China Says Tibet Protests Have Spread

BEIJING (AP) - China acknowledged Thursday that anti-government riots have spread to other provinces since sweeping through Tibet last week, as communist authorities announced the first group of arrests for the violence.

In India, the Dalai Lama told reporters he was "always ready to meet" Chinese leaders, in particular President Hu Jintao, though he said he would not travel to Beijing to do so.

But China has ignored calls for dialogue, accusing the Dalai Lama's supporters of organizing violence in Tibet in hopes of sabotaging this summer's Beijing Olympics and promoting Tibetan independence.

The Foreign Ministry said it was "seriously concerned" about a planned meeting between British Prime Minister Gordon Brown and the Dalai Lama, urging Brown not to offer support to Tibet's exiled Buddhist leader.

(AP) Armed Chinese paramilitary riot police get off a truck as they set up camp in Hutiaoxia, southeast... Full Image

Armed police and troops poured into far-flung towns and villages in Tibetan areas of adjacent provinces to reassert control as sporadic demonstrations continued to flare. Foreigners were barred from traveling there and tour groups were banned from Tibet, isolating a region about four times the size of France.

The protests against Chinese rule started peacefully in Tibet's capital, Lhasa, early last week, but erupted into riots on March 14. Authorities say 325 people were injured and 16 people died - including three protesters who allegedly jumped from windows while trying to escape police. China has denied Tibetan exile groups' claims that 80 people died.

In Aba county in northwestern Sichuan province, a Tibetan woman reached by phone Thursday said she had heard of numerous arrests of protesters in the area.

"There are many, many troops outside," she said.

"I'm afraid to leave the house," said the woman, who refused to give her name for fear of retaliation by authorities. Police were checking I.D. cards at checkpoints and could be heard shouting for protesters to turn themselves in.

The Xinhua news agency said the protesters attacked "shops and government offices" on Sunday in Aba, known as Ngawa in Tibetan, but made no mention of allegations by pro-Tibet groups abroad that troops fired on protesters, killing several.

The reports confirm previous claims by exile Tibet activist groups that the protests had spread. Foreign journalists have been banned from going to Tibet and have found it increasingly difficult to travel to areas in other provinces with Tibetan populations.

Zhang Yusheng, a spokesman for the Gansu provincial government, said a "small number of law breakers shouted reactionary slogans, raised the flag of separatism and adopted violent methods."

Shops, schools, homes, vehicles and government offices in Gansu's Gannan Tibetan Autonomous Prefecture were attacked, posing an "extremely grave threat" to social order, Zhang said Wednesday, according to state media.

Reinforcements were brought in and order was restored, he said. He mentioned no arrests.

(AP) Armed Chinese paramilitary riot police jump down from a truck as they set up camp in Hutiaoxia,... Full Image

Despite those reassurances, a receptionist who answered the phone at a hotel in the regional center of Luqu said employees and guests had been holed up inside since Tibetan protesters marched through the area on Sunday.

"The streets are now filled with police officers. Our hotel is booked out with tourists, but no one feels safe enough to set foot outside," said the woman, who refused to give her name or that of her hotel for fear of retaliation by authorities.

A police officer in the nearby town of Maqu refused to answer questions about the situation.

"We cannot tell you that information," he said before banging the phone down.

The Tibet Daily reported that 24 people had been arrested for endangering state security, and for other "grave crimes" for their roles in last Friday's riots in Lhasa.

(AP) Chinese paramilitary police unload equipment on a road on the outskirts of Hutiaoxia, southeast of... Full Image

"This incident has severely disrupted the social order, harmed people's life and property, and these illegal acts organized, pre-planned, and well-designed by the Dalai clique," Lhasa deputy chief prosecutor Xie Yanjun was quoted as saying.

Xinhua said previously that 170 people had surrendered for their role in the Lhasa riots.

The protests have been the biggest challenge in almost two decades to Chinese rule in Tibet, a Himalayan region that the People's Liberation Army occupied in 1950 after several decades of effective independence.

But authorities appeared to be regaining control in Tibet and surrounding provinces where more than half of China's 5.4 million Tibetans live. Moving from town to town, police checked IDs and set up roadblocks to keep Tibetans in and reporters out.

On Thursday morning, an Associated Press photographer was turned away from a flight to Zhongdian in Yunnan province. There were 12 policemen, including with automatic weapons at the check-in counter. The police said that no foreigners were allowed to travel to Tibetan areas due to the protests.

(AP) Map shows Tibet protests and also shows Tibetan land before Chinese occupation; 2c x 3 1/4 inches;... Full Image

In Yunnan province's Tiger Leaping Gorge, hundreds of paramilitary police aboard at least 80 trucks were seen traveling northwest along a main route into southern Tibet. Others appeared to be setting up camp and patrolling the Tibet town, a few with rifles. They were also unloading trucks with supplies.

Overall, the town appeared quiet with few people present on streets.

The security presence in areas of Tibet proper outside Lhasa seemed relatively low-key, according to an Austrian tourist who crossed the border into Nepal on Wednesday.

Andreas Steinbichler said he saw no troops or signs of violence, only routine passport checks, during the daylong drive from Lhasa.

"Traveling through Tibet you didn't realize there was any trouble at all," he said. "Outside of Lhasa we saw nothing."

The unrest has prompted discussion of a possible boycott of the Aug. 8 opening ceremony at the Beijing Olympics and calls for China to address Tibetans' grievances and engage in direct talks with the Dalai Lama.

Brown said he planned to meet with the Dalai Lama in Britain in May and told reporters he appealed to Chinese Premier Wen Jiabao to apply restraint in dealing with protests.

That drew an immediate response from Beijing, which demands countries not provide the Dalai Lama with a forum and has sought to punish those who meet or support him.

The Dalai Lama is a "political refugee engaged in activities of splitting China under the camouflage of religion," Foreign Ministry spokesman Qin Gang said in remarks issued by Xinhua.

Three Investment Banks Partake in Fed “Lending” Scam

Baltimore Sun
March 20, 2008

Three of the nation’s largest investment banks said they have borrowed from a program created this week by the Federal Reserve to stimulate lending amid concern that Wall Street faced a cash shortage.

“We have tested the window because we want to remove the stigma from the window,” said Morgan Stanley Chief Financial Officer Colm Kelleher in an interview yesterday, referring to the Fed lending program. “It’s meant to be there for normal business. It’s not meant to be there as a last-recourse thing.”

Erin Callan, chief financial officer of Lehman Brothers Holdings Inc., said the company used the window Tuesday night, adding: “We wanted to show some leadership.”

