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Sunday, September 21, 2008

Free Internet Press Newsletter - Sunday September 21 2008 - (813)

Sunday September 21 2008 edition
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Bush Seeks $700 Billion For Wall Street Bailout
2008-09-20 15:48:04

The Bush administration Saturday sent lawmakers a historic $700 billion emergency rescue plan that allows the Treasury to buy the troubled mortgage securities that have been toppling major financial firms and are at the heart of Wall Street's turmoil.

The package, the most sweeping government intervention in the markets since the Great Depression, was $200 billion higher than lawmakers had been told Friday to expect. It also does not include the $200 billion that officials said earlier this month the government will spend on the rescue of Fannie Mae and Freddie Mac. 

To accommodate the spending, the package also would also raise the federal debt limit to $11.3 trillion from the current $10.6 trillion. The debt now stands at $9.6 trillion.

President Bush, speaking to reporters Saturday during a White House appearance with Colombia President Alvaro Uribe, said drastic action was needed because of the scope of the financial crisis.

"It is a big package because it's a big problem," said Bush. "The risk of doing nothing far outweighs the risk of the package."

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At Least 40 Killed As Huge Suicide Truck Bomb Devastates Islamabad Marriott Hotel
2008-09-20 15:47:40
A massive suicide truck bomb devastated the heavily guarded Marriott Hotel in Pakistan's capital today, killing at least 40 people and wounding at least 100. Officials feared there were dozens more dead inside the burning building.

The blast targeting the U.S. hotel chain appeared to be one of the largest terrorist attacks ever in Pakistan, leaving a vast crater some 30 feet deep in front of the main building, where rescuers ferried a stream of bloodied bodies.

The five-story Marriott had been a favorite place for foreigners as well as Pakistani politicians and business people to stay and socialize in Islamabad despite repeated militant attacks.

The bombing came just hours after President Asif Ali Zardari made his first address to Parliament and days ahead of the new leader's meeting with President Bush Tuesday in New York on the sidelines of the U.N. General Assembly.

Rehman Malik, the head of Pakistan's Interior Ministry, told the Associated Press that authorities had received intelligence that there might be militant activity due to Zardari's inaugural address. Security had been tightened, he said.

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Bush Administration Proposes Historic $500 Billion Bailout
2008-09-20 01:32:27

The Bush administration Friday proposed a historic $500 billion bailout of financial firms that would let the government rather than the cold judgment of the marketplace decide the winners and losers from the crisis that has shaken the U.S. economy for the past year.

The plan, which would be the most sweeping government intervention in the markets since the Great Depression, calls for the Treasury to buy the troubled mortgage securities that have been toppling major financial firms and are at the heart of Wall Street's turmoil.

Millions of Americans could also benefit from other dramatic stopgap measures. Regulators announced efforts to stabilize the mortgage market; curb stock speculation; and insure money-market mutual funds with government money, seeking to protect ordinary investors and preserve a vital source of corporate finance.

The initiatives were precipitated in part by concern that scared investors would race to withdraw their holdings from money-market funds, which hold $3.5 trillion in investments, depleting a major source of short-term funding for corporations.

President Bush, who had remained largely silent as the crisis broadened this week, said it is a "pivotal moment for America's economy." In a Rose Garden speech remarkable for its grim language and ominous tone, Bush said: "This action does entail risk. But we expect that this money will eventually be paid back. ... The risk of not acting would be far higher."

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Space Shuttle Moved To Launch Pad As Rescue Ship
2008-09-20 01:31:52
In an unprecedented step, a space shuttle was moved to the launch pad Friday for a trip NASA hopes it will never make - a rescue mission. The shuttle Endeavour is on standby in case the seven astronauts who go up on Atlantis next month need a safer ride home.

Atlantis and its crew are headed into space for one last repair job on the 18-year-old Hubble Space Telescope. It's a venture that was canceled when first proposed a few years ago because it was considered too dangerous.

The risk is this: If Atlantis suffers serious damage during launch or in flight, the astronauts will not be at the international space station, where they could take refuge for weeks while awaiting a ride home. They would be stranded on their spacecraft at the Hubble, where NASA estimates they could stay alive for 25 days. Air would be the first to go.

