Free Internet Press Newsletter - Saturday October 11 2008 - (813)

Saturday October 11 2008 edition
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G7 Agree On Global Rescue Plan 2008-10-11 01:23:00 A crisis meeting of finance ministers and central bank governors from the west's seven leading economies Friday night agreed to take "urgent and exceptional action" to bail out banks amid fears that a fresh wave of panic had pushed the global financial system to the brink of collapse. The G7 agreed to take "all necessary steps" including adopting Britain's plans to part-nationalize banks in order to kick-start lending in frozen credit markets after Wall Street suffered the worst week in its history. With shares, oil and sterling all plunging at the end of a dramatic week, the G7 pledged to take decisive action and use all tools available to prevent more big western banks going bust. The G7 issued a five-point plan in a short communique after meeting in Washington, D.C., Friday. It pledged to "ensure that our banks and other financial intermediaries, as needed, can raise capital from public as well as private sources in sufficient amounts to re-establish confidence and permit them to continue lending to households and businesses". Facing the most severe stockmarket crash since 1929, Henry Paulson, the U.S. treasury secretary, said Friday night the U.S. would use some of the $700 billion, earmarked by Congress to buy up Wall Street's "toxic waste", to buy stakes in U.S. banks. He said the government program to purchase stock in private U.S. financial firms will be open to a broad array of institutions, including banks, in an effort to help them raise money. Read The Full Story Gigantic Swiss Banks Holding Up - For Now 2008-10-11 01:22:25 The Swiss economy is dwarfed by the size of its leading banks, and there are growing worries about their health. The government says everything is fine, but some disagree. They exist also in Zurich: "Masters of the Universe." You can recognize these money-moguls from their swanky rides - their Porsches, their Audis, their BMWs. And yet recently these chariots of high finance have been spotted being sold to auto dealers at fire-sale prices - a sure sign that the bank crisis has arrived here in Switzerland, too. "First and foremost it is the financial center of Switzerland that will bleed," prophecies Beat Bernet, bank expert at the University of St. Gallen. By now people are even contemplating the unthinkable: the collapse of Europe's leading bank, the largest money manager in the world, UBS. The Swiss have been forced once already to wave goodbye to a national icon. Swissair, whose solidity earned it the moniker "the flying bank," shut down in 2001. It was a traumatic crash-landing for the whole country, and Swissair's collapse cost the state over 2 billion Swiss francs (€1.3 billion). The big banks also bore guilt for the failure. As later became public, UBS had refused to extend funding to Swissair for emergency operations. This is how the bank earned its nasty nickname among the populace, "United Bandits of Switzerland." Read The Full Story For First Time, Scientists Predict Arrival Of Asteroid 2008-10-11 01:21:49 The object turned up over Sudan, posing no threat to people. The successful prediction shows that an alert system is working, says Jet Propulsion Lab expert. Scientists for the first time were able predict the arrival of an asteroid before it entered Earth's atmosphere. The asteroid, estimated at 6 to 15 feet in diameter, entered the atmosphere over Sudan on Tuesday morning, providing a brilliant light show in East Africa as it burned up. Scientists said it posed no threat to people on the ground, though some tiny pieces of the object may have reached the Earth's surface. The important thing, scientists said, was not the discovery of the object, but the prediction of its trajectory. Read The Full Story Investigation Concludes Palin Abused Power In 'Troopergate' 2008-10-10 21:16:53 An Alaska legislative investigation has concluded that Gov. Sarah Palin abused her power in pushing for the firing of an Alaska state trooper who was once married to her sister. The report by investigator Steve Branchflower was made public late this afternoon by a 12-0 vote of the bipartisan Legislative Council, which authorized the investigation. Branchflower's report contains four findings. The first concludes that Palin violated the state's executive branch ethics act, which says that "each public officer holds office as a public trust, and any effort to benefit a personal or financial interest through official action is a violation of that trust." Branchflower was investigating whether Palin abused her power by pushing for the firing of state trooper Mike Wooten, who was involved in a nasty divorce from Palin's sister. Palin and her husband, Todd, have accused Wooten of threatening Palin's father. The investigation also looked into whether