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Saturday, March 08, 2008

Free Internet Press Newsletter - Saturday March 8 2008 - (813)

Saturday March 8 2008 edition
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Federal Reserve To Make $200 Billion Available To Lenders
2008-03-08 01:20:27

The U.S. Federal Reserve took strong action Friday to restore order to frazzled lending markets while a new report showing unexpected job losses underscored the toll that credit markets are taking on the economy.

The Federal Reserve said it will make $200 billion available to financial institutions in an effort to ease a crisis of confidence that is making it harder for families and businesses to borrow money.

The world's financial plumbing is so clogged that the central bank sees a need for new steps to clean it out to prevent severe damage. Mounting panic in the credit markets is making it harder for Americans to get mortgages and is increasing the rates they must pay on credit cards and auto loans. Even solid businesses are finding it difficult to raise money to expand.

The nation shed 63,000 jobs in February, the Labor Department reported, the second straight month of losses and the worst monthly decline since March 2003. The construction and manufacturing industries continued to shed positions, as they have for months, but the decline broadened to include big job cuts by retailers and temporary help services.


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Commentary: The Peak Oil Crisis: Polity On Trial
2008-03-08 01:19:54
Intellpuke: The following commentary is written by Tom Whipple and first appeared on the Fall Church News-Press' website edition for Thursday, March 6, 2008.

The coming storm will bring one of the most severe tests of the cohesiveness of governments and peoples that the world has known for a long time.

Over the last century, the industrial societies have built extremely complex and specialized civilizations. A simple example is that here in America only two percent of us now live on farms where they presumably are capable of readily producing their own food. Only 0.3 percent of Americans now claim to be farmers. The remaining 99+ percent of us are dependent on oil-based food processing, storage, and transport for our daily sustenance.

The fate of most of the world's peoples is going to depend on how well we, as societies - here and around the world - get our collective acts together over the coming decades and organize to survive the transition to a post-oil world.

Currently the body politic in America is paralyzed by a rough political balance between those clinging to 20th or perhaps even 19th century concerns and those who, however vaguely, understand that things must change. So far the U.S. Congress has done little to prepare for the massive changes to our economy and lifestyles that are now only a few short years away.

Some government money has been spent researching for improved sources of renewable energy, but the centerpiece of recent energy bills - ethanol and higher mpg cars - are either absurd or too little too late. The current effort to reduce a billion or two in tax breaks during a era of $100 billion oil company profits likely will founder at the hands of lobbyists or a Presidential veto. Very few among the members of Congress and those that send them there as yet have a clue as to what is about to befall us - but this too will change.


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U.S. Army: Psychiatrists Needed On Warfronts
2008-03-08 01:18:43
U.S. troops on the battlefield found it harder to get the mental health care they needed last year, when violence rose in Afghanistan and new tactics pushed soldiers in Iraq farther from their operating bases.

A report the Army released Thursday recommends sending civilian psychiatrists to the warfront, supplementing members of the uniformed mental health corps.

Surveying a force strained by its seventh year of war, officials found that more than one in four soldiers on repeat tours of duty screened positive for anxiety, depression and other mental health problems. That was comparable to the previous year.

The report found more troops reported marital problems, an increased suicide rate, higher morale in Iraq, but a greater percentage of depression among soldiers in Afghanistan.


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World Markets See-Saw As Dollar Hits Record Low And Oil Prices Soar
2008-03-08 01:17:37

World markets experienced another volatile day Friday, with oil prices hitting a record high and the dollar a record low as gloomy U.S. jobs data prompted fears that the world's largest economy had finally tipped into recession.

World stock and bond prices see-sawed, following a week of extreme uncertainty as investors saw the U.S. Federal Reserve step into money markets in a bid to try to prevent the sub-prime mortgage crisis sparking off a new phase in the global credit turmoil.

Oil prices, which had been setting new highs through the week, jumped to $106.31 a barrel during the day in the U.S., while London Brent crude surged to $103.98, threatening to push petrol prices at the pumps in Britain to further highs.

That will complicate the task of the chancellor, Alistair Darling, as he prepares next Wednesday's budget against a background of record petrol prices.