Michael DuVally, a spokesman for Goldman Sachs Group Inc., said his firm also is “testing” the Fed facility, which opened Monday, and will use it “if doing so makes sense from an economic and funding diversification point of view.”

Wall Street firms were reluctant to turn to the Fed earlier this week because of concern that it might make them appear financially weak, The Wall Street Journal reported yesterday.

Read entire article

Bin Laden accuses pope, slams EU over cartoons

Updated 2h 26m ago | Comments251 | Recommend24
USA Today

CAIRO (AP) — Al-Qaeda leader Osama bin Laden accused Pope Benedict XVI of helping in a "new Crusade" against Islam and warned in a new audiotape of a "severe" reaction for Europeans' publication of cartoons seen by Muslims as insulting Islam's prophet Muhammad.

The message raised concerns al-Qaeda was plotting new attacks in Europe. Some experts said bin Laden, believed to be in hiding in the Afghan-Pakistan border area, may be unable to organize such an attack himself and instead was trying to fan anger over the cartoons to inspire violence by supporters.

The Vatican spokesman, the Rev. Federico Lombardi, said bin Laden's accusation that Pope Benedict XVI has played a role in a worldwide campaign against Islam is "baseless." Lombardi said the pope on several occasions has criticized the cartoons, first published in several European papers in 2006 then republished in Danish papers in February.

Benedict raised widespread anger in the Muslim world with a 2006 speech in which he cited a medieval text that characterized some of the teachings of the prophet Muhammad as "evil and inhuman," particularly "his command to spread by the sword the faith." The pope later said he was "deeply sorry" about the reactions his remarks sparked and stressed that they did not reflect his own opinions — and since he has led a public campaign for dialogue with Muslims.

Bin Laden's audiotape was posted late Wednesday on a militant website that has carried al-Qaeda statements in the past and bore the logo of the extremist group's media wing Al-Sahab. An old, still image of bin Laden aiming with an assault rifle was posted along with the message.

"The response will be what you see and not what you hear and let our mothers bereave us if we do not make victorious our messenger of God," said a voice believed to be bin Laden's, without specifying what action would be taken.

"You went overboard in your unbelief and freed yourselves of the etiquettes of dispute and fighting and went to the extent of publishing these insulting drawings," he said. "This is the greater and more serious tragedy, and reckoning for it will be more severe."

He said the cartoons "came in the framework of a new Crusade in which the Pope of the Vatican has played a large, lengthy role," according to a transcript released by the SITE Institute, a U.S. group that monitors terror messages.

The five-minute message, bin Laden's first this year, made no mention of the fifth anniversary Wednesday of the U.S.-led invasion in Iraq.

It came as the Muslim world marks the prophet Muhammad's birthday Thursday and amid the reigniting of a two-year-old controversy over Danish cartoons deemed by Muslims to be insulting.

On Feb. 13, Danish newspapers republished one of the cartoons, which shows Muhammad wearing a bomb-shaped turban, to illustrate their commitment to freedom of speech after police said they had uncovered a plot to kill the artist.

Danish intelligence service said the reprinting of the cartoon had brought "negative attention" to Denmark and may have increased the risk to Danes at home and abroad.

The original 12 cartoons first published in a Danish newspaper, then in several papers across Europe, triggered major protests in Muslim countries in 2006.

There have been renewed protests in the last month, though not as large or widespread and with little violence. A few dozen university students held a demonstration Thursday in Islamabad, where larger rallies sparked violent unrest over the cartoons in 2006. The students, who waved banners and chanted slogans against Denmark, said they had not seen the bin Laden message and the protest was not sparked by it.

Muslims widely saw the cartoons as an insult, depicting the prophet as violent. Islamic law generally opposes any depiction of the prophet, even favorable, for fear it could lead to idolatry.

Ben Venzke, the head of IntelCenter, a U.S. group that monitors militant messages, called Wednesday's video a "clear threat against EU member countries and an indicator of a possible upcoming significant attack."

Talat Masood, a retired Pakistani general and security analyst, said bin Laden was likely too isolated to organize an attack. But the al-Qaeda leader may be hoping to use anger over the cartoons to inspire violence, he said.

"Even if he has not got the capacity (to launch an attack), he will try to infuse hatred. He is trying to whip up the anguish and anger in the Islamic world and capitalize on that. He is lending his support to that movement and saying, 'We are with you,"' Masood said.

Last year, a U.S. national intelligence estimate warned that al-Qaeda had been able to regroup in Pakistan's tribal regions after the government hatched peace deals with Taliban militants which later collapsed. slamic extremists have expanded their sway in the past year in the lawless border region with Afghanistan. Taliban militants, some with links to al-Qaeda, are blamed for a growing campaign of violence that has spread from the northwest to major cities nationwide, mostly targeting security forces.

The al-Qaeda leader's tape appeared to have been recorded since December because bin Laden refers to revelations made that month by the British press that former Prime Minister Tony Blair pushed to halt a fraud investigation against aerospace company BAE Systems PLC in part because he feared it would jeopardize an arms deal with Saudi Arabia.

Bin Laden also criticized the "aggressive policies" of President Bush.

"How it saddens us that you target our villages with your bombing: those modest mud villages which have collapsed onto our women and children," he said, addressing Europeans. "All of this (you do) without right and in conformity with your oppressive ally who — along with his aggressive policies — is about to depart the White House."

On Wednesday, Bush praised Sunni tribal leaders for rising up against al-Qaeda in Iraq and said that has led to similar uprising across the country. All that, combined with a strategic influx of U.S. troops last year, has "opened the door to a major victory in the broader war on terror," Bush said.

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

The Great Unwind has begun, Citigroup warns

Avoid leveraged companies, countries and consumers, bank's strategists say

By Alistair Barr, MarketWatch

Last update: 9:51 p.m. EDT March 19, 2008

SAN FRANCISCO (MarketWatch) -- The Great Unwind has begun, Citigroup Inc. strategists warned on Wednesday.

As markets and economies de-leverage across the globe, investors should avoid companies and countries that have grown to rely too much on borrowed money, they said.

That means favoring public-equity markets over hedge funds, private-equity and real estate, while leaning toward emerging market countries and away from developed nations like the U.S., the bank's global equity strategy team advised.

Within equity markets, the financial-services should be avoided because it's still over-leveraged, while other companies have stronger balance sheets, the strategists said.

"Steady growth, low inflation and rock-bottom interest rates encouraged economic and financial participants across the world economy to gear up over the past few years," Robert Buckland and his colleagues on Citi's global strategy team wrote in a note to clients. "Easy money encouraged many to buy a bigger house, a bigger car or a bigger speculative position."

"But now, any behavior that relied upon continued access to easy money is being dramatically reassessed," they added. "Leveraged banks must lend less, leveraged consumers must consume less, leveraged companies must acquire or invest less, and leveraged speculators must speculate less."

