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Sunday, October 05, 2008

Free Internet Press Newsletter - Sunday October 5 2008 - (813)

Sunday October 5 2008 edition
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European Leaders Reject Joint Strategy On Banks
2008-10-05 01:49:04
The leaders of Europe's four largest economic powers vowed Saturday to protect their banks from the continuing reverberations of the increasingly global financial crisis but could not agree on a common Europe-wide strategy.

Unlike the United States, which last week committed $700 billion in government money to shoring up Wall Street,  Europe plans to continue dealing with its financial problems on a case-by-case basis. That approach, which has involved tens of billions of dollars at a step, is complicated by the transnational presence of so many large European financial institutions.

The European leaders did call for a global economic summit by year's end aimed at revamping the international financial system, which is a legacy of a conference held at Bretton Woods, New Hampshire, in the waning months of World War II.

French President Nicolas Sarkozy, Europe's most vocal advocate of a continent-wide response, announced that for now, he and the leaders of Britain, Germany and Italy agreed in four hours of discussions only that each country would use "its own means" to safeguard banks from collapse but would do so "in a coordinated way."

The outcome seemed to fall well short of the common policy that French and other officials had spoken of in recent days amid a rapid series of financial failures and a freezing up of the capital markets in Europe, which rival or by some measures exceed the size of the U.S. markets. The disunity in Europe also was apparent in complaints by some other countries that they were not even included in the discussion.

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Iceland On Brink Of Collapse As Inflation, Interest Rates Soar
2008-10-05 01:48:38
Almost overnight, its population became the wealthiest on Earth. Now, the credit crunch is making Iceland's cash disappear.

The snow has arrived early in Reykjavik after an unusually long and warm summer. The freeze has brought out the ghostly green haze of the aurora borealis - the Northern Lights - the shape of which shifts dramatically across the tiny city's black skies.

The bars and restaurants of Iceland's capital are packed, the Range Rovers and BMWs are parked nose to tail all along the streets of the central 101 district, and music is pumping from a black stretch Hummer limousine cruising by.

"What can we do? Its difficult times but we've spent all day talking about it, watching the news getting worse and worse. We had to go out and be with friends. Maybe it's like the party at the end of the world," says Egill Tomasson, 32, sitting in the Kaffeebarinn bar.

Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country's three independent banks has been nationalized, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won't send any more money and supplies of foreign currency are running out.

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Europe Calls For Global Summit On Bank Crisis
2008-10-05 01:48:01
Britain's Prime Minister Gordon Brown and other European Union leaders called Saturday night for a global economic summit to "rebuild the world's financial system" as they held emergency talks on how to prevent a repeat of the current international credit crisis.

At a hastily convened meeting in Paris, French President Nicolas Sarkozy said the heads of the European Union's four biggest economies - Germany, France, the U.K. and Italy - were united on the need to call all leading economic nations together to create "a new financial world just as Bretton Woods did 60 years ago".

The summit, planned for next month, is expected to include the G8 leading industrial nations, as well as India, China, South Africa, Brazil and Mexico. Sarkozy, who called last night's meeting in his role as E.U. President, said it was time for governments to clamp down on speculators and restore a moral element to the heart of a regime that had failed.

"We need to literally rebuild the international financial system. We want to lay the foundations of entrepreneurial capitalism, not speculative capitalism," he said.

As part of a rolling program of announcements, the E.U.'s "big four" agreed to release £12 billion ($24 billion) of emergency aid to ailing small businesses across the E.U. immediately, and a further £12 billion as soon as possible after that. The European Investment Bank had said the money would be released gradually over the next four years.

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Crisis In Zimbabwe As Food Runs Out
2008-10-05 01:46:49
As President Mugabe and opposition MDC leaders wrangle over cabinet appointments, millions face starvation in a catastrophe created by economic chaos and the dramatic collapse of commercial farms.

Six months after the elections, Zimbabwe still lacks a functioning government and is on the verge of a humanitarian catastrophe.

Following the worst wheat harvest since the independence war, bread has run out and sugar supplies are set to follow. USAID, the American government humanitarian agency, is warning that the country could run out of the maize, the staple food, by next month. Farming officials say the government's stated aim of producing maize on 500,000 hectares this season is unattainable.

"We are in serious trouble," said Jabulani Gwaringa, of the Zimbabwe Farmers' Union (ZFU), which represents small-scale operators. "There is no seed, fertilizer and crop chemicals on the market. Banks are not offering farmers any credit. In July we had produced about 25,000 metric tons of seed maize. We are down to 9,000 because farmers opted to eat their hybrid seed or sell it to millers."

