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Friday September 26 2008 edition
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White House Meeting Fails To Yield Bailout Bill 2008-09-26 02:25:59 A renegade bloc of Republicans moved to reshape a massive bailout of the U.S. financial system Thursday, surprising and angering Bush administration and congressional leaders who hours earlier announced agreement on the "fundamentals" of a deal. At the White House meeting that included President Bush, top lawmakers and both presidential candidates, House  Minority Leader John A. Boehner (R-Ohio) floated a new plan for addressing the crisis that has hobbled global markets. Democrats accused Boehner of acting on behalf of Republican presidential candidate Sen. John McCain (Arizona)  in trying to disrupt a developing consensus. The new proposal also displeased White House officials, including Treasury Secretary Henry M. Paulson, Jr., who chased after Democrats leaving the meeting and - half-jokingly - dropped to one knee and pleaded with them not to "blow up" the $700 billion deal, according to people present at the meeting. Before the meeting broke up, President Bush had issued a stark warning about the impact on the nation's economy if the measure did not pass. "If money isn't loosened up, this sucker could go down," said Bush, according to one person in the room. Under the alternative Republican plan, the government would set up an expanded insurance system, financed by the banks, that would rescue individual home mortgages. The government would not have to buy up the toxic mortgage-backed assets that are weighing down financial institutions. Read The Full Story Carbon Building Up In Atmosphere Faster Than Dire Predictions 2008-09-26 02:25:34 The rise in global carbon dioxide emissions last year outpaced international researchers' most dire projections, according to figures being released today, as human-generated greenhouse gases continued to build up in the atmosphere despite international agreements and national policies aimed at curbing climate change. In 2007, carbon released from burning fossil fuels and producing cement increased 2.9 percent over that released in 2006, to a total of 8.47 gigatons, or billions of metric tons, according to the Australia-based Global Carbon Project, an international consortium of scientists that tracks emissions. This output is at the very high end of scenarios outlined by the Intergovernmental Panel on Climate Change (IPCC) and could translate into a global temperature rise of more than 11 degrees Fahrenheit by the end of the century, according to the panel's estimates. "In a sense, it's a reality check," said Corinne Le Quéré, a professor at the School of Environmental Sciences at the University of East Anglia and a researcher with the British Antarctic Survey. "This is an extremely large number. The emissions are increasing at a rate that's faster than what the IPCC has used." The new statistics also underscore the growing contribution to the world's "carbon budget" from rapidly industrializing countries such as China, India and Brazil. Developing nations have roughly doubled their carbon output in less than two decades and now account for slightly more than half of total emissions, according to the new figures, up from about a third in 1990. By contrast, total carbon emissions from industrialized nations are only slightly higher than in 1990. Read The Full Story Editorial: What About The Rest Of Us? 2008-09-26 02:25:10 Intellpuke: This editorial appeared in the New York Times edition for Thursday, Sept. 25, 2008. Lawmakers were still wrangling Thursday night about the Bush administration’s $700 billion bailout of the financial system. Political theater was mainly responsible for the delay, but it will be worth the wait if lawmakers take the time to make sure that the plan includes real relief for homeowners and not only for Wall Street. The problems in the financial system have their roots in the housing bust, as do the problems of America’s homeowners. Millions face foreclosure, and millions more are watching their equity being wiped out as foreclosures provoke price declines. The problems became even more evident Thursday night with the federal seizure and sale of Washington Mutual to JPMorgan Chase. It’s unacceptable that lawmakers have yet to come out squarely in favor of bold homeowner relief in the bailout bill. Treasury Secretary Henry Paulson, the biggest advocate of bailing out Wall Street, is also a big roadblock to helping hard-pressed borrowers. He wants to keep relying on the mortgage industry to voluntarily rework troubled loans, even though that approach has failed to stem the foreclosure tide - and does a disservice to the taxpayers whose money he would put at risk in the