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Friday, October 26, 2007

Free Internet Press Newsletter - Friday October 26 2007 - (813)

Friday October 26 2007 edition
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U.S. Congress Warns Of Mortgage Catastrophe
2007-10-26 01:33:37
"We are headed for billions in lost wealth."

America's sub-prime mortgage crisis is likely to claim the homes of two million families according to an influential congressional committee which warned Thursday that foreclosures pose a grave threat to the U.S. economy.

A "tidal wave" of repossessions could cost a total of $71 billion (£34.61 billion) for homeowners unable to hang on to their properties, plus a knock-on downward effect of $32 billion on the value of neighboring homes, the joint economic committee of Congress predicted.

The figures far outstrip the White House's estimate of 500,000 foreclosures. They are likely to heighten concern that slumping house prices may shatter consumer confidence, causing a drop in high-street spending and pushing America into recession.

The committee's chairman, Senator Charles Schumer (D-New York), said: "From New York to California, we are headed for billions in lost wealth, property values and tax revenues. The current tidal wave of foreclosures will soon turn into a tsunami of losses and debt for families and communities."

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Supply Worries Push Oil Above $90, Stocks End Flat
2007-10-26 01:33:02

Oil prices closed above the symbolic level of $90 a barrel Thursday, pushed up by a host of concerns, from tensions in the Middle East to worries about supply.

Crude oil futures jumped $3.36, to close at $90.46 a barrel, exceeding the highs reached last week, though still shy of the inflation-adjusted record price of $101.70 set in April 1980.

Concern over supplies helped drive the price increase after the Energy Department reported two days ago that crude oil stockpiles fell last week. Additionally, traders reacted to reports Thursday that oil shipments from the Middle East were expected to grow more slowly than expected.

Hostilities between Turkey and Iraqi Kurds contributed to the sudden spike, along with a decision by the United States to impose new sanctions against Iran. Prices were also pushed up by expectations that the Federal Reserve would cut its benchmark interest rate next week, which could strengthen American economic growth and therefore contribute to rising oil demand, said analysts.

“It’s almost like a perfect storm,” said Fadel Gheit, managing director of oil and gas research at Oppenheimer Funds.

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BP Accepts Blame For U.S. Disasters, Agrees To $373 Million In Fines
2007-10-26 01:32:26
BP pleads guilty to Texas explosion felony, Alaska oil leaks and market rigging.

The oil company BP Thursday accepted blame for failures to protect employees, the environment and consumers as it agreed to hand over a total of $373 million to settle a string of criminal investigations into its conduct across America.

In an apparent effort to put lapses under the leadership of Lord Browne behind it, BP struck a broad deal with the U.S. Department of Justice to address the catastrophic 2005 explosion at its Texas City refinery, last year's oil leaks from an Alaskan pipeline and a pattern of manipulation of propane prices by BP's commodity traders.

In Washington, D.C., officials from six U.S. law enforcement bodies gathered to announce the company's guilty pleas.

The acting attorney general, Peter Keisler, said the deal demonstrated the U.S. government's commitment to enforce laws to protect the integrity of both financial markets and the environment.

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U.N.: Human Race Could Be Eliminated Unless Climate Change Issues Are Addressed
2007-10-25 17:11:19

A failure to address major problems faced by the planet including climate change, extinction of species and unsustainable development could threaten the survival of humanity, a United Nations report warned Thursday.

The "Global Environment Outlook" study says there are "persistent" issues such as pressure on resources, decline of fish stocks and loss of available fresh water and fertile land which are not being dealt with.

The United Nations Environment Program says that major threats to the planet such as climate change, the rate of extinction of species, and the challenge of feeding a growing population are among the many that remain unresolved, and all of them put humanity at risk.

The warning comes in UNEP's "Global Environment Outlook": environment for development (GEO-4) report published 20 years after the World Commission on Environment and Development (the Brundtland Commission) produced its seminal report, "Our Common Future".

