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Wednesday, March 19, 2008

Free Internet Press Newsletter - Wednesday March 19 2008 - (813)

Wednesday March 19 2008 edition
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Federal Reserve's Rate Cut Could Increase Inflation
2008-03-19 03:17:16
The Federal Reserve Board's rate cut Tuesday increased the chances that months of Fed moves could start to trickle down to homeowners in time to ease the pain when adjustable-rate mortgages reset this year, and people who borrow money to pay tuition, buy cars or cover unpaid credit card bills might eventually see some benefit.

Yet the Fed's action could also revive inflation, many economists fear. By reducing the interest rate financial institutions charge each other for short-term loans, the Fed makes money more readily and  cheaply available. If it miscalculates, it can pump too much money into the economy, fueling excessive demand for goods, housing and capital spending - and driving up prices.

That would undermine Fed Chairman Ben S. Bernanke's long-cherished notion of setting a low, narrow and predictable target range for inflation. Through higher consumer prices, all Americans would effectively help pay for the rescue of the financial industry. The decline in housing prices might be tempered, but inflation would eat away at real housing values.

"The good news is that this will take pressure off of housing prices," said Kenneth Rogoff, an economics professor at Harvard University."The bad news is that it will be very painful to squeeze the inflation out of the system when this mess is all over."

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Officials: Perennial Arctic Ice Cover Diminishing
2008-03-19 03:16:23

The amount of long-lasting sea ice in the Arctic - thick enough to survive for as much as a decade - declined sharply in the past year, even though the region had a cold winter and the thinner one-year ice cover grew substantially, federal officials said Tuesday.

Using new data from NASA's ICESat satellite, researchers over the past year detected the steepest yearly decline in "perennial" ice on record. As a result of melting and the southward movement of the thicker ice, the percentage of the Arctic Ocean with this stable ice cover has decreased from more than 50 percent in the mid-1980s to less than 30 percent as of last month.

"Because we had a cold winter, the public might think things have gotten better," said Walter Meier of the National Snow and Ice Data Center at the University of Colorado at Boulder. "In fact, the loss of the perennial ice makes clear that they're not getting better at all."

The surprising drop in perennial ice makes the fast-changing region more unstable, because the thinner seasonal ice melts readily in summer.

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Bush Administration Estimates Of Iraq War Costs Were Not Even Close
2008-03-19 03:15:42
At the outset of the Iraq war, the Bush administration predicted that it would cost $50 billion to $60 billion to oust Saddam Hussein, restore order and install a new government.

Five years in, the Pentagon tags the cost of the Iraq war at roughly $600 billion and counting. Joseph E. Stiglitz, a Nobel Prize-winning economist and critic of the war, pegs the long-term cost at more than $4 trillion. The Congressional Budget Office and other analysts say that $1 trillion to $2 trillion is more realistic, depending on troop levels and on how long the American occupation continues.

Among economists and policymakers, the question of how to tally the cost of the war is a matter of hot dispute - and the costs continue to climb.

Congressional Democrats fiercely criticize the White House over war expenditures. But it is virtually certain that the Democrats will provide tens of billions more in a military spending bill next month. Some Democrats are even arguing against attaching strings, like a deadline for withdrawal, saying the tactic will fail as it has in the past.

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Science Fiction Writer Arthur C. Clarke Dies At 90
2008-03-19 03:14:28
Arthur C. Clarke, a writer whose seamless blend of scientific expertise and poetic imagination helped usher in the space age, died early Wednesday in Colombo, Sri Lanka, where he had lived since 1956. He was 90.

Rohan de Silva, an aide, confirmed the death and said Mr. Clarke had been experiencing breathing problems, The Associated Press reported. He had suffered from post-polio syndrome for the last two decades.

The author of almost 100 books, Mr. Clarke was an ardent promoter of the idea that humanity’s destiny lay beyond the confines of Earth. It was a vision served most vividly by “2001: A Space Odyssey,” the classic 1968 science-fiction film he created with the director Stanley Kubrick and the novel of the same title that he wrote as part of the project.

His work was also prophetic: his detailed forecast of telecommunications satellites in 1945 came more than a decade before the first orbital rocket flight.

