Free Internet Press Newsletter - Thursday September 18 2008 - (813)

Thursday September 18 2008 edition
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Congress Left On Sidelines As Treasury, Fed Reserve Move Swiftly 2008-09-18 02:26:40 The frenetic pace of the financial crisis has forced the Treasury Department and Federal Reserve to make rapid-fire decisions in recent days, leaving Capitol Hill lawmakers effectively impotent - and frustrated. The frenetic pace of the financial crisis has forced the Treasury Department and Federal Reserve to make rapid-fire decisions in recent days, leaving Capitol Hill lawmakers effectively impotent - and frustrated. Lawmakers on both sides of the aisle expressed concern Wednesday that they have had no control over when and how federal money has been used to curb the panic on Wall Street. While many have been convinced that the moves so far have been necessary to prevent a wider financial meltdown, they said they felt confined to the sidelines as power to make momentous decisions has been concentrated in very few hands. House Speaker Nancy Pelosi (D-California) said she has dispatched Rep. Barney Frank (D-Massachusetts), chairman of the House Financial Services Committee, to determine whether Federal Reserve Chairman Ben S. Bernanke should retain authority to unilaterally bail out failing firms, as he did Tuesday with a loan of $85 billion to insurance giant American International Group. Congressional leaders learned of the rescue late Tuesday during a hastily called meeting in the Capitol with Bernanke and Treasury Secretary Henry M. Paulson, Jr., who explained the deal after it was done. Read The Full Story U.N. Power Shifts Away From The West, Wrecks Human Rights Agenda 2008-09-18 02:26:17 The West's efforts to use the United Nations to promote its values and shape the global agenda are failing, according to a detailed study published Wednesday. A sea change in the balance of power in favor of China, India, Russia and other emerging states is wrecking European and U.S. efforts to entrench human rights, liberties and multilateralism. Western policies in crisis regions as diverse as Georgia, Zimbabwe, Burma or the Balkans are suffering serial defeats in what the study identifies as a protracted trend. The hemorrhaging of western power, as reflected in longer-term voting patterns in key U.N. bodies, is mirrored by the increasing clout of China, Russia and the Islamic world, according to an audit of European influence at the U.N.  by the European Council on Foreign Relations. "The E.U. is suffering a slow-motion crisis at the U.N.," says the report, noting that the west is now being regularly outwitted in global diplomatic poker by the Chinese and Russians. "The problem is fading power to set the rules. The U.N. is increasingly being shaped by China, Russia and their allies ... The west is in disarray. The E.U.'s rifts with the U.S. on many human rights issues at the U.N. in the Bush era have weakened both." U.S. and European failure to win the day at the U.N. Security Council in recent votes on Zimbabwe and Burma as well as defeats last year on Kosovo or Darfur and the constant struggle to muster support for global action against Iran because of its nuclear ambitions are traced as part of a broader decline over the past decade. Read The Full Story Al-Qaeda Blamed For Attack Against U.S. Embassy In Yemen 2008-09-18 02:25:48 Attackers used vehicle bombs, rocket-propelled grenades and automatic weapons to mount a coordinated assault on the U.S. Embassy here Wednesday, leaving 10 guards and civilians dead outside the main gate but failing to breach the walled compound. No Americans were killed. Yemeni officials and experts on al-Qaeda said an aggressive new generation of the group's leaders in Yemen was responsible for the assault, the deadliest attack on a U.S. target in this country since the 2000 bombing of the USS Cole. Yemeni security forces have begun to pursue al-Qaeda fighters more vigorously this summer, following years of complaints by U.S. officials that the government was not fulfilling promises to counter the group. "The attack on the U.S. Embassy was retaliation by al-Qaeda for the measures taken by the government to fight the terrorists," said Foreign Minister Abou Bakr al-Qurbi, according to a statement. U.S. State Department spokesman Sean McCormack said in Washington that the multi-phased attack bore "all the hallmarks" of al-Qaeda and credited "the vigilance and the response" of Yemeni forces with preventing a more devastating assault. The government has received an average of nearly $40 million a year in U.S. economic and military aid since 2000. The attack began at 9:15 a.m., when the sound of automatic weapons fire brought resident Yahyah Mousa to his roof overlooking the street outside the walled embassy compound. "I saw soldiers shooting," before a jarring blast flung pieces of metal, glass and flesh onto the roof, said Mousa. As he and his family fled their home, at least five more