Financial-services companies are the most vulnerable to this reduction of borrowed money across the globe, they said.

During the last credit crisis in 1998, European banks were leveraged 26 to 1. In the early part of this decade, leverage grew to 32 to 1. Now the sector is geared 40 to 1 on average, according to Citi's European bank research team.

"The banks have a long way to go," the strategists said. "We would continue to avoid the sector while they are de-leveraging."

Other companies are in much better shape, having rebuilt cash from strong earnings since 2003. Emerging market companies have developed particularly strong balance sheets, having learnt hard lessons from the Asian financial crisis a decade ago.

However, even though some companies may not have much debt themselves, they may be exposed to over-leveraged customers or highly leveraged investors, Citigroup warned.

Automakers, home builders and electronics retailers benefited as customers borrowed money cheaply in recent years to buy cars, houses and flat-screen TVs. That attractive financing is now being withdrawn.

"There will be plenty of companies that have strong balance sheets, so may not be most immediately vulnerable to the credit crunch," Citi said. "But they may find that their leveraged customers are vulnerable."

The difference, or spread, between interest rates on investment-grade corporate bonds and Treasury bonds has jumped in recent months, even though most companies aren't very leveraged.

This widening may be caused by leveraged investors such as hedge funds having to sell good quality assets to meet margin calls, or requests for more cash or collateral.

"It is the leverage of the investors who hold these bonds that is now being brutally exposed," Matt King, a Citigroup credit strategist, said.

"We are now confronted by a broad bloodbath in the credit markets," Citigroup said. " The most leveraged paper is falling in value because it is leveraged, and now the least leveraged paper is also falling in value because it is owned by leveraged investors."

Investors should also avoid hedge funds themselves, along with private equity, Citi added. Both types of investment rely at least partly on borrowed money to generate returns.

"Private equity returns have been especially strong. Without leverage it will be much harder to meet excessive investor expectations [most surveys suggest 20% annual returns are expected from the asset class]," Citi warned. "Similarly, many hedge funds have generated healthy uncorrelated returns by adopting cautious underlying strategies, but applying significant leverage. Again, that looks unsustainable in the current environment."

Leveraged economies, like the U.S., should also be avoided, in favor of emerging market countries, which have reduced borrowing, the bank advised.

With less capital sloshing around the world, and the dollar falling, the U.S. may have to compete more to finance its deficits.

"The U.S. shows up as the world's greatest consumer of external capital," Citi noted. So it "has the most to lose as this capital becomes less freely available."

Alistair Barr is a reporter for MarketWatch in San Francisco.

Second Amendment Intended to Prevent Absolute Despotism

Herbert W. Titus and William J. Olson
Gun Owners of America
March 19, 2008

Compelled to take up arms to regain their liberties as Englishmen, America’s Founders knew that even the constitutional republic they had established could threaten the freedoms for which they had fought. In the First Amendment, they established a first line of defense — the freedoms of religion, speech, press, assembly and petition.

Knowing that words and parchment barriers alone would prove inadequate to restrain those elected as servants from becoming tyrants, they added the Second Amendment to secure "the right of the people to keep and bear Arms" — not to protect deer hunters and skeet shooters, but to guarantee to themselves and their posterity the blessings of "a free State."

Their foremost concern was the precipitating events of the American Revolution, wherein British troops in Massachusetts and Virginia seized American muskets, cannon and powder — actions the Declaration of Independence calls "a design to reduce (the colonists) under absolute Despotism."

Entrusting the nation’s sovereignty to the people, the amendment breaks the government’s military monopoly, guaranteeing to the people such firearms as would be necessary to defend against the sort of government abuse of their inalienable rights the British had committed.

Thus, the amendment’s "well regulated Militia" encompasses all citizens who constitute the polity of the nation with the right to form their own government. The amendment’s "keep and bear Arms" secures the right to possess firearms such as fully-automatic rifles, which are both the "lineal descendant(s) of … founding-era weapon(s)" (applying a 2007 court of appeals’ test), and "ordinary military equipment" (applying a 1939 Supreme Court standard).

No government deprives its citizens of rights without asserting that its actions are "reasonable" and "necessary" for high-sounding reasons such as "public safety." A right that can be regulated is no right at all, only a temporary privilege dependent upon the good will of the very government officials that such right is designed to constrain.

Media Declares "Victory" For Gun Rights As Second Amendment Is Systematically Destroyed

DC handgun ban case poses grave threat to constitutional rights
Steve Watson
Infowars.net
Wednesday, March 19, 2008

Comments made by justices in an ongoing landmark case, which seeks to address the very meaning of the second amendment, have been heralded as a "victory" for the individual right to bear arms, but in reality the second amendment is being completely eroded altogether.

Individual Right to Bear Arms Wins Favor in Court Argument, the headline from the New York Law Journal, was typical of the media output yesterday after most of the nine Supreme Court justices hinted that the right to bear arms is a "general right."

However, the case is likely to conclude with the introduction of several new regulations on hand gun ownership at the very least, and, if the government gets its way, a total ban on handguns.

The outcome will set the precedent for gun laws nationwide.

The NY Law Journal writes:

Justice Kennedy's comments appeared to spell trouble for efforts by the District of Columbia to revive its strict handgun ban, although lawyers for both the Bush administration and gun-rights advocates acknowledged that some lesser regulation of the right would be acceptable.

Counting Justice Kennedy, it appeared that five or more justices were ready to recognize some form of an individual right to keep and bear arms that is only loosely tethered, if at all, to the functioning of militias. What kind of regulation of that individual right will be allowed by those justices is uncertain.

[...]

When the arguments were over, gun-control advocates seemed less pessimistic than before the session began, though they did not predict victory.

Joshua Horwitz, director of the Education Fund to Stop Gun Violence, who filed a brief in the case and watched the arguments, conceded he cannot count five votes for a strictly militia-rights view of the Second Amendment that would allow for almost unlimited regulation of firearms. But he could conceive of five justices adopting an individual-rights view that will mean "a lot of regulations will be OK. The outcome is not necessarily poor for us."

The case, DC v. Heller, stems from proceedings filed by lawyers for security guard Mr Dick Anthony Heller, which state that the District's categorical restrictions are so broad that they cannot comply with the Second Amendment's protection of the right to bear arms.

An amicus curiae brief filed by U.S Solicitor General Paul D. Clement, on behalf of the Bush administration and the government, says that federal gun control measures should not be limited and proposes that a court may determine that a full scale ban on almost all self-defense firearms may be upheld as constitutional if it constitutes a “reasonable” restriction of constitutional rights.