bailout. Read The Full Story Economists Question Basis Of Paulson's Plan 2008-09-26 02:24:21 The Bush administration's pitch for a sweeping bailout of the financial system has centered on two simple premises: that the economy could suffer a crippling downturn if action is not taken very quickly and that this action should consist of the government buying troubled mortgage securities from banks and other institutions. Yet many of the nation's top economists disagree with one or both of those ideas, even as many top political leaders have swung behind them. Wall Street economists have mostly endorsed Treasury Secretary Henry M. Paulson, Jr.'s plan, or a variation thereof. Almost 200 academic economists - who aren't paid by the institutions that could directly benefit from the plan but who also may not have recent practical experience in the markets - have signed a petition organized by a University of Chicago professor objecting to the plan on the grounds that it could create perverse incentives, that it is too vague and that its long-run effects are unclear. Sen. Richard C. Shelby (Alabama), ranking Republican on the Budget Committee, brandished that letter Thursday afternoon as he explained his opposition to the bailout outside a bipartisan summit at the White House. The petition did not advocate any specific plan, including that offered yesterday by House Republicans. Economists tend to agree that the nation's economy is at serious risk as the flow of credit threatens to freeze. Just Thursday, the interest rate at which banks lend to each other rose steeply, as it has every day this week, suggesting that lenders are hoarding cash. History shows that when this happens, a broad economic crisis can follow, for instance, the Great Depression and Japan's decade-long recession in the 1990s. Read The Full Story Palin To Return Donations From Tainted Politicians 2008-09-26 02:23:28 Republican vice presidential nominee Sarah Palin said late Thursday she would donate to charity more than $1,000 in campaign contributions from two Alaska politicians who were implicated in a sprawling public corruption scandal. She's also handing back another $1,000 from the wife of one of the men. The announcement from a spokesman for the campaign of Republican nominee John McCain came hours after the Associated Press reported Palin had accepted the checks during her successful 2006 run for Alaska governor in the weeks after the FBI raided the offices of the lawmakers. The ensuing scandal became a rallying point for candidate Palin, who was swept into office after promising voters she would rid Alaska's capital of dirty politics. ''Of course, Governor Palin has made a career of holding herself to the highest standards of ethics. As soon as the governor learned of the donations today, she immediately decided to donate them to charity,'' said the spokesman, Taylor Griffin. Griffin said he did not know which charity would receive the money from Palin's old campaign fund, but expected the return to take place as early as Friday. Read The Full Story Credit Tight, But Stocks Rise On Hopes For Bailout 2008-09-25 17:37:09 Stocks rose on Thursday as investors appeared more confident that lawmakers in Washington would move quickly to pass its bailout plan for the ailing financial system. At the same time, the anxiety gripping the credit markets refused to abate. Banks continued to hoard cash, clogging crucial financial arteries that keep money flowing to businesses and consumers for car loans, credit cards and payroll payments. Interest rates on short-term loans jumped back toward the record levels seen at the end of last week, meaning that banks were reluctant to lend cash. The yields on Treasury bills continued to fall, a sign that investors were willing to accept small returns in exchange for a safer bet than stocks or corporate bonds. The Libor rate, a benchmark gauge that measures how much banks are charging one another for overnight loans, jumped the most in one day in nearly a decade. The moves in the credit market, if sustained over time, could have ripple effects on a wide swath of the economy. Many businesses depend on short-term loans to finance their day-to-day operations, like utilities and payroll. Read The Full Story Editorial: Absence Of Leadership 2008-09-25 17:36:46 Intellpuke: This editorial appeared in the New York Times edition for Wednesday, Sept. 24, 2008. It took President Bush until Wednesday night to address the American people about the nation’s financial crisis, and pretty much all he had to offer was fear itself. There was no acknowledgement of the shocking failure of government regulation, or that the country cannot afford more tax cuts for the very wealthy and budget-busting wars, or that spending at least $700 billion of taxpayers’ money