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Tuesday, July 01, 2008

Free Internet Press Newsletter - Tuesday July 1 2008 - (813)

Tuesday July 1 2008 edition
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A Ragtag Insurgency Gains An Al-Qaeda Lifeline
2008-07-01 00:51:59
Hiding in the caves and woodlands surrounding the hill-country town of Naciria, Algerian insurgents were all but washed up a few years ago.

Their nationalist battle against the Algerian military was faltering. “We didn’t have enough weapons,” recalled a former militant lieutenant, Mourad Khettab, 34. “The people didn’t want to join. And money, we didn’t have enough money.”

Then the leader of the group, a university mathematics graduate named Abdelmalek Droukdal, sent a secret message to Iraq in the fall of 2004. The recipient was Abu Musab Al-Zarqawi, the leader of al-Qaeda in Mesopotamia, and the two men on opposite ends of the Arab world engaged in what one firsthand observer describes as a corporate merger.

Today, as Islamist violence wanes in some parts of the world, the Algerian militants - renamed al-Qaeda in the Islamic Maghreb - have grown into one of the most potent Osama bin Laden affiliates, reinvigorated with fresh recruits and a zeal for Western targets.

Their gunfights with Algerian forces have evolved into suicide truck bombings of iconic sites like the United Nations  offices in Algiers. They have kidnapped and killed European tourists as their reach expands throughout northern Africa.

Last month, they capped a string of attacks with an operation that evoked the horrors of Iraq: a pair of bombs outside a train station east of Algiers, the second one timed to hit emergency responders. A French engineer and his driver were killed by the first bomb; the second one failed to explode.

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Bear Market Snapping At Wall Street's Ankles
2008-07-01 00:51:24
The Dow Jones industrial average came as close as possible to a bear market in the second quarter without actually falling into one.

Pounded in the final six weeks by the noxious mixture of rising oil prices, falling home values and continued losses in the banking sector, the Dow sank 7.4% in the quarter and finished down 19.9% from its record high last October.

The bulk of the losses struck in June as both the Dow and the Standard & Poor's 500 index suffered their biggest declines for the month since 1930 - the depths of the bear market during the Great Depression.

Though the Dow and other major averages averted the 20% drop that historically has defined a bear market, many on Wall Street are convinced that a bear is underway and that it may be a particularly bruising one given the tangle of problems afflicting the economy.

"The average bear market takes us down 30%," said Peter Boockvar, equity strategist at New York brokerage house Miller Tabak & Co. "If that's just the average we have a way to go. And if you believe this is the worst economic environment in decades, you can even make argument that that maybe we're only halfway there."

The second quarter started on an up note for the stock market as the 11th-hour rescue of Bear Stearns in mid-March raised hope that the global financial system had withstood its biggest threat in decades.
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Campaign Blog: McCain Talks About Upcoming Latin America Trip
2008-07-01 00:50:53
Sen. John McCain spoke at length about his upcoming trip to Latin America and approach to international affairs during a ride on his Straight Talk Express bus to Pipersville, Pennsylvania, Monday.

When asked about why he was going to tout the virtues of free trade abroad at a time when many Americans have grown increasingly skeptical of such agreements, the senator said he had no intention of backing away from such a longstanding commitment.

"You gotta stand on principle. I believe in the principle of free trade," he said, adding that Americans have been ill-served by the unemployment and worker displacement programs that the federal government runs. "It's terrible," he said of the two programs.

McCain said he was determined not to follow the example of President Herbert Hoover, who signed protectionist legislation into law. "We went from a recession into one of the great depressions of our history," he said. "I've got to convince people... that I have a plan to give them the kind of education and training they need."

McCain said he hoped to achieve several goals with his upcoming trip, including thanking the leaders of Colombia and Mexico for their work on the drug trade, and to "pledge my continued cooperation with them." But he added that he would also press them to make further progress.

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Chrysler To Close 1 Plant, Cut Output At Another
2008-07-01 00:49:43
Chrysler said Monday that it would indefinitely close one Missouri plant and cut production at another because of slumping demand for pickup trucks and minivans.

Executives said in a conference call that the automaker would shutter the St. Louis South plant, which makes minivans, effective Oct. 31. The St. Louis North plant, which makes full-size pickups, will be cut from two shifts to one effective Sept. 2.

Auburn Hills, Michigan-based Chrysler said the moves would affect 2,400 jobs. That includes 1,500 at the minivan plant and another 900 at the pickup truck plant, both of which are in Fenton, a St. Louis suburb.

Chrysler President and Vice Chairman Tom LaSorda said the company had no plans to reopen the minivan plant.

"We see no need for the capacity in the future," he said, adding that demand can be handled at another minivan plant in Windsor, Canada.