GEO-4, the latest in UNEP's series of flagship reports, assesses the current state of the global atmosphere, land, water and biodiversity, describes the changes since 1987, and identifies priorities for action. GEO-4 is the most comprehensive U.N. report on the environment, prepared by about 390 experts and reviewed by more than 1,000 others across the world.

It salutes the world's progress in tackling some relatively straightforward problems, with the environment now much closer to mainstream politics everywhere but, despite these advances, there remain the harder-to-manage issues, the "persistent" problems. Here, GEO-4 says: "There are no major issues raised in 'Our Common Future' for which the foreseeable trends are favorable."

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Firefighters Continue To Make Progress On California Fires
2007-10-25 15:52:08
Thousands of homes remain imperiled, two burned bodies found near San Diego.

Firefighters continued making progress today in taming the wildfires that devastated Southern California this week, but thousands of homes remained imperiled and officials said they had found two burned bodies in a home outside San Diego.

President Bush was due to tour damaged areas today, as firefighting efforts finally received a helping hand from the weather. The Santa Ana winds that helped fuel and spread the fires began to abate, and were expected to die off today.

The discovery of the two bodies in San Diego County brings to eight the number of people whose deaths have been linked to the blaze, five of whom were senior citizens who died during massive evacuation efforts earlier in the week.

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U.S. House Committee Critical Of Iraq Contractors
2007-10-25 15:51:30
U.S. Rep. Henry Waxman chairman of the House Government Oversight Committee, said Thursday that Iraqi Prime Minister Nouri al-Maliki has issued an order requiring his approval of any corruption investigations of himself or senior ministry officials.

Waxman, D-California, said the order essentially grants immunity to al-Maliki and his ministry at a time when fraud and abuse is rampant and hurting reconstruction efforts.

"These are not unfounded allegations," said Waxman. "This is Nouri al-Maliki's edict that no one will be referred to court unless he approves it."

In testimony before the panel, Secretary of State Condoleezza Rice said she was not aware of the specific order, but that the U.S. would oppose any policy shielding senior officials from criminal prosecution or investigation.

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Reports Suggest Broader Losses From U.S. Mortgages
2007-10-25 02:48:15
The loss in total real estate wealth is expected to range from $2 trillion to $4 trillion, depending on how far home prices fall, according to several economists.

Every time economists and Wall Street executives think they have acknowledged the full extent of the losses from the meltdown in real estate mortgages, more bad news turns up.

Merrill Lynch said Wednesday that it would take a charge for mortgage-related securities on its books that is $3 billion more than the $5 billion it expected just two weeks ago. And a report from the National Association of Realtors showed that sales of existing homes in September fell twice as much as economists had expected, to their lowest level in nearly 10 years.

Stocks fell sharply early Wednesday on the news, with the Standard & Poor's 500-stock index falling 1.8 percent before recovering in the afternoon. Investors also bid up Treasuries as they sought the safety of government-backed debt.

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Bush Administration Targets New Sanctions At Iran's Military
2007-10-25 02:47:39

The Bush administration plans to roll out an unprecedented package of unilateral sanctions against Iran Thursday, including the long-awaited designations of its Revolutionary Guard Corps as a proliferator of weapons of mass destruction and of the elite Quds Force as a supporter of terrorism, according to senior administration officials.

The package, scheduled to be announced jointly by Secretary of State Condoleezza Rice and Treasury Secretary Henry M. Paulson, Jr., marks the first time that the United States has tried to isolate or punish another country's military. It is the broadest set of punitive measures imposed on Tehran since the 1979 takeover of the U.S. Embassy, said the officials.

"This is a very powerful set of measures designed to send a message to Iran that there will be a cost to what they do. We decided on them because we have seen no change in Iranian behavior," said a senior administration official who spoke on the condition of anonymity because the measures have not yet been announced. "Our diplomacy needs to be stronger and more effective."

The move caps a year of growing U.S. pressure on Tehran, including billions of dollars in arms sales to Persian Gulf allies and Israel,interception of Iranian arms shipments in Iraq and Afghanistan, detention of Iranian agents in Iraq, and pressure on the United Nations and European allies to increase Iran's isolation. The dramatic U.S. steps underscore the escalating tensions between the United States and Iran.

