Oil at $100 not our fault: OPEC

Fredrik Dahl
Reuters
Thursday, January 3, 2008

OPEC officials lined up to say the exporter group could do little to tame oil prices that hit $100 a barrel for the first time on Wednesday and world markets had enough crude oil.

The comments underline the view of the producer group that factors other than supply are driving oil's record run. Officials said there was no plan for an emergency OPEC meeting before a scheduled February 1 gathering.

"The problem is not shortage of supply," Hojjatollah Ghanimifard, international affairs director at the National Iranian Oil Company, told Reuters on Thursday. Iran is OPEC's second-largest producer after Saudi Arabia.

"I think the main problem is outside the oil market. Too much liquidity is available," Ghanimifard said. "A big part of it is in the paper market of crude oil."

Oil in New York hit $100 a barrel on Wednesday, the first trading day of the year, and analysts said the price could make further gains. Crude rallied almost 58 percent last year and is up from below $20 in early 2002.

OPEC, source of more than a third of the world's oil, decided to keep oil output steady at a December 5 meeting, rebuffing calls from consumer countries for more supply to rein in prices then trading around $90.

The Organization of the Petroleum Exporting Countries cannot tame the price rise because it is not a result of supply problems, Qatar's oil minister told Reuters on Wednesday.

"I don't think OPEC can do anything," Qatar's Abdullah al-Attiyah said. "If this was related to supply then we could move."

Full article here.

Funding sought for 50 flights dragging huge "Revolution" banner

Paul Joseph Watson
Prison Planet
Thursday, January 3, 2008

Ron Paul supporters are being urged to take the revolution to the air as funding is sought for a squadron of 50 flights to take to the skies before the end of January, dragging behind them gigantic 90 by 30 feet banners promoting the Congressman's presidential campaign.

The Genesis Communications Network is hoping to follow in the footsteps of the Ron Paul Blimp by attracting sponsors for flights over key demographic battlegrounds as the Republican primaries take shape over the next few months.

The first flight sets off today and will be cruising over Cedar Rapids, Iowa from 2pm CST onwards.

Approximately $465 is needed to keep each plane in the sky for an hour which can also be moved to other key markets at a cost of $200 per night.

Huge 90 by 30 foot banner that will trail behind the planes.

Each billboard costs $3,695 to make an the organizers are hoping to raise around $120,000 in total which would buy 300 flight hours.

Please visit http://www.ronpaulaircorps.com and pledge your support for this exciting new activist adventure!

This video details the great efforts of other activists in taking to the skies for the cause of freedom.

FBI to use digital billboard alerts

Mark Sweney
London Guardian
Thursday, January 3, 2008

The FBI is to use a nationwide network of digital billboards to flash "hot pursuit" alerts and "most wanted" bulletins to help catch criminals.

In a deal with Clear Channel Outdoor, the US law enforcement agency will use billboards to run messages about wanted criminals, crime in progress and "high security" alerts about homeland security.

The agreement, which follows a successful trial in Philadelphia that led to the swift arrest of three criminals, will primarily be used to run "most wanted messages" on more than 150 digital billboards in about 20 US cities.

Billboards will also be used to display "high security messages to relevant communities" and the FBI also plans to establish a "protocol" for high priority "hot pursuit" messages to run straight after crimes are committed.

"The success of our 'wanted' messages on Clear Channel's digital billboards in Philadelphia was an impressive testament to this new technology's effectiveness in aiding law enforcement," said Brett Hovington, community relations unit chief at the FBI.

He added that a key benefit of the billboards is that they allow a "degree of separation between the tipster and the authorities", helping the FBI to protect the sources of anonymous tip-offs.

Clear Channel has previously used its billboards for public safety purposes such as informing commuters in Minneapolis that there had been a bridge collapse within 15 minutes of the event occurring.

Global Property Bubbles to Implode in 2008

Global Property Bubbles to Implode in 2008

The Telegraph is reporting UK Landlords face office rent crisis.

One of the UK's leading commercial property agents has warned that office rents may tumble next year, dealing a second devastating blow to landlords who have already seen the value of their portfolios plummet in recent months.

DTZ is predicting a 15pc-20pc fall in office demand in 2008 as banks and other financial institutions reduce their overheads, which will almost inevitably lead to a softening of rents and the increase in incentives such as rent-free periods.

DTZ's report added that the current financial crisis is symptomatic of a much wider problem than the US sub-prime market.

A spokesman said: "Sub-prime is a red herring. It was simply the most stretched segment of an over-stretched debt market. As such, it has to be seen as a catalyst rather than the cause of the recent turmoil."

My Comment: DTZ has this correct. Yet we still hear (at least in the US) how all of this is related to subprime. Alt-A and Pay Option ARMs are going to be at least as big if not a bigger problem than subprime.

The concern over rental growth in the commercial property market comes against a backdrop of a falling number of deals in the sale and purchase of commercial property.

Research from property agent Jones Lang LaSalle (JLL) reveals that the volume of transactions across the UK commercial property market dropped 25pc in 2007 to £48bn as investors fled the sector. Falling prices and reduced availability of debt restricted the flow of deals, especially larger ones, across the second half of the year.

My Comment: Commercial Real Estate Transactions Plunge in the US as well. A plunge in transaction preceded the bursting of the housing bubble in the US. Expect the same scenario to play out in the Commercial Real Estate bubble.

JLL director of capital markets Andrew Hynard said: " I think the first quarter of 2008 will be pretty slow, and we will see the pick-up in quarter two. However, the fall in capital values is likely to keep the overall value of transactions lower in 2008 than 2007."

My Comment: JLL is an amazing optimist. The US, UK, and EU all likely headed for what Shiller calls a Japanese Style Recession.

A Real Estate Bubble in Spain



Click Here To Play Video

Spanish property dreams seem to be reaching for the sky. The new skyline of the Spanish capital Madrid features 250 meter high office buildings - a symbol of the country's economic boom.

But as the city grows higher it is also becoming too expensive for many residents. Rocio Ramos and her partner bought themselves an apartment outside the city and now they are struggling to keep up with rising interest rates. At the same time, prices are stagnating after the years of building boom. On the coast many of the newly built appartments are empty. Ute Brucker took a look at developments in Madrid and Valencia.