LaSorda also denied rumors that Chrysler's owner, Cerberus Capital Management, planned to sell the company in pieces: "Hogwash, absolutely not being considered at all."
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As A Result Of Policy Disputes, Al-Qaeda Grows In Pakistan
2008-06-30 15:02:34
Late last year, top Bush administration officials decided to take a step they had long resisted. They drafted a secret plan to make it easer for the Pentagon’s Special Operations forces to launch missions into the snow-capped mountains of Pakistan to capture or kill top leaders of al-Qaeda.

Intelligence reports for more than a year had been streaming in about Osama bin Laden's terrorism network rebuilding in the Pakistani tribal areas, a problem that had been exacerbated by years of missteps in Washington, D.C., and the Pakistani capital, Islamabad, sharp policy disagreements, and turf battles between American counterterrorism agencies.

The new plan, outlined in a highly classified Pentagon order, was intended to eliminate some of those battles, and it was meant to pave a smoother path into the tribal areas for American commandos, who for years have bristled at what they see as Washington’s risk-averse attitude toward Special Operations missions inside Pakistan. They also argue that catching bin Laden will come only by capturing some of his senior lieutenants alive.

More than six months later, the Special Operations forces are still waiting for the green light. The plan has been held up in Washington by the very disagreements it was meant to eliminate. A senior Defense Department official said there was “mounting frustration” in the Pentagon at the continued delay.

After the Sept. 11 attacks, President Bush committed the nation to a “war on terrorism” and made the destruction of bin Laden’s network the top priority of his presidency. Yet it is increasingly clear that the Bush administration will leave office with al-Qaeda having successfully relocated its base from Afghanistan to Pakistan’s tribal areas, where it has rebuilt much of its ability to attack from the region and broadcast its messages to militants across the world.

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U.S. Advised Iraqi Ministry On Oil Deals
2008-06-30 15:01:08

A group of American advisers led by a small State Department team played an integral part in drawing up contracts between the Iraqi government and five major Western oil companies to develop some of the largest fields in Iraq,  say American officials.

The disclosure, coming on the eve of the contracts’ announcement, is the first confirmation of direct involvement by the Bush administration in deals to open Iraq’s oil to commercial development and is likely to stoke criticism.

In their role as advisers to the Iraqi Oil Ministry, American government lawyers and private-sector consultants provided template contracts and detailed suggestions on drafting the contracts, said advisers and a senior State Department official.

It is unclear how much influence their work had on the ministry’s decisions.

The advisers - who, along with the diplomatic official, spoke on condition of anonymity - say that their involvement was only to help an understaffed Iraqi ministry with technical and legal details of the contracts and that they in no way helped choose which companies got the deals.

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What's Colorless and Tasteless And Smells Like ... Money?
2008-06-30 14:59:42

In Tokyo and Paris, you can now spend $5 a glass on special beverages selected by a professional sommelier.

Nothing surprising there, except the beverages being served are different brands of bottled water - with various "flavors" supposedly matched to different foods.

Desalinated seawater from Hawaii, meanwhile, is being sold as "concentrated water" - at $33.50 for a two-ounce bottle. Like any concentrated beverage, it is supposed to be diluted before drinking, except that in this case, that means adding water to ... water.

And from Tennessee, a company named BlingH2O - whose marketing imagery features a mostly nude model improbably balancing a bottle of water between her heel and her hip - is retailing its water at $40 for 750 milliliters, with special-edition bottles going for $480 - more than a million times the price of the liquid that comes from your tap.

The push to turn water into the new wine is a marketing phenomenon: The bottled-water industry is engaged in an intense effort to convince Americans that the stuff in bottles is substantially different from the stuff out of the tap.

Yet empirical tests have repeatedly shown that they are generally the same. In blind taste tests, many people who swear they can differentiate between bottled-water brands and tap water fail to spot the differences, and studies have shown that both are fine to drink, and both occasionally can have quality problems.

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TechBlog: Data Breach Reports Up 69 Percent In 2008
2008-06-30 14:58:48
Intellpuke: This article by Brian Krebs appeared in his Security Fix column in the Washington Post edition for Monday, June 30, 2009.

Businesses, governments and universities reported a record number of data breaches in the first half of this year, a 69 percent increase over the same period in 2007 driven by a spike in data thefts attributed to employees and contractors, according to an analysis by identity theft experts.

The San Diego-based Identity Theft Resource Center (ITRC) tracked 342 data breach reports from Jan. 1 to June 27. Nearly 37 percent of reports came from businesses - an increase from almost 29 percent last year.

Data breach reports from health care providers (14.9 percent of the total) and banks (10 percent) continued to rise, while the share of breaches from educational institutions (21.3 percent of the total) government entities and the military (17 percent) declined for the third year in a row, the ITRC found.

