as few casualties as we had. But for the 146 Americans killed in action, and for their families -- it wasn't a cheap war. And the question for the president, in terms of whether or not we went on to Baghdad, took additional casualties in an effort to get Saddam Hussein, was how many additional dead Americans is Saddam worth?

Our judgment was, not very many, and I think we got it right.

US doles out millions for street cameras

Charlie Savage
Boston Globe
Monday Aug 13, 2007

The Department of Homeland Security is funneling millions of dollars to local governments nationwide for purchasing high-tech video camera networks, accelerating the rise of a "surveillance society" in which the sense of freedom that stems from being anonymous in public will be lost, privacy rights advocates warn.

Since 2003, the department has handed out some $23 billion in federal grants to local governments for equipment and training to help combat terrorism. Most of the money paid for emergency drills and upgrades to basic items, from radios to fences. But the department also has doled out millions on surveillance cameras, transforming city streets and parks into places under constant observation.

The department will not say how much of its taxpayer-funded grants have gone to cameras. But a Globe search of local newspapers and congressional press releases shows that a large number of new surveillance systems, costing at least tens and probably hundreds of millions of dollars, are being simultaneously installed around the country as part of homeland security grants.

In the last month, cities that have moved forward on plans for surveillance networks financed by the Homeland Security Department include St. Paul, which got a $1.2 million grant for 60 cameras for downtown; Madison, Wis., which is buying a 32-camera network with a $388,000 grant; and Pittsburgh, which is adding 83 cameras to its downtown with a $2.58 million grant.

Small towns are also getting their share of the federal money for surveillance to thwart crime and terrorism.

Recent examples include Liberty, Kan. (population 95), which accepted a federal grant to install a $5,000 G2 Sentinel camera in its park, and Scottsbluff, Neb. (population 14,000), where police used a $180,000 Homeland Security Department grant to purchase four closed-circuit digital cameras and two monitors, a system originally designed for Times Square in New York City.

"We certainly wouldn't have been able to purchase this system without those funds," police Captain Brian Wasson told the Scottsbluff Star-Herald.

Other large cities and small towns have also joined in since 2003. Federal money is helping New York, Baltimore, and Chicago build massive surveillance systems that may also link thousands of privately owned security cameras. Boston has installed about 500 cameras in the MBTA system, funded in part with homeland security funds.

Marc Rotenberg, director of the Electronic Privacy Information Center, said Homeland Security Department is the primary driver in spreading surveillance cameras, making their adoption more attractive by offering federal money to city and state leaders.

Homeland Security Department spokesman Russ Knocke said that it is difficult to say how much money has been spent on surveillance cameras because many grants awarded to states or cities contained money for cameras and other equipment. Knocke defended the funding of video networks as a valuable tool for protecting the nation. "We will encourage their use in the future," he added.

But privacy rights advocates say that the technology is putting at risk something that is hard to define but is core to personal autonomy. The proliferation of cameras could mean that Americans will feel less free because legal public behavior -- attending a political rally, entering a doctor's office, or even joking with friends in a park -- will leave a permanent record, retrievable by authorities at any time.

Businesses and government buildings have used closed-circuit cameras for decades, so it is nothing new to be videotaped at an ATM machine. But technology specialists say the growing surveillance networks are potentially more powerful than anything the public has experienced.

Until recently, most surveillance cameras produced only grainy analog feeds and had to be stored on bulky videotape cassettes. But the new, cutting-edge cameras produce clearer, more detailed images. Moreover, because these videos are digital, they can be easily transmitted, copied, and stored indefinitely on ever-cheaper hard-drive space.

In addition, police officers cannot be everywhere at once, and in the past someone had to watch a monitor, limiting how large or powerful a surveillance network could be.

But technicians are developing ways to use computers to process real-time and stored digital video, including license-plate readers, face-recognition scanners, and software that detects "anomalous behavior." Although still primitive, these technologies are improving, some with help from research grants by the Homeland Security Department's Science and Technology Directorate.

"Being able to collect this much data on people is going to be very powerful, and it opens people up for abuses of power," said Jennifer King, a professor at the University of California at Berkeley who studies privacy and technology. "The problem with explaining this scenario is that today it's a little futuristic. [A major loss of privacy] is a low risk today, but five years from now it will present a higher risk."

As this technological capacity evolves, it will be far easier for individuals to attract police suspicion simply for acting differently and far easier for police to track that person's movement closely, including retracing their steps backwards in time. It will also create a greater risk that the officials who control the cameras could use them for personal or political gain, specialists said.

The expanded use of surveillance in the name of fighting terrorism has proved controversial in other arenas, as with the recent debate over President Bush's programs for eavesdropping on Americans' international phone calls and e-mails without a warrant.