The above property cost 200,000 Euros ($292,000+-) for 65 square meters (about 700 square feet) in a building constructed in the 1970's. That is a bubble folks.

Property Bubbles Are Everywhere You Look

Florida has been ground zero of bubble popping but California, Arizona, and Nevada are catching up. Internationally, there are enormous bubble in Spain, the UK, Canada (especially Vancouver and Toronto), and China.

Credit expansion in the UK and EU was just as rampant as the US. Global property bubbles were the result. Here is an interesting chart from HousePriceCrash.Co.UK



The dotted line is an alternate trendline that I drew. The ramifications should be obvious.

Global property bubbles are poised to implode in 2008.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

The US sub-prime crisis in graphics

The US sub-prime mortgage crisis has lead to plunging property prices, a slowdown in the US economy, and billions in losses by banks. It stems from a fundamental change in the way mortgages are funded.
bbc

THE NEW MODEL OF MORTGAGE LENDING

How it went wrong

Traditionally, banks have financed their mortgage lending through the deposits they receive from their customers. This has limited the amount of mortgage lending they could do.

In recent years, banks have moved to a new model where they sell on the mortgages to the bond markets. This has made it much easier to fund additional borrowing,

But it has also led to abuses as banks no longer have the incentive to check carefully the mortgages they issue.

THE RISE OF THE MORTGAGE BOND MARKET

In the past five years, the private sector has dramatically expanded its role in the mortgage bond market, which had previously been dominated by government-sponsored agencies like Freddie Mac.

They specialised in new types of mortgages, such as sub-prime lending to borrowers with poor credit histories and weak documentation of income, who were shunned by the "prime" lenders like Freddie Mac.

They also included "jumbo" mortgages for properties over Freddie Mac's $417,000 (£202,000) mortgage limit.

The business proved extremely profitable for the banks, which earned a fee for each mortgage they sold on. They urged mortgage brokers to sell more and more of these mortgages.

Now the mortgage bond market is worth $6 trillion, and is the largest single part of the whole $27 trillion US bond market, bigger even than Treasury bonds.

HOW SUB-PRIME LENDING AFFECTED ONE CITY

THE SUB-PRIME CRISIS IN CLEVELAND

	Sub-prime lending		Black areas
	Foreclosures (repossessions)		Deutsche Bank properties

For many years, Cleveland was the sub-prime capital of America.

It was a poor, working class city, hit hard by the decline of manufacturing and sharply divided along racial lines.

Mortgage brokers focused their efforts by selling sub-prime mortgages in working class black areas where many people had achieved home ownership.

They told them that they could get cash by refinancing their homes, but often neglected to properly explain that the new sub-prime mortgages would "reset" after 2 years at double the interest rate.

The result was a wave of repossessions that blighted neighbourhoods across the city and the inner suburbs.

By late 2007, one in ten homes in Cleveland had been repossessed and Deutsche Bank Trust, acting on behalf of bondholders, was the largest property owner in the city.

THE CRISIS GOES NATIONWIDE

Sub-prime lending had spread from inner-city areas right across America by 2005.

By then, one in five mortgages were sub-prime, and they were particularly popular among recent immigrants trying to buy a home for the first time in the "hot" housing markets of Southern California, Arizona, Nevada, and the suburbs of Washington, DC and New York City.

House prices were high, and it was difficult to become an owner-occupier without moving to the very edge of the metropolitan area.

But these mortgages had a much higher rate of repossession than conventional mortgages because they were "balloon" mortgages.

The payments were fixed for two years, and then became variable and much higher.

Consequently, a wave of repossessions is likely to sweep America as many of these mortgages reset to higher rates in the next two years.

And it is likely that as many as two million families will be evicted from their homes as their cases make their way through the courts.

The Bush administration is pushing the industry to renegotiate rather than repossess where possible, but mortgage companies are being overwhelmed by a tidal wave of cases.

THE HOUSING PRICE CRASH

The wave of repossessions is having a dramatic effect on house prices, reversing the housing boom of the last few years and causing the first national decline in house prices since the 1930s.

There is a glut of four million unsold homes that is depressing prices, as builders have also been forced to lower prices to get rid of unsold properties.

And house prices, which are currently declining at an annual rate of 4.5%, are expected to fall by at least 10% by next year - and more in areas like California and Florida which had the biggest boom.

HOUSING AND THE ECONOMY

The property crash is also affecting the broader economy, with the building industry expected to cut its output by half, with the loss of between one and two million jobs.

Many smaller builders will go out of business, and the larger firms are all suffering huge losses.

The building industry makes up 15% of the US economy, but a slowdown in the property market also hits many other industries, for instance makers of durable goods, such as washing machines, and DIY stores, such as Home Depot.

Economists expect the US economy to slow in the last three months of 2007 to an annual rate of 1% to 1.5%, compared with growth of 3.9% now.

But no one is sure how long the slowdown will last. Many US consumers have spent beyond their current income by borrowing on credit, and the fall in the value of their homes may make them reluctant to continue this pattern in the future.

CREDIT CRUNCH

One reason the economic slowdown could get worse is that banks and other lenders are cutting back on how much credit they will make available.

They are rejecting more people who apply for credit cards, insisting on bigger deposits for house purchase, and looking more closely at applications for personal loans.

The mortgage market has been particularly badly affected, with individuals finding it very difficult to get non-traditional mortgages, both sub-prime and "jumbo" (over the limit guaranteed by government-sponsored agencies).

The banks have been forced to do this by the drying up of the wholesale bond markets and by the effect of the crisis on their own balance sheets.

BANK LOSSES

The banking industry is facing huge losses as a result of the sub-prime crisis.

Already banks have announced $60bn worth of losses as many of the mortgage bonds backed by sub-prime mortgages have fallen in value.

The losses could be much greater, as many banks have concealed their holdings of sub-prime mortgages in exotic, off-balance sheet instruments such as "structured investment vehicles" or SIVs.

Although the banks say they do not own these SIVs, and therefore are not liable for their losses, they may be forced to cover any bad debts that they accrue.

BOND MARKET COLLAPSE

Also suffering huge losses are the bondholders, such as pension funds, who bought sub-prime mortgage bonds.