One European diplomat said: "We are already hearing isolated reports of child deaths from hunger." In the poorest provinces, such as Matabeleland North, subsistence farmers have begun bartering their livestock for maize: one cow buys six buckets of maize, while four live chickens or a goat buy one bucket.

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Palin's Assets Worth Up To $2.1 Million
2008-10-04 16:02:26

Republican vice presidential nominee Sarah Palin and her husband, Todd, have assets worth up to $2.1 million, and they paid $24,738 in 2007 income taxes on total income of $166,495, which came from her salary as governor of Alaska and money he earned as an oil worker, fisherman and snowmachine racer, documents released by her campaign Friday show.

The tax returns indicated that Palin paid no taxes on $16,951 in state payments she received as meal and incidental expenses when she stayed at her home in Wasilla instead of at the governor's mansion in Juneau.

Alaska's director of finance has already declared that the state does not consider these $60-a-day payments taxable. Accounting experts and some tax courts have differed on the question of whether such compensation is tax-exempt. Friday, the McCain campaign issued a legal opinion from Washington lawyer Roger M. Olsen supporting the state's view that the payments are not taxable.

Palin stayed in her Wasilla home 312 nights, or 54 percent of the time, when she claimed reimbursements from Dec. 4, 2006, through June 30, 2008. Although her staff has said most of her work as governor is performed in Anchorage, 45 miles from Wasilla, Finance Director Kim Garnero said the state capital in Juneau is considered her duty station, making her eligible for the non-taxable meal and expense payments.

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Jury finds O.J. Simpson Guilty Of Armed Robbery, Kidnapping
2008-10-04 15:39:24
A Las Vegas, Nevada, jury convicted O.J. Simpson of armed robbery and kidnapping late Friday night, 13 years to the day after he was acquitted of killing his ex-wife and her friend in Los Angeles.

Simpson and his co-defendant, Clarence Stewart, were both convicted on all 12 counts. As the court clerk read "guilty" 24 times shortly before 11 p.m., Simpson grimaced and then nodded slightly, quickly regaining his composure. From the gallery, his sister, Carmelita Durio, wept on a friend's shoulder.

Both defendants were handcuffed and taken into custody. Durio's weeping became wailing as marshals escorted Simpson from the courtroom.

The verdicts mean that Simpson, 61, faces a possible life sentence for a six-minute confrontation with two sports memorabilia dealers last year at a down-market casino hotel. Sentencing will be Dec. 5.

The Las Vegas courtroom scene stood in marked contrast to the conclusion of Simpson's 1995 trial, when he smiled broadly and mouthed his thanks to the Los Angeles jury as the stunned families of Nicole Brown Simpson and Ronald Goldman wept.

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Britain's Most Senior Commander: We Can't Win Taliban War
2008-10-05 01:48:49

The public should not expect "a decisive military victory" in Afghanistan, Britain's most senior military commander in the country has warned.

Brigadier Mark Carleton-Smith said the aim was to reduce the uprising to a level at which it could be managed by the Afghan army - and made clear that this could involve talking to the Taliban.

It was necessary to "lower our expectations" and accept that it would be unrealistic to expect that multinational forces can entirely rid Afghanistan of armed bands, he suggested.

Brig. Carleton-Smith, the commander of 16 Air Assault Brigade, which has just completed its second tour of Afghanistan, told the Sunday Times that his forces had "taken the sting out of the Taliban for 2008".

But he added: "We're not going to win this war. It's about reducing it to a manageable level of insurgency that's not a strategic threat and can be managed by the Afghan army.

"We may well leave with there still being a low but steady ebb of rural insurgency."

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Britain's Rivers Could Run Dry
2008-10-05 01:48:18
Flows In Severn and Mersey rivers might drop by up to 80 percent by 2050, warn climate experts.

Britain's rivers could nearly run dry because long hot summers caused by global warming will not be sufficiently compensated by wetter winters, researchers predict. It is a scenario that would endanger wildlife and send household water bills soaring.

Flows in the Mersey and Severn are likely to be reduced in summer by up to 80 per cent by 2050, according to a study by the Environment Agency. The Thames's flow is likely to decline by up to 50 per cent during the same period.

It had been hoped that, as global warming leads to more extreme seasons, summer droughts would be offset by an increase in winter rainfall. However, while wetter winters are expected, they will not be damp enough to make up for the lack of rain during the hotter summers.