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Latin American Crisis Resolved
2008-03-08 01:15:17
The presidents of Colombia, Ecuador and Venezuela on Friday agreed to end a bitter standoff that had resulted in troop deployments, a downturn in trade and a rupture in diplomatic relations.

The crisis began after Colombia bombed a rebel camp last Saturday just inside Ecuador, killing 24 guerrillas, including Luis Edgar Devia, a top commander. The strike marked the first time the army had killed a member of the directorate of the Revolutionary Armed Forces of Colombia, or FARC, a guerrilla group that has been fighting here for 44 years.

Colombian President Alvaro Uribe had come under criticism from various Latin American governments for the incursion, but at a regional summit in the Dominican Republic on Friday he heartily shook hands with Ecuadoran President Rafael Correa, Venezuelan President Hugo Chavez and Nicaraguan President Daniel Ortega. All three of those nations had broken relations with Colombia over the incident.

The resolution of the crisis, at a meeting of the 20-nation Rio Group, came in the form of a declaration that noted Uribe had apologized for the raid and that he promised never to violate another nation's border. "With the apology and the promise of never again violating a brother country, we have overcome this very grave crisis," said Correa, in comments that were broadcast live across much of Latin America.


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Congressmen Question Mortgage CEOs About High Pay
2008-03-07 16:18:50
Lawmakers aimed their sites at three corporate executives today as they questioned how the CEOs managed to take home hundreds of millions of dollars in compensation while their companies were taking a financial nosedive due to the subprime mortgage crisis.

"It seems that CEOs hit the lottery when their companies collapse," House Oversight and Government Reform Committee Chairman Henry Waxman, D-California, said at the opening of the hearing. "Any reasonable relation between their compensation and the interests of their shareholders appears to have broken down."

Appearing before the panel were Angelo Mozilo, of Countrywide Financial Corp., the nation's largest mortgage lender; Stanley O'Neal, formerly of Merrill Lynch & Co., and Charles Prince, formerly of Citigroup Inc. All three companies have been major losers in the mortgage crisis.

Waxman noted that Mozilo received more than $120 million in compensation and sales of Countrywide stock last year while that company recorded losses of $1.6 billion. Merrill Lynch lost $10 billion in 2007, but O'Neal got a $161 million retirement package.
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U.S. Troops Losing Hearing
2008-03-07 16:18:25
U.S. Soldiers and Marines caught in roadside bombings and firefights in Iraq and Afghanistan are coming home in epidemic numbers with permanent hearing loss and ringing in their ears, prompting the military to redouble its efforts to protect the troops from noise.

Hearing damage is the No. 1 disability in the war on terror, according to the Department of Veterans Affairs, and some experts say the true toll could take decades to become clear. Nearly 70,000 of the more than 1.3 million troops who have served in the two war zones are collecting disability for tinnitus, a potentially debilitating ringing in the ears, and more than 58,000 are on disability for hearing loss, said the V.A.

"The numbers are staggering," said Theresa Schulz, a former audiologist with the Air Force, past president of the National Hearing Conservation Association and author of a 2004 report titled "Troops Return With Alarming Rates of Hearing Loss."

One major explanation given is the insurgency's use of a fearsome weapon the Pentagon did not fully anticipate: powerful roadside bombs. Their blasts cause violent changes in air pressure that can rupture the eardrum and break bones inside the ear.
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U.S. Economy Lost 63,000 Jobs In February
2008-03-07 16:17:58

The U.S. economy shed 63,000 jobs in February, the government said on Friday, the fastest falloff in five years and the strongest evidence yet that the nation is headed toward - or may already be in - a recession.

Manufacturers and construction companies, reeling from the worst housing slump in decades, led the declines in payrolls. But the losses were spread across a broad range of businesses - including department stores, offices and retail outlets - putting increased pressure on consumers’ pocketbooks.

The unexpected decline raised anticipation on Wall Street that the Federal Reserve will lower interest rates again later this month, perhaps by as much as a full percentage point, as the central bank scrambles to stave off a steep economic slowdown.

“I haven’t seen a job report this recessionary since the last recession,” said Jared Bernstein, an economist at the Economic Policy Institute in Washington, D.C. “This is a picture of a labor market becoming clearly infected by the contagion from the rest of the economy.”