Other early advocates of a space program argued that it would pay for itself by jump-starting new technology. Mr. Clarke set his sights higher. Borrowing a phrase from William James, he suggested that exploring the solar system could serve as the “moral equivalent of war,” giving an outlet to energies that might otherwise lead to nuclear holocaust.

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Sci-fi guru Arthur C. Clarke dies at 90
2008-03-18 20:15:10
Arthur C. Clarke, a visionary science fiction writer who won worldwide acclaim with more than 100 books on space, science and the future, died Wednesday in his adopted home of Sri Lanka, an aide said. He was 90.

Clarke, who had battled debilitating post-polio syndrome since the 1960s and sometimes used a wheelchair, died at 1:30 a.m. local time after suffering breathing problems, aide Rohan De Silva told The Associated Press.

Clarke was regarded as a technological seer as well as a science-fiction writer, and was known as "the godfather of the telecommunications satellite."

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Obama Speech Confronts Racial Division In U.S.
2008-03-18 15:43:28
Sen. Barack Obama Tuesday repudiated what he described as offensive comments by his former pastor, but he refused to "disown" the man who was once his spiritual mentor. The contender for the Democratic presidential nomination sought to explain the anger that persists in the black community over racism and that occasionally makes its way into sermons in black churches.

In what his campaign billed as a major speech in Philadelphia, Obama tried to come to grips with the issue of race in his run for the presidency and to reinforce his primary theme that he can help bring fundamental change to the nation. His remarks were aimed at repairing the damage his campaign has suffered from his association with Rev. Jeremiah A. Wright, Jr., and addressing what he called a "particularly divisive turn" in recent weeks as videos of the fiery pastor's sermons have circulated.

Saying that America remains stuck in "a racial stalemate," the Illinois senator said he was not naive enough to believe that the divisions could be overcome in a single election, but he said Americans working together "can move beyond some of our old racial wounds."

He described his own heritage as a biracial American married to a black woman "who carries within her the blood of slaves and slave owners."

"I have brothers, sisters, nieces, nephews, uncles and cousins of every race and every hue, scattered across three continents, and for as long as I live, I will never forget that in no other country on Earth is my story even possible," Obama declared.

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Delta Airlines Cuts Jobs, Offers Buyouts To 30,000 Employees
2008-03-18 15:42:31
Delta Air Lines said Tuesday it will offer voluntary severance payouts to roughly 30,000 employees - more than half its work force - and cut domestic capacity by an extra 5 percent this year as part of an overhaul of its business plan to deal with soaring fuel prices.

Executives at Atlanta-based Delta said in a memo to employees that the airline's goal is to cut 2,000 frontline, administrative and management jobs through the voluntary program, attrition and other initiatives.

Delta spokeswoman Betsy Talton said that if more than that amount agree to take the voluntary severance, that will be allowed. The severance program primarily affects mainline Delta employees. It will not affect Delta pilots, who have a union contract with the company, and employees at Delta regional carrier Comair, which is based in Erlanger, Kentucky.

One part of the program is for employees who are already eligible for retirement or for those whose age and years of service add up to at least 60, with 10 or more years of service. The other part of the program is an "early-out" offer for frontline employees - such as flight attendants and gate and ticket agents - with 10 or more years of service and for administrative and management employees with one or more years of service.

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After Months Of Chaos, Belgium Forms A Coalition Government
2008-03-18 15:42:03
Belgium's feuding political parties agreed to form a coalition government Tuesday after nine months of political chaos that threatened to carve the seat of the European Union into separate nations.

"It's a good deal for a government, with balanced measures," Yves Leterme, the Flemish Christian Democrat, who is scheduled to become prime minister on Thursday, told local RTBF radio after an all-night bargaining session among the country's five political parties.

The power-sharing agreement tackled the acrimonious immigration, tax and social issues, but it did not resolve the root of the government crisis: demands from politicians of the economically prosperous northern Flemish region for greater autonomy from the financially depressed, southern French-speaking section of the country.

In a rare act of royal intervention, Belgium's King Albert II has been pushing the political parties - two Flemish and three Francophone - to find a way to create a coalition government capable of running the kingdom, which has been consumed by political discord since last June's elections.

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Wall Street Earnings Send Stocks Soaring
2008-03-18 14:57:27

Financial stocks roared back on Tuesday as a pair of better-than-expected earnings reports from Wall Street’s biggest firms spurred a broad rally ahead of a likely rate cut from the U.S. Federal Reserve.

