Free Internet Press Newsletter - Friday July 25 2008 - (813)

Friday July 25 2008 edition
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U.S. Stocks Decline On Home Sales and Bank Worries 2008-07-24 23:31:27 A sharp drop in June home sales started the stock market off on a sour note Thursday and new worries about banks sent shares into a slide. Financial shares plunged, snapping a six-session winning streak, as profit-taking dragged the Dow Jones industrial average down 283.10 points, or 2.43 percent, to 11,349.28, its worst loss in a month. “We’ve had such a strong run especially in the financials,” said Ryan Larson, a trader at Voyageur Asset Management. “A lot of people are taking money off the table.” Poor earnings at a regional bank, National City, and a gloomy report on the savings and loan, Washington Mutual, were two of the more obvious catalysts; and the disappointing home sales report for June renewed worries that the housing crisis could hound banks for months to come. The sell-off in financial shares brought down the broader market. The Standard & Poor’s 500-stock index declined 29.65 points, or 2.31 percent, to 1,252.54, and the Nasdaq composite index declined 45.77 points, or 1.97 percent, to 2,280.11. A glance at the day’s worst performers highlighted the overlap between bank woes and mortgage troubles. Shares of Fannie Mae, the mortgage buyer, dipped 20 percent despite a rebound in recent days. Its sister company, Freddie Mac,  was off 18 percent. Read The Full Story Britain To Spend $6 Billion On New Nuclear Warheads 2008-07-24 23:31:06 Britain is to replace its stockpile of nuclear warheads at an estimated cost of more than £3 billion ($6 billion), according to documents seen by the Guardian newspaper. Ministers have repeatedly denied there are any plans to replace the warheads as part of the upgrade of the Trident nuclear system, insisting no decision will be taken until the next parliament, probably sometime after 2010. However, previously unpublished papers released under the Freedom of Information Act reveal one of the Ministry of Defense's (MoD's) senior officials told a private gathering of arms manufacturers that the decision had already been made. "This afternoon we are going to outline our plan to maintain the U.K.'s nuclear deterrent," David Gould, then the chief operating officer at the Defense Equipment and Support Organization, told a future deterrent industry day event. "The intention is to replace the entire Vanguard class submarine system. Including the warhead and missile." Read The Full Story Cancer Expert Tells Staff To Limit Cell Phone Use 2008-07-24 23:30:32 The head of a leading U.S. cancer research institute has reignited the controversy over the health risks of using mobile phones by sending a warning to staff that they should limit the use of the devices because of the risk of cancer. Dr. Ronald Herberman's alert to 3,000 staff at the University of Pittsburgh Cancer Institute is believed to be the first of its kind from the director of a leading research center. His call for action stands in contrast to the existing advice from many health authorities, which have pointed out that evidence of the dangers of mobile phone use is inconclusive. In a memo posted to staff, Herberman admits that the evidence is still controversial and no hard conclusions can be reached, but he says he has become convinced that there is sufficient information "to warrant issuing an advisory to share some precautionary advice on cellphone use". He has had his memo peer-reviewed by an international panel of more than 20 experts from countries including the U.S., Canada and France. He is likely to arouse considerable interest in his warning by adding that he bases it partly on "early unpublished data" from ongoing research projects. It is thought that may refer to new findings from a monitoring project across 13 countries, known as Interphone. Read The Full Story U.S. Expands Visa Program For Iraqi Allies 2008-07-24 23:30:03 The American Embassy in Baghdad announced Thursday that it had expanded tenfold its program to help Iraqi employees of the American government here, who faced threats for their work, to obtain visas and ultimately citizenship in the United States. Although the program was established by law in January, it has become a practical reality just in the last two to three weeks as guidelines have been finalized and the embassy has brought in staff members and started processing applications. The decision is the latest step in the administration’s attempt to answer sharp criticism over its failure to help even those Iraqis who have made the American presence in Iraq possible by serving as translators and supervisors on embassy projects, for the American military and for the Agency for International Development (USAID). Critics in the refugee relief community noted that the State Department had promised several times that it would try to speed up the process, and that it had not come through. State Department officials attribute the gap between words and deeds to a cumbersome refugee resettlement system that includes fingerprinting, job checks, name checks and interviews. The program would allow 5,000 Iraqis to come to the United States for each of the next five