But public support for installing more surveillance cameras in public places, both as a means of fighting terrorism and other crime, appears to be strong. Last month, an ABC News/Washington Post poll found that 71 percent of Americans favored increased use of surveillance cameras, while 25 percent opposed it.

Still, some homeland security specialists point to studies showing that cameras are not effective in deterring crime or terrorism. Although video can be useful in apprehending suspects after a crime or attack, the specialists say that the money used to buy and maintain cameras would be better spent on hiring more police.

That view is not universal. David Heyman, the homeland security policy director at the Center for Strategic and International Studies, pointed out that cameras can help catch terrorists before they have time to launch a second attack. Several recent failed terrorist attacks in England were followed by quick arrests due in part to surveillance video.

Earlier this month, Senator Joe Lieberman, independent of Connecticut, proposed an amendment that would require the Homeland Security Department to develop a "national strategy" for the use of surveillance cameras, from more effectively using them to thwart terrorism to establishing rules to protect civil liberties.

"A national strategy for [surveillance cameras] use would help officials at the federal, state, and local levels use [surveillance] systems effectively to protect citizens, while at the same time making sure that appropriate civil liberties protections are implemented for the use of cameras and recorded data," Lieberman said.

Iran: US supports terrorists in Iraq

Press TV
Monday Aug 13, 2007

Iranian Defense Minister Mostafa Mohammad Najjar has accused the United States of covertly supporting terrorist cells in Iraq.

Speaking at the monthly session of the Defense Diplomacy Committee, Mohammad Najjar dismissed the allegations made by the US that Iran is smuggling explosive devices into Iraq.

He blamed Washington for bomb attacks in the war-torn country, mainly in the capital, adding that intelligence suggests that the US government is supporting terrorist groups in Iraq.

The Iranian Defense Minister reiterated Iran's stance on Iraq, saying that the security of Iran depends on the security of Iraq and that stability and security in the country could help establish peace in the region.

" The only solution to the problem of instability in war-battered Iraq would be for the US to pull out its troops and withdraw support for terrorist groups, "said the Defense Minister.

He added the Iraqi people would achieve prosperity, security and progress with attempts of Nouri al-Maliki's government and in light of good relations with the neighboring countries.

Mohammad Najjar concluded that the Bush administration is not seeking peace and security in the Middle East since it will raise concern over its military presence in the region.

Cheney urging strikes on Iran

Warren P. Strobel, John Walcott and Nancy A. Youssef
McClatchy Newspapers
Friday Aug 10, 2007

President Bush charged Thursday that Iran continues to arm and train insurgents who are killing U.S. soldiers in Iraq, and he threatened action if that continues.

At a news conference Thursday, Bush said Iran had been warned of unspecified consequences if it continued its alleged support for anti-American forces in Iraq. U.S. Ambassador to Iraq Ryan Crocker had conveyed the warning in meetings with his Iranian counterpart in Baghdad, the president said.

Bush wasn't specific, and a State Department official refused to elaborate on the warning.

Behind the scenes, however, the president's top aides have been engaged in an intensive internal debate over how to respond to Iran's support for Shiite Muslim groups in Iraq and its nuclear program. Vice President Dick Cheney several weeks ago proposed launching airstrikes at suspected training camps in Iraq run by the Quds force, a special unit of the Iranian Revolutionary Guard Corps, according to two U.S. officials who are involved in Iran policy.

The debate has been accompanied by a growing drumbeat of allegations about Iranian meddling in Iraq from U.S. military officers, administration officials and administration allies outside government and in the news media. It isn't clear whether the media campaign is intended to build support for limited military action against Iran, to pressure the Iranians to curb their support for Shiite groups in Iraq or both.

Nor is it clear from the evidence the administration has presented whether Iran, which has long-standing ties to several Iraqi Shiite groups, including the Mahdi Army of radical cleric Muqtada al Sadr and the Badr Organization, which is allied with the U.S.-backed government of Prime Minister Nouri al Maliki, is a major cause of the anti-American and sectarian violence in Iraq or merely one of many. At other times, administration officials have blamed the Sunni Muslim group al Qaida in Iraq for much of the violence.

For now, however, the president appears to have settled on a policy of stepped-up military operations in Iraq aimed at the suspected Iranian networks there, combined with direct American-Iranian talks in Baghdad to try to persuade Tehran to halt its alleged meddling.

The U.S. military launched one such raid Wednesday in Baghdad's predominantly Shiite Sadr City district.

But so far that course has failed to halt what American military officials say is a flow of sophisticated roadside bombs, known as explosively formed penetrators, into Iraq. Last month they accounted for a third of the combat deaths among U.S.-led forces, according to the military.