Lawyer Alan Gura, opposing the law and representing Mr Heller said "We have here a ban on all guns for all people in all homes at all times in the nation's capital."

Read the transcript of yesterday's argument.

Read briefs in D.C. v. Heller.

Advocates of the ban and the representatives of the District of Columbia have attempted to argue that the history and context of the second amendment applies to the rights of militias and not to individuals.

However, there are thousands of quotes from the founding fathers that pour water on this weak argument. The founders said over and over that when a government seeks to take away individual weapons it constitutes tyranny and that government must be removed.

Here are a few choice quotes:

A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
--- Thomas Jefferson to Peter Carr, 1785. The Writings of Thomas Jefferson, (Memorial Edition) Lipscomb and Bergh, editors.

We established however some, although not all its [self-government] important principles . The constitutions of most of our States assert, that all power is inherent in the people; that they may exercise it by themselves, in all cases to which they think themselves competent, (as in electing their functionaries executive and legislative, and deciding by a jury of themselves, in all judiciary cases in which any fact is involved,) or they may act by representatives, freely and equally chosen; that it is their right and duty to be at all times armed;
---Thomas Jefferson to John Cartwright, 1824. Memorial Edition 16:45, Lipscomb and Bergh, editors.

No freeman shall ever be debarred the use of arms.
---Thomas Jefferson: Draft Virginia Constitution, 1776.

[The Constitution preserves] the advantage of being armed which Americans possess over the people of almost every other nation...(where) the governments are afraid to trust the people with arms.
---James Madison,The Federalist Papers, No. 46.

To suppose arms in the hands of citizens, to be used at individual discretion, except in private self-defense, or by partial orders of towns, countries or districts of a state, is to demolish every constitution, and lay the laws prostrate, so that liberty can be enjoyed by no man; it is a dissolution of the government. The fundamental law of the militia is, that it be created, directed and commanded by the laws, and ever for the support of the laws.
---John Adams, A Defence of the Constitutions of the United States 475 (1787-1788)

Furthermore, even if you argue that the second amendment applies to militias, the very definition of the militia, according to the founders and their contemporaries, is THE PEOPLE:

Who are the militia? Are they not ourselves? Is it feared, then, that we shall turn our arms each man gainst his own bosom. Congress have no power to disarm the militia. Their swords, and every other terrible implement of the soldier, are the birthright of an American...[T]he unlimited power of the sword is not in the hands of either the federal or state governments, but, where I trust in God it will ever remain, in the hands of the people.
---Tenche Coxe, The Pennsylvania Gazette, Feb. 20, 1788.

Before a standing army can rule, the people must be disarmed; as they are in almost every kingdom in Europe. The supreme power in America cannot enforce unjust laws by the sword; because the whole body of the people are armed, and constitute a force superior to any band of regular troops that can be, on any pretence, raised in the United States. A military force, at the command of Congress, can execute no laws, but such as the people perceive to be just and constitutional; for they will possess the power, and jealousy will instantly inspire the inclination, to resist the execution of a law which appears to them unjust and oppressive.
---Noah Webster, An Examination of the Leading Principles of the Federal Constitution (Philadelphia 1787).

Last month a majority of the Senate and more than half of the members of the House issued a brief in which they urged the Supreme Court to uphold it's previous ruling that the District's handgun ban violates the second amendment.

The brief asked the Supreme Court to uphold the lower courts decision and allow the precedent of applying a stricter standard of review for gun control cases to stand.

In a separate letter, other representatives, including Congressman Ron Paul, called for the Clement/Bush administration brief to be withdrawn as it sets a precedent for further erosion of individuals’ Second Amendment rights to keep and bear arms.

Citing Constitutional concerns the letter stated:

“If the Supreme Court finds that the D.C. gun ban is a “reasonable” limitation of Second Amendment rights, the Court could create a dangerous precedent for the nation in the future. Such a decision could open the door to further regulation on American citizens’ Second Amendment rights on a large scale.”

Essentially the government is saying "You have the right to bear arms, unless we say so."

Where there is individual ownership of weapons there is liberty, where there is not there is tyranny because powerful organizations and governments will have a monopoly on it. The latest developments in this case are not a "victory" for the second amendment, on the contrary, they constitute its very undoing.

$200B added to mortgage pipeline

Regulators are lowering capital requirements for mortgage finance firms - a move that could pump hundreds of billions more into mortgage market but raises risks.

NEW YORK (CNNMoney.com) -- An additional $200 billion in financing is headed to the battered mortgage markets after federal regulators Wednesday said they would allow finance giants Fannie Mae and Freddie Mac to reduce the capital they keep on hand.

The move is the latest attempt by policymakers to ease the housing crisis, although it raises risks faced by two government-sponsored firms that are crucial to the functioning of global financial markets.

The rule change was announced by the Office of Federal Housing Enterprise Oversight, (OFHEO), a normally low-profile agency that sets rules for the two government sponsored companies that between them hold or guarantee nearly $5 trillion in mortgages.

Fannie (FNM) and Freddie (FRE, Fortune 500) are two publicly-traded companies set up by the federal government nearly 40 years ago to help provide financing needed by lenders looking to make home loans. With the change, they are expected to buy or guarantee $2 trillion in mortgages. That is about $200 billion more than they would have without the rule changes announced Wednesday.

Kieran Quinn, the chairman of the Mortgage Bankers Association, said the new rules are a crucial step in reestablishing the pipeline of funds that flow from investors through lenders to those buying a home or refinancing a mortgage.

"This will enhance lenders' ability to offer financing to a wide variety of borrowers," said Quinn. "This should help keep some at-risk borrowers in their homes which will help stabilize the real estate market."

Relief for troubled markets

Both firms have been working in recent years to clean up accounting problems. During that process, OFHEO has been requiring them to keep 30% extra capital in reserve. The rule change allows them to reduce that excess capital to only 20%.

Even as the market for mortgage-backed securities has melted down over the past year, the securities backed by the so-called conforming loans that met Freddie and Fannie criteria were considered the gold standard.

By the fourth quarter of 2007, the two firms between them were responsible for nearly three-quarters of mortgage backed securities on the market.

But the loans that backed those securities could not be made to borrowers who had less than top credit scores, did not have significant equity in their home or needed loans for more than $417,000.

Congress recently raised the limits for the loans that Fannie and Freddie can buy or insure up to $729,750, increasing the risks for the firm and the demands on their capital.

The new loan rules were seen as a necessary step to end the credit squeeze that has hammered home values across the nation and caused billions in losses and writedowns on Wall Street, raising the risk of a recession.