Palin dismissed public safety commissioner Walt Monegan because he resisted pressure to fire Wooten. Read The Full Story U.S. Stocks Slide In Turbulent Trading 2008-10-10 16:27:23 Amid unrelenting pessimism about the health of the global economy and world governments’ ability to solve the financial crisis, stocks swung wildly on Friday, with the Dow Jones industrial average down 566 points, or 6.5 percent, by early afternoon in New York, continuing this week’s aggressive sell-off. At the opening of trading, Wall Street had seemed in a free-fall. The Dow Jones industrial average fell almost 700 points or about 8 percent in the first 10 minutes, dipping briefly below 8,000. The broader Standard & Poor’s 500-stock index, declined almost 8 percent. By mid-afternoon, the S.&P. was down 7.1 percent. Then the turnaround began, and shortly after 10 a.m., the Dow actually slipped into positive territory, briefly, before again pushing lower. Another day, another series of violent swings in a week that has seen large sell-offs in the last hour of the trading day. Read The Full Story Global Approach Considered As Financial Crisis Spreads 2008-10-10 16:27:04 The United States and Britain appear to be converging on a similar blueprint for stemming the financial chaos sweeping the world, one day before a crucial meeting of leaders begins in Washington that the White House hopes will result in a more coordinated response. The British and American plans, though far from identical, have two common elements according to officials: injection of government money into banks in return for ownership stakes and guarantees of repayment for various types of loans. Both remedies will be center stage on Saturday, when President Bush meets with finance ministers from the world’s richest countries at an unusual White House meeting to swap ideas. Bush’s invitation to finance ministers from Britain, Italy, Germany, France, Canada and Japan came on a day of phone calls and letters between European leaders and with Washington. Adding to the urgency, the Japanese stock market plunged more than 10 percent Friday morning, after having dropped 9 percent on Wednesday. Read The Full Story Connecticut Court Overturns Ban On Same-Sex Marriage 2008-10-10 16:26:24 The Connecticut Supreme Court ruled on Friday that same-sex couples have the right to marry, reversing a lower court decision that had concluded that the civil unions legalized in the state three years ago offered the same rights and benefits as marriage. With the 4-to-3 ruling, Connecticut becomes the third state in the nation to legalize same-sex marriage. California legalized gay marriage in May 2008, and Massachusetts in 2004. “Today is really a great day for equality in Connecticut,” said Bennett Klein, senior lawyer at Gay and Lesbian Advocates and Defenders,which argued the case before the Supreme Court. “Today’s decision really fulfills the hopes and dreams of gay and lesbian couples in Connecticut to live as full and equal citizens.” Opponents of same-sex marriage called for continued steps for a constitutional ban on the practice. “It’s an outrage, but it’s not unexpected,” said Peter Wolfgang, the executive director of the Family Institute of Connecticut. “We thought all along that the court would usurp the democratic process and force same-sex marriage on Connecticut.” Read The Full Story GM, Ford Fight For Survival 2008-10-10 03:28:47 America's biggest car manufacturers, General Motors and Ford, are facing a long, hard battle for survival tonight after Wall Street abruptly lost confidence in their financial stability in the face of plummeting vehicle sales. In the course of a few hours, GM's shares crashed by 31% to close at $4.76, their lowest level since 1950, while Ford's stock plunged by 21% to a 20-year low of $2.08 on mounting concern that both companies are at risk of bankruptcy. The Detroit-based car makers, which have been the mainstays of U.S. motor manufacturing for more than a century, are struggling to cope with an evaporation of bank funding for car loans to enable customers to purchase new vehicles. In a severe blow to their financial credibility, Standard & Poor's said it was considering downgrading its credit ratings for both GM and Ford, citing "the rapidly weakening state of most global automotive markets". Both are already rated as offering "junk" debt, meaning that they are high-risk prospects for lenders, and a further reduction will make it even harder for them to borrow money. GM's sprawling empire includes brands such as Cadillac, Chevrolet, Saab and Vauxhall. It has traditionally been the largest of Detroit's "big three" car makers, ahead of Ford and privately owned Chrysler. Read The Full Story Fears Of Recession Take Hold On Wall Street 2008-10-10 03:28:18 ear and foreboding took hold on Wall Street Thursday, as the stock market again plunged and investors became convinced that the nation is on the verge of a