Cheney, who's long been skeptical of diplomacy with Iran, argued for military action if hard new evidence emerges of Iran's complicity in supporting anti-American forces in Iraq; for example, catching a truckload of fighters or weapons crossing into Iraq from Iran, one official said.

The two officials spoke on condition of anonymity because they weren't authorized to talk publicly about internal government deliberations.

Secretary of State Condoleezza Rice opposes this idea, the officials said. Defense Secretary Robert Gates has stated publicly that "we think we can handle this inside the borders of Iraq."

Lea Anne McBride, a Cheney spokeswoman, said only that "the vice president is right where the president is" on Iran policy.

Bush left no doubt at his news conference that he intended to get tough with Iran.

"One of the main reasons that I asked Ambassador Crocker to meet with Iranians inside Iraq was to send the message that there will be consequences for . . . people transporting, delivering EFPs, highly sophisticated IEDs (improvised explosive devices), that kill Americans in Iraq," he said.

He also appeared to call on the Iranian people to change their government.

"My message to the Iranian people is, you can do better than this current government," he said. "You don't have to be isolated. You don't have to be in a position where you can't realize your full economic potential."

The Bush administration has launched what appears to be a coordinated campaign to pin more of Iraq's security troubles on Iran.

Last week, Lt. Gen. Raymond Odierno, the No. 2 U.S. military commander in Iraq, said Shiite militiamen had launched 73 percent of the attacks that had killed or wounded American troops in July. U.S. officials think that majority Shiite Iran is providing militiamen with EFPs, which pierce armored vehicles and explode once inside.

Last month, Brig. Gen. Kevin Bergner, a multinational force spokesman, said members of the Quds force had helped plan a January attack in the holy Shiite city of Karbala, which lead to the deaths of five American soldiers. Bergner said the military had evidence that some of the attackers had trained at Quds camps near Tehran.

Bush's efforts to pressure Iran are complicated by the fact that the leaders of U.S.-supported governments in Iraq and Afghanistan have a more nuanced view of their neighbor.

Maliki is on a three-day visit to Tehran, during which he was photographed Wednesday hand in hand with Iranian President Mahmoud Ahmadinejad. Unconfirmed media reports said Maliki had told Iranian officials they'd played a constructive role in the region.

Asked about that, Bush said he hadn't been briefed on the meeting. "Now if the signal is that Iran is constructive, I will have to have a heart-to-heart with my friend the prime minister, because I don't believe they are constructive. I don't think he in his heart of hearts thinks they're constructive either," he said.

Bush and Afghan President Hamid Karzai differed on Iran's role when they met last weekend, with Karzai saying in a TV interview that Iran was "a helper" and Bush challenging that view.

The toughening U.S. position on Iran puts Karzai and Iraqi leaders such as Maliki in a difficult spot between Iran, their longtime ally, and the United States, which is spending lives and treasure to secure their newly formed government.

A senior Iraqi official in Baghdad said the Iraqi government received regular intelligence briefings from the United States about suspected Iranian activities. He refused to discuss details, but said the American position worried him.

The United States is "becoming more focused on Iranian influence inside Iraq," said the official, who requested anonymity to discuss private talks with the Americans. "And we don't want Iraq to become a zone of conflict between Iran and the U.S."

Proposals to use force against Iran over its actions in Iraq mark a new phase in the Bush administration's long internal war over Iran policy.

Until now, some hawks within the administration — including Cheney — are said to have favored military strikes to stop Iran from furthering its suspected ambitions for nuclear weapons.

Rice has championed a diplomatic strategy, but that, too, has failed to deter Iran so far.

Patrick Clawson, an Iran specialist at the Washington Institute for Near East Policy, said a strike on the Quds camps in Iran could make the nuclear diplomacy more difficult.

Before launching such a strike, "We better be prepared to go public with very detailed and very convincing intelligence," Clawson said.

Stocks Rebound After Fed Adds Liquidity

Stocks Pare Losses After Fed Adds Liquidity, Indexes at Times Move Into Positive Territory

NEW YORK (AP) -- Wall Street pared its losses Friday after the Federal Reserve said it would do all it can to "facilitate the orderly functioning of financial markets" and twice injected liquidity into the banking system.

The stock market, which has been gyrating for weeks over fears that credit is drying up, began to pare its losses several hours after the Fed's latest injection of cash into the system Friday. The day's declines, however, showed the depths of fear that have investors yanking money out of stocks.

The Fed added $16 billion in liquidity to the market at midmorning Friday, supplementing the $19 billion added earlier in the day.