With investors looking for the Fed to lower its benchmark interest rate - and some expecting the steepest cut in a generation - Monday’s apprehension gave way to an optimistic bounce for some of the market’s most beaten-up stocks.

At 2 p.m., the Standard & Poor’s 500-stock index was up 3 percent, vanquishing its Monday losses. The Dow Jones industrials picked up 295 points, and the Nasdaq composite index was up 2.8 percent.

The resurgence in shares of financial firms, which took a severe beating on Monday after the near-collapse of Bear Stearns, was striking. Lehman Brothers, whose share price plummeted 19 percent on Monday as rumors swirled that the bank was facing liquidity problems, gained back all its losses after reporting a 57 percent decline in net income for the first quarter. That figure beat expectations and restored some confidence in the company; its stock rose 37 percent to $43.63 a share.

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U.K. Judge Reverses Exxon Freeze On Venezuela Assets
2008-03-18 14:56:57
A U.K. judge has overturned a decision to freeze $12 billion of Venezuelan assets awarded to Exxon Mobil in a setback to the oil giant's fight to win compensation for a seized oil project but a boost for leftist President Hugo Chavez.

Exxon convinced an English court to freeze the assets of Venezuela's state oil company, PDVSA, in January so cash would be available if Exxon won arbitration over an oil project which was lost to Chavez's nationalization drive.

After hearing PDVSA's argument, the judge ruled there was no urgent risk of the company hiding its assets to avoid paying compensation and discharged the injunction.

Venezuela's government bond prices, which had been battered by the freeze, rallied after the ruling.

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Economic Turmoil Shakes Up Campaign Strategies
2008-03-18 03:42:14
McCain, Clinton and Obama offer few specifics for handling the recent upheaval. The new focus on the issue may work to the Democrats' advantage.

For months, the top presidential candidates have focused on showing a war-weary public that they have what it takes to be the next commander in chief, but on Monday, as the Iraq war entered its sixth year, they faced a test with far more relevance to the everyday lives of Americans: whether they could serve as economist in chief.

With turmoil growing in financial markets that rely on trust and public confidence, each of the three candidates claimed to have ideas to guide the country through this complex and risky time.

That meant shifting gears quickly. Presumptive Republican nominee John McCain was in Iraq, a trip intended in part to add to his foreign policy credentials. Democrat Hillary Rodham Clinton was in Washington to deliver what her campaign called a "major speech" on the war. And Barack Obama, her party rival, was preparing to give an address on race and politics in Philadelphia today.
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Commentary: Social Insecurity, Sooner Than You Think
2008-03-18 03:41:42
Intellpuke: This commentary was written by Allan Sloan, Fortune magazine's senior editor at large. It appears in the Washington Post online edition for Tuesday, March 18, 2008. Mr. Sloan's commentary follows:

One of Washington's rites of spring is almost upon us. It's the wonks' version of the Cherry Blossom Festival: the release of the annual Social Security trustees' report showing the health of our nation's biggest social program. Each year, the report touches off a debate, mostly misguided, about Social Security's financial status. Given the political environment this year, you can expect more heat than usual when the report comes out. But you're unlikely to see much light.

So let me try to illuminate things for you. Forget all the talk you'll hear about how Social Security is okay until 2040 or thereabouts. That is, as we'll soon see, utter nonsense. The real problem starts only a decade or so from now, when Social Security begins to take in less cash than it spends.

How can I say that, given Social Security's $2.3 trillion (and growing) trust fund? It's because the fund owns nothing but Treasury securities. Normally, of course, Treasury securities are the safest thing you can hold in a retirement account. But Social Security's Treasurys won't help cover the program's cash shortfall because Social Security is part of the federal government. Having one arm of the government (Social Security) own IOUs from another arm (the Treasury) doesn't help the government as a whole cover its bills.

Here's why the trust fund has no financial value. Say that Social Security calls the Treasury sometime in 2017 and says it needs to cash in $20 billion of securities to cover benefit checks. The only way for the Treasury to get that money is for the rest of the government to spend $20 billion less than it otherwise would (fat chance!), collect more in taxes (ditto), or borrow $20 billion more (which is what would happen). The spend-less, collect-more, and borrow-more options are exactly what they would be if there were no trust fund. Thus, the trust fund doesn't make it any easier for the government to cover Social Security's cash shortfalls than if there were no trust fund.

