Free Internet Press Newsletter - Tuesday October 21 2008 - (813)

Tuesday October 21 2008 edition
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U.S. Said To Be Urging New Mergers In Banking 2008-10-21 03:29:17 In a step that could accelerate a shakeout of the nation’s banks, the Treasury Department hopes to spur a new round of mergers by steering some of the money in its $250 billion rescue package to banks that are willing to buy weaker rivals, according to government officials. As the Treasury embarks on its unprecedented recapitalization, it is becoming clear that the government wants not only to stabilize the industry, but also to reshape it. Two senior officials said the selection criteria would include banks that need more capital to finance acquisitions. “Treasury doesn’t want to prop up weak banks,” said an official who spoke on condition of anonymity, because of the sensitivity of the matter. “One purpose of this plan is to drive consolidation.” With bankers traumatized by the credit crisis and the loss of investor confidence, officials said, there are plenty of banks open to selling themselves. The hurdle is a lack of well-capitalized buyers. Stable national players like Bank of America, JPMorgan Chase, and Wells Fargo are already digesting acquisitions. A second group of so-called super-regional banks are well positioned to take over their competitors, officials said, but have been reluctant to undertake or unable to complete deals. Read The Full Story India's Unmanned Moon Mission May Launch Race For Lunar Land Grab 2008-10-21 03:28:53 Satellite hopes to map lunar surface for rare helium 3. It will be a small step for mankind, but a giant leap forward for India. In a boost to national prestige, the country will launch its first unmanned moon mission Wednesday - blasting its Chandrayaan satellite into space from an island off the Bay of Bengal, using a domestically produced rocket system. In doing so, it will match China, which last year became the first Asian nation to send a satellite to orbit the moon, signaling the possibility of a race for mineral wealth on the lunar surface. If all goes to plan, India's tricolor flag should be drifting down towards the freezing, airless lunar surface as dawn breaks over the subcontinent on November 11. The 239,000-mile journey is not straightforward - it took the Americans and Russians almost two decades to master it, from the moment space exploration was born. Once above the Earth's atmosphere the launch vehicle's thrusters will have to maneuver and fire the Chandrayaan I rocket with precision. If all goes to plan, the satellite, weighing half a tonne, will enter a lunar orbit some 62 miles above the moon's surface on November 8 and begin its two-year mission to map the moon in 3-D, survey its surface for mineral wealth and start its 11 hi-tech probes, including five from the US, Sweden, Japan, Germany and Bulgaria. One of India's aims in reaching the moon is the possibility of harvesting helium 3, a key fuel for nuclear fusion. Although fusion is not commercially viable today, scientists say it one day will be, and that once it is a fuel supply will become a problem, as the Earth is believed to have only 15 tons of helium 3. The moon is thought to contain up to 5 million tons. Read The Full Story McCain Stresses He's Not Bush 2008-10-21 03:27:54 Battling George W. Bush for the Republican presidential nomination in 2000, John McCain lashed out at the Texas governor, denouncing his proposed tax cuts as a giveaway to the rich. Eight years later, this time running as the Republican presidential nominee, the senator from Arizona is again criticizing Bush and his financial policies, as he renews his efforts to demonstrate that he would represent a departure from the current administration. At virtually every campaign stop, McCain is reprising a line he used last Wednesday in his final debate with Sen. Barack Obama: "I am not George Bush." And in a television ad introduced last week, McCain looks into the camera and says, "The last eight years haven't worked very well, have they?" As he struggles to pull his campaign out from beneath the shadow of a president whose approval ratings have reached historic lows, McCain is offering some of his toughest criticism of the Bush White House. In recent weeks, he has focused his message on the administration's handling of the nation's financial crisis, suggesting that the Treasury Department has been more interested in "bailing out the banks" than helping struggling homeowners avoid foreclosure. "I am so disturbed that this administration has not done what we have to do, and that is to go out and buy up these bad mortgages," McCain told Jewish leaders in a conference call Sunday morning. Read The Full Story Laws Allow Donors To Surpass Campaign Contribution Limits 2008-10-21 03:26:40 Much of the attention on the record amounts of money coursing through the presidential race this year, including in Senator Barack Obama's announcement on Sunday of his $150 million fund-raising haul in September, has focused on the explosion of small donors. There has been another proliferation on the national fund-raising landscape that was not fully apparent until the latest campaign finance reports were filed last week: people who have given tens of thousands of dollars at a time to help the candidates. Enabled by the fine print in campaign finance laws, they have written checks that far exceed normal individual contribution limits to candidates, to joint fund-raising committees that benefit the candidates as well as their respective parties. Many of these large donors come from industries with interests in Washington. A New York Times analysis of donors who wrote checks of $25,000 or more to the candidates’ main joint fund-raising committees found, for example, the biggest portion of money for both candidates came from the securities and investments industry, including executives at various firms embroiled in the recent financial crisis like Bear Stearns, Lehman Brothers and AIG. The joint fund-raising committees have been utilized far more heavily this presidential election than in the past.  