to bail out Wall Street and the banks should be done carefully, transparently and with oversight by Congress and the courts. We understand why he may have been reluctant to address the nation, since his contempt for regulation is a significant cause of the current mess. But he could have offered a great deal more than an eerily dispassionate primer on the credit markets in which he took no responsibility at all for the financial debacle. He promised to protect taxpayers with his proposed bailout, but he did not explain how he would do that other than a superficial assurance that in sweeping up troubled assets, government would buy low and sell high. And he warned that “our entire economy is in danger” unless Congress passes his bailout plan immediately. In the end, Mr. Bush’s appearance was just another reminder of something that has been worrying us throughout this crisis: the absence of any real national leadership, including on the campaign trail. Read The Full Story Bush Aides Linked To Interrogation Talks 2008-09-25 17:36:23 Senior White House officials played a central role in deliberations in the spring of 2002 about whether the Central Intelligence Agency could legally use harsh interrogation techniques while questioning an operative of al-Qaeda, Abu Zubaydah,according to newly released documents. In meetings during that period, the officials debated specific interrogation methods that the C.I.A. had proposed to use on al-Qaeda operatives held at secret C.I.A. prisons overseas, the documents show. The meetings were led by  Condoleezza Rice, then the national security adviser, and attended by Defense Secretary Donald H. Rumsfeld,  Attorney General John Ashcroft and other top administration officials. The documents provide new details about the still-murky early months of the C.I.A.’s detention program, when the agency began using a set of harsh interrogation techniques weeks before the Justice Department issued a written legal opinion in August 2002 authorizing their use. Congressional investigators have long tried to determine exactly who authorized these techniques before the legal opinion was completed. The documents are a list of answers provided by Ms. Rice and John B. Bellinger III, the former top lawyer at the  National Security Council, to detailed questions by the Senate Armed Services Committee, which is investigating the abuse of detainees in American custody. The documents were provided to the New York Times by Senator Carl Levin, chairman of the committee. ABC News first reported on the White House meetings in a broadcast earlier this year. Rice’s answers to the questions shed some light on the internal deliberations among senior officials but do not present a clear picture of the positions taken by participants in the debate. Read The Full Story Sen. Stevens' Attorney Says He Paid Construction Bills 2008-09-25 17:35:47 U.S. Sen. Ted Stevens (R-Alaska) paid every bill sent to him for extensive renovations to his home and did not lie about the work on financial disclosure forms, his attorney told jurors this morning. "The evidence will demonstrate that you are dealing here with a man who is honest and would not have intentionally violated the law," the lawyer, Brendan Sullivan, said in opening statements in Stevens' corruption trial in federal court. Stevens, 84, one of the Senate's most powerful Republicans, is charged with failing to disclose on the documents that he received more than $250,000 in gifts and extensive renovations to his Girdwood, Alaska home, which he called the "Chalet." Prosecutors have said Stevens hoped to avoid public scrutiny of his ties to the head of an oil services company, Veco, who allegedly was funding some of the improvements. Sullivan told jurors that Stevens was a devoted public servant who paid more than $160,000 in renovation costs. He added that Stevens and his wife, Catherine, paid every bill they received for the project, which included jacking the house up on stilts to install a new first floor. The senator and his wife believed they had paid the fair market price for the renovations and didn't know that the oil company's chief executive, Bill Allen, was keeping other bills or costs from them, Sullivan told jurors. Allen will be a key prosecution witness. Read The Full Story Scientists: Rocks May Be Oldest On Earth 2008-09-25 17:35:06 A swath of bedrock in northern Quebec may be the oldest known piece of the Earth's crust. In an article appearing in Friday’s issue of the journal Science, scientists report that portions of that bedrock are 4.28 billion years old, formed when the Earth was less than 300 million years old. “These rocks paint this picture of an early Earth that looked pretty much like the modern Earth,” said Richard Carlson of the Carnegie Institution of Washington