Change in thinking

The lower capital limits are important, not just for the additional $200 billion they make available, but for the change of thinking it signals in the Bush administration, said Jaret Seiberg, financial services analyst for policy research firm Stanford Group.

"The psychology is quite critical here," said Seiberg. "There is now an increasing view in the market that the administration understands the seriousness of the crisis and is willing to take steps it previously dismissed."

In recent weeks, Wall Street's appetite for mortgage-backed securities insured by Fannie and Freddie started to wane. That weakening demand helped force mortgage rates higher than they would have been.

"That showed that investors were starting to get nervous," said Seiberg. "That could have had a devastating impact on not just the mortgage market but the economy. Any step to make sure that market remains liquid is an important one."

But there are risks involved in Fannie and Freddie lowering their capital reserves and in buying larger loans. If problems in the housing and mortgage markets continue to deepen, it could in the worst case scenario lead to a federal government bailout of Fannie and Freddie. Seiberg believes that's a risk worth taking given the need to inject more cash into the market.

"There's a trade off when you lower capital levels, you take on more risk," said Seiberg. "That's unavoidable. The question going forward is whether Freddie and Fannie can manage that risk."

But some argued the risks are not worth it and this was the wrong move. "In truth, both Fannie and Freddie are already in a more precarious position than politicians or investors would like to admit," said Peter Schiff, president of Euro Pacific Capital, a brokerage firm focusing on overseas investments.

"Lowering reserve requirements is simply an irresponsible attempt to postpone the pain of falling home prices, but it will simply result in greater indebtedness and a deeper recession."

OFHEO Director James Lockhart said in a statement he was confident that both firms have resolved their accounting issues enough to allow the agency to lower its previous capital requirements. He pointed out that as part of this initiative, both companies announced that they will begin the process to raise significant additional capital.

"Let me be clear - both companies have prudent cushions above the OFHEO-directed capital requirements and have increased their reserves," he said. "We believe they can play an even more positive role in providing the stability and liquidity the markets need right now."

Fannie Mae CEO Daniel Mudd said while the rules changes are not a complete solution for the embattled housing and home loan markets, he believes it will help, even though the two firms will continue to focus on prime loans to borrowers with good credit and a large amount of equity in their homes.

"We hope it will help restart the housing engine that powers our economy," he said.

Fannie, Freddie get OK to buy more mortgages

Federal regulator Ofheo loosens capital requirements to prop up market

By Robert Schroeder, MarketWatch

Last update: 12:03 p.m. EDT March 19, 2008

WASHINGTON (MarketWatch) -- The federal government loosened strict capital requirements on Fannie Mae and Freddie Mac on Wednesday, allowing them to inject billions of dollars into the nation's sagging mortgage market by stepping up their purchase of more loans.

The Office of Federal Housing Enterprise Oversight said it is reducing Fannie Mae's and Freddie Mac's capital-surplus requirement to 20% from 30% previously. The companies will be clear to invest the additional capital in mortgages and mortgage-backed securities.

The move is expected to add up to $200 billion of immediate liquidity to the market for mortgage-backed securities. Wednesday's move by Ofheo, combined with other actions, should enable the two companies to buy or guarantee about $2 trillion in mortgages this year.

Ofheo is the federal regulator for the two companies. In response to accounting scandals at the two companies, Ofheo has been requiring that Fannie and Freddie hold 30% more capital than typically required.

"We believe they can play an even more positive role in providing the stability and liquidity the markets need right now," said Ofheo Director James Lockhart in a statement.

Both Fannie and Freddie are government-sponsored enterprises, or GSEs, that buy mortgages from banks and other lenders and repackage them as securities, thus freeing up liquidity in the mortgage market.

Lockhart noted that both companies will have "prudent" capital cushions above the Ofheo-directed requirements, and have boosted their reserves.

Shares of both companies quickly rose about 20% or more, on the heels of sizable Tuesday rallies, before pulling back. Shares of Fannie Mae lately were up nearly 10%, to $31, while Freddie Mac's shares climbed 12% to $29.18.

Help for foreclosures

Treasury Secretary Henry Paulson welcomed the move, saying freeing up additional capital "will enable the companies to help more homeowners and will strengthen the underlying fundamentals of the mortgage market."

Daniel Mudd, Fannie Mae's chief executive, said his company is working to minimize foreclosures, boost affordability and restore liquidity to the market. "This progressive, sustainable plan will help bring the stability the market needs," Mudd said in a statement.

Freddie Mac CEO Richard Syron said the uncertain mortgage and credit market environment "demonstrates the benefits of [Fannie and Freddie] to the U.S. economy.

"This approach allows us to continue to create these benefits in a way that balances our mission to provide stability, liquidity, and affordability consistent with safety and soundness while enhancing the interests of shareholders," Syron said.

Congressional Democrats also hailed the regulator's move, as did mortgage bankers.

Sen. Charles Schumer, D-N.Y., said Ofheo's action should help head off more problems in the housing and credit markets.

"One of the most important components to reducing the number of foreclosures is giving more flexibility to Fannie and Freddie," Schumer said in a statement. "So this is a major step forward that should help mitigate the spread of foreclosures and provide some relief to the credit markets in general."

Rep. Paul Kanjorski, D-Pa., who chairs a House Financial Services subcommittee on capital markets and GSEs, said the move will help more families buy or stay in their homes.

Ofheo's announcement "will provide a significant and immediate source of capital for America's mortgage markets at a very important time," the congressman said in a statement.

Individual Right to Bear Arms Wins Favor in Court Argument

Tony Mauro
NY Law Journal
Tuesday, March 18, 2008

WASHINGTON - When U.S. Supreme Court Justice Anthony Kennedy is cast as the swing vote in a case before the Court, he often waits until late in the oral argument to tip his hand.

But as the Court yesterday considered the landmark Second Amendment case D.C. v. Heller, Justice Kennedy was quick to lay bare his view on the scope of the right to bear arms contained in the amendment. The first part, he said, was meant to reaffirm "the existence and the importance" of the treatment of state militias contained in the Constitution itself. The second part, he asserted, means that "in addition" there is a right to bear arms, which he later declared was a "general right."

The Second Amendment reads, "A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed."

Justice Kennedy's comments appeared to spell trouble for efforts by the District of Columbia to revive its strict handgun ban, although lawyers for both the Bush administration and gun-rights advocates acknowledged that some lesser regulation of the right would be acceptable.

Read the transcript of yesterday's argument.

Counting Justice Kennedy, it appeared that five or more justices were ready to recognize some form of an individual right to keep and bear arms that is only loosely tethered, if at all, to the functioning of militias. What kind of regulation of that individual right will be allowed by those justices is uncertain.

