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Tuesday, August 19, 2008

Free Internet Press Newsletter - Tuesday August 19 2008 - (813)

Tuesday August 19 2008 edition
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Obama On Verge Of Naming Running Mate
2008-08-18 21:00:14
Senator Barack Obama has all but settled on his choice for a running mate and set an elaborate rollout plan for his decision, beginning with an early morning alert to supporters, perhaps as soon as Wednesday morning, said aides.

Obama’s deliberations remain remarkably closely held. Aides said perhaps a half-dozen advisers were involved in the final discussions in an effort to enforce a command that Obama issued to staff: that his decision not leak out until supporters are notified.

Obama had not notified his choice - or any of those not selected - of his decision as of late Monday, advisers said. Going into the final days, Obama was said to be focused mainly on three candidates: Senator Evan Bayh, of Indiana, Virginia Gov. Tim Kaine, and Senator Joseph R. Biden, Jr., of Delaware.

Some Democrats said they still hoped that he would choose Senator Hillary Rodham Clinton, of New York, or Gov. Kathleen Sebelius, who has been under steady consideration by Obama’s campaign.

By all indications, Obama remains likely to chose someone relatively safe and avoid taking a chance with a game-changing selection. A similar strategic choice now faces Obama’s likely Republican opponent, Senator John McCain, of Arizona, who has been under pressure from some Republicans to make a more daring choice.

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California Court Rules Doctors Can't Refuse Treatment To Gays On Religious Grounds
2008-08-18 20:59:36
Doctors may not discriminate against gays and lesbians in medical treatment, even if the procedures being sought conflict with physicians' religious beliefs, the California Supreme Court decided Monday.

In the second, major gay-rights victory this year, the state high court said religious physicians must obey a state law that bars businesses from discriminating on the basis of sexual orientation.

"The 1st Amendment's right to the free exercise of religion does not exempt defendant physicians here from conforming their conduct to the .. antidiscrimination requirements," Justice Joyce L. Kennard wrote for the court.

The decision stemmed from a lawsuit filed by Guadalupe T. Benitez, an Oceanside lesbian who lives with her partner and wanted to become pregnant with donated sperm.

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Pope Steps Into Berlusconi Brouhaha
2008-08-18 20:59:08

Italian Prime Minister Silvio Berlusconi's government was engaged Monday in a vigorous damage-limitation exercise after Pope Benedict appeared to lend his moral authority to speculation that Italy was in danger of returning to fascism under the tycoon's hard-line rightwing leadership.

In his usual Sunday address, the Catholic pontiff expressed concern at "recent examples of racism" and reminded Catholics that it was their duty to steer others in society away from "racism, intolerance and exclusion [of others]".

On any other day his remarks might have been seen as no more than a restatement of Catholic doctrine, but they came in the midst of a furious dispute over an editorial published by Italy's best-selling Catholic weekly, Famiglia Cristiana.

In an editorial on Friday condemning recent government moves against immigrants and Roma, the weekly said it was to be hoped that fascism was not "resurfacing in our country under another guise". The censure outraged Berlusconi's supporters, many of whom are pious Catholics.

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U.S. Officials: Russia Moving Short-Range Ballistic Missiles Into South Ossetia
2008-08-18 15:02:49
Although Russia claimed it had begun withdrawing its troops from Georgia on Monday, Russian soldiers were digging in positions along the highway approaching Tbilisi and showed no signs of pulling back from the severest confrontation between Russia and the West since the collapse of the Soviet Union.

Instead, along one major road, four Russian tanks rattled a few miles closer to the capital, and then plowed through parked police cars blocking a road as Georgian police officers stood by in dismay.

Elsewhere on the ground in Georgia, no significant troop movement was evident.

American officials said Sunday the Russian military had been moving launchers for short-range ballistic missiles into South Ossetia, a step that appeared intended to tighten its hold on the breakaway territory.

The Russian military deployed several SS-21 missile launchers and supply vehicles to South Ossetia on Friday, according to American officials familiar with intelligence reports. From the new launching positions north of Tskhinvali, the South Ossetian capital, the missiles can reach much of Georgia, including Tbilisi, the capital.