and one of the authors of the paper. Other scientists are intrigued, but not yet entirely convinced that the rocks are quite that old. “There is a certain amount of healthy skepticism that needs to play a role here,” said Stephen J. Mojzsis, a professor of geological sciences at the University of Colorado. Dr. Mojzsis said the new research was well done, but that he thought these were younger sedimentary rocks, pressed together out of the remnants of earlier rocks that were indeed 4.28 billion years old. “I hope that I’m wrong,” said Dr. Mojzsis. “If that happens, I believe there will be a land rush by geologists to northern Quebec.” Read The Full Story	Bush's Bailout Meeting Ends in Disarray; McCain Gets Blame 2008-09-26 02:25:48 Congressional negotiators’ carefully-crafted agreement on a $700 billion rescue plan threatened to unravel Thursday as lawmakers at an often tense White House meeting clashed over details. As Republican presidential nominee John McCain looked on, House Republican Leader John Boehner raised concerns that the plan would be too costly to taxpayers, and offered an alternative plan. Democrats were mad. "What this looked like to me was a rescue plan for John McCain," said Senate Banking Committee Chairman Christopher Dodd of the Republican objections. His reference was to McCain's eleventh-hour intervention in the negotiations, when he declared he was suspending his campaign and postponing Friday night's debate with Democrat Barack Obama to help negotiate a bailout plan. Democrats think that Republicans were backing away from a compromise many of them agreed to earlier Thursday - without McCain's involvement - in order to give McCain time to play a role and perhaps appear as a rescuer. Read The Full Story Commentary: Crash 2008-09-26 02:25:20 Intellpuke: This commentary was written by Timothy Egan and appeared in the New York Times edition for Wednesday, Sept. 24, 2008. The big guy with the crew cut and a hand that lost three fingers to a meat grinder looked out at the most powerful men in global capitalism Tuesday, and asked a pointed question: “I’m a dirt farmer,” said Senator Jon Tester, the Montana Democrat who still lives on his family homestead. “Why do we have one week to determine that $700 billion has to be appropriated or this country’s financial system goes down the pipes?” Good question, one that Treasury Secretary Henry M. Paulson and Federal Reserve Chairman Ben Bernanke have yet to adequately answer. If they seemed flummoxed, perhaps it’s because they still can’t explain what will be accomplished by nearly nationalizing the banking system and giving the treasury secretary more power than a king. Another question - since we now own a big part of the world’s largest insurance company, A.I.G., does that mean I can save a load of money on my car insurance? - might be easier to answer. This bailout, in present form, is toast. Now, with John McCain offering to suspend his campaign and delay Friday’s debate, it looks like the drainage of years past is pulling him down. He wants to back out of facing Barack Obama at the height of the campaign. Why not change the topic, from foreign affairs to the economy? Some have already tried to protect the true villains of the crash of 2008. Witness Neil Cavuto of Fox News, he of the sycophantic questions to Enron executives and other thieves just before they were exposed, blaming the mortgage crisis on banks lending to “minorities and risky folks,” as he said last week. There is certainly a food chain of greed, from the lowliest house-flipper in the Southern California exurbs to the Hamptons hedge fund manager. We all put reason in a box and buried it for a time; but before $700 billion is committed to a secretary whose decisions “may not be reviewed by any court of law or any administrative agency,” as the original draft of the bailout states, it’s worth remembering where the biggest heist took place, and how Wall Street dragged down the rest of the country once before. You could hear the echoes of history in Tester’s question, riding the fierce urgency of now at a time when the Great Depression and all its gloomy atmospherics are in the air again. Read The Full Story Washington Mutual Sold In Biggest U.S. Bank Failure 2008-09-26 02:24:35 Federal regulators Thursday night seized the massive, troubled mortgage lender Washington Mutual in the largest bank failure in U.S. history, then immediately sold much of the company to J.P. MorganChase for $1.9 billion in a deal that will create the largest bank in the country. The historic two-step was orchestrated by Sheila Bair, chairman of the Federal Deposit Insurance Corporation (FDIC), on terms that preserve Washington Mutual's deposits and avoid what could have been a huge drain on the insurance fund that protects