deep and prolonged recession. The rout continued in Japan, where stocks plummeted in early trading. The government took steps toward an extraordinary public investment in U.S. banks and General Motors stock fell to its lowest price since 1950 on fears it will not be able to weather the downturn. Share prices fell across every industry and for each of the 30 stocks in the Dow Jones industrial average, which was down 679 points, or 7.3 percent, to 8579.19. The plummeting stock market could not be blamed on any single piece of horrible news - there were no additional bank failures or government bailouts or corporate bankruptcies. "I've never seen a panic like this," said David Wyss, chief economist at Standard & Poor's. "I've seen stock market drops, but not an overall panic." The broad Standard & Poor's 500 fell 7.6 percent, the seventh consecutive day of misery on Wall Street. The index has now fallen 42 percent from its all-time high one year ago yesterday and 22 percent this month alone. Stocks are on track for their worst calendar year since 1937. Read The Full Story	Interview: 'Capitalism Has Degenerated Into A Casino' 2008-10-11 01:22:47 Intellpuke: Spiegel Online interviewed Nobel Peace Prize laureate Muhammad Yunus. In the interview, Mr. Yunus said that greed has destroyed the world's financial system. The interview follows: SPIEGEL ONLINE: Mr. Yunus, for years you have been preaching a more socially conscious way of doing business and have denounced the narrow focus on maximizing profit as harmful. Now, the entire financial system is wobbling ... Yunus: The current turn of events makes me sad. It is certainly not something I am happy about. The collapse has hurt so many people and has suddenly made the entire world unstable. We should now be concentrating on making sure that such a financial crisis does not happen again. SPIEGEL ONLINE: What should be done? Yunus: There are huge holes in the current financial system that need to be plugged. The market is clearly not able to solve these problems itself, and now people are having to run to the governments to ask for emergency assistance. That is not a good sign because it shows that trust in the markets has evaporated. At the moment, there is unfortunately no other option than for government takeovers and government support. That is currently the method being used to combat the crisis - a method kicked off with the $700 billion bailout package passed in the US. In Germany, the government has likewise jumped into the fray. Read The Full Story Interview: 'The United States Has Essentially A One-Party System' 2008-10-11 01:22:08 Intellpuke: Spiegel Online interviewed linguist and public intellectual Noam Chomsky. In the interview, Mr. Chomsky says America essentially has a one-party system. The interview follows: SPIEGEL: Professor Chomsky, cathedrals of capitalism have collapsed, the conservative government is spending its final weeks in office with nationalization plans. How does that make you feel? Chomsky: The times are too difficult and the crisis too severe to indulge in schadenfreude. Looking at it in perspective, the fact that there would be a financial crisis was perfectly predictable, its general nature, if not its magnitude. Markets are always inefficient. SPIEGEL: What exactly did you anticipate? Chomsky: In the financial industry, as in other industries, there are risks that are left out of the calculation. If you sell me a car, we have perhaps made a good bargain for ourselves. But there are effects of this transaction on others, which we do not take into account. There is more pollution, the price of gas goes up, there is more congestion. Those are the external costs of our transaction. In the case of financial institutions, they are huge. SPIEGEL: But isn't it the task of a bank to take risks? Chomsky: Yes, but if it is well managed, like Goldman Sachs, it will cover its own risks and absorb its own losses. But no financial institution can manage systemic risks. Risk is therefore under priced, and there will be more risk taken than would be prudent for the economy. With government deregulation and the triumph of financial liberalization, the dangers of systemic risks, the possibility of a financial tsunami, sharply increased. Read The Full Story Deforestation Costs More Than The Financial Crisis 2008-10-11 01:18:51 It is a steep bill. Our shrinking forest cost us up to $5 trillion a year - far more than the current banking crisis. Environmentalists hope the sobering calculation, made by a European Union-commissioned team, will focus political will on funding conservation. How to put a price tag on nature? That conundrum is at the heart of research by a team headed by Deutsche Bank economist Pavan Sukhdev. They have found a way of calculating a figure for environmental damage and loss of biodiversity in forests. And the price is high: At between $2 trillion and $5 trillion per year it dwarfs the cost