years. Each person can bring his immediate family, which includes spouses and children. More distant relatives, including siblings, parents and grandchildren, can apply under another program. So the actual numbers emigrating would probably be considerably higher. The average Iraqi household is estimated to have about six people, said officials from the International Organization for Migration. Read The Full Story U.S. Existing Home Sales Fell Sharply In June 2008-07-24 15:25:21 Sales of existing homes fell more sharply than expected in June as the housing industry continued to be bruised by the worst slump in more than two decades. The National Association of Realtors reported that sales dropped by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units. That was more than double the decline that had been expected and left sales 15.5 percent below where they were a year ago. The downward slide in sales depressed prices, too. The median price for a home sold in June dropped to $215,100, down by 6.1 percent from a year ago. That was the fifth largest year-over-year price drop on record. The drop in sales pushed inventories of unsold single-family homes and condominiums to 4.49 million units, up by 0.2 percent. That represented a 11.1 month supply at the June sales pace, the second highest level in the past 24 years. On Wall Street, stock prices fell Thursday as investors fretted over the steeper-than-expected drop in home sales and a big loss reported by Ford Motor Co. (Intellpuke: You can read a separate article on Ford's problems elsewhere on today's Free Internet Press mainpage.) The Dow Jones industrial average was down 145 points in early afternoon trading. In another troubling sign for housing, Freddie Mac's nationwide survey of mortgage rates showed a big jump, reflecting elevated market fears about the financial health of Freddie and Fannie Mae, the two giant players in mortgage markets. The rates on 30-year mortgages surged to 6.63 percent this week, the highest level in nearly a year and up from 6.26 percent last week. Read The Full Story Editorial: A Lesson Not Learned 2008-07-24 15:24:59 Intellpuke: This editorial appeared in the New York Times edition for Thursday, July 24, 2008. After the controversy over Palm Beach County’s infamous “butterfly ballot” in 2000, there was a lot of earnest talk about improving ballot design so that voters do not miscast their votes. Two election cycles later, a study has found that ballots around the country are still far too confusing and that poor design and instructions have disenfranchised hundreds of thousands of voters in the last several federal elections. The problem of badly designed ballots - which affects all kinds of voting technology, from paper ballots to electronic machines - is likely to be particularly acute this fall. There will be many first-time voters, and many jurisdictions have introduced new voting technology. In the short term, states and localities need to give as much guidance as they can to help voters. In the long term, Congress and the states need to start requiring uniform, well-designed ballots so Americans can be sure that the candidates they choose actually get their vote. Palm Beach County’s butterfly ballot was one of the great debacles in election history. It was so confusing that it was hard to tell which hole to punch to cast a vote for a particular candidate. Many people intending to vote for Al Gore accidentally punched the hole for Patrick Buchanan or punched holes for both Gore and Buchanan, which disqualified their votes. Read The Full Story Commentary: Paying Doctors To Ignore Patients 2008-07-24 15:24:27 In contrast, the doctor-patient visit, which involves no expensive equipment, offers no significant profit opportunity. So the best way for a doctor to make money in his practice is not to spend time with patients but to use equipment as much as possible. That means moving the maximum number of patients through the practice, and spending the minimum amount of time with each one. From 2000 to 2005, the number of Medicare patients seen by doctors increased by 8.5 percent, while the number of services each one received was up 14 percent, according to the Government Accountability Office. It’s not only Medicare that pays doctors on a fee-for-service basis; most private insurers do also. This is part of the reason that spending on physician services nationwide has risen every year since 2000 by about $25 billion. This year the tab will exceed $500 billion. Doctors who do their own CT scanning and other imaging order roughly two to eight times as many imaging tests as those who do not have their own equipment, a 2002 study by researchers at the University of North Carolina found. Altogether, doctors are ordering roughly $40 billion worth of unnecessary imaging each year - which adds up to nearly 2 percent of the total Americans pay for health care. No wonder the Government Accountability Office last month urged Medicare to find a way to constrain doctors’ use of imaging tests. Read The Full Story Ford Posts $8.7 Billion 2nd-Quarter Loss 2008-07-24 15:23:30 Ford Motors Thursday reported a $8.7 billion loss for the second quarter, the worst quarterly performance in the company's history, and announced a raft of