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Wednesday, September 17, 2008

Free Internet Press Newsletter - Wednesday September 17 2008 - (813)

Wednesday September 17 2008 edition
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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.

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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."

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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.

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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.

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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.

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Pakistan Orders Troops To Fire If U.S. Troops Launch Another Raid
2008-09-16 16:12:16
Pakistan's military has ordered its forces to open fire if U.S. troops launch another air or ground raid across the Afghan border, an army spokesman said Tuesday.

The orders, which come in response to a highly unusual Sept. 3 ground attack by U.S. commandos, are certain to heighten tensions between Washington and a key ally against terrorism. Although the ground attack was rare, there have been repeated reports of U.S. drone aircraft striking militant targets, most recently on Sept. 12.

Pakistani officials warn that stepped-up cross-border raids will accomplish little while fueling violent religious extremism in nuclear-armed Pakistan. Some complain that the country is a scapegoat for the failure to stabilize Afghanistan. 

Pakistan's civilian leaders, who have taken a hard line against Islamic militants since forcing Pervez Musharraf to resign as president last month, have insisted that Pakistan must resolve the dispute with Washington through diplomatic channels.

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Editorial: Wall Street Casualties
2008-09-16 16:11:47
Intellpuke: This editorial appeared in the New York Times edition for Monday, September 15, 2008.

It is oddly reassuring that the Treasury Department and Federal Reserve let Lehman Brothers fail, did not subsidize the distress sale of Merrill Lynch to Bank of America, and tried to line up loans for the American International Group, the troubled insurer, rather than making a loan themselves. Government intervention would have been seen either as a sign of extreme peril in the global financial system or of extreme weakness on the part of federal regulators.

Instead, the dizzying events on Wall Street suggest that the system may be strong enough to absorb the downfall of Lehman and Merrill - though the chaos at A.I.G. seems harder to swallow. However, the stock market’s initial reaction - a brutal drop, but not a Black Monday-style sell-off - offered a ray of hope that the disruptions may be manageable. And, more important, barring the risk of cascading failures, regulators finally seem willing to hold Wall Street accountable for its mistakes.

Lehman’s bankruptcy filing may even provide much-needed transparency to a financial system that has been hamstrung for more than a year by a lack of good information - on who owns what and who owes how much and to whom. Lehman’s creditors and other firms involved in its trades will now have to line up in bankruptcy court, detailing their positions for all to see - and learn from. That did not happen in the spring when the Fed prevented a bankruptcy filing from Bear Stearns to avoid what it said would have been a system-wide failure.

Still, the disappearance in one weekend of two icons of American capitalism has negative repercussions, for taxpayers and for the economy.

The Fed has broadened yet again its emergency-loan programs for Wall Street banks, agreeing to take risky and poor quality collateral, like junk bonds. That puts taxpayers at ever greater risk. Remember, the Federal Reserve already put the taxpayers on the hook by offering $29 billion in guarantees to quell the Bear crisis in March. This month, the Treasury Department pledged to make good if need be on trillions of dollars of obligations of Fannie Mae and Freddie Mac.

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In U.S., Inflation Still Seen As Risk
2008-09-16 16:10:37

The Federal Reserve decided against cutting interest rates Tuesday, even as Wall Street teetered, but indicated it could cut rates if the problems in the financial system create deeper problems in the overall U.S. economy.

The central bank resisted calls from many in Wall Street that it cut that rate in order to help ease the blow to financial firms and the economy from the crisis in the financial world that is unfolding with the bankruptcy of Lehman Brothers, acquisition of Merrill Lynch, and potential bankruptcy of insurance giant AIG. Indeed, on options markets yesterday afternoon, traders priced in more than a 50 percent chance that the central bank would cut rates.

The Fed's policymaking committee, in a meeting scheduled long before this weekend's crisis in the financial world, elected to leave the federal funds rate unchanged at 2 percent. That rate, at which banks lend to each other, ultimately affects what Americans pay to borrow money through credit cards, adjustable rate mortgages, and auto loans.