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Iraq War Opponents Plan Series Of Protests
2008-03-18 03:40:15

Antiwar protesters said Monday that they plan a series of demonstrations starting this evening and lasting through Wednesday that could disrupt traffic, hamper commuters and block access to some buildings in downtown Washington.

The actions, aimed to draw attention to the fifth anniversary of the start of the Iraq war, are directed at business, government, political and media centers that demonstrators blame for the continuation of the war, according to members of the United For Peace and Justice coalition, which is heading the protest.

Activists plan Wednesday morning to target the headquarters of the Internal Revenue Service, at 12th Street and Constitution Avenue NW, which they said they hope to shut down. They said they will also protest at various corporations in the vicinity of K Street between 13th and 18th streets NW.

Antiwar military veterans plan a 9 a.m. march Wednesday on the Mall from the National Museum of the American Indian to the Capitol.

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New Pakistani Parliament Set To Challenge Musharraf
2008-03-18 03:39:17
Pakistan swore in its newly elected Parliament on Monday, setting the stage for a political clash with the government of President Pervez Musharrafa month after voters handed a victory to the country's major opposition parties.

The long-awaited first session of the 342-member National Assembly convened at Pakistan's gleaming white Parliament house amid tight security, two days after a deadly bomb attack on a popular restaurant in the center of the capital.

Sharpshooters with rifles at the ready stood atop almost every corner of the massive building as a parade of black and silver bulletproof SUVs deposited legislators and Pakistani luminaries at the crowded entrance.

One of the first to arrive was former prime minister Chaudhry Shujaat Hussain, leader of Musharraf's Pakistan Muslim League faction and a strong supporter of the president. Hussain, who lost his parliamentary bid last month, said the convocation of the new Parliament signaled fresh hope for his party and Pakistan: "The future is very bright. It is the first day, and we pray that everything will be all right."

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Floods Rage Through Parts Of Central U.S.
2008-03-19 03:16:58
Torrential rains chased hundreds of people from their flooded homes and deluged roads in the nation's midsection Tuesday, killing at least two people in Missouri and sweeping a teen down a drainage pipe near Dallas, Texas.

The storm system also grounded hundreds of flights. One control tower at Dallas-Fort Worth International Airport was briefly evacuated when a funnel cloud was spotted.

The National Weather Service posted flood and flash flood warnings from Texas to Ohio, with tornado watches in Texas, Louisiana and Arkansas.

Emergency officials in Mesquite, Texas, searched for a 14-year-old boy apparently swept away by floodwaters as he and a friend played in a creek. The friend was able to swim to safety and said he saw the boy get sucked into a drainage pipe, according to a Fire Department news release.

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Commentary: Can't Grasp The Credit Crisis? Join The Club
2008-03-19 03:16:05
Intellpuke: The following commentary was written by David Leonhardt and appeared in the New York Times edition for Wednesday, March 19, 2008.

Raise your hand if you don’t quite understand this whole financial crisis.

It has been going on for seven months now, and many people probably feel as if they should understand it. But they don’t, not really. The part about the housing crash seems simple enough. With banks whispering sweet encouragement, people bought homes they couldn’t afford, and now they are falling behind on their mortgages.

But the overwhelming majority of homeowners are doing just fine. So how is it that a mess concentrated in one part of the mortgage business - subprime loans - has frozen the credit markets, sent stock markets gyrating, caused the collapse of Bear Stearns,left the economy on the brink of the worst recession in a generation and forced the Federal Reserve to take its boldest action since the Depression?

I’m here to urge you not to feel sheepish. This may not be entirely comforting, but your confusion is shared by many people who are in the middle of the crisis.

“We’re exposing parts of the capital markets that most of us had never heard of,” Ethan Harris, a top Lehman Brothers economist, said last week. Robert Rubin, the former Treasury secretary and current Citigroup executive, has said that he hadn’t heard of “liquidity puts,” an obscure kind of financial contract, until they started causing big problems for Citigroup.

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Editorial: Mr. Obama's Profile In Courage
2008-03-19 03:15:10
Intellpuke: The following editorial appeared in the New York Times edition for Wednesday, March 19, 2008.

