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Thursday, July 17, 2008

Free Internet Press Newsletter - Thursday July 17 2008 - (813)

Thursday July 17 2008 edition
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Slowing Economy Means Global Role Reversals
2008-07-16 23:45:25

The global slowdown stemming in part from the deepening U.S. financial crisis is hitting the world's richest nations the hardest even as emerging nations, some with once-fragile economies, are proving relatively resilient.

Consider, for instance, Britain. A severe housing slump and credit crunch sparked a 63 percent drop in new British home mortgages in May compared with May 2007. Mirroring losses in the United States, the average home price in Britain fell to $344,704 in June, down 6.3 percent compared with June 2007, according to the Nationwide Building Society. The stock market in London slipped into bear market territory, joining New York's.

"It affects everybody, and you need not be a home owner, or have credit or be a consumer," said Martin Slaney, head of derivatives at GFT Global Markets in London. "People are getting used to a new terminology; they know all sorts of credit-crunch-related terms. Money can be made now, but generally it's a hugely unfortunate economic time. There's a lot of talk about how bad it is."

Contrast that with oil-fat Russia - a red-hot emerging market. As in many commodity-driven economies in the developing world, soaring energy revenue has largely insulated Russia, the world's second-largest oil exporter, from the turbulence in global markets. Its gross domestic product is expected to grow 8 percent this year, and consumer spending continues to boom, with a 13 percent increase so far this year, according to Troika Dialog, a Moscow investment house.

"We are overloaded with money, crazy amounts of money from the energy market," said Mikhail Bergen, a professor at Moscow's Higher School of Economics.

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FBI Probing IndyMac For Possible Fraud
2008-07-16 23:44:58
Failed bank IndyMac is under investigation by the FBI for possible fraud involving its mortgage lending, unnamed law enforcement officials said on Wednesday.

It was not immediately clear how long the FBI's probe of IndyMac has been underway. The bureau said on Wednesday it had raised to 21 from 19 the number of corporate targets in its investigation of the mortgage industry.

U.S. banking regulators seized mortgage lender IndyMac on Friday after withdrawals by panicked depositors led to the third-largest banking failure in U.S. history.

The FBI declined to comment on IndyMac, and law enforcement officials spoke about the bank on condition that they not be identified.

Evan Wagner, a spokesman for IndyMac said: "The first we heard of the investigation was in the press accounts today. We're not in a position to confirm or deny (the investigation) because it's an uncorroborated press account."

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U.S. Prepares To Boost Its Afghan Forces
2008-07-16 23:44:23
Senior U.S. military officials are developing plans to speed the deployment of thousands of additional troops to Afghanistan, including possibly pulling the next brigade scheduled to go to Iraq this fall and sending it to Afghanistan instead.

President Bush has already committed to beefing up the U.S. presence in Afghanistan next year. But Defense Department officials said the recent efforts of military planners would accelerate the process and could allow the new brigade of 3,500 soldiers to deploy there before the end of this year.

The change comes amid growing violence in southern and eastern Afghanistan, prompting U.S. commanders in that country as well as other military brass to push the Pentagon's Joint Chiefs of Staff to reevaluate troop rotations to Iraq and Afghanistan.

On Sunday, nine U.S. soldiers were killed at a remote outpost in eastern Afghanistan during a sophisticated offensive by hundreds of insurgent fighters, the largest single American loss of life in Afghanistan in three years.

The U.S. and Afghan troops who manned the outpost have been ordered to abandon the base, a NATO spokesman said Wednesday. The post is a small, recently constructed facility near the village of Wanat, close to the border with Pakistan.

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E.Coli Linked To Beef Now Reported In 5 States
2008-07-16 23:43:07
An E. coli outbreak traced to recalled beef in Michigan and Ohio has spawned cases in three other states, U.S. health officials said Tuesday.

New York, Kentucky and Indiana each have one lab-confirmed case of a bacterial infection that matches the 41 previously reported cases, according to the Centers for Disease Control and Prevention.