They acknowledged, however, that the economic picture has become more dismal. "Strains in financial markets have increased significantly and labor markets have weakened further," said the Federal Open Market Committee in a statement accompanying its decision. "Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters."

Financial markets were none too pleased at the absence of a rate cut. The stock market, which essentially unchanged for the day at the time of the announcement, fell steeply thereafter. At 2:25 p.m., the Dow Jones industrial average was off 108 points, or 1 percent. It was down more than 4 percent Monday.

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Big Storms Are Taking Heavy Toll On U.S. Midwest
2008-09-16 16:09:37
Communities across the Midwest were reeling Monday after heavy weekend storms across the region left at least 17 people dead, more than two million homes and businesses without power, and scores of roadways flooded.

The storm, which combined remnants of Hurricane Ike with a slow-moving front in a wave of low pressure, produced wind gusts of up to 81 miles per hour, spurred five tornadoes in Michigan and dumped 4 to 10 inches of water on parts of Missouri, Illinois, Indiana and Michigan.

Accumulated rainfall forced at least 200 Illinois residents into temporary shelters, and on Monday Gov. Rod R. Blagojevich declared seven counties in the northeastern portion of the state disaster areas.

“We haven’t been able to conduct much damage assessment yet, we’ve mostly been in response mode,” said Patti Thompson, a spokeswoman for the Illinois Emergency Management Agency. “There’s been flash flooding in several parts of the state, especially in Chicago and the collar counties.”

The storm produced little rain in Ohio, but its sustained winds of more than 40 m.p.h. snapped trees and power lines, leaving 1.9 million customers without power. The storm is also being blamed for five deaths in that state, including that of a woman who died when a tree struck her home, said Tamara McBride, a spokeswoman for the Ohio Emergency Management Agency.

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Congressional Committee Seeks Answers In Anthrax Case
2008-09-16 16:08:59

The strength of the government's evidence against Bruce E. Ivins, who died before prosecutors publicly labeled him the lone culprit in the 2001 anthrax-by-mail attacks, will be tested anew Tuesday when FBI Director Robert S. Mueller III appears before the House Judiciary Committee.

Authorities have released scores of pages from search warrants that they executed in an attempt to link Ivins, a bioweapons researcher at the Army lab at Fort Detrick, Maryland, to poison-laced letters that killed five people and sickened 17.

The case relies on a patchwork of circumstantial and scientific evidence tracing anthrax spores back to a beaker in Ivins' lab and a series of work logs, unusual e-mails and behavior patterns that Ivins exhibited. It adds up, officials argue, to a portrait of a man who had the know-how, motive and opportunity to pull off the largest biological attack in U.S. history.

The material and a series of private briefings by Justice Department and FBI officials have yet to convince a small but vocal group of lawmakers that the government has solved the case.

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Wall Street Crisis Is Culmination Of 28 Years Of Deregulation
2008-09-16 03:04:24
No one cog in the federal government's machine of financial regulation let down the country by failing to prevent the latest shakeout on Wall Street. The entire system did.

"They just haven't done a particularly good job," said James Barth, a senior finance fellow at the Milken Institute, a nonpartisan research group based in Los Angeles, California.

Kathleen Day, a spokeswoman for the Center for Responsible Lending, a consumer-oriented research group, explained the regulatory lapses more starkly: "The job of regulators is that when the party's in full swing, make sure the partygoers drink responsibly," she said. "Instead, they let everyone drink as much as they wanted and then handed them the car keys."

Analysts and politicians are raising serious questions about the nation's financial regulatory system, which dates to the New Deal era.

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Europe's Biofuel Conundrum
2008-09-16 03:03:57
The European Parliament may be backing away from its targets for crop-based biofuels, but the European Union is still hoping that it can create a certification scheme that will ensure that biofuels are produced in a sustainable and environmentally friendly way.