Federal Reserve policy makers "are trying to do everything they can short of cutting the federal funds rate" to try to calm the markets, said Ed Yardeni, president of Yardeni Research in Great Neck, N.Y.

But, he said, "I think they probably have to cut rates, and probably before their scheduled September meeting."

He noted that it was Fed rate cuts that calmed the market after the 1998 Russian debt crisis and the implosion of the hedge fund Long-Term Capital Management.

In midday trading, the Dow Jones industrials fell 37.48, or 0.28 percent, to 13,233.20, after being down as much as 212 points and briefly moving into positive territory. On Thursday, the Dow fell 387 points and extended a series of triple-digit moves that began in late July.

Friday's moves were typical of the zigzag trading and triple-digit moves in the Dow since the index closed at a record 14,000.41 on July 19. As of Thursday's close, the Dow was down about 730 points, or 5.2 percent, from its record close.

Broader stock indicators also pared their losses from earlier in the session. The Standard & Poor's 500 index slipped 0.22, or 0.02 percent, to 1,452.87, and the Nasdaq composite index fell 8.74, or 0.34 percent, to 2,547.75.

On Friday, the New York Fed, which carries out the central bank's market operation, announced a three-day repurchase agreement and then a second "repo" to inject liquidity into the market. The Fed said Friday it would accept $19 billion and then $16 billion in mortgage backed securities. The move came after the fed funds rate, the rate banks charge each other for overnight loans, ticked above 6 percent again Friday -- well above the Fed's target of 5.25 percent and a sign that credit was becoming harder to obtain.

The Fed stepped in after the same occurrence Thursday, injecting a larger-than-normal $24 billion in temporary reserves to the U.S. banking system. In a repo, the Fed arranges to buy securities from dealers, who then deposit the money the Fed has paid them into commercial banks.

"It's encouraging because it's a proactive step and they're not just focused on the inflation numbers and not ignoring turmoil in the credit market," said John Miller, head of the fixed income funds at Nuveen Asset Management.

The Fed's moves Thursday and Friday follow its August meeting Tuesday at which it left short-term interest rates unchanged at 5.25 percent, as it has done for more than a year. In its statement following the meeting, the bank said its primary concern remains inflation.

But the tumultuousness of the final two sessions of the week, which followed a sharp run-up in the week's first three sessions, has some market observers wondering whether the Fed will step in and douse some of the credit fears that have gripped the markets. So while some are now calling for a rate cut at the Fed's September meeting or even sooner, others contend investors will in any case first need to gather some confidence that the subprime woes and the credit market tightening aren't lethal for the economy and the markets.

"The confidence will be restored over time if the economy and the financial markets are resilient enough to overcome these kinds of announcements and view them in isolation," Miller said. "I think it's premature to forecast a recession, particularly if the Fed is responsive. There is no reason why we couldn't work our way out of this fairly quickly."

However, he thinks subprime unease is likely to continue, particularly this fall as a big batch of subprime mortgages written in 2005 and 2006 begin to reset their rates.

"I think other shoes will drop simply because of the size of the lending that went on in the subprime sector, the upcoming resets and the tightening of credit standards."

But regardless of how quickly it might be restored, investor confidence worldwide has been shaken. In Asia, stocks fell Friday after regulators including the Bank of Japan added liquidity. The European Central Bank for the second day added cash to its money markets.

These banks and others around the world haven't worked together to inject liquidity into the markets since the aftermath of the Sept. 11, 2001, attacks. But the measures, intended to keep financial markets well-oiled, also seemed to confirm investor fears of a larger problem in the credit markets that will stall corporate growth -- including the burst of takeover activity that powered stocks higher this year.

Overseas, Japan's Nikkei stock average fell 2.4 percent. Hong Kong's Hang Seng Index fell 2.9 percent. Britain's FTSE 100 fell 3.71 percent, Germany's DAX index fell 1.48 percent, and France's CAC-40 fell 3.13 percent.

Bonds rose again Friday as investors again sought the relative safety of Treasurys. The yield on the benchmark 10-year Treasury note fell to 4.77 percent from 4.79 percent late Thursday. The dollar was mixed against other major currencies, while gold prices rose.

The concerns about credit and the effect of subprime loans, those made to borrowers with weak credit, were undiminished Friday, perhaps in part because of comments from Countrywide Financial Corp.

The nation's biggest mortgage lender fell $1.64, or 5.7 percent, to $27.02 after saying in a regulatory filing Thursday that disruptions in credit and secondary mortgage markets pose a risk to the company and could hurt its financial standing in the short-term. Earlier in the week, Countrywide said it still has access to capital despite the credit crunch.

Credit concerns unnerved investors not only for the deals that such difficulties could prevent but also for deals in the works that could be derailed.