of the current financial crisis which economists gauge at about $1.5 trillion. Entitled "The Economics of Ecosystems and Biodiversity," the report was originally published in May but has returned to the spotlight at the World Conservation Congress in Barcelona this week. Conservationists gathered at the event have said it underscores the need to ramp up funding for environmental protection. And when making traditional economic calculations, it is all too easy to overlook natural reserves like food, fibers, fuel, clean water, healthy soil and protection from floods, said the report. "Though our well being is totally dependent upon these 'ecosystem services' they are predominantly public goods with no markets and no prices, so they often are not detected by our current economic compass." In order to pinpoint an accurate price, the researchers added the values of the various services offered by forests, such as absorbing carbon dioxide and providing clean water. Read The Full Story Judge: Palin Must Preserve Emails On Private Accounts 2008-10-10 21:16:43 An Alaska state judge on Friday ordered Gov. Sarah Palin to preserve e-mails she's sent from or received at private e-mail accounts until a lawsuit demanding that the e-mails be made public is resolved. Superior Court Judge Craig Stowers issued the order in response to a lawsuit by Alaskan Andree McLeod, who questioned the legality of the governor's use of private e-mail accounts to conduct state business. Stowers refused McLeod's request that Palin be ordered not to use private e-mail accounts to conduct state business. But he granted her request that the governor and her office be ordered to preserve any e-mails and documents attached to them that were sent or received from her private e-mail accounts. "Alaska Gov. Sarah Palin and the office of the governor of Alaska … are ordered to preserve all e-mails (including attachments thereto) sent between December 4, 2006, and the resolution of this litigation," Stowers wrote. Palin's use of private e-mail accounts have been the subject of controversy in Alaska out of concern that the use of such accounts would allow Palin to skirt state laws requiring the preservation and release of the e-mails under state law. Read The Full Story Political Blog: McCain's Risky Turn 2008-10-10 16:27:13 There is a scene early in "Dead Certain," Robert Draper's book about President Bush, when the Bush campaign, reeling from its loss to John McCain in New Hampshire in the 2000 primary, is plotting its moves for a do-or-die struggle in South Carolina. As Bush's South Carolina team sketched out one tough step after another, Mark McKinnon, Bush's media adviser, listened with amazement. Draper writes that McKinnon was thinking: "They're letting the dogs off the chain." John McCain was the victim in that campaign eight years ago. Now, struggling to overcome Barack Obama's lead in the polls, he is unleashing attacks and empowering forces that lead him in the same direction. Through television ads by his campaign and by the Republican National Committee, Obama is under attack for his association with William Ayers, the domestic terrorist of the 1960s. On the campaign trail, McCain's rallies have at times turned into angry rants by his supporters aimed at Obama and the Democrats. Frank Keating, the former governor of Oklahoma and a McCain surrogate went on television this week and played the race card, saying Obama should own up to the fact that he was once a "guy of the street" who used cocaine. I wrote Thursday about the risks to both McCain and Obama - and the country - as they fire at one another in increasingly sharp terms. The danger is that the winner will come to office with a sizable portion of the population poisoned by the effects of the campaign. Read The Full Story Palins Repeatedly Pressed Case Against Trooper 2008-10-10 16:26:39 The 2007 state fair was days away when Alaska's public safety commissioner, Walt Monegan, took another call about one of his troopers, Michael Wooten. This time, the director of Gov. Sarah Palin's Anchorage office was on the line. As Monegan recalls it, the aide said the governor had heard that Trooper Wooten was assigned to work the kickoff to the fair in late August. If so, Monegan should do something about it, because Gov. Palin was also planning to attend and did not want him nearby. Somewhat bewildered, Monegan soon determined that Trooper Wooten had indeed volunteered for duty at the fairgrounds - in full costume as “Safety Bear,” the troopers’ child-friendly mascot. Two years earlier, the trooper and the governor’s sister had been embroiled in a nasty divorce and child-custody battle that had hardened the Palin family against him. To Monegan and several top aides, the state fair episode was yet another example of a fixation that the governor and her husband, Todd, had with Trooper Wooten and the most granular details of his life. “I thought to