It's not seldom that Jan Henke finds himself on a jet cruising at 10,000 meters above the Atlantic Ocean on yet another trip from Germany to Brazil. Or to Argentina. Sometimes he heads the other way to Malaysia or Indonesia. Once he arrives, his procedure is generally the same. He doesn't waste much time taking in the sights or hanging out in the cities. Rather, Henke heads out into the countryside to tromp through the mud in yet another isolated field on a farm far away from Europe.

Henke is a senior consultant with International Sustainability and Carbon Certification (ISCC). Since February, his group has been running a pilot program for the German Energy Agency to find out just how farmers around the world raise their crops. Particularly, Henke is interested in those plantations that grow crops like sugar cane, African palms and even corn. And, if the crop can be processed into fuel for European gas tanks, Henke wants to see how it is raised so his organization can create rules that ensure the methods used are environmentally sustainable.

"We are creating a checklist, and then going from plantation to plantation to see if they are fulfilling these criteria. The idea is to see what can actually be done in practice to see if you can control these things," Henke told Spiegel Online. "You don't want to reinvent the wheel, but you want to see if these criteria fulfill what is being asked for on the European market."

And yet, the project Henke is working on is very much akin to reinventing the wheel. Just a little over one year after the European Union established concrete targets requiring all fuel sold in the 27-member bloc to contain a 10 percent mixture of biofuel by the year 2020 - with an interim target of 5.75 percent by 2010 - the idea of making gas and diesel from plants is under attack. Some say the savings on CO2 emissions relative to fossil fuels isn't nearly enough. Others point out that, having rapidly developed into a massive market, farmers in the tropics are mowing down rain forests and draining peat bogs - and releasing massive amounts of CO2 in the process - to get in on some of the biofuels action. Still others say that mass planting of biofuels crops means less land is available for growing edible crops, thus driving up food prices.

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Palin 'Unlikely' To Meet With Prosecutor
2008-09-16 03:03:13
Alaska Gov. Sarah Palin is unlikely to meet with a special prosecutor looking into whether she or other state officials improperly pushed to punish a trooper, a spokesman for John McCain's presidential campaign announced Monday.

Since Palin was named as McCain's running mate Aug. 29, the campaign has dismissed the state legislature's investigation into her dismissal of the state's director of public safety, saying that Democrats are exploiting the probe for political gain.

McCain campaign spokesman Ed O'Callaghan said that Palin is "unlikely to cooperate" with the investigation, which he called "tainted."

Palin's husband, Todd, was subpoenaed in the probe last week. O'Callaghan said he did not know whether Todd Palin would challenge the subpoena.

Sarah Palin has said she fired Walter Monegan over disagreements about budget priorities. Monegan says he received repeated e-mails and phone calls from both Palins and her staff expressing dismay over the continued employment of state trooper Mike Wooten, whose divorce from Sarah Palin's sister was ugly.

Todd Palin and 12 other people were subpoenaed Friday by a joint committee, made up of three Republicans and two Democrats, after prosecutor Stephen Branchflower said that someone may have attempted to deny worker's compensation benefits to Wooten.

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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.

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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.

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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.

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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.

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U.S. Stock Markets Moderate Following Monday's Tumultuous Trading
2008-09-16 16:12:30

After a historic plunge Monday, U.S. stocks suffered modest declines this morning as nervous investors awaited news of the fate of insurer American International Group (AIG).

The Dow Jones industrial average fell more than 160 points at the opening bell Tuesday but then regained those losses and was about flat by mid-day, after closing down 504 points Monday - the biggest point drop in seven years. The technology-heavy Nasdaq and Standard & Poor's 500-stock index were also close to even shortly after 2 p.m.

The market has been roiled by the demise of Lehman Brothers, the fourth-largest investment bank, which filed for bankruptcy Monday, and the quick sale of Merrill Lynch to Bank of America for about $50 billion. Both helped send U.S. and global markets plummeting over the past two days.