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Experts: U.S. Military Strike On Iran Would Have Dire Consequences On Oil Market
2007-10-26 01:33:23
A U.S. military strike against Iran would have dire consequences in petroleum markets, say a variety of oil industry experts, many of whom think the prospect of pandemonium in those markets makes U.S. military action unlikely despite escalating economic sanctions imposed by the Bush administration.

The small amount of excess oil production capacity worldwide would provide an insufficient cushion if armed conflict disrupted supplies, oil experts say, and petroleum prices would skyrocket. Moreover, a wounded or angry Iran could easily retaliate against oil facilities from southern Iraq to the Strait of Hormuz.

Oil prices closed at a record $90.46 a barrel in New York Thursday as the Bush administration tightened U.S. financial sanctions on Iran over its alleged support for terrorism and issued new warnings about Tehran's nuclear program. Tension between Turkey and Kurds in northern Iraq, and fresh doubts about OPEC output levels also helped drive the price of oil up $3.36 a barrel, or 3.8 percent.

Although the Bush administration is not openly threatening a military strike against Iran, the president recently spoke of needing to avoid "World War III," and Vice President Cheney said that the United States would "not stand by" while Iran continued its nuclear program. "We will not allow Iran to have a nuclear weapon," he said.

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Sluggish U.S. Economy Keeps Dollar Vulnerable
2007-10-26 01:32:47
The dollar was under pressure on the foreign exchanges Thursday as fresh evidence of the weakness of the U.S. economy intensified speculation about a cut in interest rates from the Federal Reserve next week.

Data for durable goods orders, weekly jobless claims and sales of new homes all increased expectation on Wall Street that the U.S. central bank would ignore the plight of the greenback and take steps to boost the economy.

The dollar was Thursday within a whisker of its record low against the euro and trading at around $2.05 against the British pound.

A sharp drop in Pentagon orders for new planes was the main factor behind the 1.7% drop in durable goods orders last month, but analysts pointed out that even when volatile goods such as military hardware and aircraft were stripped out orders were 5.6% lower than a year ago.

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U.S. Nuclear Submarine Commander Removed
2007-10-26 01:32:06
The commanding officer of the nuclear-powered submarine USS Hampton was relieved of his duty Thursday because of a loss of confidence in his leadership, said the Navy.

Cmdr. Michael B. Portland was relieved of duty after a U.S. Navy investigation found the ship failed to do daily safety checks on its nuclear reactor for a month and falsified records to cover up the omission.

''His oversight of the crew's performance did not identify these issues'' on his own, Navy Lt. Alli Myrick, a public affairs officer, told the Associated Press. Portland's commanders identified the problems during a routine review, she said.

It appears from a preliminary investigation on the Hampton that sailors in Submarine Squadron 11 had skipped the required analysis of the chemical and radiological properties of the submarine's reactor for more than a month, even though a daily check is required.

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U.S. Sen. Boxer Seeks Answers On Edited Climate Testimony
2007-10-25 15:52:18
White House edited out climate warnings.

Bush administration officials acknowledged Wednesday that they heavily edited testimony on global warming, delivered to Congress on Tuesday by the director of the Centers for Disease Control and Prevention, after the president's top science adviser and other officials questioned its scientific basis.

Senate Democrats say they want to investigate the circumstances involved in the editing of CDC Director Julie L. Gerberding's written testimony to the Senate Environment and Public Works Committee on "climate change and public health." Gerberding testimony shrank from 12 pages to six after it was reviewed by the Office of Management and Budget. 

The OMB removed several sections of the testimony that detailed how global warming would affect Americans, according to White House spokeswoman Dana Perino, because John H. Marburger III, who directs the Office of Science and Technology Policy, and his staff questioned whether Gerberding's statements matched those released this year by the U.N. Intergovernmental Panel on Climate Change. 

"As I understand it, in the draft there was broad characterizations about climate change science that didn't align with the IPCC," Perino told reporters Wednesday. "When you try to summarize what is a very complicated issue and you have many different experts who have a lot of opinions, and you get testimony less than 24 hours before it's going to be given, you - scientists across the administration were taking a look at it, and there were a decision that she would focus where she is an expert, which is on CDC."