deposits up to $100,000. The fall of Washington Mutual, which was the country's largest savings and loans, expands once again the vast burned-over district at the heart of the financial industry. The federal government has seized mortgage-financiers Fannie Mae and Freddie Mac and insurance giant American International Group. The five largest independent investment banks are closed or have changed their business model. Most of the largest mortgage companies are closed or sold. This is the first time, however, that a large bank funded mostly by deposits has failed during the current crisis. The sale furthers the consolidation of the U.S. financial industry, which is increasingly dominated by a few colossal banks with more than $1 trillion in assets, offering a vast range of services. J.P. Morgan will become the largest, surpassing Bank of America. Read The Full Story Prosecutor: Sen. Stevens Knowingly Hid Gifts 2008-09-26 02:23:59 A Justice Department prosecutor told a jury Thursday that U.S. Sen. Ted Stevens, who has represented Alaska in  the Senate for 40 years, engaged in “a scheme to conceal from the public” a variety of gifts and home renovation services he received. In her opening statement of what is expected to be a nearly month-long trial, the prosecutor, Brenda Morris, said  Stevens knowingly did not list on Senate disclosure forms goods and services totaling $250,000 that he received from an Alaska contractor, Bill Allen. Stevens, 84, the longest-serving Republican in the Senate’s history, has pleaded not guilty to seven felony counts of filing false statements. Morris listed several items she said Stevens had received in recent years, including a sled dog and a massage chair, but at the heart of the case, she noted, was the makeover of the Stevens family home in Girdwood, Alaska. She said Allen, a freewheeling oil services contractor and onetime friend of Stevens, paid for most of the renovations, which included a new first floor built after jacking up the house, along with two new decks, a garage, lighting and a built-in gas grill. In his opening statement, Stevens’ lawyer, Brendan Sullivan, told the jury that the senator did not “intentionally violate the law” and was misled by Allen about the exact costs. Sullivan also offered a new and striking assertion: that Stevens had not been familiar with the details of the project and could not have knowingly concealed the costs, because Stevens’ wife of 28 years, Catherine Stevens, had the principal responsibility to look after the details of the renovation. Read The Full Story Lawmakers Agree On Outline Of Bailout 2008-09-25 17:37:19 U.S. House and Senate negotiators from both parties said Thursday that they had reached general agreement to move forward with the administration’s proposed $700 billion bailout of the financial system, authorizing unprecedented government intervention to prevent what President Bush warned could be a widespread economic collapse. Emerging from a nearly three-hour meeting in the Capitol, Republicans and Democrats said the legislation would include limits on the pay packages for executives of firms that seek assistance and a mechanism for the government to take an equity stake in some firms, so taxpayers have a chance to profit if the bailout plan works. The announcement that lawmakers had reached an accord came on a day of political theater at the Capitol and at the White House where President Bush planned to meet Congressional leaders and the presidential candidates, Senator John McCain, Republican of Arizona, and Senator Barack Obama, Democrat of Illinois. “I now expect we will indeed have a plan that can pass the House, pass the Senate, be signed by the president, and bring a sense of certainty to this crisis that is still roiling in the markets,” said Robert Bennett, Republican of Utah. “That is our primary responsibility, and I think we our now prepared to meet it.” Bennett, one of the senior members of the banking committee, made a point of describing the meeting as free of political “posturing.” Read The Full Story Pakistani, American Troops Exchange Fire 2008-09-25 17:36:58 Pakistani and American ground troops exchanged fire along the border with Afghanistan on Thursday after the Pakistanis shot at two American helicopters, ratcheting up tensions as the United States increases its attacks against militants from al-Qaeda and the Taliban, who are being sheltered in Pakistan's restive tribal areas. The two American OH-58 Kiowa reconnaissance helicopters were not damaged and no casualties were reported on either side from the ground fire, but American and Pakistani officials agreed on little else about what happened in the fleeting mid-afternoon clash between the allied troops. American and NATO officials said that the two helicopters were flying