The market has been buoyed Tuesday by a continuing decline in fuel prices and a drop in consumer prices. Also cheering some investors: British bank Barclays has acknowledged that it is considering the purchase of some Lehman Brothers assets, and the Financial Times reported this morning that a deal had been reached.

If completed, the purchase would illustrate some confidence in the sector, analysts said. "It shows that there are banks that are willing to risk their capital to purchase their peers, and also it suggests bargaining," said Tom Sowanick, chief investment officer at Clearbrook Financial LLC in Princeton, New Jersey.

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Exposure To Plastics Chemical Elevates Health Risks
2008-09-16 16:12:04

The first large study of humans exposed to a chemical widely used in everyday plastics has found that people with higher levels of bisphenol A had higher rates of heart disease, diabetes and liver abnormalities.

The research, published Tuesday in the Journal of the American Medical Association by a team of British and American scientists, compared the health status of 1,455 men and women with the level of the chemical, also known as BPA, in their urine.

The researchers divided the subjects into four groups according to their BPA levels and found that those in the quartile with the highest concentrations were nearly three times more likely to have cardiovascular disease than those with the lowest levels, and 2.4 times more likely to have diabetes. Higher BPA levels were also associated with abnormal concentrations of three liver enzymes.

Data on the health status on the study subjects, who ranged in age from 18 to 74 years, were drawn from a large federal database, the National Health and Nutrition Examination Survey, for 2003-2004.

The BPA exposure levels in the study were below those deemed safe by the federal government, adding to a growing body of studies in animals that have linked low-level BPA exposure to various disorders.

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Crude Oil Drops Below $91 A Barrel
2008-09-16 16:11:29
Oil prices extended their sharp decline on Tuesday, as financial worries cast a shadow on economic growth. In two days, oil has dropped $10 a barrel.

In New York, oil futures fell as much as 5 percent below $91 a barrel in morning trading, their lowest level since February. In early afternoon trading, oil was down $4.48 to $91.23. The drop followed a decline of $5.47 a barrel on Monday, when it closed under the symbolic $100-a-barrel threshold for the first time since March.

The price of oil has lost more than 37 percent since it peaked in early July at $145.29 a barrel because of slowing economic growth and falling consumption in Western economies. The drop accelerated on Monday after Wall Street suffered its worst day since 2001, and Lehman Brothers filed for bankruptcy protection.

As the economic picture darkens, the outlook for oil consumption is worsening. The OPEC cartel, which accounts for about 40 percent of the world’s oil, on Tuesday lowered its forecast for oil demand this year because of slowing economic growth.

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Hewlett-Packard Cuts 24,600 Jobs After Acquiring EDS
2008-09-16 16:10:15
When Hewlett-Packard Co. announced five months ago it was acquiring technology-services firm Electronic Data Systems Corp. (EDS), Wall Street expected big layoffs from the combined company.

The size of the job cuts - 24,600 jobs over the next three years, nearly 8 percent of HP's 320,000-employee work force - came as a shock when HP laid out its plans Monday for integrating EDS.

The surprise could provide a lift for Palo Alto, California-based HP's stock price Tuesday because of the potential cost savings from the dramatic reduction in staff and HP Chief Executive Mark Hurd's track record for wringing more profits out of lean operations.

"Today's story is kind of an eyebrow-raiser - I was surprised at the magnitude of the cuts," said analyst Bob Djurdjevic with Annex Research.

Djurdjevic added that EDS had been cutting jobs before HP bought it, and some investors were concerned those cutbacks weren't addressing a key problem for EDS in the need to ink more profitable deals. That challenge now falls to HP.

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Officials Pledge To Empty Ike-Battered Texas Peninsula Of Residents
2008-09-16 16:09:24
The few hundred holdouts on Texas' ravaged Bolivar Peninsula will be required to leave in the next few days, and officials said Tuesday they are ready to use emergency powers to empty the barrier island scraped clean by Hurricane Ike.