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'Liar Loans' Threaten To Prolong Mortgage Crisis
2008-08-18 15:02:23

In the mortgage industry, they are called ''liar loans'' - mortgages approved without requiring proof of the borrower's income or assets. The worst of them earn the nickname ''ninja loans,'' short for ''no income, no job, and (no) assets.''

The nation's struggling housing market, already awash in subprime foreclosures, is now getting hit with a second wave of losses as homeowners with liar loans default in record numbers. In some parts of the country, the loans are threatening to drag out the mortgage crisis for another two years.

''Those loans are going to perform very badly,'' said Thomas Lawler, a Virginia housing economist. ''They're heavily concentrated in states where home prices are plummeting'' such as California, Florida, Nevada and Arizona.

Many homeowners with liar loans are stuck. They can't refinance because housing prices in those markets have nose-dived, and lenders are now demanding full documentation of income and assets.

Losses on liar loans could total $100 billion, according to Moody's . That's on top of the $400 billion in expected losses from subprime loans.

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Pakistan Looks Ahead Without Musharraf
2008-08-18 15:01:47
The immediate reaction in Pakistan’s corridors of power and streets to the resignation of President Pervez Musharraf  was one of optimism and opportunity.

“His resignation will bring stability hopefully,” said Foreign Minister Shah Mahmood Qureshi. He noted that the stock market, which had suffered in recent sessions, had reacted positively.

Aitzaz Ahsan, the leader of a lawyers’ movement that has been pushing for Musharraf’s ouster and the reinstatement of 57 dismissed judges, said the resignation was a cause “to rejoice.”

The governing coalition that engineered the ouster of Musharraf must now face a range of potential problems, minus the main factor that unified it: opposing him.

The two leading coalition partners, Nawaz Sharif and Asif Ali Zardari, have had a fractious relationship. Sharif is a former prime minister who was deposed by Musharraf in 1999, while Zardari is the widower of Benazir Bhutto, a former prime minister who was assassinated in December.

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Despite Pullout Pledge, Russian Troops Dig In
2008-08-18 01:51:41
Russia pledged Sunday to begin removing its troops from Georgia on Monday, but the streets of this occupied city reflected a broadening, not a waning, of Russia's military incursion.

President Dmitry Medvedev vowed to "begin the withdrawal of the military contingent" starting Monday. Russian leaders have made contradictory and at times clearly false statements about their troops' plans and positions ever since the Georgia operation began. On Saturday, a top Russian general told reporters that his country had no troops in Gori.

During a reporter's 24-hour stay in the city this weekend, Russian soldiers roamed the streets in armored personnel carriers and waved Kalashnikov rifles to prevent entry to a captured Georgian military base that is now the Russian headquarters. Russian soldiers dug fortified positions for tanks along highways east and west of Gori and trucked in television and radio equipment to begin broadcasting in their own language.

"We have stopped firing - be glad about that," a young Russian captain said when asked whether troops would soon withdraw.

Meanwhile, Gori's few remaining Georgians endured pat-downs and vehicle searches when moving around town. Some residents gave shelter to fellow Georgians who arrived from villages to the north with accounts of continuing ethnic violence there. At least 27 civilians have died here in Gori in scattered incidents of violence since the Russian troops arrived, medical officials said, including a doctor killed in front of a hospital by helicopter fire.

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Halliburton's Hidden Treuhand
2008-08-18 01:51:16
Halliburton takes advantage of a European loophole that lets corporations hide beneficiaries and assets.

Little is known of a customary European legal practice that offers corporations and individuals an opportunity to profit from assets while maintaining complete anonymity of the beneficiary's identity. This practice is referred to as "Hidden Treuhand" in the English language. The practice of Hidden Treuhand submits to legal local customs in Austria, Germany, Liechtenstein, Luxemburg and Switzerland, but due to globalization, has moved beyond European borders via corporations and individuals, who put it to personal use.