ABN Amro Holding NV had been down sharply early and was recently off 58 cents at $46.54 amid worries that one or both of two competing bids for the company might fall apart. ABN fell as investors appeared to re-evaluate risk that a bid from Fortis NV, part of a consortium led by Royal Bank of Scotland PLC, could lose out to a bid from Barclays PLC, or that both could fail. However, Fortis' chief executive said he was "very confident" about financing the ABN deal, according to Dow Jones Newswires.

In economic news, the Commerce Department said U.S. import prices rose for a fifth consecutive month in July, increasing 1.5 percent. Prices rose in part amid increased energy costs. The figures could stir concern among the Fed about inflationary prices.

Light, sweet crude fell 85 cents to $70.74 per barrel on the New York Mercantile Exchange.

Declining issues outnumbered advancers by about 5 to 3 on the New York Stock Exchange, where volume came to 1.33 billion shares.

The Russell 2000 index of smaller companies turned positive, rising 6.99, or 0.89 percent, to 791.86.

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

Fed Adds $35 Bln in Funds, Most Since September 2001 (Update6)

Aug. 10 (Bloomberg) -- The Federal Reserve added $35 billion in temporary funds to the banking system through the purchase of securities including mortgage-backed debt to meet demand for cash amid a rout in bonds backed by home loans to riskier borrowers.

The Fed's additions totaled the most since September 2001. They came in two weekend repurchase agreements, of $19 billion and $16 billion, for which the Fed accepted securities including mortgage-backed debt, so-called agency debt and Treasuries as collateral. Losses in U.S. subprime mortgages have been rippling through credit markets, driving interest rates higher and sinking stocks. The Fed added $24 billion yesterday.

The New York Fed's actions lowered the Federal funds rate to 5.25 percent, matching the bank's benchmark overnight rate, according to ICAP Plc. The rate began trading today at 6 percent, the highest open since January 2001. Treasuries fell after the additions, stocks rebounded and the dollar rose against the yen.

``They've been very aggressive and they want to make sure there's sufficient liquidity in the financial market,'' said Ward McCarthy, principal at Stone & McCarthy Research in Skillman, New Jersey. ``It looks like they succeeded.''

2001 Record

The Fed's benchmark was 6 percent the last time fed funds opened at today's level. On average, the Fed has added about $9 billion in temporary funds daily this year through yesterday.

In the week after the Sept. 11, 2001, terror attacks, the Fed added a daily average of $75.3 billion in reserves through repos. The record was $81.25 billion on Sept. 14, 2001.

Stocks dropped worldwide earlier on speculation losses in mortgage debt will hurt economic growth and earnings. European benchmark indexes fell 1 percent or more.

The European Central Bank today loaned 61.05 billion euros ($83.6 billion), pumping funds into the banking system for a second day. The ECB added an unprecedented 94.8 billion euros yesterday.

Some banks may experience ``unusual funding needs,'' the Fed said in a statement from Washington. The Fed's discount window is open and the central bank pledges to provide liquidity, the Fed said.

As of yesterday, interest-rate futures for August showed investors saw more than a 50 percent chance the Fed will cut the key rate a quarter-point on any day from Aug. 16, Merrill Lynch & Co. said in a report yesterday. An August rate cut is a ``genuine possibility,'' JPMorgan Chase & Co. said in a report today.

``Because of today's operations, the probability of an August cut has gone down,'' said Dominic Konstam, head of interest-rate strategy in New York at Credit Suisse Group. ``The Fed is going out of its way not to cut rates to resolve the liquidity issue.''

`Special Demand'

Countrywide Financial Corp., the biggest U.S. mortgage lender, said it faces ``unprecedented disruptions'' that may reduce profit, suggesting a credit crunch that started with the U.S. subprime market will spread. BNP Paribas SA, France's biggest bank, helped spark financial market turmoil yesterday by halting withdrawals from three investment funds because it couldn't value their holdings.

The New York Fed accepted $19 billion of securities in today's first repurchase agreement, of $31.2 billion submitted. In the second, it took $16 billion of $40.95 billion submitted.

The central bank probably received only mortgage-backed debt in today's operations, said Louis Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey. The central bank likely wanted to avoid taking Treasury debt at a time when government securities are in demand as a safe haven, he said.

``The Street has special demand for the highest-quality Treasury collateral right now, so the Fed chose to leave Treasury collateral,'' Crandall said. ``It should not be taken as a sign that basic Fannie Mae and Freddie Mac mortgage pools are difficult to finance.''