These have fallen sharply in value in the last few months, and are now worth between 20% and 40% of their original value for most asset classes, even those considered safe by the ratings agencies.

If the banks are forced to reveal their losses based on current prices, they will be even bigger.

It is estimated that ultimately losses suffered by financial institutions could be between $220bn and $450bn, as the $1 trillion in sub-prime mortgage bonds is revalued.

Ex-Secret Service Man: Bhutto Killing A "Professional Job"

Government explanation loses all credibility as Musharraf looks for Britain, US to bail him out

Paul Joseph Watson
Prison Planet
Wednesday, January 2, 2007

Former Secret Service Assistant Director Bill Pickle tells CNN that the killing of Benazir Bhutto was a "professional job" as the credibility of the initial government explanation for her death dwindles into an outright farce.

With the official government explanation for Bhutto's death (that she died after hitting her head on a sunroof) now completely discredited after footage emerged clearly showing a gunman firing at her before the explosion, Pakistan's President Pervez Musharraf has been forced to bring in London's Scotland Yard to whitewash the ugly aftermath.

The military dictator was no doubt impressed by the Metropolitan Police's execution of innocent Brazilian electrician Jean Charles de Menezes, as well as their disgraceful success in avoiding any reprisals for his murder.

Musharraf is so dependent on his British and American handlers to bail him out of this mess that he is even prepared to hand over control of his nuclear arsenal to them, according to a report in the UK Herald.

"US special forces snatch squads are on standby to seize or disable Pakistan's nuclear arsenal in the event of a collapse of government authority or the outbreak of civil war following the assassination of Benazir Bhutto," reported the newspaper.

"The troops, augmented by volunteer scientists from America's Nuclear Emergency Search Team organisation, are under orders to take control of an estimated 60 warheads dispersed around six to 10 high-security Pakistani military bases."

US launches criminal probe of CIA tapes

By Randall Mikkelsen

WASHINGTON, Jan 2 (Reuters) - The U.S. Justice Department said on Wednesday it had launched a criminal investigation into the CIA's destruction of videotapes depicting the harsh interrogation of terrorism suspects.

"There is a basis for initiating a criminal investigation of this matter, and I have taken steps to begin that investigation," Attorney General Michael Mukasey said in a statement issued by the department.

The CIA last month disclosed that it had destroyed in 2005 hundreds of hours of tapes from the interrogations of two al Qaeda suspects, prompting an outcry from Democrats, human rights activists and some legal experts.

The interrogations, which took place in 2002, were believed to have included a form of simulated drowning known as waterboarding, condemned internationally as torture.

President George W. Bush has said the United States does not torture but has declined to be specific about interrogation methods.

The Justice Department and the CIA's inspector general last month launched an initial inquiry into the tapes. Congress is also investigating the tapes' destruction.

The CIA said it would "cooperate fully with this investigation, as it has with others into this matter."

But the agency's inspector general, John Helgerson, said he would step aside from the full investigation.

Helgerson said the inspector general's office had reviewed the tapes "some years ago" as part of a review into agency interrogations and that he had helped prepare a report on the issue, so it would be inappropriate to be involved in the probe.

Mukasey said he had asked a federal prosector from Connecticut, John Durham, to lead the probe.

Jim Rogers dumping his dollars (11/07 OLD)

In this clip Jim Rogers explains why the the value of the dollar is sinking dramatically and where he is moving his assets to in preparation of a U.S. economic collapse. For more information regarding the U.S. Economy and its effect on Real Estate visit my website at http://www.PhilDeCarolis.com

Oil Touches $100 a Barrel on Supply Concern, Increased Demand

By Mark Shenk and Nesa Subrahmaniyan

Jan. 2 (Bloomberg) -- Crude oil rose to $100 a barrel for the first time in New York as record global fuel consumption threatens to outpace production.

Oil's gain, extending last year's 57 percent rally, was boosted by forecasts that U.S. stockpiles dropped to a three-year low last week. Unrest in Nigeria, Africa's largest oil producer, also spurred prices.

``This is the culmination of everything that we talked about last year,'' said John Kilduff, vice president of risk management at MF Global Ltd. in New York. ``Various geopolitical problems have deteriorated overnight, in particular Nigeria and Pakistan. Commodities, and in particular oil, have become safe havens in a dangerous world.''

Three-figure prices may bring energy costs near the tipping point that will cause global economic growth to falter. China has more than doubled oil use since New York crude dropped to this century's low of $16.70 a barrel on Nov. 19, 2001. That's soaked up most of the world's spare production capacity amid supply cuts in Nigeria, Iraq and Venezuela.

Crude oil for February delivery rose $4.02, or 4.2 percent, to $100 a barrel at 12:10 p.m. on the New York Mercantile Exchange, the highest since trading began in 1983. Prices were up $3.46, or 3.6 percent, to $99.44 a barrel at 1:24 p.m.

Important Number

``This is an important psychological number,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. in Wakefield, Massachusetts. ``Everyone has been expecting this since early December.''

Prices on Oct. 15 passed the previous all-time inflation- adjusted record. Measured in today's dollars, oil in 1981 rose as high as $84.73 after a decade of Middle East instability including the Arab-Israeli war in 1973, the Iranian revolution in 1979 and the Iran-Iraq war that began in 1980.

Oil embargoes and higher prices helped trigger recessions in developed countries, prompting efficiency drives that sent prices lower for two decades to as little as $10.35 a barrel on Dec. 21, 1998.

Prices rose 2.9 percent last week partly because of the assassination of Benazir Bhutto, Pakistan's former prime minister. Pakistan borders Iran, which holds the world's second- biggest oil reserves, and is located along the Arabian Sea, where tankers travel before entering the Persian Gulf.

``Not one drop of oil was disrupted when Benazir Bhutto was assassinated last week, but prices surged,'' Mueller said. ``Anything that can is sending the market higher. That's what happens when you have a jittery market.''

Soaring energy costs have so far failed to choke rising consumption in developing nations, led by China and India. Asia's developing economies will grow 9.8 percent this year, the International Monetary Fund said in its Oct. 17 World Economic Outlook report.

Brent Oil

Brent crude for February settlement rose $3.79, or 4 percent, to $97.64 a barrel on London's ICE Futures Europe exchange. Futures touched $97.75, the highest since trading began in 1988.