Stock markets dropped after the opening bell, then recovered before heading down again. At 2:30 p.m., the Dow Jones industrials were down nearly 200 points, or 1.6 percent, as Wall Street weighed the economic news.


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U.S. Payrolls Fall Again, Raising Recession Fears
2008-03-07 16:17:07
Employers unexpectedly cut jobs in February at the steepest rate in nearly five years, a second straight month of employment losses that heightened fears the world's largest economy has skidded into recession.

"The question appears no longer to be are we going into a recession but how long and deep it will be," said economist Joel Naroff of Naroff Economic Advisors Inc in Holland, Pennsylvania.

The Labor Department on Friday said 63,000 nonfarm jobs were eliminated on top of an upwardly revised loss of 22,000 in January, sharply contrary to Wall Street economists' forecasts that 25,000 positions would be added in February.

The department also halved the number added in December to 41,000 from the 82,000 estimated a month ago, in a move that underlined the steady deterioration in the U.S. labor market.


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NASA Wary Of Relying On Russia
2008-03-07 03:46:54
Moscow soon to be lone carrier of astronauts to space station.

Friday night, a European spacecraft is scheduled to blast off from French Guiana on its maiden voyage to the international space station (ISS), giving NASA and the world a new way to reach the orbiting laboratory.

For NASA, however, the launch of the Jule Verne Automated Transfer Vehicle (ATV) also highlights a stark reality: In 2 1/2 years, just as the station gets fully assembled, the United States will no longer have any spacecraft of its own capable of carrying astronauts and cargo to the station, in which roughly $100 billion is being invested. The three space shuttles will be retired by then, because of their high cost and questionable safety, and NASA will have nothing ready to replace them until 2015 at the earliest.

For five years or more, the United States will be dependent on the technology of others to reach the station, which American taxpayers largely paid for. To complicate things further, the only nation now capable of flying humans to the station is Russia, giving it a strong bargaining position to decide what it wants to charge for the flights at a time when U.S.-Russian relations are becoming increasingly testy.

In addition, some fear the price will be paid not only in billions of dollars but also in lost American prestige and lost leverage on the Russians when it comes to issues such as aiding Iran with its nuclear program.


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Shares Tumble As Credit Worries Worsen
2008-03-07 03:46:21

The decline in the market that started Thursday morning in Europe and accelerated in New York hit the Asian markets hard in early trading Friday.

Tokyo was down 3.30 percent at noon, reaching a six-week low, while markets in Hong Kong and Sydney were trading down more than 3 percent, setting the stage for what was shaping up to be a difficult day across Asia. Other markets, including Taiwan and Shanghai, were all opening lower.

The declines came amid renewed anxiety about the availability of bank loans - and fears that the Federal Reserve in Washington may be unable to curb the credit slump.

In New York trading, the broad Standard & Poor’s 500-stock index dropped 2.2 percent, or 29.36 points, reaching its lowest close since September 2006. The index, which closed at 1,304.34, is off more than 16 percent from its peak last fall.


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GAO Seeks Authority Review Of U.S. Spy Agencies
2008-03-07 03:44:29
As he leaves his post as the nation's top auditor, David M. Walker is again asking Congress to give the Government Accountability Office (GAO) the power to review the finances of the CIA and other intelligence agencies.

Walker, whose 10-year term as comptroller general concludes Wednesday, is supporting legislation that would give the GAO access to the last major area of the federal government not subject to its audits and investigations.

With some support on Capitol Hill, Walker said he is fighting powerful legislative patrons of intelligence agencies, especially the CIA, who have resisted examinations of how taxpayer dollars are spent.

"Everybody's for accountability in Washington until they're the ones subjected to it," Walker said in an interview. "There are a lot of forces that are vested in the status quo."


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U.S. Iraq Envoy To Leave Soon After Top General
2008-03-07 03:43:51

U.S. Ambassador to Iraq Ryan C. Crocker plans to leave Baghdad as early as January, leaving the most critical U.S. diplomatic post not long after the top military commander, Gen. David H. Petraeus, is expected to rotate out of Iraq. 

Crocker, 58, plans to retire from the foreign service. He has been telling colleagues that he wants to leave by mid-January, before a new administration comes in, after almost 22 months in Iraq.