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Warning On Frozen Chicken Dinners As Salmonella Sickens People In 12 States
2008-10-05 01:47:27
The government is urging consumers to thoroughly cook frozen chicken dinners after 32 people in 12 states were sickened with salmonella poisoning.

The health warning by the U.S. Department of Agriculture cited frozen dishes in which the chicken is raw, but breaded or pre-browned, giving the appearance of being cooked. They include "chicken cordon bleu," "chicken Kiev," or chicken breasts stuffed with cheese, vegetables or other items.

USDA said many of the people who became ill apparently did not follow the package's cooking instructions and microwaved the chicken dishes even though the instructions did not provide for it. Microwaving didn't heat the meals enough to kill the salmonella.

The department said consumers should cook chicken products to a minimum internal temperature of 165 degrees Fahrenheit.

USDA's Food Safety and Inspection Service issued the warning Friday after Minnesota health officials found a link between the chicken dinners with salmonella illnesses reported in Minnesota and 11 other states. It did not name the states in its release, and did not immediately respond to a message left at its press office Saturday seeking that information.

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Bailout Seen As Politically Risky Measure
2008-10-04 16:02:40

Henry M. Paulson, Jr., was in his corner office in the Treasury Department on Monday afternoon, too nervous to turn on his television, when his chief of staff poked his head into the Treasury secretary's office to tell him the stunning news playing out on Capitol Hill: The House had just defeated the Wall Street rescue plan that Paulson had helped craft.

Within minutes, Paulson was on his way across the street to the White House, his senior staff hustling to keep up, for a meeting in the Roosevelt Room with the administration's economic team. There was no time for pleasantries, and before everyone had taken their seats, the former Goldman Sachs chief began firing off options.

Should they push for an immediate vote in the Senate? Should the Democratic leaders be flashed a green light to put together a bill that they could pass on their own, without Republicans? Should they make small changes to win over the dozen or so votes they would need on a second try in the House?

Forty-five minutes into the meeting, they were joined by President Bush, who asked the one question no one had considered: If his plan is not working, what is Plan B?

Paulson looked at his boss, then delivered the answer he did not want to hear: There is no Plan B. The Treasury Department and the Federal Reserve had stretched their authorities to the limits, employing obscure powers never before used to keep their fingers in the dikes. The rescue package had to pass.

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Analysis: Wall Street Bailout Path A Maze Of Unknowns
2008-10-04 15:39:41
Now comes the hard part.

With congressional passage of the bailout bill Friday, the financial industry's focus will shift to the mechanics of the deal: How exactly does the government plan to spend up to $700 billion to buy troubled loans from banks?

The measure gives the Treasury Department up to 45 days to set up the acquisition system, and so far Treasury Secretary Henry M. Paulson has said little about how he planned to implement his new authority. In a statement Friday, Paulson said Treasury would move rapidly but "methodically" to use its "broad set of tools."

Securities experts say the system needs to minimize the possibility that certain firms would be favored at the expense of others - especially given Paulson's ties to Wall Street as the former chairman of Goldman Sachs Group Inc.

"Someone who controls $350 [to] $700 billion can determine who survives and who doesn't," said Lawrence E. Harris, a finance professor at University of Southern California (USC) and the former chief economist of the Securities and Exchange Commission. "That's a massive amount of power that has the potential for, if not fraud, then favoritism and blind mistakes."

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Witnesses Say Light Was Green For Engineer Before Deadly California Rail Crash
2008-10-04 15:39:13
Three observers who say they were at the Chatsworth Metrolink station in Los Angeles, California, before last month's deadly train crash have asserted in interviews that a final, crucial railroad signal was green as the commuter line's engineer headed toward the collision point.

The accounts, including one from a station security guard and another from a retiree who says he was interviewed by a federal investigator, contradict a key preliminary finding by the National Transportation Safety Board (NTSB).

The safety agency has said its evidence shows the signal was red when the Metrolink train, driven by engineer Robert M. Sanchez, barreled over a switch that merges two tracks into one and slammed into a Union Pacific train, leaving 25 dead and 135 injured.

Experts say it is common for investigators to get sharply differing witnesses' accounts during inquiries into catastrophic accidents. But the three witnesses were insistent.

"I saw the light was green. Everything seemed all right," said Chris Watson, 20, the station security guard. Watson said he was standing midway down the platform on Sept. 12 as Metrolink 111 pulled out of the station.
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