The dollar's 11 percent slide last year against the euro boosted oil prices because it made commodities cheaper for buyers outside the U.S. and attracted investors as a hedge against inflation.

``The consumer is going to be hit with record fuel bills during the first quarter of the year,'' Kilduff said. ``Most of the attention is on crude oil but the product markets are also soaring to records and that's going to hurt.''

Heating oil for February delivery rose 9.68 cents, or 3.7 percent, to $2.7412 a gallon in New York. Futures touched $2.7465, the highest since trading began in 1978. Gasoline for February delivery climbed 9.13 cents, or 3.7 percent, to $2.5671. The contract touched a record $2.5784.

Iranian Dispute

A simmering dispute between the U.S. and Iran has contributed to oil's rally. President Mahmoud Ahmadinejad has said Iran wants to develop atomic energy to generate electricity. George W. Bush's administration says the project is a cover for producing nuclear weapons.

A military conflict would threaten almost a quarter of global oil supply that passes from the Persian Gulf through the Strait of Hormuz waterway off Iran's coast.

In Nigeria, Africa's biggest oil exporter, militants have attacked oil installations and kidnapped foreign workers since the beginning of 2006, forcing Royal Dutch Shell Plc to halt about 500,000 barrels a day of output, almost a quarter of the country's total.

Venezuelan Output

In Venezuela, production has slumped to about 2.44 million barrels a day from almost 3 million barrels a day in 2002, according to Bloomberg's estimates, before President Hugo Chavez fired almost 20,000 workers who had closed the state oil company in an attempt to overthrow the government.

Iraq's oil production has yet to reach levels attained before the U.S.-led invasion of 2003 as the country struggles with sectarian fighting and attacks on its energy infrastructure.

Higher prices have been cast as vindication for a theory that the world has reached the maximum rate of oil production as explorers fail to discover major new fields to replace aging deposits being tapped in countries such as Saudi Arabia, Kuwait and Iran.

While Saudi Arabian Oil Minister Ali al-Naimi and Exxon Mobil Corp. President Rex Tillerson have said oil supplies will last for decades, energy traders are increasingly debating the amount of available crude.

Investors who back the peak-oil theory, such as Boone Pickens, a Dallas hedge fund manager and former oil executive, have led the price rally of the past two years. Pickens, chairman of BP Capital LLC, correctly predicted in 2004 that oil prices would top $60 a barrel in 2005 and in early 2006 said oil could reach $90 to $100 a barrel within two years.

Dollar extends early losses after downbeat ISM data

Greenback plunges against yen; Fed minutes, crude-oil spike add pressure

By Lisa Twaronite, MarketWatch

Last update: 2:23 p.m. EST Jan. 2, 2008

SAN FRANCISCO (MarketWatch) -- The dollar extended losses against most major rivals Wednesday, plunging against the yen after the Institute of Supply Management said the U.S. factory sector contracted in December, crude-oil futures hit $100 a barrel for the first time and minutes from the Federal Reserve's last meeting showed little opposition to an interest rate cut.

Nearly all members of the Federal Open Market Committee backed the quarter percentage-point cut in the federal funds rate at the Dec. 11 meeting, though the minutes provided little guidance about what the FOMC might do at the Jan. 29 and 30 meeting. Read The Fed.

Lower interest rates weigh on the dollar because they reduce the return on dollar-denominated assets.

Earlier Wednesday, crude for February delivery rallied $4.02 to $100 a barrel on the New York Mercantile Exchange, on expectations U.S. crude inventories may have fallen for a seventh straight week and concerns about violence in Nigeria, Africa's biggest crude producer.

Oil's standard trading unit is dollars per barrel. As the dollar drops, so does the price of oil in non-dollar terms. This usually encourages investors who hold other currencies to bid up the price of oil, leading it to rise in dollar terms.

A report released n the morning session showed the ISM index fell to 47.7% from 50.8% in November. Economists expected the index to slide to 50.5%. Readings below 50% indicate more manufacturing firms were contracting than were growing in December. It was the lowest reading since April 2003 and the first sub-50 reading since January 2007. See Economic Report.

"Today's [ISM] release is definitely unsettling," wrote Stephen Stanley, Chief Economist at RBS Greenwich Capital.

"The real question is whether today's data point to a brief pause in activity or a more persistent trend. It is always tough to make that call when faced with one outlier downside reading. We are inclined to wait a month and see what the January figures look like before tossing the manufacturing sector onto the trash heap," he added.

U.S. stocks were sharply lower Wednesday, after the ISM report and crude-oil price spike. See Market Snapshot.

Yen surges

The stock market downturn lifted the yen, which tends to weaken as investor's appetite for risk increases and they take on so-called carry trade positions, in which investors borrow funds in yen at low rates to invest in other higher-yielding assets.

The dollar was buying 109.47 yen, down about 2.2%, compared with 111.02 yen earlier.

The euro was at $1.4732, up about 0.8%, compared with $1.4652 earlier.

The dollar managed to hold onto some gains against the British pound sterling, which was down about 0.3% at $1.9821, but still up from $1.9783 earlier.

The dollar index, which measures the greenback against a basket of six major currencies, was down about 0.8% at 75.940, compared with 76.390 earlier Wednesday.

Currency investors largely shrugged better-than-expected construction data.

Commerce Department data showed spending on construction projects hit a two-month high in November, rising by 0.1% on strong outlays for public, state and local construction projects. Economists surveyed by MarketWatch had been expecting construction spending to fall by 0.5% in November.

Spending on home construction, meanwhile, continued its slide, falling by 2.5% in November following a drop of 2.3% in October. It's the 21st consecutive decline. See Economic Report.

Later Wednesday, the Federal Reserve is scheduled to release the minutes of its Dec. 11 meeting, at which the central bank cut rates by a quarter-point to 4.25%.

Yuan starts on high note

In Asian trading Wednesday, the Chinese yuan kicked off the new year with a new record high close against the dollar over-the-counter trading. The yuan rose to 7.2934 against the dollar, up from Friday's 7.3041 close. Chinese markets were closed Monday.

The yuan gained nearly 7% in 2007, with over 2% of the gains coming in the last two months of 2007.