There are moments - increasingly rare in risk-abhorrent modern campaigns - when politicians are called upon to bare their fundamental beliefs. In the best of these moments, the speaker does not just salve the current political wound, but also illuminates larger, troubling issues that the nation is wrestling with.

Inaugural addresses by Abraham Lincoln and Franklin D. Roosevelt come to mind, as does John F. Kennedy’s 1960 speech on religion, with its enduring vision of the separation between church and state. Senator Barack Obama, who has not faced such tests of character this year, faced one on Tuesday. It is hard to imagine how he could have handled it better.

Mr. Obama had to address race and religion, the two most toxic subjects in politics. He was as powerful and frank as Mitt Romney was weak and calculating earlier this year in his attempt to persuade the religious right that his Mormonism is Christian enough for them.

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Thanks for your donations!
2008-03-18 22:25:32

  I've been a little slack on posting thank you's for donations, and I apologize.

  The following folks have donated to Free Internet Press, either through a straight donation or subscription since our hardships started.  You've all been so much help.  You've kept food on the table.  I'd say a roof over my head, but we've run enough news about the mortgage crisis that so many people are going through.

  Our economy is really rough.  I've been trying to find work, and compared to late 2006, I'm finding 1/10 the available jobs in my field (Information Technology).  I know almost everyone is feeling the same thing, with gas and food prices going up, but we aren't making more money.  We really appreciate your help and caring! 

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  I don't like asking for help.  My close friends know, I'm the guy who takes care of others.  I'm always on top of everything, and I'm the go-to guy.  Some friends know I'll loan them money and make my own bills a little late.  If a car breaks down, a computer (or server) is acting quirky, a faucet is leaking, I'm there for them.  Personally, I'm not comfortable being the one asking for help, but our close friends have been helping so much too. 

  For all of our readers, we're striving to continue doing what we do best here.&nbs! p; We're finding the news, and making it available as quickly ! and accu rately as possible.

  I do have a grand plan for making Free Internet Press better.  If we can get enough regular subscribers, we'll be able to grow our staff, with Intellpuke driving our journalists, and be able to bring even more news to you daily.

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Supreme Court Majority Appears To Back Gun Rights
2008-03-18 15:43:51
A majority of the Supreme Court Tuesday seemed to clearly indicate that the Second Amendment provides an individual right to possess a firearm and several justices appeared skeptical about whether the District of Columbia's handgun ban could be considered a reasonable restriction on that right.

Two justices cleanly framed the issue confronting them after about 90 minutes of intense arguments that took a trip back to the English Bill of Rights and the founding of a new nation on this continent.

Justice Stephen G. Breyer noted the number of people killed by handguns and asked if it was unreasonable for a "city with a very high crime rate to say 'no handguns here'."

From the other side, Chief Justice John G. Roberts, Jr., asked: "What's reasonable about a total ban on possession?''

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Transcript Of Sen. Barack Obama's Speech In Philadelphia
2008-03-18 15:43:06
OBAMA: Thank you. Thank you so much. Thank you. Thank you. Thank you so much. Thank you. Thank.

Let me begin by thanking Harris Wofford for his contributions to this country in so many different ways. He exemplifies what we mean by the word "citizen." And so we are very grateful to him for all the work he has done, and I'm thankful for the gracious and thoughtful introduction.

"We the people, in order to form a more perfect union."

Two hundred and twenty one years ago, in a hall that still stands across the street, a group of men gathered and, with these simple words, launched America's improbable experiment in democracy.

Farmers and scholars; statesmen and patriots who had traveled across the ocean to escape tyranny and persecution finally made real their declaration of independence at a Philadelphia convention that lasted through the spring of 1787.

The document they produced was eventually signed but ultimately unfinished. It was stained by this nation's original sin of slavery, a question that divided the colonies and brought the convention to a stalemate until the founders chose to allow the slave trade to continue for at least 20 more years, and to leave any final resolution to future generations.

OBAMA: It was stained by this nation's original sin of slavery, a question that divided the colonies and brought the convention to a stalemate until the founders chose to allow the slave trade to continue for at least twenty more years, and to leave any final resolution to future generations.

Of course, the answer to the slavery question was already embedded within our Constitution - a Constitution that had at is very core the ideal of equal citizenship under the law; a Constitution that promised its people liberty and justice, and a union that could be and should be perfected over time.