The practice of Hidden Treuhand is relevant and unregulated. More and more, the relevant practice of Treuhand is used in hiding an asset owner's identity from the outside world. Assets, whether they are corporate shares or fixed assets, can be owned in secret. The personal income derived from these assets can also be kept secret from tax authorities. An example of how Hidden Treuhand facilitates tax evasion is part of the latest scandal where thousands of Germans evaded tax through the services of the LGT Treuhand Bank in Liechtenstein, using a combination of Treuhand and foundations to hide true owner identity of bank accounts.

Hidden Treuhands in Europe impact the lives of American citizens. Hidden Treuhands enable even American corporations to hide the identity of beneficiaries, assets and income. Halliburton has a Hidden Treuhand embedded in its Austrian subsidiary. It prevents transparency regarding corporate activities.

The lack of transparency creates special advantages for some, and consequences for others such as governments, competitors, stockholders and citizens. For example, a beneficiary can evade personal income tax, because the income derived from a hidden asset is not linked to the beneficiary. There is another advantage to Hidden Treuhands that borrows from the concept of a "trust." The "trust" concept allows for dividends to be removed. Money transferred to a subsidiary may be considered a dividend. By using a network of subsidiaries, favorable tax laws and banking secrecy, CEOs and insiders can profit without transparency. The Hidden Treuhand is an important aspect of what makes globalization so attractive to American and European corporations.

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Vladimir Putin Takes On A Powerless West
2008-08-18 21:00:00
Russian Prime Minister Vladimir Putin approached the crisis in Georgia coolly and efficiently, prompting admiration from even some American observers. But Moscow's brutal strike against Georgian President Saakashvili has divided the Western world, with the split running straight through the European Union.

Russia's rebirth begins at 5 a.m. on Jan. 1, 2000, in a musty, inconspicuous room in the small Chechen city of Gudermes, on the highway between the capital Grozny and the coastline of the Caspian Sea.

A leaden darkness hangs over Gudermes, with only occasional gunfire erupting from the sky over Chechnya's embattled capital. At this hour, just as Europe is going to bed, a short, wiry man in a blue windbreaker is speaking to a select group of soldiers and officers of the 42nd Motor Rifle Division. "You are defending more than Russia's dignity and honor in Chechnya. You are also here to stop the disintegration of our country," says the guest, speaking in a biting voice, a cold, fish-like look in his eyes. The man from faraway Moscow, who is not yet particularly well-known at this point, is Vladimir Putin. He has ordered his troops to increase their bombing of this insubordinate, separatist republic, and they have already set fire to refineries and factories. The renegade Chechens, who have been carrying the bug of separatism into the Russian heartland for the past six years, are on the verge of military defeat. Moscow's troops, deeply humiliated by the rebels, are beginning to regain their courage. They will never forget the new president for having come to speak to them at this late hour.

It is the hour of the beginning of Russia's comeback as a major power and of the unparalleled career of a man who his patron, former St. Petersburg Mayor Anatoly Sobchak, accurately described in this way: "He is tough as nails and sees his decisions through to the end."

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Editorial: The Corporate Free Ride
2008-08-18 20:59:25
Intellpuke: This editorial appeared in the New York Times edition for Monday, August 18, 2008.

Here is a crazy idea to address the United States’ gaping fiscal deficit: persuade corporate America to start paying taxes.

An investigation by the Government Accountability Office found that almost two-thirds of companies in the United States usually pay no corporate income taxes. Big companies, those with more than $50 million in sales or $250 million in assets, are less likely to avoid Uncle Sam altogether. Still, about a quarter of them report no tax liability either.

The G.A.O., which looked at tax returns from 1998 through 2005, does not tell us exactly how so many corporations managed to avoid the taxman. It simply notes that they were able to record sufficient expenses - salaries, interest and “other deductions” - to cancel out their taxable income.

We find it hard to believe that some two-thirds of American companies fail to turn a profit. What we find easier to believe is that corporations have become increasingly skilled at tax-avoidance strategies, including transfer pricing -  overcharging their American units for products and services provided by subsidiaries abroad to artificially reduce their profits here.