In its tightly-controlled currency markets, China permits the yuan to trade in a band of 0.5% on either side of its official parity rate, which it sets daily.

Chinese officials have indicated that the yuan will be allowed to gradually appreciate in the country's tightly controlled foreign-exchange market, to help alleviate domestic inflationary pressures.

National City to Trim Dividend by 49%, Cut 900 Jobs

By David Mildenberg

Jan. 2 (Bloomberg) -- National City Corp., Ohio's largest bank, will eliminate another 900 jobs and halve its dividend, the first reduction since the payout began in 1935. The company fell 6 percent in New York trading.

The lender plans to raise capital and hired Goldman Sachs Group Inc. as its adviser, Cleveland-based National City said today in a statement. The bank is halting home loans through brokers and firing the employees in that business, bringing total cuts to 3,400, or about 10 percent of its workforce, in one year.

National City is still reeling from the U.S. housing slump a year after selling its subprime mortgage unit to Merrill Lynch & Co. It now expects to make $15 billion to $20 billion in home loans in 2008, compared with a previous projection of $35.7 billion.

``The housing market was poised for a correction and then it corrected with a high degree of suddenness,'' Chief Executive Officer Peter Raskind said in an interview. ``It's not clear to me that anything can be done prudently to dramatically improve that process.''

National City will pay 21 cents a share on Feb. 1 to shareholders of record on Jan. 14. The dividend was previously 41 cents a share.

The bank fell 99 cents to $15.47 in New York Stock Exchange composite trading, the biggest drop in three weeks. The stock lost 55 percent in 2007.

`Cleaning Up the Mess'

``National City is probably at the front edge of cleaning up the mess,'' said analyst Gerard Cassidy of RBC Capital Markets, who has an ``underperform'' rating on the bank. ``They still have some heavy lifting going forward. We think others are going to follow. The housing problems are going to continue through 2008.''

U.S. home foreclosures rose 68 percent in November from a year earlier as adjustable-rate mortgages left subprime borrowers unable to meet higher payments, according to RealtyTrac Inc., an Irvine, California-based seller of housing information.

The bank said it plans to raise ``non-dilutive'' capital in the first quarter of this year to improve its so-called Tier 1 capital ratio, which is used to assess a bank's ability to withstand loan losses. The bank on Dec. 31 was above ``well- capitalized levels'' set by regulators, Treasurer Thomas Richlovsky said, without disclosing the figures.

The bank will continue making home loans through its 300 mortgage offices and 1,448 bank branches, spokeswoman Kristen Baird Adams said. It had about 34,000 employees as of Sept. 30, according to a regulatory filing.

California, Ohio

Most of National City's problem loans stem from markets including California where prices surged and then declined, Raskind said.

About one-third of the bank's branches are in Ohio and Michigan. Ohio has the third-highest foreclosure rate in the U.S., and Michigan ranked sixth, according to RealtyTrac Inc.

National City on Dec. 17 took a $200 million charge related to the declining value of mortgage securities and said it expects to set aside about $700 million in the fourth quarter to cover bad loans. The bank said it has ``elevated risk'' from loans made by its former First Franklin unit and its closed National City Home Equity business. National City sold First Franklin, which principally made loans to borrowers with less than prime credit, to Merrill Lynch in December 2006.

Washington Mutual, the biggest U.S. savings and loan, sold $3 billion of perpetual convertible preferred bonds last month to shore up its capital and slashed its dividend 73 percent after mortgage-market losses increased.

Bank of America Corp., the nation's second-largest bank behind Citigroup Inc., said in October it would stop making loans through brokers, a business called wholesale lending. The move will lead to 700 job cuts, Bank of America said.

US might take over Pak nukes?

Press TV
Wednesday, January 2, 2008

Pakistan has dismissed a report that US forces will 'seize or disable' the country's nuclear weapons, after the assassination of Bhutto.

The British daily Herald had earlier quoted military sources as saying that a US Special Forces squad and volunteer scientists from the Nuclear Emergency Search Team had orders to take control of Pakistan's estimated 60 nuclear warheads.

The report also said some of the US forces were already in neighboring Afghanistan to 'seize or disable' Pakistan's nuclear weapons in the event of the collapse of the administration following the killing of former PM Benazir Bhutto.

Pakistani Foreign Office Spokesman Mohammad Sadiq, however, rejected the report as 'baseless and ridiculous', saying Pakistan has an effective command and control system, The Hindustan Times reported.

Over the past few weeks, Pakistan has been trying to allay the West's concerns about the safety of its nuclear arsenals, saying it has an established command and control system.

Couple banned for life from shopping centre and branded 'terrorists' - for taking photos of their grandchildren

STEVE DOUGHTY
Daily Mail
Wednesday, January 2, 2008

A couple were banned for life from a shopping centre - because they were taking photos of their beloved grandchildren.

Kim and Trevor Sparshott were ordered to stop taking photos because they were causing a security threat.

They were thrown out of the centre after they took out a camera to snap the look on the youngsters' faces when they turned up unexpectedly.

The couple were on a four-day break from their home in Spain and wanted to surprise their family by arriving at the centre, in Fareham, Hants, while they were shopping.

But when they went to take a photo, a security guard pounced and ordered them out.

The guard then insisted that cameras were banned because of the risk of a terrorist attack - and barred the bemused couple for life.

Speaking from her home in Malaga, Spain, Mrs Sparshott, 51, said: "I couldn't believe it. I was so shocked.

"He said we had committed an act of terrorism.

"At first I wanted the ground to swallow me up whole because it was so embarassing - but then I got really angry."

Mr Sparshott, 52, added: "Instead of being a nice surprise for our family it turned into a nightmare. I was furious.

"In these worrying times we understand the need for caution, but surely a quiet word when he first saw us would have stopped all this unpleasantness."

The couple, who had been visiting their daughter, who lives in Gosport, Hants, with her husband and children, returned to Spain in shock.

They wrote a letter of complaint to the centre, and received a reply from manager Pam Gillard who said taking photos was a security risk.

In the reply to the Sparshotts, Ms Gillard said: "By the sounds of it my officers/duty manager didn't explain the position very clearly and for that I apologise."