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1 Dead As Mortar Rounds Hit School Near U.S. Embassy In Yemen
2008-03-18 15:42:17
Two mortar rounds that may have been meant for the U.S. Embassy in Yemen crashed into a school next door on Tuesday, killing a security guard, said an Interior Ministry official.

Three pupils at the high school and three other guards also were wounded when the shells exploded, said the official, who spoke on condition of anonymity because ministry rules bar him from talking to the media.

Troops sealed off roads and prevented journalists from approaching the school, which is attended mostly by Yemeni students.

The Interior Ministry official said unknown attackers fired the mortar rounds at the school next to the embassy in the downtown San'a district of Sawan.

U.S. State Department spokesman Tom Casey said: "It is fair to say that the embassy was a potential target." Washington "will be looking to work with Yemeni authorities as they investigate this incident," he said.

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U.S. Federal Reserve Cuts Key Rate 0.75 Percent
2008-03-18 14:57:43
The U.S. Federal Reserve reduced its benchmark interest rate by three-quarters of a percentage point on Tuesday, to 2.25 percent, a cut that was less than investors had been hoping for even though it was one of the deepest in Fed history.

While leaving the door open for additional rate cuts, policy makers also expressed growing concern about inflation. “Uncertainty about the inflation outlook has increased,” the central bank said. “It will be necessary to continue to monitor inflation developments carefully.”

The statement highlighted the growing dilemma that the Fed faces, between fighting an economic downturn and heading off new inflationary pressures that have become apparent in everything from energy and food prices to the falling value of the dollar.

The Fed’s announcement was the culmination of an extraordinary series of actions over the last two weeks to prop up financial markets and the economy with a flood of cheaper money.

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Dalai Lama Says He'll Resign If Tibet Violence Escalates
2008-03-18 14:57:13
The Dalai Lama on Tuesday invited international observers, including Chinese officials, to scour his offices here and investigate whether he had any role in inciting the latest anti-Chinese violence in Tibet. He also threatened to resign as leader of Tibet’s government-in-exile in the event of spiraling bloodshed in his homeland.

He said he remained committed to only nonviolent agitation and greater autonomy for Tibetans, not independence. He condemned the burning of Chinese flags and attacks on Chinese property and called violence “suicidal” for the Tibetan cause.

In a clear effort to quickly seize the higher moral ground and at the same time poke at China’s important aspirations, he complimented Beijing for having met three out of four conditions to be a “superpower” - he acknowledged it has the world’s largest population, military prowess, and a fast-developing economy.

“Fourth, moral authority, that’s lacking,” he said, and for the second time in two days he accused Chinese officials of a “rule of terror” in Tibet, the formerly Himalayan kingdom he fled for exile in India 49 years ago.

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Fed Reserve's Plan May Signal More Economic Turbulence Ahead
2008-03-18 03:42:31

Investors dumped stocks of the nation's major investment firms yesterday after a rescue plan for one of the biggest, Bear Stearns, exposed unexpectedly large cracks in the foundation of the financial system.

Even after the Federal Reserve on Sunday night offered an unprecedented credit line to investment banks, their shares plummeted. Lehman Brothers was down 19 percent. Europe's largest bank, UBS, which has recorded huge losses from mortgage investments like those at its U.S. counterparts, suffered its sharpest drop in European trading in nearly 10 years.

U.S. currency traders launched a furious sell-off of the dollar immediately after the Fed acted Sunday, some staying up all night on concerns, they said, that major U.S. bank failures could be on the horizon. Major stock market indicators swung wildly, with the Standard and Poor's 500-stock index falling as much as 2.4 percent but ending 0.9 percent lower. The Dow Jones industrial average rebounded from early losses, finishing up about 0.2 percent on the strength of J.P. Morgan Chase, which has agreed to purchase Bear Stearns for a fire-sale price.

President Bush said his administration is "on top of the situation" in dealing with the slumping economy, praising the Fed for its steps. "One thing is for certain - we're in challenging times. But another thing is for certain - that we've taken strong and decisive action," he told reporters after meeting with Treasury Secretary Henry M. paulson, Jr., and other economic advisers.

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Editorial: Who Will Come To The Rescue?
2008-03-18 03:41:57
Intellpuke: The following editorial appeared in the New York Times edition for Tuesday, March 18, 2008.