changes meant to ramp up its production of small cars. The company attributed $8 billion of the losses to the reduced value of its assets, such as the sport-utility vehicle and pickup truck lines for which consumer demand has evaporated. Ford's American sales are down 14 percent from last year, with its light trucks taking an 18 percent hit. Overall, the company was off $3.88 per share - 62 cents per share not counting its shrinking asset value. The loss compares with a net profit of $750 million, or 31 cents per share, in the same quarter a year ago. Either way, the performance was worse than Wall Street expected. Analysts had predicted a 27-cents-a-share loss, according to a survey from Smartmoney.com. Ford stock Thursday opened down and was trading off nearly 10 percent, at $5.44 shortly before 1 p.m. Ford said in a statement that it does not expect a U.S. economic recovery to start until early 2010. Chief Executive Alan Mullaly said he could not promise that the company would be profitable by then, however, because the global economic outlook was still too uncertain. "It really goes with the economy, both in the United States and World-Wide," said Mullaly. Read The Full Story Sallie Mae's Profit Nose-Dives 72 Percent In 2nd Quarter 2008-07-24 15:22:35 Sallie Mae, the U.S.' largest student lender, Wednesday reported that second-quarter profit fell 72 percent, but indicated that business was improving from a dismal start of 2008. The company, based in Reston, Virginia, said in a statement that it experienced "strong growth" and "solid performance" in its student loan businesses in the three months ending June 30. It added that it had started to obtain financing to make loans at more favorable rates, aided by a new Department of Education program to buy securities composed of student loans. In a statement, Albert L. Lord, vice chairman and chief executive, called the results "encouraging." Sallie Mae makes both private student loans and loans that are guaranteed by the government. It raises money by pooling student loans into securities and then selling them to investors. It sold $7 billion in securities during the quarter, "clearly a good sign for Sallie Mae and a good sign for the continued availability of student lending," said Luke Swarthout, higher education advocate for U.S. Public Interest Research Group. Despite the improved outlook, SLM Corp., as it is officially called, is not without challenges given the tight credit markets. Rates to borrow have come down from their heights, but "our funding costs" have been "extraordinarily high," said Lord. Read The Full Story Is L.A. Attorney Facing Federal Charges Or Political Witch Hunt? 2008-07-24 15:21:54 In a high-stakes legal drama that stretches from Los Angeles, California, to Washington, D.C., federal prosecutors are poised to file criminal campaign finance charges against a prominent L.A. attorney, but his lawyers are fighting back, questioning whether his outspoken criticism of the Bush administration has made him the target of a political prosecution. A federal grand jury has been secretly probing whether attorney Pierce O'Donnell violated federal campaign laws by asking employees of his law firm to contribute to the 2004 presidential campaign of John Edwards and then reimbursing those who did, according to several sources, including a member of O'Donnell's legal team. O'Donnell, 61, has indicated that he is willing to plead to a misdemeanor charge and pay a large fine, but prosecutors in the U.S. attorney's office in Los Angeles have been insisting that any deal would require him to plead guilty to a felony, which would end his legal career in California, according to several sources who asked not to be named because of the sensitivity of ongoing negotiations. Members of O'Donnell's legal team are questioning whether the veteran Democratic attorney is being threatened with a felony because he represents victims of Hurricane Katrina in a lawsuit against the government and has been openly critical of President Bush's policies on civil rights in the wake of the 9/11 attacks, said a source close to O'Donnell. Read The Full Story	Bush Uses Anti-Terror Funds To Strengthen Pakistan's Air Force 2008-07-24 23:31:17 The Bush administration faced Congressional criticism Thursday for diverting funds from Pakistan's faltering fight against the Taliban and al-Qaeda to pay instead for upgrades of its U.S.-built F-16 combat planes. With increased fighting in Afghanistan, much originating with forces based in Pakistan's northwest, members of Congress questioned how the switch to the planes, intended mainly as a counter to the Indian air force, would contribute to quelling the insurgency. The White House spokeswoman, Dana Perino, Thursday insisted: "The F-16s are used in counter-terrorism operations. We made them available to the Pakistanis, and they need to be maintained." There is no record of the F-16s being much used in the tribal areas, mainly because Pakistan fears civilian deaths would increase hostility to its forces. Nita Lowey, the Democrat who heads the House state and foreign operations committee, said: "Congress provided these funds specifically for counter-terrorism and law enforcement. It is incumbent on the state department and Pakistan to demonstrate clearly how these F-16s would be used to fight al-Qaeda and the Taliban in order to get congressional support." Read The Full Story Investigation Launched Into Civilian Deaths From U.S. Air Strikes In Afghanistan 2008-07-24 23:30:55 U.S. and NATO military officials in Afghanistan have launched investigations into three separate U.S.