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Tropical Storm Fay Begins To Hit Florida
2008-08-18 16:07:09
1500 UTC Mon Aug 18 2008
at 11 am EDT...1500 UTC...a Hurricane Warning is in effect for the
southwestern coast of Florida from Flamingo to Anna Maria Island.
A Hurricane Warning means that hurricane conditions are expected
within the warning area within the next 24 hours. Preparations to
protect life and property should be rushed to completion.

At 11 am EDT...the Tropical Storm Warning along the Florida East
Coast is extended northward to Cocoa Beach. A Tropical Storm
Warning is in effect along the Florida East Coast from Cocoa Beach
southward...and along the Florida West Coast east of Flamingo...
including Lake Okeechobee.

A Tropical Storm Warning and a Hurricane Watch are in effect for the
Florida Keys from Ocean Reef to Key West...including the Dry
Tortugas and Florida Bay. A Hurricane Watch remains in effect for
the Florida Mainland east of Flamingo to Card Sound bridge...and
along the Florida West ! Coast north of Anna Maria to Tarpon Springs.

At 11 am EDT...1500 UTC...a tropical storm watch is in effect along
the Florida East Coast north of Cocoa Beach to Fernandina Beach.

A tropical storm watch is in effect for the northwestern Bahamas.

At 11 am EDT...1500 UTC...the government of Cuba has discontinued
all warnings and watches for Cuba.

Interests elsewhere in the Florida Peninsula and the eastern Gulf of
Mexico should monitor the progress of Fay.

Tropical storm center located near 23.6n 81.5w at 18/1500z
position accurate within 30 nm

present movement toward the north-northwest or 335 degrees at 11 kt

estimated minimum central pressure 1003 mb
Max sustained winds 50 kt with gusts to 60 kt.
50 kt....... 65ne 0se 0sw 0nw.
34 kt.......100ne 90se 0sw 0nw.
12 ft seas..100ne 120se 0sw 0nw.
Winds and seas vary greatly in each quadrant. Radii in nautical
miles are the la! rgest radii expected anywhere in that quadrant.

Repeat! ...cente r located near 23.6n 81.5w at 18/1500z
at 18/1200z center was located near 23.2n 81.2w

forecast valid 19/0000z 24.6n 81.8w
Max wind 55 kt...gusts 65 kt.
50 kt... 60ne 60se 0sw 0nw.
34 kt...100ne 90se 45sw 45nw.

Forecast valid 19/1200z 26.2n 82.1w
Max wind 65 kt...gusts 80 kt.
64 kt... 25ne 25se 0sw 0nw.
50 kt... 60ne 60se 30sw 30nw.
34 kt...120ne 120se 60sw 60nw.

Forecast valid 20/0000z 27.8n 82.0w...inland
Max wind 50 kt...gusts 60 kt.
50 kt... 30ne 30se 30sw 30nw.
34 kt...120ne 120se 60sw 60nw.

Forecast valid 20/1200z 29.3n 81.8w...inland
Max wind 40 kt...gusts 50 kt.
34 kt... 60ne 60se 0sw 0nw.

Forecast valid 21/1200z 31.5n 81.5w...inland
Max wind 35 kt...gusts 45 kt.
34 kt... 50ne 50se 0sw 0nw.

Extended outlook. Note...errors for track have averaged near 225 nm
on day 4 and 300 nm on day 5...and for intensity near 20 kt each da! y

outlook valid 22/1200z 33.6n 81.5w...inland
Max wind 25 kt...gusts 35 kt.

Outlook valid 23/1200z 35.5n 82.5w...inland remnant low
Max wind 20 kt...gusts 25 kt.

Request for 3 hourly ship reports within 300 miles of 23.6n 81.5w

next advisory at 18/2100z

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Financial Companies' Problems Worry Wall Street, Dow Drops 170 Points
2008-08-18 15:02:36
Wall Street pulled back sharply Monday following more reports that the financial sector remains under stress. The Dow Jones industrial averagefell more than 170 points.