Judge Jim Yarbrough, the top elected official in Galveston County, said the roughly 250 people who defied warnings they would be killed if they rode out the storm in the rural coastal community are a ''hardy bunch'' and there are some ''old timers who aren't going to want to leave.''

The Texas attorney general's office is looking into the legal options available to force the remaining residents leave, Yarbrough said. Local authorities are prepared to do whatever it takes to get residents to a safer place.

''I don't want to do it,'' he said. ''I'm doing it because it's in their best interests.''

The sliver of land is just too damaged for residents to stay there, and the population must be cleared so that recovery can begin, officials said. With no gas, no power and no running water, there is also concern about spread of disease.

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Rangle To Remain As House Ways And Means Committee Chief
2008-09-16 16:08:46

U.S. Representative Charles B. Rangel will not step down from the chairmanship of the House Ways and Means Committee, despite pressure from Republicans and others who say his leadership is being undermined by his swirling ethical problems.

Rangel’s lawyer, Lanny Davis, told reporters during a conference call on Tuesday that the House speaker, Nancy Pelosi, supports his decision to remain in the chairmanship. The announcement came after Rangel, the 78-year-old Harlem Democrat, met behind closed doors on Monday with the speaker and other party leaders.

Davis said Rangel was addressing the ethical issues in a forthright way by asking the House ethics committee for an investigation, and hiring an accountant to report on his finances directly to the committee.

“The chairman believes that the facts should prevail, not innuendo or editorial opinion, or the partisan actions of the Republican leadership,” said Davis.

About the possibility of stepping aside temporarily, while the ethics committee conducts its review, Davis said, “It’s not even on the table.”

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Lehman Bankruptcy Hits Florida Pension Funds
2008-09-16 03:04:09

The bankruptcy of Lehman Brothers, a prestigious Wall Street firm, will touch Florida's pension funds and the state-run insurer because both hold its securities.

The State Board of Administration holds $322 million in Lehman stock and bonds. The SBA manages the state's employee fund and more than two dozen other funds, including assets for the Florida Hurricane Catastrophe Fund and the Florida Prepaid College Plan.

Dennis MacKee, a spokesman for the SBA, said the agency has an $84 million unrealized loss on its holdings.

About two-thirds of the securities are held by the Florida Retirement System, which includes the pension funds for local counties such as Miami-Dade and Broward. The rest is spread out in the catastrophe fund and the Lawton Chiles Endowment Fund, which helps fund Medicare.

MacKee said because the SBA is such a substantial investor in the financial markets, with more than $159 billion in funds under management, the agency has a relationship with most of the large Wall Street houses.

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Commentary: The Ugly New McCain
2008-09-16 03:03:30
Intellpuke: This commentary was written by Washington Post Op-Ed Columnist Richard Cohen and appeared in the the Post's edition for Tuesday, September 16, 2008.

Following his loss to George W. Bush in the 2000 South Carolina primary, John McCain did something extraordinary: He confessed to lying about how he felt about the Confederate battle flag, which he actually abhorred. "I broke my promise to always tell the truth," said McCain. Now he has broken that promise so completely that the John McCain of old is unrecognizable. He has become the sort of politician he once despised.

The precise moment of McCain's abasement came, would you believe, not at some news conference or on one of the Sunday shows but on "The View," the daytime TV show created by Babara Walters. Last week, one of the co-hosts, Joy Behar, took McCain to task for some of the ads his campaign has been running. One deliberately mischaracterized what Barack Obama had said about putting lipstick on a pig - an Americanism that McCain himself has used. The other asserted that Obama supported teaching sex education to kindergarteners.

"We know that those two ads are untrue," said Behar. "They are lies."

Freeze. Close in on McCain. This was the moment. He has largely been avoiding the press. The Straight Talk Express is now just a brand, an ad slogan like "Home Cooking" or "We Will Not Be Undersold." Until then, it was possible for McCain to say that he had not really known about the ads, that the formulation "I approve this message" was just boilerplate. But he didn't.

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