Endeavour and four more astronauts would need to blast off on a rescue flight as soon as NASA determined Atlantis was too damaged to fly home.

On Friday, Endeavour was parked at its launch pad just a mile from where Atlantis is tentatively set to lift off on Oct. 10.

It is the first time since 2001 - when flights were more closely spaced - that both of NASA's shuttle pads have been occupied. And it will probably be the last.

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Commentary: Moguls Steal Home While Companies Strike Out
2008-09-20 01:31:14
Intellpuke: This commentary was written by veteran journalist and commentator Bill Moyers, managing editor of public affairs program "Bill Moyers Journal", and Michael Winslow, the program's senior writer. It appeared on the website edition for Friday, September 19, 2008.

From our offices in Manhattan, we look out on the tall, gleaming skyscrapers that are cathedrals of wealth and power - the Olympus ruled by the gods of finance, the temples of the mighty, the holy of holies, whose priests guard the sacred texts of salvation - the ones containing the secrets of subprime lending and derivatives as mysterious and elusive as the Grail itself.

This last couple of weeks, ordinary mortals below could almost hear the ripcords of golden parachutes being pulled as the divinities on high prepared for soft, safe landings - all this while tossing their workers like sacrificial lambs into the purgatory of unemployment.

During the last five years of his tenure as CEO of now-bankrupt Lehman Brothers, Richard Fuld's total take was $354 million. John Thain, the current chairman of Merrill Lynch, taken over this week by Bank of America, has been on the job for just nine months. He pocketed a $15 million signing bonus. His predecessor, Stan O'Neal, retired with a package valued at $161 million, after the company reported an $8 billion loss in a single quarter. And remember Bear Stearns's Chairman James Cayne? After the company collapsed earlier this year and was up for sale at bargain basement prices, he sold his stake for more than $60 million.

Daniel Mudd and Richard Syron, the former heads of Fannie Mae and Freddie Mac - aka the gods who failed - are fighting to keep severance packages of close to $24 million combined - on top of the millions in salary each earned last year while slaughtering the golden calf. As it is written in the Gospel According to Me, when the going gets tough, the tough get going.

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Europeans, Left And Right, Ridicule U.S. Financial Meltdown
2008-09-20 15:47:51
They list greed and Greenspan among the culprits, and there are comparisons to ... Albania. But, amid the gloating, there is fear for financial systems in Britain, Spain, Italy and elsewhere.

It's a rare day when finance officials, leftist intellectuals and ordinary salespeople can agree on something; but the economic meltdown that wrought its wrath from Rome, Italy, to Madrid, Spain, to Berlin, Germany, this week brought Europeans together in a harsh chorus of condemnation of the excess and disarray on Wall Street.

The finance minister of Italy's conservative and pro-U.S. government warned of nothing less than a systemic breakdown. Giulio Tremonti excoriated the "voracious selfishness" of speculators and "stupid sluggishness" of regulators. And he singled out Alan Greenspan, the former chairman of the U.S. Federal Reserve, with startling scorn.

"Greenspan was considered a master," Tremonti declared. "Now we must ask ourselves whether he is not, after [Osama] bin Laden, the man who hurt America the most. ... It is clear that what is happening is a disease. It is not the failure of a bank, but the failure of a system. Until a few days ago, very few were willing to realize the intensity and the dramatic nature of the crisis."

In an interview Thursday in the Italian newspaper Corriere della Sera, Tremonti drew a comparison to corruption-ridden Albania in 1997, when a nationwide pyramid scheme cost hundreds of thousands of people their savings and ignited anarchic civil conflict.

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Bankruptcy Judge Okays Sale Of Lehman Units To Barclays
2008-09-20 15:47:24
A bankruptcy judge decided just after midnight Saturday that Lehman Brothers can sell its investment banking and trading businesses to Barclays, the first major step to wind down the nation's fourth-largest investment bank.

U.S. Bankruptcy Judge James Peck gave his decision in a courtroom packed with lawyers at the end of an eight-hour hearing, which capped a week of financial turmoil.