Hacking was the least-cited cause of data breaches in the first six months of 2008 (11.7 percent of the total). Instead, lost or stolen laptops and other digital storage media remain the most frequently cited cause of data breaches, accounting for more than 20 percent of all reported cases, the ITRC found. The inadvertent posting of personal and financial data online prompted roughly 15 percent of the data breach disclosures.

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Future Of Biofuel Clouded By Weather
2008-07-01 00:51:41

The record storms and floods that swept through the Midwest last month struck at the heart of America’s corn region, drowning fields and dashing hopes of a bumper crop.

They also brought into sharp relief a new economic hazard. As America grows more reliant on corn for its fuel supply, it is becoming vulnerable to the many hazards that can damage crops, ranging from droughts to plagues to storms.

The floods have helped send the price of ethanol up 19 percent in a month. They appear to have had little effect on the price of gasoline at the pump, as ethanol represents only about 6 percent of the nation’s transport fuel today.

That share is expected to rise to at least 20 percent in coming decades. Experts fear that a future crop failure could take so much fuel out of the market that it would send prices soaring at the pump. Eventually, the cost of filling Americans’ gas tanks could be influenced as much by hail in Iowa as by the bombing of an oil pipeline in Nigeria.

“We are holding ourselves hostage to the weather,” said John M. Reilly, a senior lecturer at the Massachusetts Institute of Technology and an ethanol expert. “Agricultural markets are subject to wide variability and big price spikes, just like oil markets.”

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Campaign Blog: Obama Hits Back On Questions About His Patriotism
2008-07-01 00:51:04
Dogged by persistent questions about his faith in God and country, Sen. Barack Obama Monday journeyed to Harry Truman's birthplace to lay out his vision of patriotism, conceding that he has learned in this campaign "the question of who is - or is not - a patriot all too often poisons our political debate."

"Throughout my life, I have always taken my deep and abiding love for this country as a given, " said Obama. "It was how I was raised. It was what propelled me into public service. It it why I am running for president. And yet at times over the last 16 months, my patriotism [has been] challenged - at times as a result of my own carelessness, more often as a result of the desire by some to score political points and raise fears about who I am and what I stand for."

The address, at the Truman Memorial Building here in Independence, Missouri, was an extraordinary one for a presumptive nominee of the Democratic Party just four months before election day. Obama has built his candidacy on the promise of change in a political year when the vast majority of Americans feel their nation is on the wrong track. But he has found himself tripping over one of the lowest hurdles a politician faces, the issue of his patriotism.

False assertions have persistently circulated online, claiming incorrectly that Obama will not recite the Pledge of Allegiance, place his hand on his heart for the national anthem or wear an American flag pin on his lapel.

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Bush Administration Delaying Medicare Fee Cut
2008-07-01 00:50:09
The Bush administration said Monday it will delay paying doctors for treating Medicare patients in early July to give Congress more time to block a scheduled 10.6 percent fee cut.

The move by the Centers for Medicare and Medicaid Services doesn't block the cut, scheduled to take place Tuesday. It's up to Congress to decide that.

To give Congress more time to act, the agency will instruct its contractors to delay the processing of any physician or non-physician Medicare claims for health care services given during the first 10 business days of July. Claims for services received on before June 30 will be processed as usual.

CMS will not be making any payments at the 10.6 percent reduced rate until July 15, at the earliest, agency spokesman Jeff Nelligan said. The delay in processing claims probably means that claims that would have been paid in mid-July will be delayed up to a week, the agency estimates.

Another option would have been to issue on-time payments at the lower rate and pay the rest later after Congress fixes the problem.

Congress, facing the prospect of millions of angry seniors at the polls in November, will be under tremendous pressure to act quickly when it returns to Washington the week of July 7 to prevent the cuts in payments for some 600,000 doctors who treat Medicare patients. The cuts were scheduled because of a formula that requires fee cuts when spending exceeds established goals.

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Light Winds Help Big Sur Firefighters
2008-07-01 00:49:26
Mother Nature has lent a helping hand to firefighters battling blazes around the northern part of the state today, dishing up light winds that appear to be pushing a blaze threatening Big Sur back on itself for now.

More than 1,250 structures remain threatened by the Basin Complex fire in Monterey County, one of 1,500 blazes that have blackened nearly 400,000 acres in tinderbox-dry Northern California over the last 10 days.

Near Big Sur, crews with the U.S. Forest Service have been feverishly trying to construct fire breaks to protect Palo Colorado Canyon, a scattered collection of homes hidden in the steep hills east of California 1.

"You don't realize it driving along the highway, but there are quite a few homes tucked up in those hillsides," said John Ahman, a Forest Service spokesman. "And those are what we're most concerned with."

The good news for now, said Ahman, is that winds have been light and out of the northwest, helping push the fire back onto itself since Sunday. A dose of coastal overcast also propped up humidity levels, helping further slow the fire's advance and allowing hand crews to get closer to fight the blaze.