The outbreak has been traced to beef sold in Kroger supermarkets in Michigan and Ohio. The Kroger Co. last month recalled ground beef sold in Michigan and Ohio stores, then this month expanded it to include other states. Nebraska Beef Ltd. supplied the meat, ultimately recalling 5.3 million pounds of beef.

The Kentucky patient lives near Ohio, but the New York and Indiana patients did not travel to either of the states where the outbreak began, said Mark Sotir, a CDC investigator working on the outbreak.

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Southern California Home Sales And Prices Keep Falling
2008-07-16 23:37:03
Southern California's housing market continues to be racked by falling prices and declining sales volume, a real estate information service reported Wednesday.

The median home sales price was $355,000 in June, down 29.3% from a year ago. Home values are now on par with what they were in early 2004.

The figure of 17,424 homes sold in Southern California was down 13.6% from the same month a year ago and the lowest sales total recorded by DataQuick Information Systems, the La Jolla firm that has been tracking area home sales since 1988.

The volume of home sales did rise 3% from May, but analysts attributed that uptick to bargain hunters snapping up foreclosed homes at steep discounts.

While most industry analysts believe prices will continue falling, they disagree over how much farther they will drop.

Los Angeles economist Christopher Thornberg, principal of Beacon Economics, said home prices are still out of sync with what buyers can afford to pay. Thornberg said prices must fall to 40% below the peak to match incomes.
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Congressional Opposition, From Both Parties, Over Bailout Plan
2008-07-16 03:30:18
The Bush administration’s plan to rescue the nation’s two largest mortgage finance companies ran into sharp criticism in Congress on Tuesday as some lawmakers questioned the open-ended request for money that could be used to help the companies.

The criticism prompted House leaders to push back their timetable for approving emergency housing legislation, saying final action would take at least until early next week. A growing number of Republicans had voiced skepticism and, in some cases, angry opposition, to the administration’s proposal to help the two companies, Fannie Mae and Freddie Mac. 

It was unclear whether the criticism was hand-wringing before Congress ultimately adopted the rescue package or whether it meant a delay or that major changes to the proposal were in the works.

The Republican opposition threatened to incite an ugly intramural fight with the White House. In a high-stakes election year, the resistance reflected the deep fear among some lawmakers that the plan could set off a large taxpayer bailout, touching off a wave of voter anger in November.

For some lawmakers facing tough re-election contests, opposing the rescue plan is a way to reaffirm their identity as budget hawks while publicly breaking with a deeply unpopular lame-duck administration.

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Israel Exchanges Lebanese Murderer For Bodies Of 2 Captured Soldiers
2008-07-16 03:29:32

Israel's cabinet Tuesday gave final approval for a prisoner swap Wednesday in which it will give up a notorious Lebanese militant in return for two Israeli soldiers who are presumed dead.

The capture of the soldiers, Eldad Regev, 27, and Ehud Goldwasser, 32, two years ago sparked a month-long war in Lebanon that claimed nearly 1,200 lives. Although at first Israel hoped the reservists survived the ambush, it now believes both are dead. Their remains will be returned to Israel at 9 a.m. through the Rosh Hanikra crossing at the border in northern Israel.

In return, Israel was due last night to pardon a Lebanese prisoner, Samir Kuntar, who has spent nearly three decades in Israeli jails for murder and attempted murder. In 1979, at the age of 16, he was one of four militants who sailed from Lebanon to the coast at Nahariya on a rubber dinghy and then attacked an apartment block. They broke into a flat and dragged out a man, Danny Haran, and his four-year-old daughter Einat. Kuntar, according to witnesses, shot and killed Haran and then beat his daughter to death. Haran's wife, Smadar, hid in their bedroom with their second daughter, Yael, who was two, but as she tried to silence the child's cries she accidentally smothered her to death.

Kuntar is one of five Lebanese prisoners who will be handed back Wednesday. In addition, Israel will deliver the remains of 199 Lebanese and Palestinian fighters who have been killed in recent years. The agreement was negotiated through a German mediator.

Shimon Peres, the Israeli president, was to sign the pardon. "It's not a happy choice," Peres said before the cabinet vote. "On one hand, we have the most terrible murderer. On the other hand, we have our commitment to our boys who were sent to fight for their country. It is our moral duty and our heartfelt wish to see them come back."