The deal was said to be worth $1.75 billion earlier in the week but the value was in flux after lawyers announced changes to the terms on Friday. It may now be worth closer to $1.35 billion, which includes the $960 million price tag on Lehman's Midtown Manhattan office tower.

Lehman Brothers Holdings Inc. filed the biggest bankruptcy in U.S. history Monday, after Barclays PLC declined to buy the investment bank in its entirety.

The British bank will take control of Lehman units that employ about 9,000 employees in the U.S.

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We're Paying The Price Today For Decades Of Relentless Dam Building
2008-09-20 01:32:10
Decades ago, three new dams were started every day. But the debts of temporary prosperity are all coming due and payable today.

Between 1950 and 1970, three new dam projects were started every single day in the world. Today, primarily in China, Turkey, Brazil, Japan and India, one new dam project begins daily with an average completion date of four years. Fifteen hundred dams are currently under construction worldwide.

Dams fragment, divert and subjugate the world's rivers. In one long lifespan, beginning with the inauguration of Hoover Dam in 1936, the engineering marvel of the 20th century, civilization has altered the most important function that makes the earth work, water. Thus, transmuting humanity into something foreign to the earth it inhabits - a stranger to the very system which gave rise to our species.

The late Carl Sagan was among precious few visionary humans who shared the extraordinary ability to differentiate between deep thought and deep nonsense and recognized the persistence of a satisfying delusion to perpetuate the latter. Dr. Sagan wrote, "We go about our daily lives understanding almost nothing of the world. We give little thought to the machinery that generates the sunlight that makes life possible, to the gravity that glues us to an earth that otherwise sends us spinning off into space or to the atoms of which we are made and on whose stability we fundamentally depend."

Without some sense, some outline of how the earth works and our relationship to it, one is deprived of knowing, let alone of asking, the really important questions that promote regenerative life and prevent massive-scale destruction and degeneration.

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Obama: A Time For 'Resolve'
2008-09-20 01:31:41
Barack Obama, after huddling for more than hour with some of the Democratic Party's top economic minds, sought today to calm fears about the integrity of the economy. He laid out broad principles he wants to see included in emergency measures pending in Washington, but said it was premature to outline his own specific prescriptions.

"I know these are difficult days, and I know there are a lot of families out there that are feeling anxiety about their jobs, about their homes, and about their retirement savings," he told reporters before a rally at the University of Miami. "But here's what I also know. This is not a time for fear, or for panic. It's a time for resolve. It's a time for leadership."

Obama said the immediate need is to get the capital markets working properly again so the economy can continue to hum; but he resisted offering a detailed blueprint, saying he wanted to let officials at the Treasury Department, the Fed, and in Congress work on a bipartisan solution.

"You don't do it in a day," he said. "We've gotta do it in an intelligent, systemic, thoughtful fashion. I'm much less interested in scoring political points than making sure we have a structure in place that is sound and is actually going to work."

Obama said any plan must target homeowners, not just financial institutions. "For too long this administration has been willing to hit the fast-forward button in helping distressed Wall Street firms while pressing pause when it comes to saving jobs and keeping people in their homes," he said.

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China Toxic Scandal Includes Liquid Milk
2008-09-20 01:30:52

The crisis over contaminated milk in China grew Friday after government tests found the industrial chemical melamine in liquid milk produced by three leading dairy companies.

The scandal had been thought to be confined to tainted milk powder, blamed for the deaths of four infants and illnesses in 6,200 others.

But about 10% of liquid milk samples taken from Mengniu Dairy Group and Yili Industrial Group - the two largest dairy producers in China - contained melamine, according to a report by the General Administration of Quality Supervision, Inspection and Quarantine posted on the agency's website. Milk from Shanghai-based Bright Dairy also showed contamination.

The agency will find out the reason for adding the melamine and punish those responsible, said the notice, adding that all the batches which had tested positive are being recalled.

Hong Kong's two biggest grocery chains removed all milk made by Mengniu from shelves. On Thursday, the chains had recalled milk, yoghurt, ice cream and other products made by Yili.

In Singapore, the sale and import of all Chinese dairy products was suspended yesterday after several items tested positive for a toxic chemical, widening a crisis over tainted food in China.

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