myself, ‘Man, do they have a heavy-duty network and focus on this guy’,” said Monegan. “You’d call that an obsession.” Read The Full Story Former Finnish President Wins Nobel Peace Prize 2008-10-10 16:26:11 The Norwegian Nobel Committee awarded its 2008 peace prize on Friday to Martti Ahtisaari, the former Finnish president who has been associated over decades with peace efforts and quiet, cautious diplomacy from Asia to Africa and Europe. Out of 197 people nominated for the annual prize, the committee said, Ahtisaari had been chosen “for his important efforts in several continents and over three decades to resolve international conflicts.” To outsiders, Ahtisaari, 71, has often seemed an undemonstrative and aloof figure. But some people who worked with him praised what Gareth Evans, the head of the nongovernmental International Crisis Group in Brussels, Belgium, called “charm and humor” in dealing with his various negotiating partners. He has played a central role in ending conflicts that took root in the late 20th century and threatened the early 21st century with conflagrations in many places, some of them remote and all of them complex, presenting mediators with tangles of ethnic, religious or racial passions. Specifically, the committee mentioned his work in ending South African domination of Namibia, the former South-West Africa, from the 1970s to the late 1990s , and peace efforts in the Indonesian province of Aceh, Kosovo, Northern Ireland, Central Asia, the Horn of Africa and, most recently, in Iraq. Read The Full Story U.S. Allegedly Listened In On Calls Of Americans Abroad 2008-10-10 03:28:35 The chairman of the Senate intelligence committee is looking into allegations that a U.S. spy agency improperly eavesdropped on the phone calls of hundreds of Americans overseas, including aid workers and U.S. military  personnel talking to their spouses at home. The allegations, by two former military intercept officers assigned to the National Security Agency (NSA), include claims that U.S. spies routinely listened in on intimate conversations and sometimes shared the recordings with each other. At least some of the snooping was done under relaxed eavesdropping rules approved by the Bush administration to facilitate spying on terrorists. The chairman of the Senate intelligence committee, Sen. John D. Rockefeller IV (D-West Virginia), Thursday termed the accusations "extremely disturbing" and said his staff had begun gathering information and may consider holding hearings. "Any time there is an allegation regarding abuse of the privacy and civil liberties of Americans, it is a very serious matter," he said. The alleged intercepts were described by two linguists who said they witnessed the activity while assigned to the NSA's giant eavesdropping station known as Back Hall at Fort Gordon, Georgia. Adrienne Kinne, 31, a former Army reservist, was an intercept operator at the site from 2001 to 2003, while Navy linguist David Murphee Faulk, 39, held a similar position from 2003 to 2007. Both provided accounts to investigative journalist James Bamford for his book "The Shadow Factory," due for release next week, and also in interviews with ABC News. Both said the NSA's intercept program was intended to pick up intelligence about terrorists and their plans - which sometimes happened. But the operators also would frequently tap into phone calls by Americans living abroad -  usually satellite phone calls made from the Middle East, or routine calls made by U.S. military personnel from phones in Baghdad's Green Zone, they said in interviews broadcast Thursday. Read The Full Story Prosecution Rests In Trial Of U.S. Sen. Ted Stevens 2008-10-10 03:27:49 A Democratic senator who has been a longtime friend of Sen. Ted Stevens took the witness stand Thursday to defend the integrity of the powerful Alaska Republican, who is battling corruption charges. Sen. Daniel K. Inouye (D-Hawaii) testified that he liked and admired Stevens from the moment he met him in the 1960s because of their common experiences as World War II veterans. "I have never heard of him lying under oath," said Inouye. "I have never known him to lie." "I can assure you his word is good enough to take to the bank," the senator from Hawaii testified. The testimony came as defense lawyers began producing a steam of witnesses they intend to call to attest to Stevens'  character, including former secretary of state Colin L. Powell. Prosecutors rested their case Thursday against Stevens on charges that he lied on financial disclosure forms to hide more than $250,000 in gifts, including renovations to his home in Girdwood, Alaska, from 1999 through 2006. The government alleges that most of those gifts and renovations were provided by Bill Allen, the chief executive of Veco, a now-defunct oil services company that was one of Alaska's largest private employers. Read The Full Story
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