explosions sounded behind them, amid heavy gunfire, Mousa said. The blasts sent plumes of black smoke rising over this medieval city of narrow towers and cramped streets. Read The Full Story Livni Wins Kadima Party Landslide In Israel 2008-09-18 02:25:04 Tzipi Livni, Israel's foreign minister, claimed a remarkable election victory Wednesday to become the leader of the ruling Kadima party, putting her on track to become the country's first female prime minister in more than 30 years. Exit polls put Livni ahead of her closest rival, Shaul Mofaz, the hawkish transport minister and former army chief. Livni, a former Mossad agent and lawyer, now has six weeks to put together a coalition government. If she succeeds - and her large margin of victory will help - she will become Israel's first female prime minister since Golda Meir resigned in 1974. If she fails, general elections will be held within three months. There were cheers at Kadima's headquarters when exit polls from Israel's three main television networks gave Livni between 47% and 49% of the vote, against 37% for Mofaz. The two other candidates, Avi Dichter, the internal security minister, and Meir Sheetrit, the tourism minister, were a long way behind. With about half of the actual votes counted early this morning, Livni had won 47% and Mofaz 41%, party officials told Israel Radio. She needed 40% to avoid a runoff next week. Minutes after the voting ended, Livni telephoned her party workers at their Tel Aviv headquarters to congratulate them. "We fought like lions, against many opportunists, and you were simply amazing ... The good guys won," she said. "I know you did it as friends, but like me you did it because you want this to be a better place." Read The Full Story Regulators Try To Change Rules 2008-09-17 20:30:37 Federal officials issued a raft of proposed and final rules this week aimed at shoring up the weakened financial markets and strengthening the eroding balance sheets of banks. With little notice, regulators at four agencies that oversee the nation’s banks and savings associations on Monday and Tuesday proposed a significant change in accounting rules to bolster banks and encourage widespread industry consolidation by making them more attractive to prospective purchasers. The regulators and the administration have decided to resort to further loosening of the accounting rules to try to get the industry through problems that some experts have attributed in large part to years of deregulation. Separately, the Securities and Exchange Commission imposed new limits on short-selling and issued guidelines to help financial institutions prop up money market accounts in light of losses reported by one large fund on Tuesday. On Sunday, the Federal Reserve announced that it had eased restrictions that had prevented a regulated company like a bank from transferring money to a less regulated and more risky affiliate. That action would, for instance, enable one arm of a giant financial company, like the commercial banks of Bank of America or Citigroup,  to move money to another arm, like their investment units. The action by the four banking agencies, which provides more favorable accounting treatment of so-called goodwill, an intangible asset that reflects the difference between the market value and selling price of a bank, is similar to a step taken in the midst of the savings-and-loan crisis that helped many institutions in the short run. Over the longer term, that decision increased the overall costs of the bailout after the government took away the goodwill benefits. Under the proposal issued this week, the regulators will permit buyers of banks and thrifts to count some of the goodwill toward meeting their regulatory capital requirements. Read The Full Story Dark Mood Among Hedge Funds in London 2008-09-17 20:30:13 The global credit crisis and the collapse of Lehman Brothers have punished all manner of hedge funds, but in London, where a number have already been closed, the retreat has a particular resonance. Along with celebrity chefs, Russian oligarchs and Italian soccer coaches, hedge funds that established operations here in the last decade have been viewed as a mark of London’s new hip spirit of decadent cool - a notion reinforced by the British pound’s long period of strength and a housing boom. Now, the failure of Lehman Brothers, which had deep relationships with some of the largest hedge funds in the world, has unsettled an already jittery market, inciting fears that some hedge fund assets might be frozen here and thus unavailable for sale if investors want to redeem them. For GLG Partners, the largest, most scrutinized hedge fund in London - whose founding partners were originally backed by Lehman - the uncertainty added to broader concerns. Its funds are down 11 percent, on average, through August, albeit in a very difficult market. And at least $4 billion is expected to depart this November when its most recognized and successful trader, Greg Coffey, leaves to start a fund. Read