-led air  strikes that Afghan officials say killed at least 78 civilians this month. The investigations come during what United Nations and Afghan officials say is one of the deadliest years for civilians since the war began. In the first six months of this year, the number of civilians killed in fighting has increased by nearly 40 percent over the same period last year, according to U.N. data. "We have seen a number of occurrences lately where a large number of civilians have been killed. It would be fair to say that this year so far there has been an increase in the number of civilians killed by all sides," said Dan McNorton, a spokesman for the U.N. Assistance Mission in Afghanistan. More than half of those killed in the three recent U.S.-led air strikes - which occurred in a three-week span in three provinces in eastern and western Afghanistan - were women and children, according to Afghan and Western officials. In one case, about 47 women and children in a wedding party were killed. The death toll from Western air strikes has renewed political furor over foreign military operations in Afghanistan as the Taliban insurgency is intensifying. Read The Full Story Scientists Find Trigger Of Northern Lights' 'Dance' 2008-07-24 23:30:17 Scientists say they have discovered what makes the northern lights dance. Researchers working on a NASA mission to understand the interplay of magnetic fields and charged particles blown outward from the Sun have identified the trigger for the colorful electrical storms in the polar regions. They hope this is a step in developing reliable forecasts of geomagnetic storms that can disrupt satellites in orbit and power grids on the ground. The findings appeared in an article published Thursday on the Web site of the journal Science. Scientists have long known that the dancing auroras of color known as the northern and southern lights are generated by charged particles flying from the Sun and interacting with the Earth's magnetic field, which is then pulled into a windsock shape by the solar wind. Turbulent storms on the Sun generate extremely bright auroral displays, but even in quieter times, smaller events known as substorms still generate the lights. Read The Full Story Scottish National Party Shocks Labor Party In By-Election Win 2008-07-24 23:29:44 The Scottish nationalists Friday night dealt a massive blow to British Prime Minister Gordon Brown's leadership as the party pulled off an historic victory over Labor in the Glasgow East by-election. In a devastating knock back for the prime minister, Scottish National Party (SNP) leader Alex Salmond delivered the "earthquake" result he had predicted. The newly elected SNP Parliament member, John Mason, said: "This SNP victory is not just an earthquake. It is an epic win and will send tremors all the way to Westminster." Mason said voters had sent a message to Brown that his government is out of touch. "It is time for a change," he said. Read The Full Story In Germany, Obama Urges Joint Fight Against Terrorism 2008-07-24 15:25:08 Before an enormous crowd, Democratic presidential contender Barack Obama Thursday summoned Europeans and Americans together to "defeat terror and dry up the well of extremism that supports it" as surely as they conquered communism a generation ago. "The walls between old allies on either side of the Atlantic cannot stand," said Obama, speaking not far from where the Berlin Wall once divided the city. "The walls between the countries with the most and those with the least cannot stand. The walls between races and tribes, natives and immigrants, Christian and Muslim and Jew cannot stand," he said. Obama said he was speaking as a citizen, not as a president, but the evening was awash in politics. His remarks inevitably invited comparison to historic speeches in the same city by Presidents John F. Kennedy and Ronald Reagan, and he borrowed rhetoric from his own appeals to campaign audiences in the likes of Berlin, New Hampshire, when he addressed a crowd in one of the great cities of Europe. "People of Berlin, people of the world, this is our moment. This is our time," he said. Read The Full Story Dutch Trading Firm Said To Manipulate Oil Market 2008-07-24 15:24:47 Commodity regulators in Washington, D.C., have accused a Dutch trading company of making roughly $1 million in illegal profits by manipulating the prices of crude oil, heating oil and gasoline over an 11-day period last year. In audiotapes uncovered in their investigation, regulators said one defendant described the scheme as an effort to “bully the market” by making a massive number of trades at or near the end of the trading day to move closing prices. The lawsuit is certain to resonate loudly in Washington, D.C., where the Senate is in the midst of debating proposals to tackle high oil prices by curbing market speculation and where lawmakers have repeatedly demanded tougher enforcement