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L.A. City Attorney Sues Blue Cross Of California Over Health Insurance Cancellations
2008-07-16 23:45:13
When Blue Shield of California learned Ana Simoes needed emergency surgery to remove her gall bladder, the company OK'd the operation but also turned the case over to an investigative unit, according to corporate records disclosed Wednesday.

A Blue Shield investigator scrutinized Ana's medical records and compared them to the application she filled out for coverage, the investigator's notes show. Ultimately, the investigator scribbled "unable to prove" in her notes, and then opened an investigation into Ana's husband, Augustine. This time, the investigator concluded the Chino dairy farmer had left out an elevated cholesterol reading, and the omission was used to justify canceling the couple's coverage.

The cancellation was highlighted by Los Angeles City Attorney Rocky Delgadillo as an example of the allegedly abusive practices at the heart of a lawsuit he filed Wednesday against Blue Shield. The suit contends that Blue Shield has illegally canceled the coverage of more than 850 policyholders, including people like the Simoeses, since 2002.

Blue Shield spokesman Tom Epstein said he could not comment because company officials had not seen the suit. In the past, Blue Shield has said that it canceled policies rarely and that the practice was a legal and necessary tool to combat fraud.

The Blue Shield suit is similar to those Delgadillo filed earlier this year against insurers Anthem Blue Cross and Health Net. Like Blue Shield, those companies have denied any wrongdoing and say they only rescind coverage when necessary.
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Iraq Wants Security Control Of All Provinces By Year End
2008-07-16 23:44:40
Iraq hopes to have control over security across the country by the end of the year, national security advisor Mowaffak Rubaie said Wednesday, as U.S.-led forces handed over responsibility for the southern province of Qadisiya to local authorities.

Rubaie's comments reflect the Iraqi government's growing confidence in its security forces since they carried out a string of operations this year to assert authority over parts of the country that had been in the hands of Sunni Arab and Shiite Muslim militants.

The government is pressing U.S. officials for a timetable for the withdrawal of American forces.

"We will be very joyous when the last foreign soldier leaves Iraq," Rubaie said at a ceremony marking the handoff in Diwaniya, the provincial capital. "And we will tell them thank you for liberating Iraq and for supporting our forces in achieving stability."

The handoff comes at a time when the number of attacks nationwide has dropped to its lowest level since 2004, according to U.S. military statistics. Still, bombings in central and northern Iraq in recent months have underscored the persistent threat posed by insurgents.
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Oil Prices Fall Again, Dow Up Nearly 300 Points
2008-07-16 23:43:50
The stock market notched its best gain in 3 1/2 months Wednesday as a second straight day of falling oil prices led Wall Street to shake off troubling inflation data.

The Dow Jones industrial average soared nearly 300 points, with investors piling back into many of the financial stocks they had shunned like the plague in recent days.

The pullback in oil raised hope that the the upward pressure on food, gasoline and other consumer prices would moderate in coming weeks and provide much-needed relief to the economy.

"The biggest driver is we had two down days in a row in energy prices," said Art Hogan, chief market strategist at Jefferies & Co. "One of biggest negative catalysts, away from fear of the financial meltdown, has been energy. To get a pullback in energy prices, and a significant pullback, is really positive."

Two days after one of their worst-ever declines, financial stocks surged, thanks in part to unexpectedly strong results and a surprise dividend increase from Wells Fargo & Co., the biggest banking company on the West Coast.
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Lawmakers Probe Web Tracking By Kansas Internet Provider
2008-07-16 23:37:26

An Internet provider based in Kansas used a monitoring technology earlier this year to track sites visited by its users, apparently without directly notifying them, according to a congressional panel investigating the action.

Embarq, which serves 1.3 million Internet customers in 18 states, including Virginia, acknowledged that it used "deep packet inspection" technology provided by the Silicon Valley firm NebuAd to direct targeted advertising to users.

Some lawmakers and others question whether such actions violate users' rights to keep their Internet behavior to themselves. The House Energy and Commerce subcommittee on telecommunications and the Internet will take up the subject at a hearing Thursday.