about one mile inside Afghan air space to protect an American and Afghan patrol on the ground when the aircraft were fired on by small-caliber arms fire from a Pakistani military checkpoint near Tanai district in Khost Province. In response, the American ground troops shot short bursts of warning fire, which hit well shy of the rocky, hilltop checkpoint, and the Pakistanis fired back, said Rear Adm. Gregory Smith, a spokesman for the Central Command. A spokesman for the Pakistani army, Maj. Gen. Athar Abbas, said Pakistani forces fired warning shots at the American aircraft after they crossed into Pakistan’s territory in the area of Saidgai, in North Waziristan’s Ghulam Khan region. “On this, the helicopters returned fire and flew back,” said General Abbas. Read The Full Story More Bad News Seen In U.S. Economic Data 2008-09-25 17:36:35 Wall Street rallied in late trading Thursday as lawmakers said they had reached a fundamental agreement on a rescue plan for the financial sector and investors shrugged off new evidence of a struggling economy. The Dow Jones industrial average, which traded up more than 300 points today, closed up 196 points, or 1.8 percent, while the broader Standard & Poor's 500-stock index gained 23 points and the technology-heavy Nasdaq gained 31 points. House and Senate negotiators said this afternoon that they have reached agreement on basic principles governing the $700 billion financial rescue plan. The plan would allow the government to buy financial firms' bad debt. Congressional leaders, top administration officials and presidential candidates from both parties are scheduled to meet with Bush this afternoon. "It should somewhat stabilize the equity market," said Joseph Brusuelas, chief economist at Merk Investments. "This is the first time in two generations that members on the Hill can move markets. It's going to take time for both our political class and our financial class to get used to." Read The Full Story Chinese Astronauts Ready For First Space Walk 2008-09-25 17:36:10 China carried out a textbook-perfect launch Thursday night with the liftoff of three astronauts into space for the country's third manned spaceflight and first spacewalk. Underscoring the political implications of the mission, a beaming President Hu Jintao congratulated the astronauts on live television. He called the voyage "another milestone in the Chinese people's march towards aerospace science." The mission was a sign of China's growing strategic power and an indication of the importance it gives to space exploration for commercial and military purposes. While NASA officials complain that diminishing budgets threaten U.S. dominance in space, China has joined Europe, India and other nations in announcing ambitious new developments in aerospace. "After the Olympics, it's the most exciting thing that enhances our national pride and dignity this year," said He Haihong, 25, a sales manager at an electronics company who founded a Web site for Chinese aerospace fans. "Not only is the rocket launched but also our hopes for a better life." Astronaut Zhai Zhigang is scheduled to attempt the spacewalk over the weekend, according to the state-run New China News Agency and CCTV. The spacewalk is aimed at helping China learn how to dock two orbiters to create an orbiting space station over the next few years. Read The Full Story China's Milk Scandal Now Presents Risk In Europe 2008-09-25 17:35:35 European Union regulators on Thursday ordered rigorous testing of imports containing at least 15 percent milk powder after concluding that tainted milk powder from China may well be circulating in Europe and putting children at risk. The action, announced by the European Food Safety Agency and the European Commission, significantly expands the potential geographic reach of a milk adulteration scandal in China to now include a range of foods sold around the world. The Europeans said cookies, toffees and chocolates are the major concerns. The World Health Organization (WHO) and the United Nations Children's Fund also expressed concern on Thursday about the Chinese milk contamination and the implications for other foods. In the United States, some consumer groups called on the Food and Drug Administration to restrict imports of foods that may contain suspected dairy ingredients from China. Milk products in China contaminated with the industrial chemical melamine have sickened more than 50,000 young children in recent weeks. While it is illegal to import dairy products and baby formula from China into the European Union, European nations import many processed foods containing milk powder manufactured outside of Europe. Such products could contain milk powder originating in China. Read The Full Story
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