But after nearly 70 years of sidestepping the meaning of the Second Amendment, one thing was clear: The U.S. Supreme Court was finally ready to tackle the knotty question head-on.

When the arguments were over, gun-control advocates seemed less pessimistic than before the session began, though they did not predict victory.

Joshua Horwitz, director of the Education Fund to Stop Gun Violence, who filed a brief in the case and watched the arguments, conceded he cannot count five votes for a strictly militia-rights view of the Second Amendment that would allow for almost unlimited regulation of firearms. But he could conceive of five justices adopting an individual-rights view that will mean "a lot of regulations will be OK. The outcome is not necessarily poor for us."

Full article here.

'Free CCTV film access for security services'

Christopher Hope and James Kirkup
London Telegraph
Tuesday, March 18, 2008

The security services could be given access to footage from CCTV cameras that will allow them to spy on people across the country.

Home Office officials have had talks with the information watchdog to establish whether it is possible to make images available to track terrorist suspects.

Currently, the police and security services have to apply for permission to examine images taken from thousands of cameras across Britain.

A spokesman for the Information Commissioner's Office confirmed yesterday that the meeting had "involved discussions about national security and the issue of cameras and traffic".

Civil liberties campaigners expressed concern that the move would expand Britain's "surveillance society".

Guy Herbert, the general secretary of the NO2ID campaign, said: "I don't think anyone who is sensible would object to proper regulation of CCTV images by the security services or the police in a real inquiry.

"But the worry is that it might become a routine fishing investigation that produces two different effects: that everyone becomes a suspect and that it is not controlled."

The proposal comes as Gordon Brown unveils today a new National Security Strategy in which he will summarise all the threats to the country's interests.

Full article here.

25 Intolerable Contradictions: The Final Undoing of the Official 9/11 Story

Elizabeth Woodworth
Global Research
Tuesday, March 18, 2008

A review of "9/11 Contradictions: An Open Letter to Congress and the Press," by Dr. David Ray Griffin. Interlink Publishing, March 2008. 368 p. List

At last there is a book about 9/11 that politicians and journalists can openly discuss without fear of being labeled "conspiracy theorists".

9/11 Contradictions advances no theories. It simply exposes 25 astonishing internal contradictions that will haunt the public story of this unparalleled event for all time.

Until now, the persistent and disturbing questions about the day that changed the world have confused and alienated journalists and politicians, because:

1. The technical issues regarding the collapse of the towers, the failure of the military to intercept the flights, and the relatively minor damage to the Pentagon have been considered too complex for analysis in the media.

1. However, Griffin’s new book requires no technical expertise from the reader, because each readable chapter revolves around one simple internal contradiction inherent in the public story. "If Jones says ‘P’ and Smith says ‘Not P’, we can all recognize that something must be wrong, because both statements cannot be true."

2. Many who have doubted the official story have offered alternative theories which have been dismissed as "conspiracy theories" by a press which must understandably place a high value on its credibility.

   However, this book offers no alternative theories to explain the contradictions within the public story. It simply presents the glaring contradictions that have never been probed by Congress or the media, and beseeches members of these institutions come to grips with the reality and lead the charge for a truly independent investigation.

3. The 9/11 issue is six years old, journalists are busy people, and the world has moved on.

Though six years have passed, this matter is by no means closed, nor is the trail cold. "The accepted story about 9/11 has been used to increase military spending, justify wars, restrict civil liberties, and exalt the executive branch of the government." Indeed, this reviewer notes, the public story has recently been challenged in foreign forums (Japan Parliament, January 10, 2008, and at the European Parliament building in Brussels, February 26, 2008). The 9/11 Commissioners themselves have cast doubt on the credibility of the Commission Report in their January 2, 2008 New York Times article, "Stonewalled by the CIA." (Ref. http://www.nytimes.com/2008/01/02/opinion/02kean.html)

Let us now turn to the contradictions. But first, to quote Professor Griffin:

"Within the philosophy of science, there are two basic criteria for discriminating between good and bad theories. First, a theory should not be inconsistent with any of the relevant facts....Second, it must be self-consistent, devoid of any internal contradictions. If a theory contains an internal contradiction, it is an unacceptable theory."

Unacceptable, for example, is the following internal contradiction, quoted from the chapter summaries that have been helpfully provided at the end of the book interested investigative journalists and members of Congress:

With regard to the identity of the plane spotted over the White House around the time of the Pentagon strike: The military’s denial that it was a military plane is contradicted by CNN footage of the plane’s flight, which showed, as former military officers have agreed, that it was an Air Force E-4B.

[Reviewer’s note: "The E-4B serves as the National Airborne Operations Center for the president, secretary of defense and the Joint Chiefs of Staff or JCS." Cited from a current US Air Force factsheet at http://www.af.mil/factsheets/factsheet.asp?fsID=99.]

In his 2004 "The New Pearl Harbor", Griffin had already noted that the Standard Operating Procedures regarding flight interceptions had been inexplicably dropped on September 11^th. This reviewer deduces that because a complex network of defense systems could not have been fully disabled without coordination from a senior military level, it was logical for Dr. Griffin to open the current volume by asking questions that the 9/11 Commission failed to ask: what were President Bush, Secretary of Defense Donald Rumsfeld, and General Richard B. Myers, Acting Head of the Joint Chiefs of Staff, doing that morning? In each case, inexplicable contradictions emerged in the reports of their whereabouts, and the same applied to Vice President Dick Cheney. None of these public officials were questioned under oath, and now it is abundantly clear that the contradictions surrounding them must be laid to rest in by a thorough and rigorous investigation.

In Part II, Griffin carefully tracks the disparities in the reported times at which the military was notified about the erratic behaviors of Flights 11, 175, 77, and 93. In each case, the striking contradictions he unearths are shown to require a serious investigation into how this over-arching failure actually did happen, and---this reviewer suggests---what connection it may have had to the unprecedented military air drills that were progressing throughout the attacks.

In Part III, probing questions regarding the pre-9/11 tastes and habits of the alleged hijackers are closely pursued through early press reports, with the confounding revelation that they had taken up Western sexual and drinking practices, and could certainly not be characterized as devout Muslims ready to meet their maker. The contradictions revealed in the investigation of cell phone and airphone reports of their actions on the planes is nothing short of brilliant, negating the entire phenomenon of the aggregate onboard myth.

Finally, Part IV deals with the towers themselves, including advance knowledge of their collapses, and the extraordinary oral testimonies of dozens of firefighters who reported, for example, massive explosions in the sub-basements of the buildings: a 50-ton hydraulic press reduced to rubble; a 300-lb. steel door wrinkled up like a strip of aluminum foil.