The Full Story U.S. Supreme Court's Influence Waning Globally 2008-09-17 14:21:54 Judges around the world have long looked to the decisions of the United States Supreme Court for guidance, citing and often following them in hundreds of their own rulings since the Second World War. Now, American legal influence is waning. Even as a debate continues in the court over whether its decisions should ever cite foreign law, a diminishing number of foreign courts seem to pay attention to the writings of American justices. “One of our great exports used to be constitutional law,” said Anne-Marie Slaughter, the dean of the Woodrow Wilson School of Public and International Affairs at Princeton. “We are losing one of the greatest bully pulpits we have ever had.” From 1990 through 2002, for instance, the Canadian Supreme Court cited decisions of the United States Supreme Court about a dozen times a year, an analysis by the New York Times found. In the six years since, the annual citation rate has fallen by more than half, to about five. Australian state supreme courts cited American decisions 208 times in 1995, according to a recent study by Russell Smyth, an Australian economist. By 2005, the number had fallen to 72. The story is similar around the globe, legal experts say, particularly in cases involving human rights. These days, foreign courts in developed democracies often cite the rulings of the European Court of Human Rights in cases concerning equality, liberty and prohibitions against cruel treatment, said Harold Hongju Koh, the dean of the Yale Law School. In those areas, Dean Koh said, “they tend not to look to the rulings of the U.S. Supreme Court.” Read The Full Story Congressional Panel Says Homeland Security Dept. Oversaw $15 Billion In Failed Contracts 2008-09-17 03:33:18 In the five years since it was created, the U.S. Department of Homeland Security (DHS) has overseen roughly $15 billion worth of failed contracts for projects ranging from airport baggage-screening to trailers for Hurricane Katrina evacuees, according to congressional data to be released Wednesday. The contracts wound up over-budget, delayed or canceled after millions of dollars had already been spent, according to figures and documents prepared by the House Committee on Homeland Security. A panel of experts is to testify today before the House Subcommittee on Management, Investigations and Oversight on how to fix problems with the DHS acquisitions process. The six-member panel includes an acquisition director from the Government Accountability Office (GAO), leaders of watchdog groups and the deputy inspector general for DHS. A spokesman for DHS declined to comment in advance of the hearing. The experts are to talk about a series of problem projects: About $351 million was wasted and not properly overseen in the U.S. Coast Guard'sDeepwater program after ships were built and then scrapped, according to Homeland Security committee staffers and oversight agency reports. A $1.5 billion Boeing program to help secure U.S. borders with electronic sensors and other equipment is being shelved after it was over-budget, late and had technology problems. Read The Full Story GAO: EPA Lets Waste From Electronic Products Flow Freely 2008-09-17 03:32:52 The U.S. Environmental Protection Agency has done little to curb the export of discarded electronic products containing hazardous waste, much of which ends up in poorly regulated countries and harms the environment and public health, the Government Accountability Office (GAO) concluded in a report being released Wednesday. The 63-page report - commissioned by House Foreign Affairs Committee Chairman Howard L. Berman (D-California) - is a scathing critique of the EPA's failure to control the export of used electronic equipment, which often is sent to China, India and other countries to be dismantled under unsafe conditions. U.S. authorities have yet to develop a national approach for handling the waste, which often contains toxic metals such as lead, mercury and cadmium. Amounts are rapidly growing as consumers replace their laptops, cellphones and televisions. "It's a really inadequate situation that we've allowed to continue," said Berman, whose panel is holding a hearing on the issue today. "We have a regulation where, as far as I can tell, there's no effort to enforce it." EPA spokesman Timothy Lyons took issue with the report, saying the agency is working hard to enforce a January 2007 rule that requires the EPA to oversee the export of cathode-ray tubes. "In the 18 months since the CRT rule went into effect, EPA initiated 20 investigations, recently issued one complaint and entered into one settlement," Lyons wrote in an e-mail. "Improving compliance with the rule is our top priority as we continue our efforts to educate the public and the regulated community about the new rule, and take enforcement action when necessary." Read The Full Story Fed Reverses Course, Agrees To $85 Billion Bailout Of AIG 2008-09-17 00:16:42 Fearing a financial crisis worldwide, the Federal Reserve reversed course on Tuesday and agreed to an $85 billion bailout that would give the government control of the troubled insurance giant American International Group (A.I.G.).  