Overnight Rates

The Fed typically only accepts so-called agency mortgage- backed securities, such as those guaranteed by government- chartered Fannie Mae or Freddie Mac, rather than non-agency home- loan bonds from other financial institutions. Issuance and trading of non-agency bonds, including securities backed by subprime mortgages, has ground to a near-halt the past month.

Overnight euro rates again rose to as high as 4.27 percent today, compared with the ECB's benchmark rate of 4 percent.

Fed funds, the U.S. overnight interbank lending rate, closed at 4 15/16 percent yesterday, after trading between 4 3/4 percent and 5 3/4 percent, and averaging 5.38 percent, according to ICAP Plc, the world's largest inter-dealer broker.

In repos, the Fed buys U.S. Treasury, mortgage-backed and so-called agency debt from its 21 primary dealers for a set period, temporarily raising the amount of money available in the banking system. At maturity, the securities are returned to the dealers, and the cash to the Fed.

Repos help maintain enough money in the system to keep overnight interest rates close to the central bank's target. They don't signal a policy shift.

How Bush Gained the Power to Spy on You without Security Justifications

Aziz Huq
TheNation.com
Friday Aug 10, 2007

The Bush Administration has successfully forced on Congress a law that largely authorizes open-ended surveillance of Americans' overseas phone calls and e-mails. How did they do it?

After enduring weeks of blistering criticism for Attorney General Alberto Gonzales's inartful elisions about the National Security Agency (NSA) spying activities, the Bush Administration has successfully forced on Congress a law that largely authorizes open-ended surveillance of Americans' overseas phone calls and e-mails. How did they do it?

The Protect America Act of 2007 -- the title alone ought to be warning that unsavory motives are at work -- is the most recent example of the national security waltz, a three-step Administration maneuver for taking defeat and turning it into victory.

The waltz starts with a defeat in the courts for Administration actions -- for example, the Supreme Court's extension of the rule of law to the US military prison at Guantánamo in the 2004 case of Rasul v. Bush, or its striking down of the military commissions in 2006 in Hamdan v. Rumsfeld. The second step does not follow immediately. Rather, some months later, the Administration suddenly announces that the ruling has created a security crisis and cries out for urgent remedial legislation. Then (and here's the coup de grâce) the Administration rams legislation through Congress -- the Detainee Treatment Act of 2005, or the Military Commissions Act of 2006 -- that not only undoes the good court decision but also inflicts substantial damage to the infrastructure of accountability.

This time, the sordid dance began with a bad ruling for the government, a ruling that demands some context to be understood.

In January the Administration suddenly announced that it was submitting the secretive NSA "terrorist surveillance program" to the Foreign Intelligence Surveillance Court, or FISC, a closed judicial process established by the 1978 FISA law to handle search warrants for foreign intelligence purposes. The move came as federal appellate courts in Ohio and California seemed on the cusp of ruling the NSA's domestic surveillance efforts illegal as violations of FISA and possibly the Fourth Amendment. It seemed a way to forestall defeat in those cases.

But in early summer, a FISC judge declined to approve part of the NSA's activities. While the ruling remains classified, it apparently focused on communication that originated overseas but passed through telecom switches in the United States.

Modern telecommunications work by breaking communications into packets of data and routing them through a network of connected computers. Messages do not travel in a linear fashion: A message from Murmansk to Mali might be routed through California. Many of the largest switches routing international data are located in the United States. As USA Today reported in May 2006, the NSA is already tapping those switches. And since January, the government appears to have obtained "basket warrants," allowing it to trawl this data freely, without any judicial or Congressional oversight.

It seems likely that the judge objected because the NSA was collecting calls that originated overseas but ended in the United States. The NSA can generally get a warrant for such communications -- unless there is no evidence that the person under scrutiny is a terrorist. A broad-brush NSA surveillance program, especially one that generates its leads through data-mining, the science of extracting information from large databases, might have exactly this problem.

The second step in the waltz came several months later, with Administration allies such as House minority leader John Boehner invoking the FISC ruling on Fox News as justification for a new law. As usual, the Administration and its allies had no compunction about using classified information -- such as the ruling -- when it helped them politically. And as usual, the Administration artfully concealed the full details of the ruling even while insisting on it as a spur to immediate action. By waiting for the last week of the Congressional session, the Administration in effect cut off the possibility of meaningful debate.

The third step of the waltz has a grim familiarity about it: enactment of a law that is in no way limited to addressing the narrow "problem" created by the FISC ruling. Rather, the Protect America Act is a dramatic, across-the-board expansion of government authority to collect information without judicial oversight. Even though Democrats negotiated a deal with Director of National Intelligence Mike McConnell that addressed solely the foreign-to-foreign "problem" created by the FISC ruling, the White House torpedoed that deal and won a far broader law.