It is interesting to note that Dr. Griffin has become a virtual one-man clearinghouse for the vast accumulation of research that has been done on this world-changing event. It now appears highly likely that his neutral approach to this impressive body of evidence will be the axe that finally splits the issue open. Each one of the 25 carefully researched contradictions represents a crumbling brick in the official facade that shields the world from the unknown underlying truth.

As a writer myself, and a retired professional librarian, it was an honour to critique and give bibliographic support for Dr. Griffin’s chapters, and for the extensive research supplied in the footnotes. Throughout the process, I was able to witness first-hand the precise, methodical, and ethical standards to which he works. One can only hope that the exceptional quality and responsibility evident in his work will inspire people in Congress and the media (and indeed in all walks of life) to rise to his challenge to investigate this pivotal international issue.

Campaign denies McCain’s Iran/al Qaeda gaffe.

Think Progress
Tuesday, March 18, 2008

Today, Sen. John McCain (R-AZ) said that Iranian operatives are “taking al-Qaeda into Iran, training them and sending them back” — despite the fact that Iran is a Shiite nation and al Qaeda are Sunni fighters. Responding to reports of McCain’s factually inaccurate claim, the McCain campaign released a statement attempting to paint the senator’s fundamental error as an isolated slip of the tongue:

In a press conference today, John McCain misspoke and immediately corrected himself by stating that Iran is in fact supporting radical Islamic extremists in Iraq, not Al Qaeda — as the transcript shows. Democrats have launched political attacks today because they know the American people have deep concerns about their candidates’ judgment and readiness to lead as commander in chief.

The fact that McCain made identical remarks on Hugh Hewitt’s radio show as well makes it clear McCain did not simply “misspeak.” What’s more, McCain corrected himself only after Sen. Joe Lieberman (I-CT) “stepped forward and whispered in the presidential candidate’s ear.”

UPDATE: Fox News aired footage of Lieberman correcting McCain during today’s press conference. Watch it:

Update - A video by CNN shows that McCain repeated the inaccurate claim twice during the same press conference, bringing his total number of "misspeaks" to three.

Pentagon’s Cyborg Insects All Grown Up

Sharon Weinberger
Wired
March 19, 2008

For years, now, Pentagon-backed researchers have been trying to create cyborg insects that could serve as living, remote-controlled spies. The problem is, those modified bugs never survived long enough to be useful. Now, Georgia Tech professor Robert Michelson says he’s managed to get the bug ‘borgs to live into adulthood.

DARPA’s Hi-MEMS program aims to implant place micro-mechanical systems [MEMS] “inside the insects during the early stages of metamorphosis,” the agency explains. That way, as the bugs get older, tissues grow around — and fuse together with — the tiny machines.

Flight International reports that, in his latest work, Michelson truncated a Manduca moth’s thorax “to reduce its mass.” Then he put in “a MEMS component… where abdominal segments would have been, during the larval stage.”

Images taken by x-ray of insects with these changes and others found that tissue growth around the inserted probes was good. One DARPA goal is to show that during locomotion the heat and mechanical power generated by the thorax could be harnessed to power the MEMS.

Ultimately, DARPA wants these MEMS to remote-operately the insects, either through "direct electrical muscle excitation, electrical stimulation of neurons, projection of ultrasonic pulses simulating bats, [or] projection of pheromones," the agency says. The ultimate goal would be to have the cyborgs "carry one or more sensors, such as a microphone or a gas sensor, [and] relay back information."

The realization of cyborgs with most of the machine component inside the insect body will provide stealthy robots that use muscle actuators which have been developed over millions of years of evolution.

The cyborgs also offer unparalleled opportunities for lab workers to shout, "It's alive! It's aliiiiiiiive!!!"

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Protesting in a violent way

YouTube
March 19, 2008

As this short video demonstrates, 9/11 truth activists are not violent, regardless of what the professional propagandist Geraldo Rivera tells the average Faux News navel-gazer. Included in the video is the segment taped in Times Square, where Gerald gives the finger to demonstrators, thus revealing he is in fact little more than an impetuous adolescent. Also included: Luke Rudkowski’s confrontation of mayor Michael Bloomberg, the arrest of Alex Jones for the crime of bullhorning in New York, and a compilation of others clips.

Paulson admits U.S. economy in sharp decline

WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson on Tuesday described the economy as being in "sharp decline," the closest he has come yet to conceding an election-year recession has set in.

Appearing tired after a weekend of helping to broker a fire sale takeover of Wall Street investment bank Bear Stearns to keep it from outright collapse, Paulson pushed back against efforts to have him admit a recession was under way.

"There's no doubt that the American people know that the economy has turned down sharply. So to me much less important is the label that's placed on it today. Much more important is what we do about it," he told NBC's Today Show.

Paulson also appeared on ABC's "Good Morning America" where he claimed the Bush administration's $152-billion fiscal stimulus program could generate hundreds of thousands of jobs once tax rebate checks begin flowing in May.

"It will start making a difference here in the second and third quarter, maybe adding 500,000 or more jobs," he said without elaborating about the sectors that might create jobs.

Checks of $600 for individuals and $1,200 for couples are to start being issued on May 2.

Treasury officials, in cooperation with the Federal Reserve, worked nonstop last weekend to help engineer the $2-a-share takeover of Bear Stearns by JPMorgan as they sought to restore some stability to shell-shocked financial markets.

Fed policy-makers were meeting on Tuesday amid expectations their next step will be to slash interest rates by a whopping 1 percent to try to give the flagging U.S. economy a lift.

But the turbulence that persists in markets, analysts say, stems substantially from a loss of confidence that has made ordinary investors wary and threatens to become an outright credit crunch as banks and financial institutions become reluctant to make loans or to take risks.

Paulson insisted Treasury was "all over" the turbulence in capital markets and said he did not think Bear Stearns shareholders believe they have been bailed out by the Federal Reserve.

"The big focus on the part of all policy makers is to minimize the spillover to the real economy. We need to keep our capital markets stable, functioning well," Paulson told NBC.

He said he had great confidence in U.S. capital markets, saying they were resilient and flexible, but it would take some time to work through the turbulence.

The latest evidence on Tuesday pointed to continuing and extended problems for economic policy-makers. Government data showed so-called core wholesale prices, excluding food and energy, measured by the Producer Price Index climbed at the fastest pace in February in more than a year.

Construction starts on new houses declined another 0.6 percent and applications for building permits tumbled 7.8 percent in February, an indicator that the deterioration in the U.S. housing sector will continue to worsen for some time.