"I am prepared to remain in Baghdad until early 2009, when I intend to retire," Crocker said in an e-mail to the Washington Post. "That will make two years in Iraq and 37 years in the Foreign Service - it's enough!"

Iraq experts are concerned about the near-simultaneous departure of two men who have made the most progress during the checkered five-year U.S. presence in Iraq. "To have changes all occur at the same time is not healthy, especially when dealing with a place like Iraq," said Edward S. Walker, a former assistant secretary of state for Near Eastern affairs under whom Crocker served.


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Fired U.S. Attorney Says Colleague Told Him Politics Was Behind His Ouster
2008-03-08 01:20:11
A longtime protege of President Bush told former U.S. Attorney David Iglesias that he was fired for political reasons and that he shouldn't fight his ouster, Iglesias says in a new book.

"This is political," Iglesias recalls Texas U.S. Attorney Johnny Sutton telling him shortly after he was ousted. "If I were you, I'd just go quietly."

Iglesias, a former U.S. attorney in New Mexico, is one of nine federal prosecutors whose firings triggered a yearlong controversy at the Justice Department and led to the resignations of Attorney General Alberto Gonzales and 11 other Justice Department officials.

Iglesias cites the exchange with Sutton in his upcoming book, "In Justice," as further evidence that he was forced out because Republicans were displeased with his refusal to prosecute Democrats.

"I couldn't believe what I was hearing: a U.S. attorney all but admitting that a colleague was being hung out to dry for reasons that had nothing to do with performance or professionalism," he wrote in a draft of the book, which McClatchy obtained.


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Commentary: The Other Side Of The McCain Lobbyist Scandal
2008-03-08 01:19:34
Intellpuke: The following commentary was written by Jerold M. Starr, author of "Air Wars: The Fight To Reclaim Public Broadcasting", and first appeared on The Nation's website edition for Tuesday, March 4, 2008.

I don't know whether Senator John McCain had sex with lobbyist Vickie Iseman, but I do know, first hand, that he broke the rules while doing the bidding of media mogul Lowell "Bud" Paxson, a major contributor to McCain's 2000 presidential campaign. McCain's staff lied it about it then and they are inventing new lies even now.

I was the leader of the campaign opposing the transfer of Pittsburgh's second public television station (Channel 16), along with $17.5 million, to a conservative televangelist ministry so that Paxson could expand his network into the Pittsburgh market. In fact, I wrote a well-reviewed book in 2000 about the entire case, "Air Wars: The Fight to Reclaim Public Broadcasting".

Since this man could well be the next President of the United States, his character should be of concern to all people of this country.

In 1994, local media revealed that Pittsburgh's public station WQED had piled up millions of dollars of debt due to obvious malfeasance and, according to our informants, possible embezzlement. By 1996, new CEO George Miles' solution to this problem was to commercialize and sell off Channel 16. Along with activist Linda Wambaugh, I organized the Save Pittsburgh Public Television campaign to advocate a solution that would have both addressed the debt and saved the station.


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Lawyer Missing After Criticizing China's Human Rights Record
2008-03-08 01:18:02

A prominent human rights lawyer is missing, presumed detained by the authorities, amid a crackdown on dissent ahead of the Beijing Olympics.

Teng Biao - who has defended AIDS activists, Falun Gong practitioners and farmers fighting for their land - was last seen on Thursday, being bundled into a black car outside his home in Beijing.

He had recently been warned by police that he would be detained unless he stopped talking to the foreign media and writing about human rights abuses in the runup to the Olympics.

Shortly before he went missing, Teng told the Guardian that his passport had been seized, his phone bugged and his emails checked by the authorities.

He was warned that he also faced getting fired from his job as a lecturer at the China University of Political Science and Law and risked detention.


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'Worst Storm Of Winter' To Hit U.K. This Weekend
2008-03-08 01:15:32

People are being warned to stay indoors Sunday night and avoid unnecessary journeys, with winds of up to 80 mph expected to tear through parts of the U.K.

Forecasters warned of coastal flooding as spring tides coincide with what could be the strongest storm of the winter.

Wales and the south of England are expected to bear the brunt of the storm-force winds tomorrow night, but other parts of the U.K. may also be affected, with winds up to 50 mph.