The decision, only two weeks after the Treasury took over the federally chartered mortgage finance companies Fannie Mae and Freddie Mac,is the most radical intervention in private business in the central bank’s history. With time running out after A.I.G. failed to get a bank loan to avoid bankruptcy, Treasury Secretary Henry M. Paulson, Jr., and the Fed chairman Ben S. Bernanke convened a meeting with House and Senate leaders on Capitol Hill about 6:30 p.m. Tuesday to explain the rescue plan. They emerged just after 7:30 p.m. with Paulson and Bernanke looking grim, but with top lawmakers generally expressing support for the plan, but the bailout is likely to prove controversial because it effectively puts taxpayer money at risk while protecting bad investments made by A.I.G. and other institutions it does business with. What frightened Fed and Treasury officials was not simply the prospect of another giant corporate bankruptcy, but A.I.G.’s role as an enormous provider of financial insurance to investors who bought complex debt securities. That effectively required A.I.G. to cover losses suffered by the buyers in the event the securities defaulted. It meant A.I.G. was potentially on the hook for billions of dollars worth of risky securities that were once considered safe. Read The Full Story Main Party In Israeli Coalition To Elect New Leader 2008-09-17 00:16:18 The main party in Israel's governing coalition will choose a new leader on Wednesday, and polls indicate that the winner will probably be the country’s foreign minister, Tzipi Livni, who says her goal is to form a new government without general elections and charge ahead on peace talks with the Palestinians. Her main rival, Transportation Minister Shaul Mofaz, a former general who is viewed as more hawkish, says his own polling shows him to be the likely victor. One of them must get more than 40 percent of the vote to avoid a runoff, which, if needed, will happen a week later. The selection of a new head of the party, Kadima, was prompted by police investigations of Prime Minister Ehud Olmert on allegations that he took money illegally while he was mayor of Jerusalem and industry minister. Olmert has promised to step down, but is expected to stay on as a caretaker prime minister until a new coalition is formed. Olmert is still keen to reach some kind of historic peace agreement with the Palestinians before he finally ends his term. Read The Full Story Political Blog: Fiorina Sets Off Flap, Saying Palin Couldn't Run A Corporation 2008-09-17 00:15:58 Having once been dubbed the “most powerful woman in business,” Carly Fiorina, a top economic adviser to Senator John McCain and the former chief executive of Hewlett-Packard, knows a little something about executive talent. After all, until she was ousted from the executive suite at Hewlett-Packard, Fiorina was a Silicon Valley legend, breaking glass ceilings wherever she went. But today, Fiorina veered off-message when she was asked to cast an eye over Sarah Palin and how she might fare in the corporate world. On the McGraw Milhaven Show on KTRS radio in St. Louis, Missouri, Fiorina was praised by Milhaven for having worked her way up from being a secretary to running the computer giant. He went on to say that in tapping Palin, McCain “thinks she has the experience to be president.” But, the line of questioning went on, what about running a company: “Do you think she has the experience to run a major company like Hewlett-Packard,” Fiorina was asked. “No, I don’t,” said Fiorina. But, Fiorina added, “that’s not what she is running for.” Returning to the McCain campaign message, Fiorina went on to say she finds it “quite stunning actually” that the Obama campaign is questioning Palin’s executive experience. Read The Full Story	Commentary: 'Who Would Lend An American Bank Money These Days?' 2008-09-18 02:26:28 Intellpuke: The following commentary appeared on Spiegel' website edition for Tuesday, Sept. 16, 2008. The U.S. government's refusal to bail out Lehman Brothers could herald the beginning of a painful but overdue flushing out of the financial sector. By letting Lehman collapse, German commentators argue, Washington is giving banks a choice: Clean up your own mess or go under. The collapse of Lehman Brothers and takeover of Merrill Lynch in a dramatic weekend that has shaken world  financial markets shattered two symbols of American financial power and highlighted that much of America's economic boom was built on self-delusion, write German media commentators. They say the decision by the U.S. financial authorities not to bail out Lehman may signal the beginning of the end of the financial crisis. It will force the world's financial insitutions to get their own houses in order rather than relying on taxpayers' money to bail them