To those who have followed this Administration's legal strategy closely, the outcome should be no surprise. The law's most important effect is arguably not its expansion of raw surveillance power but the sloughing away of judicial or Congressional oversight. In the words of former CIA officer Philip Giraldi, the law provides "unlimited access to currently protected personal information that is already accessible through an oversight procedure."

Like the Constitution's Framers, this Administration understands that power is accrued through the evisceration of checks and balances. Unlike that of the Framers, its mission is the transformation of limited government into a government that is not accountable to anyone.

On Monday, the Administration defended the Protect America Act as a "narrow" fix and rejected accusations that it authorized a "driftnet." To see how disingenuous these claims are requires some attention to the details of the legislation.

The key term in the Protect America Act is its licensing of "surveillance directed at a person reasonably believed to be located outside of the United States." This language has a superficial reasonableness, since domestic surveillance has long been understood to raise the most troubling abuse concerns.

But the trouble with this language is that it permits freewheeling surveillance of Americans' international calls and e-mails. The problem lies in the words "directed at." Under this language, the NSA could decide to "direct" its surveillance at Peshawar, Pakistan -- and seize all US calls going to and from there. It could focus on Amman, or Cairo, or London, or Paris, or Toronto... Simply put, the law is an open-ended invitation to collect Americans' international calls and e-mails.

Further, the law does not limit the collection of international calls to security purposes: Rather, it seems the government can seize any international call or e-mail for any reason -- even if it's unrelated to security. Indeed, another provision of the law confirms that national security can be merely one of several purposes of an intelligence collection program. This point alone should sink the Administration's claim to be doing no more than technical fiddling. While the FISA law limited warrantless surveillance absolutely, this law licenses it, not only for national security purposes but also for whatever purpose the government sees fit.

Of further concern is the "reasonably believe" caveat. This means that so long as the NSA "reasonably" believes its antennas are trained overseas, wholly domestic calls can sometimes be collected. And since the NSA uses a filter to separate international calls from wholly domestic calls, it need only "reasonably believe" that it's getting this right. It's this new latitude for error that is troubling, especially because this isn't an Administration known for its care when the rights and lives of others are at stake. It remains deeply unclear how much domestic surveillance this allows.

The problems created by this loosening of standards are compounded by the risibly weak oversight procedures contained in the law. Rather than issuing individualized warrants, now the Director of National Intelligence and the Attorney General can certify yearlong programs for collecting international calls. The program as a whole is placed before the FISA court, which can only invalidate those procedures and claims that are "clearly erroneous." The government thus has to meet an extraordinarily low standard, in a one-sided judicial procedure in which the court has no access to details of the program's actual operation.

Congressional oversight is even more laughable. Attorney General Gonzales, that paragon of probity and full disclosure, is required to report not on the program's overall operations but solely on "incidents of noncompliance." Of course, given how weak the constraints imposed by the law are, self-reported noncompliance is likely to be minimal.

Finally, some advocates and legislators have taken comfort in the law's six-month sunset provision. But this means that the act will be up for authorization in the middle of the presidential campaign, an environment in which the pressures to accede to Administration demands will be even higher than usual. And the law doesn't really sunset after six months: The provision is artfully drafted to allow the NSA to continue wielding its new surveillance powers for up to a year afterward.

The Protect America Act, in short, does not live up to its name: It does not enhance security-related surveillance powers. Rather, it allows the government to spy when there is no security justification. And it abandons all but the pretense of oversight. The result, as with so many of this Administration's ill-advised policies, is power without responsibility -- and it is by now all too clear how wisely and carefully this Administration wields power in the absence of accountability.

One coda to this story is worth adding. The Justice Department is unlikely to take action against Representative Boehner for his partisan invocation of classified information on network news. Newsweek reported this week that former Justice Department lawyer Thomas Tamm is being investigated apparently in connection to leaks of information about the NSA's domestic surveillance. So goes Gonzales Justice: Politicized manipulation of classified information gets the green light, while hardworking career officials become targets for speaking out when they see the law being violated.

Is Economy Facing Widening Credit Squeeze?

Is Economy Facing Widening Credit Squeeze?

With the home-mortgage crunch roiling stock markets, economists are beginning to worry about America’s credit-card debt.

WEB EXCLUSIVE

By Susanna Schrobsdorff

Newsweek

Updated: 4:03 p.m. ET Aug 9, 2007

Aug. 9, 2007 - Kristin Schantz, a 26-year-old manager for a human-resources company in Kenosha, Wis., got some unpleasant news in the mail last week. In a form letter, Capital One told her the interest rate on her credit card was about to almost double—she’d been bumped up from a fixed 8.9 percent rate to a "variable rate that equals the prime rate plus 6.9 percent"—or about 15.8 percent. Schantz, who says she’s “never late with payments,” is irate. The letter blamed rising interest rates across the economy for the decision.