FULL STORY: CLICK HERE

How the Police Create Crimes: Criminals With Badges

PAUL CRAIG ROBERTS
Counterpunch
Wednesday, January 2, 2008

Take heed, ye red-blooded American males. The police are operating a new sting designed to destroy your life.

The police are planting attractive women half naked in parks. They entice passing males, engage them in conversation, lay back, spread their legs and rest their feet on the men's shoulders.

After being as friendly and suggestive as possible, they ask to see your penis.

Don't show it to them. You are being filmed by police. If you show your penis, you will be arrested as a pervert.

Only American police, judges, and juries could think that responding to a seductress's invitation is proof of perversion. But, hey, you live in America where Christians believe that killing as many Muslims as possible for Israel is God's work. Don't expect a dumb Amerikan jury, or a self-righteous Republican judge, or a mindless law professor to understand entrapment.

No, this is not a joke. It is actually happening. Last May in Berliner Park in Columbus, Ohio, Robin Garrison, a 42-year-old firefighter was lured into arrest by a half naked woman under a tree.

In reporting the story, the idiot--possibly some male-hating feminist--who wrote the headline for ABC News describes the above: "Topless Woman Lured Perverts in Police Sting."

Get that, red-blooded American males. You are a pervert if you show your penis to a woman who is seducing you.

The reporter, Marcus Baram, is not indignant about the sting. Neither is Gabriel Chin, a University of Arizona law professor who says: "It's not entrapment to give somebody an opportunity to commit a crime."

It was Anglo-Saxons who made laws against entrapment. Thanks to law professors like Chin, gullible reporters and jurors, and corrupt police, prosecutors, and judges, Americans no longer have the protection of law. In the Orwellian world in which we now live, a male who succumbs to female seduction is a pervert.

The American police have never prevented crimes. In olden days, the police solved crimes by finding the guilty party. No more. In our time, the police create crimes. And that is why the US prison population is twice the size of China's, an authoritarian country with a population four to five times larger than America's.

And not only in Columbus, Ohio, are crimes created by police. The corrupt New York Police Department ensnared 300 innocents during 2007 via "Operation Lucky Bag." Police place IPods, cell phones, wallets, and shopping bags containing items in New York subway stations. The items appear to be dropped, lost, or abandoned. Anyone who picks up one of the planted items is arrested for "subway grand larceny."

This particular police atrocity is in conflict with New York law, which allows someone who finds property 10 days to turn it in to the police or to find the owner.

The corrupt NYPD says that the property left as bait has not been abandoned, but is the property actively left by an officer who is still in the vicinity."

There you have it. The American Police--"support your local Gestapo"--spend their time engineering false crimes and not investigating real crimes. Americans are more at risk from the police than they are from criminals.

On December 29, I received yet another email from a law-abiding American family harassed by police. The family refused to sell a $75,000 piece of property to a deputy sheriff for $4,000. Farm operations were obstructed. The mother was stopped every time she went out in the car. The son was framed and sent to prison.

Never make the mistake of calling the police, and never get stopped by a traffic cop. You run the risk that he will drop a bag of drugs into you car and arrest you on a drug offense. If you encounter a police officer, be sure you have thousands of dollars with which to buy him off from making false charges. Most police charges are false charges. Americans need to wake up to this fact or the American prison population will outstrip the rest of the world combined.

Top economist says America could plunge into recession

Suzy Jagger
London Times
Monday, December 31, 2007

Losses arising from America’s housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world’s leading economists has told The Times.

Robert Shiller, Professor of Economics at Yale University, predicted that there was a very real possibility that the US would be plunged into a Japan-style slump, with house prices declining for years.

Professor Shiller, co-founder of the respected S&P Case/Shiller house-price index, said: “American real estate values have already lost around $1 trillion [£503 billion]. That could easily increase threefold over the next few years. This is a much bigger issue than sub-prime. We are talking trillions of dollars’ worth of losses.”

He said that US futures markets had priced in further declines in house prices in the short term, with contracts on the S&P Shiller index pointing to decreases of up to 14 per cent.

“Over the next five years, the futures contracts are pointing to losses of around 35 per cent in some areas, such as Florida, California and Las Vegas. There is a good chance that this housing recession will go on for years,” he said.

Professor Shiller, author of Irrational Exuberance, a phrase later used by Alan Greenspan, the former Federal Reserve chairman, said: “This is a classic bubble scenario. A few years ago house prices got very high, pushed up because of investor expectations. Americans have fuelled the myth that prices would never fall, that values could only go up. People believed the story. Now there is a very real chance of a big recession.”

He pointed out that signs at the beginning of 2007 that had indicated that some states were beginning to experience a recovery in house prices had proved to be false: “States such as Massachusetts had seen some increases at the beginning of the year. Denver also looked like it had a different path. Now all states are falling.”

FULL STORY: CLICK HERE

CIA-ISI Created “Qaeda Network” Blamed for Pakistan Troubles

Kurt Nimmo
Prison Planet
Monday, December 31, 2007

It is a familiar if not worn-out refrain: “The Qaeda network accused by Pakistan’s government of killing the opposition leader Benazir Bhutto is increasingly made up not of foreign fighters but of homegrown Pakistani militants bent on destabilizing the country, analysts and security officials here say.”

If we are to believe the New York Times — you know, the propaganda sheet in large part responsible for selling the “war” in Iraq, that is to say the plan to mass murder of more than a million Iraqis — the contrived terrorist scare crow al-Qaeda has “clearly expanded their ranks and turned to a direct confrontation with the Pakistani security forces while also aiming at political figures like Ms. Bhutto,” never mind there is absolutely no evidence of this and never mind as well al-Qaeda was in fact created by Pakistan’s ISI, with a large infusion of CIA cash and directives.

“Al Qaeda right now seems to have turned its face toward Pakistan and attacks on the Pakistani government and Pakistani people,” averred Robert Gates, one of the primary founders of al-Qaeda, a fact he willingly admitted in his memoir, From the Shadows. Of course, no mention of this slimy connection in the “liberal” New York Times, the former home of the neocon disinfo operative Judith Miller.

“The expansion of Pakistan’s own militants, with their fortified links to Al Qaeda, presents a deeply troubling development for the Bush administration and its efforts to stabilize this volatile nuclear-armed country.”