measures. Moreover, unlike many manipulation cases, this one accuses the defendants of actually succeeding in moving prices that are used as benchmarks for consumer markets - a remarkable claim in markets widely considered too big to be bullied. The complaint, announced Thursday, is the first fruits of a broad investigation that was announced two months ago by the Commodity Futures Trading Commission,which oversees the futures exchanges that help determine global benchmark prices for energy and agricultural commodities. Read The Full Story Credit Suisse Earnings Fall 62 Percent 2008-07-24 15:23:58 Credit Suisse posted a smaller-than-expected fall in second-quarter earnings on Thursday as it managed more cash for the world’s wealthy and its investment banking unit returned to profit. The Swiss bank’s earnings easily beat analysts’ forecasts, despite falling 62 percent to 1.2 billion Swiss francs ($1.16 billion), because of smaller asset write-downs than expected and as its investment bank, private bank and asset management business all posted profits. A Reuters poll of analysts had forecast profit of 526 million francs. A reduction in risk exposure, the small write-down and strong inflows for private banking were all positive, analysts said. The first results from a big European bank for the second quarter also backed up signs from American rivals that banks could be through the worst of the write-downs ignited by the subprime mortgage crisis and subsequent credit squeeze. Read The Full Story Bush Threatens To Veto Bill To Sell Government Oil 2008-07-24 15:22:54 President George W. Bush on Thursday threatened to veto legislation that would require the government to sell 10 percent of the oil in the nation's emergency petroleum stockpile. The House of Representatives was expected to vote on the bill later on Thursday. Democrats hope the legislation will lower oil prices by putting on the market more of the Strategic Petroleum Reserve's light, sweet crude that is sought by refiners. "Drawing down our emergency oil reserve in the absence of a severe energy disruption is counter to the purpose of the SPR, and offers the nation a quick fix instead of much needed long-term, responsible energy solutions," the White House said in a statement. The bill would require the government to sell 10 percent of the emergency stockpile's oil, or 70 million barrels, in the open market. About 40 percent of the stockpile's oil is light sweet crude. Read The Full Story IOC Bars Iraq From Olympic Games 2008-07-24 15:22:13 Iraqi athletes have been banned from competing in the Olympics in Beijing because of a squabble between the Iraqi government and the International Olympic Committee, making Iraq one of the few countries to be barred from the games. Iraqi officials learned on Tuesday that its seven-member Olympic team would not be allowed to participate this summer because of the dispute, according to Haider Ali Lazim, a former member of the Iraqi National Olympic Committee who represented Iraq in judo in the 2004 Olympics in Athens, Greece. The dispute began when the government of Prime Minister Nouri al-Maliki disbanded the Iraqi Olympic Committee in May, accusing its members of corruption and winning their seats through rigged elections. Lazim, a member of the disbanded group, said the committee denies the allegations. The government appointed an interim committee headed by the minister of sports, but the International Olympics Committee refused to recognize it, citing Olympic Charter rules that bar government interference in national Olympic committee activities. On June 4, it suspended Iraq's Olympic committee, giving the Iraqi government a deadline of Wednesday - the deadline for the submission of rosters in all sports but track and field. "I feel sad for sports in Iraq and I feel angry at our government because it caused all this," said Lazim. "But there is no doubt that the decision of the International Olympics Committee is correct and legal." Read The Full Story Dolly's Deluge Rakes Coasts Of Texas, Mexico 2008-07-24 15:21:39 Hurricane Dolly rolled into South Texas and northern Mexico on Wednesday, deluging the Rio Grande Valley with rain, knocking out power to tens of thousands of people and ripping roofs off resorts on South Padre Island. The worst fears of local officials did not materialize. The levees along the Rio Grande held and no major flooding was reported, state and local officials said. The brunt of the storm surge did not flow up the river. “The levees are holding up just fine, and the river level hasn’t risen too much,” said Johnny Cavazos, the emergency management coordinator for Cameron County, at the state’s southern tip. “We got lucky.” Some officials still worried about the enormous amount of rain the storm would dump - up to 20 inches in some places -  which could swell the river and breach levees in the coming days. The storm, the first to affect the United States mainland this year, first raked across South Padre Island, a tourist resort, in the early afternoon. A few hours later, it hit the coast about 30 miles north of Port Isabel, churning inland and losing power slowly, said the National Hurricane Center in Miami, Florida. Read The Full Story
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