The more the Federal Reserve does to avert financial contagion, the clearer it becomes that the Fed alone cannot solve the problems in the financial system. To many Americans, it’s now obvious that taxpayers will have to step in. Less obvious is that if the United States government doesn’t stabilize the markets, foreign governments increasingly will, in exchange for an ever larger stake in the American financial system.

Over the weekend, Treasury Secretary Henry Paulson, Jr., said the government would do “what it takes” to keep order in the financial markets. On Monday, President Bush echoed that point, when he wasn’t making inappropriate jokes. The American people need an explanation of what they may have in mind.

The Fed’s huge loans and interest rate cuts can buy time for flagging banks. They can also help prevent specific problems, like last weekend’s near collapse of Bear Stearns, from causing a chain reaction. They cannot save defaulting homeowners, transform bad mortgage loans into good ones, or do the same for hundreds of billions of dollars of securities tied to those loans.

As those problems persist, financial institutions are under increasing pressure to write off their losses, cutting ever deeper into their capital. As capital shrinks, creditors have to clamp down on lending, to good and bad borrowers alike, no matter what the Fed may do.

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Men In Black They're Not - 2 Private Eyes Take On Cold UFO Case
2008-03-18 03:40:38
Where's that power pole? And the guy who said he photographed a flying saucer above it? Two down-to-earth private eyes want to know.

Private eye T.K. Davis has worked his share of oddball cases. Once he tracked down a one-armed woman wanted for child endangerment. He staked out a backyard to catch a guy throwing dirt clods into a pool. When you make your living answering life's mysterious questions at $100 an hour, you take a few calls out of the blue.

He works the streets of Capitola, California, a suburban town near Santa Cruz, where dog-walking mothers and aging hippies compete for beach time. Oh, sure, it might seem innocent enough, but it can get a little creepy if you let it. People might see things - unusual objects in the sky, for instance - and not say a thing for fear of being ridiculed.

At times like that, a private eye comes in handy. He can look around, ask a few hard questions - even if it means risking his reputation built over 30 years as a deputy sheriff.

That's more or less where Davis finds himself now, behind the wheel of his blue Ford Explorer, with his partner Frankie Dixon. They're cruising down streets, looking at utility poles and trying to figure out: Is that the one in these three pictures, the pictures with the unidentified flying object?
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Update: Man Says Ricin Belonged To His Brother
2008-03-18 03:39:38
The man at the center of a ricin scare at a Las Vegas, Nevada, motel says he never had any intention of hurting anyone with the deadly biological agent, his brother told the Associated Press.

Roger Bergendorff, who finally regained consciousness last week after almost a month of hospitalization, possessed the ricin powder found in his motel room in February and believes he was contaminated by it, said Erich Bergendorff, who talked to his brother on the phone Sunday.

"He just confirmed that it was not intended for anybody," Erich Bergendorff said in a telephone interview from his home north of San Diego in Escondido. "It was something that would be used for his own purposes, for self-defense."

Roger Bergendorff, 57, was upgraded from critical to fair condition Monday at Spring Valley Medical Center.

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Rights Group: Attacks In Kenya Are 'Meticulously' Organized
2008-03-18 03:38:55
Post-election attacks on villagers in Kenya's Rift Valley were often "meticulously" organized by local opposition leaders who called for "war" against people from President Mwai Kibaki's Kikuyu ethnic group, according to a detailed report released Monday by the advocacy group Human Rights Watch.

The report also describes killings of hundreds of opposition supporters by Kenyan police, especially in the slums of Nairobi and the opposition stronghold of Kisumu in western Kenya. In other instances, it says, police failed to use adequate force to protect people who came under attack by militias and gangs.

Based on 200 interviews with witnesses, police officers, politicians and others, the report also found evidence suggesting that senior government officials had been aware of planned reprisal attacks by Kikuyu gangs against opposition supporters in several western towns.

"This was not done by ordinary citizens, it was arranged by people with money," said one young man who took part in the revenge attacks, according to the report. "They brought the jobless like me."

Violence following Kenya's disputed Dec. 27 presidential election is estimated to have killed at least 1,000 people and displaced half a million, with most of the unrest taking place across the volatile Rift Valley, where successive Kenyan governments have failed to address long-standing grievances over land.

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