A band of exceptionally low pressure was due to bring heavy rain and severe gales across the country, said Meteogroup U.K.


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Whaling Protester Says He Was 'Shot' By Japanese Coast Guard
2008-03-08 01:15:00

The leader of an anti-whaling environmental group claimed Friday that he had been shot by Japanese coastguard officers while on his ship in the Southern Ocean and had survived only because he was wearing a protective vest.

Paul Watson, captain of the Sea Shepherd vessel Steve Irwin, claimed a bullet struck him above the heart and that he had video footage of the ship's doctor removing it from his protective vest. Two other crew members were injured, the marine conservation group said. One injured his hip as he tried to dodge incoming "flash grenades", and another received bruises to the back when one of the grenades exploded behind him.

"I felt this impact on my chest," Watson told Australian radio. "I found a bullet buried in the Kevlar vest that I wear. It bruised my shoulder but it would have hit my heart if I didn't have the vest."

Japanese officials said no shots had been fired. Tomohiko Taniguchi, a foreign ministry spokesman, said the mother ship, the Nisshin Maru, had warned Watson and his crew that it would retaliate with flash grenades unless they stopped throwing "stink bombs" containing butyric acid.

"The Nisshin Maru was attacked four times today," Taniguchi told the Guardian. "After the second wave of attacks Sea Shepherd was warned that if they threw more acid then the whaling ship would retaliate. But no bullets were fired."


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CDC Officials Try To Calm Fears About Vaccine Link To Autism
2008-03-07 16:18:40
Officials with the federal Centers for Disease Control and Prevention scrambled Thursday to reassure the public that childhood vaccines were safe after news spread that an agency had acknowledged a link between a child's autism and the shots she received as a toddler.

"Our message to parents is that immunization is life- saving," Dr. Julie L. Gerberding, the CDC's director, said at a hastily convened conference call with reporters. "There's nothing changed. ... This is proven to save lives and is an essential component of protection for children across America and around the world."

Over the years, despite a small and vocal group of parents who insist otherwise, studies consistently have shown no credible link between vaccines and autism, but pediatricians who have long reassured suspicious parents braced for another cascade of questions.

On Thursday, the parents of Hannah Poling, now 9, took their case public, sharing news that federal health officials had conceded that a series of vaccines she got when she was 19 months old exacerbated an underlying condition and ultimately led to her diagnosis of autism.

That concession - thought to be the first of its kind - makes her eligible for money from a federal vaccine-injury fund.
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Carlyle's Lenders Liquidating Securities
2008-03-07 16:18:11
Carlyle Capital, the investment fund linked to the private equity firm Carlyle Group, said Friday that it was “considering all available options” after it received further margin calls, prompting some analysts to warn that more funds could struggle to meet increasingly tighter margin requirements.

The fund, which invests mostly in triple-A rated mortgage debt and whose investors include Carlyle Group managers, issued the statement after some of its lenders called in loans and then liquidated the collateral. Shares in the fund were suspended from trading on the Amsterdam stock exchange on Friday after dropping 58 percent the day before.

Increasing volatility and concern among banks about leverage levels, combined with fear that the global credit crisis could worsen, mean some lenders are asking for more securities as they question the value of even the highest-rated securities. Peloton Partners, a London-based hedge fund set up by some former Goldman Sachs partners, was forced last week to liquidate a $1.8 billion fund that invested in top-rated debt. The fixed-income fund of Kohlberg Kravis Roberts & Companywas in talks with lenders last month about delaying some debt repayments.

“This phase has been driven by liquidation, and it raises the question, are others vulnerable, too?” said Vivek Tawadey, a credit analyst at BNP Paribas in London.

The Carlyle fund, which invested about $22 billion in mortgage debt issued by Fannie Mae and Freddie Mac, said on Thursday that it had missed four of seven margin calls worth a total of $37 million and said it expected to receive at least one more default notice.


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Stocks Fall Following Jobs Report
2008-03-07 16:17:46
Stocks tumbled for a second consecutive session Friday after the government's February jobs report revealed employers slashed payrolls last month, compounding fears that the U.S. economy is succumbing to recession. The Dow Jones industrial average fell about 100 points, bringing its two-day slide to more than 300, but the index was fluctuating in late trading.