out. This painful process will end up making the banking sector stronger, commentators argue. But the big investment banks will never be as powerful as they were before the crisis. Conservative Die Welt writes: "There hasn't been such a quake on Wall Street since Black Friday of 1929. The old-established investment bank Lehman Brothers tumbled into insolvency and will go under just like Bear Stearns did before it - and Merrill Lynch saved itself by hurling itself into the arms of Bank of America." Read The Full Story FDA To Rule On Bioengineered Animals 2008-09-18 02:26:03 The U.S. Food and Drug Administration (FDA) will release Thursday long-awaited regulatory guidelines governing genetic engineering of animals for food, drugs or medical devices. Although none of the provisions is likely to surprise the biotech industry, their formal appearance after years of discussion is expected to energize a field whose commercial potential is huge but so far unrealized. The agency's regulatory control of animals will be considerably stronger than its oversight of genetically engineered plants and microorganisms. The latter - or substances derived from them - are on the market and, in some cases, have proved controversial. The guidelines tell companies what the FDA wants to know about their work at virtually every stage of creating an engineered animal. For example, biotech firms will be asked to provide the molecular identity of snippets of DNA inserted in an animal's genome, as well as where the genetic message lands and whether it descends unaltered through subsequent generations. The FDA also wants to be told how the genetic alterations might change an animal's health, behavior and nutritional value. Read The Full Story Copter Crash In Iraq Claims Lives Of 7 U.S. Soliders 2008-09-18 02:25:16 An American Chinook helicopter crashed early Thursday as it was landing in southern Iraq, killing seven U.S. soldiers, said the military . The CH-47 Chinook was landing after midnight about 60 miles west of Basra at the time of the crash, the U.S. statement said. A spokesman for the Multi-National Force-Iraq confirmed to the Associated Press that the helicopter had crashed. He said five had died, and the bodies of two soldiers who had originally been missing were found. The spokesman said hostile fire was not suspected. The official spoke on condition of anonymity because he wasn't authorized to provide details. The chopper was a part of an aerial convoy flying from Kuwait to the U.S. military base at Balad just north of Baghdad. The Chinook, the Army's workhorse, is designed to transport troops and supplies to combat and other regions. The statement said the incident is under investigation. Read The Full Story Dow Falls More Than 440 Points, Bailout Fails To Stop Stock Slump 2008-09-17 20:30:49 The Dow Jones industrial average fell almost 450 points on Wednesday as one of the most stunning government bailouts in American history failed to stem the runaway fears engulfing the global financial system. Investors embarked on a frenzied flight to safety, just hours after the Federal Reserve and the Treasury Department propped up American International Group, the ailing insurance giant, with an $85 billion loan. Many wondered which once-proud institution would be the next to fail. “There’s a growing sense that there’s no end to this in sight,” said Edward Yardeni, the investment strategist. Stocks around the world plummeted. The Dow Jones industrial average, which fluctuated in negative territory throughout the day, lost nearly 150 points in the final 15 minutes of trading alone. The blue-chip index ended down 449.36 points, nearly matching the 500-point decline on Monday. Since the start of the week, the Dow is off more than 800 points, or 7.1 percent. The broader Standard & Poor’s 500-stock index lost 4.7 percent, after a similarly steep sell-off in the last minutes of the session. The technology-heavy Nasdaq lost 4.9 percent. Investors, seeking security in a market that has so far refused to stabilize, poured money into ultra-safe government notes, driving the yield on short-term Treasury bills to the lowest levels in 50 years. The moves meant that investors were willing to accept virtually zero return on their money in exchange for an investment that would not yield a loss. Read The Full Story Morgan Stanley, Wachovia Considering Merger...Maybe 2008-09-17 20:30:24 As the wrenching shifts within the American financial industry shook world markets on Wednesday, Morgan Stanely, one of the two major Wall Street banks left standing, was considering a possible merger with the Wachovia Corporation or another bank, according to people briefed on the discussions. A tie-up with a bank would restore Morgan Stanley to its structure during the Depression, when the firm split from the Morgan banking empire. It would also leave Goldman Sachs, long the envy of Wall Street, as the only major American investment bank left. As Morgan Stanley’s share price came under renewed assault on