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Hoarding Nations Drive Food Costs Higher
2008-06-30 15:02:14
At least 29 countries have sharply curbed food exports in recent months, to ensure that their own people have enough to eat, at affordable prices.

When it comes to rice, India, Vietnam, China and 11 other countries have limited or banned exports. Fifteen countries, including Pakistan and Bolivia, have capped or halted wheat exports. More than a dozen have limited corn exports. Kazakhstan has restricted exports of sunflower seeds.

The restrictions are making it harder for impoverished importing countries to afford the food they need. The export limits are forcing some of the most vulnerable people, those who rely on relief agencies, to go hungry.

“It’s obvious that these export restrictions fuel the fire of price increases,” said Pascal Lamy, the director general of the World Trade Organization (WTO). 

By increasing perceptions of shortages, the restrictions have led to hoarding around the world, by farmers, traders and consumers.

“People are in a panic, so they are buying more and more - at least, those who have money are buying,” said Conching Vasquez, a 56-year-old rice vendor who sat one recent morning among piles of rice at her large stall in Los Banos, in the Philippines, the world’s largest rice importer. Her customers buy 8,000 pounds of rice a day, up from 5,500 pounds a year ago.

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Pentagon Resists Order To Clean Up Pollution That Poses 'Imminent Dangers' To Public Health
2008-06-30 15:00:06
The U.S. Defense Department, the nation's biggest polluter, is resisting orders from the Environmental Protection Agency (EPA) to clean up Fort Meade and two other military bases where the EPA says dumped chemicals pose "imminent and substantial" dangers to public health and the environment.

The Pentagon has also declined to sign agreements required by law that cover 12 other military sites on the Superfund list of the most polluted places in the country. The contracts would spell out a remediation plan, set schedules, and allow the EPA to oversee the work and assess penalties if milestones are missed.

The actions are part of a standoff between the Pentagon and environmental regulators that has been building during the Bush administration, leaving the EPA in a legal limbo as it addresses growing concerns about contaminants on military bases that are seeping into drinking water aquifers and soil.

Under executive branch policy, the EPA will not sue the Pentagon, as it would a private polluter. Although the law gives final say to EPA Administrator Stephen L. Johnson in cleanup disputes with other federal agencies, the Pentagon refuses to recognize that provision. Military officials wrote to the Justice Department last month to challenge EPA's authority to issue the orders and asked the Office of Management and Budget (OMB) to intervene.

Experts in environmental law said the Pentagon's stand is unprecedented.

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Iran's Oil Cash Causing Rapid Inflation
2008-06-30 14:59:11
Faced with rapid inflation and growing international concern about his country's nuclear ambitions, Iranian President Mahmoud Ahmadinejad is relying on huge increases in oil and gas revenue to insulate his government from internal and external pressures.

Some of the same Western countries taking steps to compel Iran to stop uranium enrichment are also the biggest consumers of its oil and gas. The European Union said last week that it would freeze the assets of Bank Melli, Iran's largest, in keeping with U.N. sanctions. The E.U. is also the leading global consumer of Iranian oil and gas.

Oil wealth, which funds 60 percent of the national budget, has allowed Iran's government to exercise its power to cut interest rates and ignore warnings from the country's Central Bank that overspending will worsen inflation.

Iran earned $80 billion from oil and gas sales in the fiscal year that ended March 20, up from $35 billion three years ago. But the increasing oil revenue is causing a widening gap between rich and poor, as some businesspeople prosper while inflation eats away at consumers' purchasing power. These developments jeopardize Ahmadinejad's populist appeal and could hurt his campaign for reelection in 2009.

Since 2005, when Ahmadinejad came to power, the annual rate of inflation has risen from 12.1 percent to 19.2 percent, according to Central Bank figures. The rate reached 25.2 percent in May, the bank said.

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EBay Ordered To Pay $61 Million Damages In Sale Of Fake Goods
2008-06-30 14:58:34
A French court on Monday ordered the online auction giant eBay to pay 38.6 million euros, or $61 million, in damages to the French luxury goods company LVMH, in the latest round in a long-running legal battle over the sale of counterfeit goods on the Internet.

LVMH, a maker of high-end leather goods, perfumes and other fashion and luxury products, successfully challenged eBay for a second time in the French court, arguing that 90 percent of the Louis Vuitton bags and Dior perfumes sold on eBay are fakes.

The court ruled that eBay, which earns a commission on the sales, was not doing enough to stamp out counterfeit sales.

EBay vowed to appeal the ruling in a brief statement issued immediately after the decision was announced.

“When counterfeits appear on our site we take them down swiftly, and today’s ruling is not about our fight against counterfeiting,” eBay said in a statement from Paris. “It’s about an attempt by LVMH to protect uncompetitive commercial practices at the expense of consumer choice and the livelihood of law-abiding sellers that eBay empowers every day. We will fight this ruling on their behalf.”

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