The decline in the three major stock indexes came despite the Federal Reserve's announcement that it would take steps to aid the credit markets.

The Labor Department's report that employers cut jobs by 63,000 last month - the most since March 2003 - unnerved investors worried about the health of the economy and who had been expecting a 25,000 gain in jobs. While the unemployment rate fell to 4.8 percent, the decline reflects people leaving the labor force.

The payroll numbers arrived minutes after the Federal Reserve announced it would take fresh steps to ease credit troubles, including boosting the amount of money it will auction to banks.


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Republican Campaign Arm Is Missing Cash
2008-03-07 03:47:07
FBI investigating treasurer fired over lack of auditing.

Authorities investigating possible fraud by a longtime Republican operative have determined that the House Republican  campaign committee has lost a substantial sum of money, and several Republican lawmakers believe funds were pilfered from their campaign accounts as well, law enforcement and Capitol Hill sources said Thursday.

The National Republican Congressional Committee (NRCC), the U.S. House Republicans' campaign arm, lost a "significant amount of money," said a law enforcement official who also confirmed that the FBI has begun investigating the committee's longtime treasurer, Christopher J. Ward.

An official close to the NRCC said preliminary reviews of its bank statements and reports to the Federal Election Commission (FEC)demonstrate clear discrepancies between "what [money] we have and what we should have."

"We don't know if it's a big number or a small number," said the official. "It looks like something was stolen. But we don't have an accurate number. We don't know."


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Carlyle-Managed Fund In Default To Lenders
2008-03-07 03:46:38
Carlyle Capital, a publicly traded financial fund managed by the Carlyle Group, failed to meet lenders' minimum requirements on its $21.7 billion portfolio Thursday, sending ripples through markets.

Carlyle Capital, listed on the Euronext in Amsterdam, said it received notices from banks that it was in default on its loans, which were used to buy AAA-rated home-mortgage-backed bonds from Fannie Mae and Freddie Mac. 

Banks essentially issued what are known as margin calls. A lender issues a margin call to require a borrower to add money to an account when a stock's or bond's value drops below a certain level.

The margin calls also reflect the spreading turmoil in the capital markets, which is infecting even the highest-rated securities.

Carlyle Capital is run by Carlyle Group, the Washington, D.C.-based private-equity firm that has earned outsize returns for its investors over the past two decades.


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Aversion To Risk Deepens U.S. Credit Woes
2008-03-07 03:45:58
The credit markets came under renewed stress Thursday as investors sought absolute safety and even moved away from debt issued by Fannie Mae and Freddie Mac, the government-sponsored mortgage lending enterprises.

The intensifying credit crisis came as one regulator, Timothy F. Geithner, the president of the Federal Reserve Bank of New York,said that some banks had moved from being too willing to take on risks to being reluctant to take any chance of losing money, a move that was making the crisis worse.

“The rational actions taken by even the strongest financial institutions to reduce exposure to future losses have caused significant collateral damage to market functioning,” Geithner said in a speech to the Council on Foreign Relations. â€œThis, in turn, has intensified the liquidity problems for a wide range of bank and nonbank financial institutions.”

Those liquidity problems intensified Thursday as a new increase in the number of mortgage foreclosures was reported and two financial companies that had relied on borrowed money said they were unable to raise the cash demanded by their lenders.


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German Authorities Report Problems With Blood Thinner Heperin
2008-03-07 03:44:06
Concerns about the safety of the blood thinner heparin spread to Germany on Thursday after drug authorities there received reports of patients being sickened after taking the drug.

Meanwhile, U.S. Food and Drug Administration officials announced that they were asking all companies in the United States that produce heparin to test it with two new procedures.

The complex tests, nuclear magnetic resonance spectroscopy and capillary electrophoresis, are the only ones that can uncover whether the drug contains a possibly counterfeit ingredient.

Dr. Janet Woodcock, deputy F.D.A. commissioner, said that the agency would post instructions online for the tests.

Food and Drug officials said Wednesday that a possibly counterfeit ingredient had been found in certain batches of heparin linked to at least 19 deaths in the United States and more than 700 severe allergic reactions. 


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