(Reporting by David Lawder and Andy Sullivan; Writing by Glenn Somerville; Editing by Chizu Nomiyama)

Fed cuts rates by 0.75 points

Two dissents show disagreement on board

By Greg Robb & Laura Mandaro, MarketWatch

Last update: 2:24 p.m. EDT March 18, 2008

WASHINGTON (MarketWatch) - Stopping short of giving the market everything it wanted, the Federal Reserve cut a key interest rate by three quarters of one percentage point on Tuesday.

The Fed action takes the federal funds rate target down to 2.25%, the lowest since December 2004.

The Fed said the size of the rate cut was enough to promote growth.

"Today's policy action, combined with those taken earlier, including measures to foster market liquidity, should help to promote moderate growth over time and to mitigate the risks to economic activity," the Fed said.

But the market had expected more.

Based on futures trading in Chicago, investor's bets implied a 100% chance of a cut of one percentage point. Read complete Fed coverage.

The Fed did leave the door open for more cuts.

In its statement, the Fed said downside risks remain and it would act in a timely manner if needed.

Dallas Fed president Richard Fisher and Philadelphia Fed president Charles Plosser dissented in favor of less aggressive action.

The rate cut comes seven weeks after the central banks last lowered the benchmark overnight rate.

The Fed has slashed interest rates by a cumulative two percentage points so far this year, ranking it among the most abrupt rate-cutting sprees in the modern history of the U.S. central bank.

Some Fed watchers had warned that a full percentage point rate cut was more than the central bankers could stomach, especially because of the drop in the foreign exchange value of the dollar.

"They've got to be worried about the value of the dollar," said Vince Reinhart, a former top staffer at the Fed and now an analyst at the conservative American Enterprise Institute think-tank.

This week, the dollar hit record lows versus the euro and the Swiss franc and a twelve-and-a-half-year low versus the yen. Read complete market coverage.

But before the meeting, currency traders said the dollar would continue lower no matter what the Fed did. Many are agitating for coordinated currency intervention.

Another factor explaining the smaller-than-expected rate cut was concern about inflation.

Earlier this morning, the government reported rising prices at the wholesale level.

The core rate of the producer price index rose 0.5% in February and was up 2.4% year-on-year. See full story.

"The Fed is concerned about inflation," said Mickey Levy, chief economist at Bank of America.

In its statement, the Fed said "uncertainty about the inflation outlook has increased."

But the central banks said it expects inflation to moderate in coming quarters as energy and other commodity prices level out and slower growth eases pressures on goods.

Running out of room to maneuver.

Former Fed officials are increasingly calling for Congress and the Bush Administration to do more to help the economy, especially by assisting homeowners struggling to stay in their homes.

The government may also have to take steps to provide more capital to the banking system. The Fed's actions are essentially temporary.

The Fed has taken several extraordinary actions in the past week.

Most importantly, the Fed agreed for the first time to lend billions of dollars to investment firms that are holding complex mortgage securities that have fallen sharply in value.

Single-family housing starts sink to 17-year low

Building permits drop 7.8%, biggest decline in 13 years

By Rex Nutting, MarketWatch

Last update: 9:42 a.m. EDT March 18, 2008

WASHINGTON (MarketWatch) -- With no end in sight to the housing bust, new construction on single-family homes dropped by 6.7% in February to a seasonally adjusted annual rate of 707,000, the lowest in 17 years, the Commerce Department reported Tuesday.

Starts of single-family homes have plunged 62% since the peak two years ago.

"The housing recession is intensifying," wrote Harm Bandholz, economist for UniCredit Markets.

Total housing starts, including multifamily units, dropped 0.6% in February to a seasonally adjusted annual rate of 1.065 million, better than the 990,000 pace expected by economists surveyed by MarketWatch. See Economic Calendar.

January's starts were revised higher to a 1.071 million pace from 1.012 million reported initially.

Building permits, a leading indicator of construction, fell 7.8% in February to a seasonally adjusted annual rate of 978,000, the lowest since the autumn of 1991. It was the biggest monthly decline in 13 years. Read the full report.

Permits for single-family homes dropped 6.2% in February to a 639,000 annual pace, a 17-year low. Single-family permits are down 65% from the peak.

The report confirms that home building remains extremely weak, with home prices falling and sales tumbling.

"It is clear that we have not yet reached the bottom, and still have a considerable way to go before that claim can be plausibly made," wrote Richard Moody, chief economist for Mission Residential.

The data are likely to have little impact on deliberations at the Federal Reserve later Tuesday. The Fed is expected to slash interest rates, perhaps by an unprecedented full percentage point. The Fed is intently focused on daily conditions in financial markets, and expects a very slow recovery for the housing market.

In a separate report, the Labor Department said producer prices rose 0.3% in February. Core prices, which exclude food and energy, rose 0.5%, more than expected. See full story.

In the past year, housing starts are down 28.4%. Single-family starts are down 40.5%. Building permits are down 36.5% in the past year, while single-family permits are down 41.9%, the biggest drop in 26 years.

The government cautions that its housing data are volatile and subject to large sampling and other statistical errors. In most months, the government can't be sure whether starts increased or decreased. In February, for instance, the standard error for starts was plus or minus 11.2%. Large revisions are common.

It can take four months for a new trend in housing starts to emerge from the data. In the past four months, housing starts have averaged 1.08 million annualized, down from 1.13 million in the four months ending in January.

On Monday, the National Association of Home Builders reported builder sentiment remained at extremely low levels in March, barely bouncing off a record-low set in December.

Details

Starts of multifamily units rose 14.5% in February, continuing a boom in apartment building. Multifamily starts are up 23% in the past year.

Regionally, starts fell 28% in the Northeast, were flat in the Midwest, rose 3.9% in the South and rose 5.1% in the West.

Housing completions fell 8.8% in February to a seasonally adjusted annual rate of 1.208 million, the lowest in 12 years. Home builders are trying to work off their excess inventories, but still have too many homes in the pipeline for the number of sales.

Rex Nutting is Washington bureau chief of MarketWatch.

Planned Parenthood Racism Investigation

YouTube
March 18, 2008

Plunging U.S. dollar must be addressed

Kansas City Star
Tuesday, March 18, 2008

Bear Stearns survived the Great Depression, but it was done in by the great unwinding that began with the subprime mortgage meltdown.

During the weekend, JP Morgan Chase & Co. agreed to buy Bear for a mere $2 a share — 1 percent of its value more than two weeks ago.

The Federal Reserve made the right move in underwriting this historic transaction.

With other banks refusing to extend the credit Bear Stearns needed to process transactions, the only alternative for the investment house was bankruptcy.

That, in turn, would threaten to bring down other Wall Street institutions as well.

Bear Stearns’ spectacular fall highlighted the rapid collapse of confidence in long-time Wall Street banks as the credit-market crisis continued with no end in sight.

Full article here.