Wednesday, the firm’s chief executive, John J. Mack, received a telephone call from Wachovia expressing interest in the Wall Street bank. Other banks have also expressed interest in Morgan Stanley, which is considering various options. The talks with Wachovia are preliminary and no deal may emerge. Only a day ago, Morgan Stanley defended itself in the face of growing doubts about its future, but many specialists believe that the events of the last four days are heralding a new period of painful change for Wall Street. While Wall Street has gone through tough times before only to emerge bigger and stronger, some question whether the industry can rebound quickly after using high levels of leverage, or borrowed money, to binge on risky investments. Those investments have proved to be disastrous. Worldwide, financial companies have reported more than $500 billion in charges and losses stemming from the credit crisis - a figure some specialists say could eventually exceed $1 trillion. Read The Full Story Stocks Drop Sharply Despite AIG Bailout 2008-09-17 14:22:06 Stocks dropped sharply on Wall Street Wednesday morning, as an unprecedented $85 billion government bailout of the troubled insurer American International Group (A.I.G.) failed to placate investors’ fears. In one of the most extraordinary weeks in financial history, investors and customers in Asia and Europe tried to understand the breadth of the government’s efforts to rescue the insurance company. In Asia, customers continued to line up at offices to cancel insurance policies or to get questions answered. On Wall Street, the Dow Jones industrials plummeted more than 200 points in the first minutes of trading. The Dow was down 338 points about noon, and the broader Standard & Poor’s 500-stock index lost about 3.6 percent. Shares fought their way to a positive finish on Tuesday, but spent much of the day in negative territory. On Monday, the American stock market suffered its worst single session since the days after the 9/11 terrorist attacks. Shares of A.I.G. shed another 44 percent even after the Federal Reserve and the Treasury Department decided to prop up the ailing insurer with an $85 billion loan. Shareholders in the company appeared to be worried that their value would be wiped out by the deal. Federal officials took the extraordinary measures after fears arose that a collapse at A.I.G. could set off catastrophic consequences in the global financial system. Treasury prices fell as the rescue of A.I.G. raised concern that the government would have to issue more debt to shore up financial markets. And the cost of borrowing overnight dollars spiked in the interbank lending market in Europe. Read The Full Story Russia, Concerned About Banks, Halts Trading 2008-09-17 14:21:42 Russian financial regulators halted stock trading for the second time this week on Wednesday in a move that immediately stirred memories of Russia’s traumatic financial crisis in 1998. The Russian stock market has in recent years muscled its way onto the global financial stage, spawning dedicated hedge funds from New York to London to Stockholm and enriching a generation of investors. Yet its sharp fall this summer is a reminder that it has remained, in many ways, a wobbly emerging market. It dropped more than 25 percent in just three days this week and is off 57 percent since its peak in May. Still, officials are promising measures to jump-start a rebound and halt a spiral of margin-call selling. They have released billions of dollars in federal money to banks in a strategy that came into sharper focus on Wednesday. The Micex index was down 3.09 percent by 12:10 p.m. on Wednesday, when regulators halted trading. The other main index, RTS, was down 6.39 percent when trading was stopped. The Federal Service for Financial Markets opened the Micex exchange for an unusual 30-minute session after its usual closing time, running from 6 to 6:30 p.m. Read The Full Story McCain Shifts Regulation Stance 2008-09-17 03:33:08 A decade ago, Sen. John McCain embraced legislation to broadly deregulate the banking and insurance industries, helping to sweep aside a thicket of rules established over decades in favor of a less restricted financial marketplace that proponents said would result in greater economic growth. Now, as the Bush administration scrambles to prevent the collapse of the American International Group (AIG), the nation's largest insurance company, and stabilize a tumultuous Wall Street, the Republican presidential nominee is scrambling to recast himself as a champion of regulation to end "reckless conduct, corruption and unbridled greed" on Wall Street. "Government has a clear responsibility to act in defense of the public interest, and that's exactly what I intend to do," a fiery McCain said at a rally in Tampa, Florida, Tuesday. "In my administration, we're going to hold people on Wall Street responsible. And we're going to enact and enforce reforms to make sure that these outrages never happen in the first place." McCain