And yet few seem to be troubled by the fact these militants were mentored and lavishly funded by the CIA. Long ago relegated to the memory hole are uncomfortable facts: Gen. Akhtar Abdul Rahman, Pakistani ISI’s head from 1980 to 1987, regularly met with bin Laden in Peshawar, Pakistan; the CIA essentially micromanaged Afghanistan’s opium production; the ISI trained “militants” (i.e., patsies and useful idiots) to attack the Soviet Union proper; well over 100,000 Islamic militants were trained in Pakistan between 1986 and 1992 in camps constructed and overseen by the CIA and MI6, with the British SAS training future al-Qaeda and Taliban fighters in bomb-making and other black arts, etc., on and on, ad nauseam.

Now we are expected to believe al-Qaeda, appearing out of the mist of amnesia, is a portentous threat to the poor people of Pakistan, as related by the premier propaganda sheet, the New York Times.

Al Qaeda in Pakistan now comprises not just foreigners but Pakistani tribesmen from border regions, as well as Punjabis and Urdu speakers and members of banned sectarian and Sunni extremists groups, Najam Sethi, editor of The Daily Times, wrote in a front-page analysis. “Al Qaeda is now as much a Pakistani phenomenon as it is an Arab or foreign element,” he wrote.

Excuse me, but al-Qaeda, the database and perennial boogieman, has always been a “Pakistani phenomenon,” that is with the good grace of the CIA and MI6, with a bit of collaboration from the Mossad and German intelligence.

How long before we are told the U.S. has to send an infusion of soldiers, pronto, the fight the evil al-Qaeda in Pakistan?

Soon. Lest we face the specter of that Muslim atom bomb falling into the hands of al-Qaeda.

Oh, please.

United Nations Propaganda Comic Book Designed to Brainwash Kids

Kurt Nimmo
Truth News
December 30, 2007

It’s a super — as in superhero — way to inculcate the younger generation:

“Marvel Comics and the United Nations are teaming up to create comic books to show superheroes working with the agency to rid the world of conflict and disease,” reports United Press International. “The United Nations and Marvel Comics are working together to develop a comic book set in a fictional war-torn country with superheroes working alongside UNICEF aid workers and U.N peacekeepers.”

No mention of the “war-torn country” this will be based upon, but allow me to offer and example: Yugoslavia. In this example, the United States secretly supported a terrorist group, the so-called Kosovo Liberation Army, and filled their ranks with “al-Qaeda fighters,” delivered by NATO with a bit of help from Germany’s BND.

As engineered, this project helped fuel Yugoslavia’s social and ethnic divisions and create a situation rife for a “peacekeeping” operation. It also helped to have the IMF and bankers working on the destruction of the Yugoslavian economy, ushering in third worldization and blueprinted misery.

Slobodan Milosevic, like Saddam Hussein after him, became a “new Hitler,” with plenty of help from a script-reading corporate media accusing him of directing his army to rape between 25,000 to 100,000 Muslim women.

At the behest of the United Nations and its puppet master, the United States, NATO, in direct violation of its charter, bombed Yugoslavia. “Yugoslavia attacked no NATO member,” writes Michael Parenti. “U.S. leaders discarded international law and diplomacy,” although of course “U.S. diplomacy is something else, as evidenced in its dealings with Vietnam, Nicaragua, Panama, Iraq” and other “rogue nations.”

“The United Nations hopes to bolster its international image damaged by the unilateral diplomatic efforts of some Western countries by teaching children the value of international cooperation,” the UPI continues. “The United Nations said it will distribute the comics to nearly 1 million U.S. children initially, but hopes to reach a broader international audience following the initial release.”

International cooperation, for instance, consisting of the premeditated murder of 500,000 Iraqi children under medieval sanctions and allowing the genocide in Rwanda to unfold with sickening precision. In fact, there is a farrago of nasty stuff the “humanitarian” United Nations has been accused of over the years, although you will not learn about it by way of the corporate media:

“United Nations peacekeeping troops have been involved in a catalogue of crimes and scandals across the globe,” the Scotsman reported in 2002.

During the UN peacekeeping mission to Somalia, it was claimed Canadian, Belgian and Italian soldiers were involved in torture and murder.

An inquiry by the Canadian government of a young Somali man in 1993, found that he had been murdered by its troops and that a senior officer had lied in an attempt to cover up the atrocity. Two soldiers were jailed.

In Belgium, newspapers published photographs of two soldiers holding a Somali boy over a fire. Three paratroopers were prosecuted, but were acquitted by a military tribunal.

An Italian magazine published photographs showing soldiers from the country’s elite paratroop regiment apparently torturing a naked Somali with electrodes and sexually abusing a Somali woman. Two generals who had commanded the Italian force in Somalia resigned.

In January 2000 the United Nations were sued for the first time in its history for alleged complicity in the crime of genocide which drove hundreds of thousands Rwandan Tutsis from their homes.

Two Rwandan women accused the UN, which was meant to be defending their families, of handing them over to their killers or running away.

The families of these women were slaughtered during the 1994 genocide in which 800,000, mostly Tutsi people, were slaughtered by Hutus.

In Bosnia, more than 20 peacekeepers were ejected from the mission for theft and corruption. Nearly four dozen others were sent home after allegedly abusing mental patients at a hospital. Canadian peacekeepers were accused of rape, beatings and sexual abuse of a teenage handicapped girl.

Don’t expect any of this to find its way into a Marvel comic book.

Video: 'The most conclusive evidence' Bhutto was shot

David Edwards and Katie Baker
Raw Story
Monday, December 31, 2007

On Sunday, UK's Channel 4 news broadcasted a new video of the Bhutto assassination which they say "provides the most conclusive evidence yet that Benazir Bhutto was shot."

Although the Pakistani government officially claims that Bhutto died from hitting her head on the sunroof as she ducked into her car, evidence in the video drastically contradicts that account.

The video shows a large crowd swarming around Bhutto's car. A clean-shaven man in sunglasses is visibly watching, concealing a gun; behind him stands the suspected suicide bomber dressed in white. As the video rolls, the man in sunglasses moves closer to Bhutto's car and fires three shots. Directly after, the suicide bomber detonates his device and chaos ensues.