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U.S. Economy Shows New Signs Of Stress
2007-10-25 15:51:55
Merrill Lynch loss, home-sales data exposed weaknesses.

Many of the nation's biggest companies have cut back their sales expectations in recent days and the financial system is showing signs of new stress, evidence that the U.S. economy is more threatened by the sharp downturn in housing than it appeared to be only a few weeks ago.

The investment firm Merrill Lynch Wednesday reported its first quarterly loss in six years and said the value of assets on its books had fallen $7.9 billion. The National Association of Realtors reported that the number of existing homes sold in September was the lowest in the eight years the data have been tracked.

The developments were the latest to undermine investors' confidence that the August financial crisis has passed since the stock market reached an all-time high Oct. 9. Stocks fell in early trading Wednesday, with the Dow Jones industrial average down about 200 points before recovering most of its loss by the end of the session.

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Waxman's Oversight Puts Pressure On Bush Administration
2007-10-25 02:48:32

For months, Rep. Henry A. Waxman, chairman of the House oversight committee, has been threatening, subpoenaing and just plain badgering Secretary of State Condoleezza Rice to come before his panel to answer questions about the run-up to the Iraq war, corruption and State Department contracting.

Thursday, Rice will finally appear, but Waxman (D-California) has not spent the week on a victory lap. He has found time to produce evidence accusing State Department security contractor Blackwater Worldwide of tax evasion, to fire off a letter to Rice demanding information about alleged mismanagement of a $1 billion contract to train Iraqi police, and to hold a hearing on uranium poisoning on Navajo land.

Waxman has become the Bush administration's worst nightmare: a Democrat in the majority with subpoena power and the inclination to overturn rocks but, in Waxman, the White House also faces an indefatigable capital veteran - with a staff renowned for its depth and experience - who has been waiting for this for 14 years.

These days, the 16-term representative is always ready with a hearing, a fresh crop of internal administration e-mails or a new explosive report. And he has more than two dozen investigations underway, on such issues as the politicization of the entire federal government, formaldehyde in Federal Emergency Management Agency (FEMA) trailers, global warming, and safety concerns about the diabetes drug Avandia.

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$38 Million Computerized Accounting System In Iraq Is Useless
2007-10-25 02:48:02

A $38 million U.S. effort to create a computerized accounting system for the Iraqi government has been suspended because the Ministry of Finance there has continued to use a paper system, according to the latest report of Stuart W. Bowen, Jr., the special inspector general for Iraq reconstruction.

"Nobody noticed" when the computerized Iraq Financial Management Information System was inoperable for a month, and no one relies on it to produce reports, Bowen said in a report released by his office Wednesday.

Bowen's statement follows a disclosure earlier this month by the Government Accountability Office that $8 million was spent to train about 500 Iraqi government employees in various ministries to use the computerized system, but the Finance Ministry refused to drop its paper spreadsheets.

Installation of the new accounting system was halted last May when a British contractor and his security team were kidnapped from the Ministry of Finance office, located outside the protected Green Zone where many international officials live and work.

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18 Killed In Mexico Oil Rig Accident
2007-10-25 02:46:47
At least 18 oil workers were killed when a drilling rig hit an oil platform in stormy weather, spilling gas and oil into the Gulf of Mexico, the state-owned oil company said Wednesday. Seven workers were still missing.

Rescuers have pulled 61 oil workers to safety from storm-tossed waters but have yet to control the oil leak, Mexico's oil monopoly Petroleos Mexicanos, or Pemex, said in a news release.

One survivor, Eder Ortega Flores, 25, told the Televisa television network that workers abandoned the rig amid 25-foot waves only after leaking gas rose to unbearable levels and the supply of air from emergency breathing devices ran out. Once in the water, the waves battered the workers' orange-colored, covered life rafts.

"The life rafts didn't hold up under the force of the waves," he said. "They broke up, at least the one I was on, little by little, until the raft sank, and all my co-workers went into the sea."

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