hopes to tap into anger among voters who are looking for someone to blame for the economic meltdown that threatens their home values, bank accounts and 401(k) plans; but his past support of congressional deregulation efforts and his arguments against "government interference" in the free market by federal, state and local officials have given Sen. Barack Obama an opening to press the advantage Democrats traditionally have in times of economic trouble. Read The Full Story FDA Bans 28 Drugs Made In India - But There's Nothing Wrong With Them 2008-09-17 03:32:36 The U.S. Food and Drug Administration said Tuesday that it was halting importation of 28 drugs made by the giant Indian generic drug maker Ranbaxy Laboratories because of manufacturing deficiencies at two of the company's plants. Douglas Throckmorton, a physician with the FDA's Center for Drug Evaluation and Research, said there was "no evidence of harm to consumers" from drugs made at the Dewas and Paonta Sahib plants, both in India. He called the import ban "a preventive action". FDA officials said numerous tests of the drugs have found they are not contaminated, sub-potent or unsafe and urged patients taking the drugs not to stop. The drugs on the list include numerous antibiotics and antivirals, as well as medicines for high cholesterol, diabetes, high blood pressure, seasonal allergies and acne. FDA officials said the action is not expected to disrupt availability of the medicines to U.S. consumers. All but one -  oral capsules of the antiviral drug ganciclovir - are made by other companies. Supplies of that medicine will be allowed in after batch-by-batch testing and assurances by the company on the manufacturing process. Read The Full Story Some Seek Federal Agency To Buy Bad-Debt As Long-Term Answer 2008-09-17 00:16:29 As the Bush administration has lurched from pillar to post in the financial crisis, some lawmakers and experts were considering a longer-term legislative solution that would create a new agency to dispose of the mortgage-related assets at the core of Wall Street’s woes. Proponents of a more systematic government role to help relieve financial institutions of their toxic securities range from Lawrence H. Summers, the former Treasury secretary under President Clinton, to former Federal Reserve chairman Paul A. Volcker and Alan Greenspan.  In Congress, the idea that is gaining traction centers on the creation of a new agency that would buy troubled assets from hobbled companies. The idea was floated on Tuesday by Barney Frank, Democrat of Massachusetts, who heads the House Financial Services Committee. Among those signaling that it merited serious consideration were Senate Majority Leader Harry Reid and the House speaker, Nancy Pelosi. With seven weeks until the presidential elections, no one expects Congress or the White House to move quickly to create a new federal agency that puts taxpayers at risk for hundreds of billions of dollars in bad assets. Steny H. Hoyer, the House majority leader, said there was no time to consider any new proposals in the two weeks before Congress adjourns. But in its ad hoc approach to the crisis, the Treasury Department and the Federal Reserve have, in effect, already embarked on a course similar to the proposals in Congress. In the case of Bear Stearns, the Fed took $29 billion of the investment bank’s mortgage-related assets as collateral for a Fed loan to JPMorgan Chase, which then agreed to acquire Bear Stearns. Read The Full Story Alaska's Attorney General: State Employees Won't Honor Subpoenas 2008-09-17 00:16:08 Alaska's investigation into whether Gov. Sarah Palin abused her power, a potentially damaging distraction for John McCain's presidential campaign, ran into intensified resistance Tuesday when the attorney general said state employees would refuse to honor subpoenas in the case. In a letter to state Sen. Hollis French, the Democrat overseeing the investigation, Republican Attorney General Talis Colberg asked that the subpoenas be withdrawn. He also said the employees would refuse to appear unless either the full state Senate or the entire Legislature votes to compel their testimony. Colberg, who was appointed by Palin, said the employees are caught between their respect for the Legislature and their loyalty to the governor, who initially agreed to cooperate with the inquiry but has increasingly opposed it since McCain chose her as his running mate. ''This is an untenable position for our clients because the governor has so strongly stated that the subpoenas issued by your committee are of questionable validity,'' wrote Colberg. Last week, French's Senate Judiciary Committee subpoenaed 13 people. They include 10 employees of Palin's administration and three who are not: her husband, Todd Palin; John Bitney, Palin's former legislative liaison who now is chief of staff for Republican House Speaker John Harris; and Murlene Wilkes, a state contractor. Read The Full Story
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