"Surreptitiously tracking individual users' Internet activity cuts to the heart of consumer privacy," said Rep. Edward J. Markey (D-Massachusetts),the panel's chairman. "Embarq's apparent use of this technology without directly notifying affected customers that their activity was being tracked, collected and analyzed raises serious privacy red flags."

Federal privacy and wiretap laws generally require consumers to consent to the collection and use of their personal information. There has been ongoing debate over whether the technology's interception or use violates these laws.

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U.N. Court Orders U.S. To Halt Executions Of Mexicans
2008-07-16 23:36:39
A United Nations court ruled Wednesday that the United States should halt the executions of five Mexican nationals - including a convicted killer sentenced to die in three weeks - until their cases can be reviewed.

The ruling by the International Court of Justice, also known as the World Court, is not binding. Nonetheless, Mexican officials and attorneys for the condemned men said they hoped it would influence U.S. authorities overseeing the five cases in Texas, as well as the 46 other cases of Mexican nationals on death row across the United States.

The most pressing case involves Jose Medellin, who was convicted of raping and killing two teenage girls 15 years ago as part of a gang initiation rite. He is scheduled to die Aug. 5 in Texas. His case has stirred a passionate reaction in Mexico, which does not have the death penalty.

On Wednesday, Mexican Foreign Minister Patricia Espinosa said she hoped U.S. authorities would abide by the World Court's decision and stay the executions.

The World Court ruled in 2004 that the Mexican nationals deserved to have their cases reviewed because of claims they did not to have an opportunity to seek legal help from Mexican consulates, a right granted under the 1963 Vienna Conventions. After the court's ruling, President Bush asked courts in Texas to comply, but they refused, setting off another round of legal fights. In March, the U.S. Supreme Court backed the Texas courts, saying that they were not bound by international rulings and that Bush could not force them to review the cases.

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Wachovia Plans To Add To Its Shallow Reserves
2008-07-16 03:30:01
Wachovia's stock fell to a 17-year low Tuesday after an analyst warned that the commercial bank, which holds more deposits than any other in the Washington, D.C., region, will face two years of losses arising from the credit crisis and a dramatic restatement of troubled assets on its books.

The amount of the bank's bad loans is growing faster than what the company is stashing away, and its reserves are markedly lower than the industry average, according to bank officials and regulators. Wachovia has enough money to cover about 84 percent of its non-performing loans, the bank said yesterday.

As fears mount over the health of the nation's banking system, Wachovia will have to take exceptional steps to raise enough capital to meet its obligations, analysts said. This does not mean that the bank will fail anytime soon or that depositors face imminent danger.

"Wachovia is a fundamentally strong and stable company on solid footing ... and is well-capitalized," said spokeswoman Christy Phillips-Brown.

Company officials disclosed yesterday that the bank was raising enough money to add $4.2 billion to its reserves and $1.3 billion more to cover losses in the second quarter. Those sums are in the same league as the provisions made by the biggest banks in the country to cover losses due to the credit crisis.

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Medvedev Launches Outspoken Criticism Of U.S. Missile Defense Plan
2008-07-16 03:29:12

Russia's new president, Dmitry Medvedev, Tuesday launched an outspoken attack on America's European missile defense plans, in the latest sign that policy towards the west is unchanged since Vladimir Putin.

Medvedev denounced the Bush administration's plans to build a missile defence shield in the Czech Republic and Poland, allegedly to shoot down a rogue missile fired by Iran. He accused the U.S. of aggravating the situation and promised that Russia would respond appropriately.

"This common [security] heritage cannot survive if one of the sides selectively destroys isolated elements of the strategic construction," Medvedev said, adding: "This doesn't satisfy us."

Addressing Russian ambassadors in Moscow, Medvedev also dubbed Kosovo's U.S.-backed independence illegal and accused the Baltic states of glorifying fascism. "They are shuffling history like a pack of cards," he said.

Medvedev's hard line in one of his first speeches on foreign policy since his May inauguration is likely to disappoint western observers. They hoped his presidency might usher in a more conciliatory era.

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