Schantz isn’t the only American who has lately received Capital One’s letter. Blogs are teeming with postings from people complaining about sudden rate increases by the company. In a statement to NEWSWEEK, the McLean, Va.-based Capital One acknowledged that it had raised rates for “some” customers, citing “business and economic factors (a core one being rising interest rates)” and changes in the lending market.

For now, consumers can dump Capital One and move their balances to other credit cards with better rates—as Schantz has done. But because Capital One is the largest independent issuer of credit cards, its move may signal that similar rate increases are on the way from other credit-card providers. “It could definitely be a harbinger of things to come,” says Aaron Smith, a senior economist at Moody’s Economy.com. “They may have assumed more risk than other companies—but I would be very surprised if it was an isolated move.”

That raises an important question: is Cap One’s rate increase the start of a widening credit squeeze? If so, it would be a direct result of the home-mortgage crunch, currently roiling financial markets worldwide. “We’re not in the same world as we were five or six months ago,” says Keith Leggett, senior economist at the American Bankers Association. “There is a growing risk aversion among market participants.”

As home prices across the United States have stagnated or fallen and consumers have tapped out the equity in their homes, banks have gotten more cautious about lending and have tightened their standards for new mortgages and home-equity loans. As a result, more Americans are shifting debt onto credit cards. This week, the Federal Reserve said non-real estate consumer-credit usage rose at about twice the rate than economists had predicted for June. And revolving credit usage (which includes credit-card debt) was up by 8.7 percent at an annual rate for the month. That boost helped bring total consumer credit, both revolving and not revolving (like auto loans), to a record $2.459 trillion.

Meanwhile, continued concerns about a credit crunch in the stock markets may be putting pressure on credit-card companies to tighten standards and raise rates. (Wall Street fell sharply again on Thursday after a French bank said it was freezing three funds that invested in U.S. subprime mortgages because it was unable to properly value their assets.) The market “has changed the psychology of the situation,” says Smith. “Now they’re saying, ‘Oh my gosh, we’re going to get into the same trouble these mortgage companies are getting into, we’d better tighten standards too’.” He predicts that evidence of tightening—and a resulting increase in consumer interest rates—could show up as soon as next week, when the Federal Reserve releases its quarterly survey of loan officers.

A credit-card squeeze carries real risks for the U.S. economy overall. “The shift from home-equity borrowing to credit cards is quite costly,” says Smith. Not only are mortgage interest rates about half that of credit-card interest rates, but the interest paid on credit cards isn’t tax-deductible. Smith believes that already-strapped households with little or no savings to rely on will be faced with increased financial obligations that will eventually lead to slower growth in consumer spending. And with consumer spending accounting for about 72 percent of gross domestic product, any slowdown could have a big impact.

Americans are so tapped out financially that they may not be able to stop using plastic no matter how high rates get, says Christian Weller, an economist and senior fellow at the Center for American Progess. “I think credit-card usage could still go up even if rates go up,” says Weller. “The credit market right now is like a balloon that’s being squeezed on the mortgage side and expanding on the credit cards side,” he says.

Weller says he’s concerned that credit-card debt has risen dramatically over the past few months, even as growth in consumer spending has slowed. This, he says, is a sign that credit-card borrowing is being used to close a widening household budget gap—that cards are being used to fund housing, transportation and medical care. “I believe what we’re seeing is that consumers are borrowing out of necessity—we’re not talking about a flat-screen TV or iPods here.”

For customers who need access to credit but get knocked out of the prime credit-card market due to tightening standards, the only alternative to meet their expenses may be the subprime credit- card market, says Ellen Cannon, assistant managing editor at the financial research group Bankrate.com. And that could put them even deeper into trouble, she says. “What happens with the subprimes is that they’ll give you a $200 credit limit and then they charge you $59 initiation fee and an annual fee of $45. So by signing up, you can be $150 in the hole and your interest rate is 32 percent. It’s highway robbery.”

How long will it take Americans to dig themselves out of their credit hole? Years. “Debt will increase and consumption will weaken in the next year,” says Smith. “But there will come a point when people will either have maxed out their credit or they’ll see their credit rating starting to suffer, and that’s when many of them will decide to get their household balance sheets back in order—probably by sometime in early 2009.” Smith warns, however, that reversing a borrowing trend is “a slow process.” And that’s something anyone who’s ever tried to pay down a big credit-card bill knows firsthand.

With Katie Connolly

URL: http://www.msnbc.msn.com/id/20201030/site/newsweek/page/0/