Investors were concerned once again about the health of financial companies after media reports of further problems in the sector. The Wall Street Journal reported, citing unidentified sources, that Lehman Brothers Holdings Inc. might have to pre-announce its third-quarter results in anticipation of a large loss, while Barron's said the U.S. Treasury might have to recapitalize mortgage financiers Fannie Mae and Freddie Mac.

The continuing bad news about the financial sector isn't coming as a surprise, but it nonetheless is depressing a market that is hoping for concrete signs that banks and brokerages can put the year-old credit crisis behind them and return to significant profit growth.

Even neutral news about the housing market couldn't lift Wall Street's mood. The National Association of Home Builders monthly index on the housing market remained flat at 16 in August. That met the expectations of economists surveyed by Thomson Financial/IFR. Benchmarks related to current sales and expectations of future sales improved, but apparently not enough to move investors to buy.

"It's a very, very fragile balance of powers right now," said Thomas J. Lee, equities analyst at JPMorgan. "But the fact that commodities are declining is overall good for consumers and good for the market."

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Musharraf Resigns As Pakistan's President
2008-08-18 15:02:02
Bowing to pressure from Pakistan's newly-elected civilian government, Pakistani President Pervez Musharraf, once a top U.S. ally, said Monday that he will resign from office immediately, ending nearly nine years of largely military rule under his leadership.

Musharraf announced his decision to step down in a nationally televised address 10 days after leaders of Pakistan's two ruling coalition parties called for his impeachment. Demand for his resignation became increasingly vocal last week after Pakistan's four provincial assemblies voted overwhelmingly for his ouster.

In the nearly hour-long address, Musharraf struck a defiant and emotional tone, saying that his political opponents had opted for the politics of confrontation over reconciliation; but he said he is stepping down in the interest of maintaining stability in the country.

"I am leaving with the satisfaction that whatever I could do for this country I did it with integrity," said Musharraf. "I am a human, too. I could have made mistakes, but I believe that the people will forgive me."

He also added: "I publicly announced my support of the government and to the prime minister. I told them I am ready to offer my experience. But unfortunately the coalition took me for a problem, not a solution."

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FDA Reports New Deaths From Diabetes Drug Byetta
2008-08-18 15:01:16
Federal regulators are working on a stronger label for a widely used diabetes drug marketed by Amylin Pharmaceuticals Inc. and Eli Lilly & Co. after deaths continue to be reported despite earlier government warnings.

The Food and Drug Administration said Monday it has received six new reports of patients developing a dangerous form of pancreatitis while taking Byetta. Two of the patients died and four were recovering.

The drugmakers said in a statement that patients taking Byetta have shown ''very rare case reports of pancreatitis with complications or with a fatal outcome.'' The companies added that diabetes patients are already at increased risk of pancreatitis compared with healthy patients.

The FDA announcement updated an October alert about 30 reports of Byetta patients developing the ailment. Regulators stressed that patients should stop taking Byetta immediately if they develop signs of acute pancreatitis, which can cause nausea, abdominal pain and potentially deadly complications.

More than 700,000 patients worldwide have used the injectable drug since it was launched in June 2005. It is marketed for patients with type 2 diabetes by San Diego-based Amylin and Eli Lilly.

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Export Boom Helps Farmers, But Not U.S. Factories
2008-08-18 01:51:29

Exports are the bright spot this year in an otherwise bleak economy, but the world is not suddenly snapping up made-in-America goods like aircraft, machinery and staplers. The great attraction is decidedly low-luster commodities like corn, wheat, ore and scrap metal.

This helps explain why manufacturing jobs are continuing to disappear by the tens of thousands and factories are closing even during a mini-boom in exports. While the surge in commodities is a welcome relief, it is an unreliable prop for an industrial power.

“The historical data tell us clearly: don’t get too used to commodity export booms; as any third world country will tell you, they tend to go away pretty quickly,” said L. Josh Bivens, a trade expert at the labor-oriented Economic Policy Institute. 

His point was that while Boeing's aircraft or Caterpillar’s tractors are distinctive and sought after, corn grown in Iowa is virtually interchangeable with corn grown in Argentina or any other bread-basket country. “Over a long period,” said Bivens, “commodities contribute right around zero to export growth.”

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