Reporter Jonathan Rugman points out how, as the gunman fires, Bhutto's hair is lifted and her shawl seems to rise as she falls inside her car.

"These images ... apparently [contradict] the official version of events," Rugman asserts.

"As more such images come to light," he says, "they will fuel the anger of protesters both here at the scene of the crime and around the country who feel that they've been lied to by the government and that there's been a deliberate coverup of what amounts to a massive security failure to protect this country's best known politician."

Authorities initially said that Bhutto died from bullet wounds, and a surgeon who treated her said the impact from shrapnel on her skull killed her. But, Rugman points out, no blood was found on the bulletproof car -- and, every other passenger in the car survived. The video clearly shows three policeman to the left of the car, doing nothing to hold back the crowd. Was the government trying to cover-up a security lapse? Those close to the president say that was not the case.

"We do things here [quite differently]," says Senator Tarif Azeem, a friend of President Musharraf, citing Bhutto's want to "be amongst the crowd" as the reason why she stood through the sunroof without much security around her.

Officials have rejected calls for independent foreign inquiry, although they have offered to exhume her body if requested. According to Rugman, the government's actions suggest they may be hiding something.

"[The truth] really matters in a country where scores of people have died in protests against Mrs. Bhutto's death and indeed against the circumstances of Mrs. Bhutto's death," Rugman says, adding that the "great fear" in Pakistan is that the assassination will go unsolved.

This video is from Channel 4 News, broadcast on December 30, 2007.

BBC Censored Benazir Bhutto's Reports that Bin Laden Had Been Murdered

Existentialist Cowboy Blog
Monday, December 31, 2007

When a news organization as venerable as the BBC censors the reportage of a story as important as the assassination of Benzir Bhutto --a highly visible critic of Bush/British policy with regard to the "War on Terrorism" et al --it is fair to ask: who is the BBC protecting? Are they covering up the motive for her murder? Are they protecting the regimes that engineered her assassination?

Here is the original, unedited version in which Bhutto states that Bin Laden had been murdered.

Here is the BBC's Censored version.

Bhutto herself has exposed a motive for her murder. Solving the case is a matter of finding the gunmen whom Hilary Clinton thinks may be found found among Pakistani troops.

CLINTON, Iowa - Hillary Rodham Clinton waded into Pakistan's volatile internal political situation yesterday, raising the possibility the country's military might have assassinated Benazir Bhutto because the killing took place in the garrison city of Rawalpindi.

Clinton's remarks came as Pakistan President Pervez Musharraf's government seemed to reject a call for an independent international investigation of the murder that Clinton and John Edwards proposed on Friday.

During a question-and-answer session at an elementary school here, Clinton offered a detailed prescription for the troubled country, suggesting that the U.S divert aid away from its military to social welfare programs.

And for the second time in as many days, she cast doubt on Musharraf's contention that the suicide bombing that led to the death of the country's most popular opposition leader was masterminded by al-Qaida.

"There are those saying that al-Qaida did it. Others are saying it looked like it was an inside job - remember Rawalpindi is a garrison city," she said.

--Hillary: Pakistan troops might have killed Bhutto
Isn't it interesting that it was Secretary of State Condoleezsa Rice who brokered Bhutto's return to Pakistan when even Bhutto knew that her life would be endangered? I smell the work of an axis of evil: neocons, Bush, and his puppet: Musharraf.

Bhutto herself has exposed the fraudulent nature of the Bush/Blair "war on terrorism". If Bin Laden is dead, as has been reported, then the various tapes that he is alleged to have made are all phony. The war on terrorism itself is a callous, calculated fraud perpetrated by a murderous Bush regime, a murderous Blair regime, a murderous puppet regime of Musharraf.

That's why Bhutto was murdered. She was the woman who knew too much. Bhutto exposed the fact that US policies cause terrorism and she stated the various ways in which groups inside the US and Britain benefited politically and materially from the phony war on phony terrorism, the failed war in Afghanistan, the war crime that is still perpetrated against the people of Iraq. Bhutto posed a threat to the culprits in the Bush regime to include Bush himself. She posed a threat to the kiss ups in Musharraf's regime to include Musharraf and the liars who tried to float the incredible "lone lever" theory. She was murdered. And the BBC has been caught censoring the most important piece of the puzzle. If Osama is dead, the war on terror is a bloody fraud!

Tony Blair converts to Catholicism

Tony Blair converts to Catholicism

Ex-U.K. prime minister formally embraces his wife's faith

The Associated Press

updated 9:24 a.m. ET, Sat., Dec. 22, 2007

LONDON - Tony Blair, who often kept his religious views private while serving as Britain's prime minister, has converted to Catholicism, officials said Saturday.

Blair, who had long been a member of the Church of England, converted to the Catholic faith during a Mass held on Friday night at a chapel in London, the Catholic Church said.

"It can be confirmed that Tony Blair has been received into full communion with the Catholic church by Cardinal Cormac Murphy-O'Connor," the head of the church in England and Wales, the church said in a statement.

"I'm very glad to welcome Tony Blair into the Catholic Church," the statement quoted Murphy-O'Connor as saying.

"For a long time he's been a regular worshipper at Mass with his family and in recent months he's been following a program of formation for his reception into full communion. Our prayers are with him, his family and his wife at this joyful moment in their journey of faith together," Murphy-O'Connor said.

Feared being a 'nutter'
There had long been speculation that Blair planned to convert to Catholicism. His wife, Cherie, is Roman Catholic, the couple's children have attended Catholic schools, and Blair had regularly attended Catholic, rather than Anglican, services.

Blair, who is now a Middle East peace envoy, met Pope Benedict XVI at the Vatican in June.

The former prime minister told the BBC this year that he had avoided talking about his religious views while in office for about 10 years for fear of being labeled "a nutter."

In England's last census, 72 percent of people identified themselves as Christian. Many are Anglicans affiliated with the Church of England, which was created by royal proclamation during the 16th century after King Henry VIII — who married six times — broke ties with the Roman Catholic Church in a dispute over divorce.

The Church of England has said that less than 10 percent of its members are regular churchgoers.

Britons often are surprised by people who openly and fervently discuss their religious views, and the degree to which faiths such as evangelicalism can influence U.S. politics.

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

URL: http://www.msnbc.msn.com/id/22368586/