Obama’s campaign has leaned on wealthy benefactors to contribute up to $33,100 at a time to complement his army of small donors over the Internet as he bypassed public financing for the general election. More than 600 donors contributed $25,000 or more to him in September alone, roughly three times the number who did the same for Senator John McCain.  Read The Full Story British Aid Worker Shot In Kabul 2008-10-21 03:25:38 Taliban say aid worker killed for "spreading Chistianity". Taliban insurgents claimed responsibility Monday for the murder of a British aid worker in Kabul, accusing her of spreading Christianity. Gayle Williams, 34, was shot dead by two men on a motorcycle as she walked to the office of the Christian charity Serve. Aid organizations in Afghanistan were Monday night assessing the security risks for their staff in response to the murder. So far this year, 29 aid workers, either foreign or Afghans employed by one of the 100-plus agencies in the country, have been killed. A Taliban spokesman claimed responsibility for the shooting. "This woman came to Afghanistan to teach Christianity to the people of Afghanistan," he said. "Our [leaders] issued a decree to kill this woman. This morning our people killed her in Kabul." The street where the killing took place is wide and dusty, with few shops and many villas surrounded by high walls. The area is popular with NGOs (non-government organizations) and foreign companies. "After I heard the shots I came and she was lying there," said a police officer, Dei Agha, pointing at the pavement. "She was covered with blood, we put her in a police pick up truck and took her to the morgue." Read The Full Story Wall Street Lifted By Positive Signs In Credit Markets 2008-10-20 16:04:26 Signs of improvement in the credit markets brought a wave of relief to Wall Street on Monday morning, as investors sent shares higher after the open and welcomed comments from the chairman of the Federal Reserve that seemed to encourage a new government stimulus package. The Dow Jones industrials were about 250 points as the last hour of trading began. The Standard & Poor’s 500-stock index rose nearly 2.9 percent, and the Nasdaq composite index was up about 1.78 percent. After weeks of extraordinary coordinated efforts by the world’s governments and central banks, investors awoke on Monday to find - finally - signs that credit was beginning to flow more easily. Borrowing rates among banks, a crucial gauge of fear in the credit markets, dropped the most in nine months, according to one measure. The cost that banks charge one another for three-month loans fell back to its levels in September, based on the closely watched Libor rate. The rate for overnight interbank loans fell to the lowest level in more than four years. It appeared that lower interest rates, enormous injections of liquidity and the unprecedented moves by world governments to take ownership stakes in large banks had eased some of the stress that had plagued the credit markets for weeks. Read The Full Story DARPA Contract Descriptions Hints At Advanced Video Spying 2008-10-20 16:04:07 Real-time streaming video of Iraqi and Afghan battle areas taken from thousands of feet in the air can follow actions of people on the ground as they dig, shake hands, exchange objects and kiss each other goodbye. The video is sent from unmanned and manned aircraft to intelligence analysts at ground stations in the United States and abroad. They watch video in real time of people getting in and out of cars, loading trunks, dropping things or picking them up. They can even see vehicles accelerate, slow down, move together or make U-turns. "The dynamics of an urban insurgency have resulted in a rapid increase in the number of activities visible in the video field of view," according to the Defense Advanced Research Projects Agency.  Although the exploits of the Predator, the Global Hawk and other airborne collectors of information have been widely publicized, there are few authoritative descriptions of what they can see on the ground. Some insights into the capabilities of the Predator and other aircraft can be drawn from a DARPA paper that describes the tasks of a contractor that will develop a method of indexing and rapidly finding video from archived aerial surveillance tapes collected over past years. Read The Full Story U.S. Deficit Rises And The Consensus Is To Let It Grow 2008-10-20 03:49:39 Like water rushing over a river’s banks, the federal government’s rapidly mounting expenses are overwhelming the federal budget and increasing an already swollen deficit. The bank bailout, in the latest big outlay, could cost $250 billion in just the next few weeks, and a newly proposed stimulus package would have $150 billion or more flowing from Washington, D.C., before the next president takes office in January. Adding to the damage is that tax revenues fall as the economy weakens; this is likely just as the government needs hundreds of billions of dollars to repair the financial system. The nation’s wars are growing more costly, as fighting spreads in Afghanistan. And a declining economy swells outlays for unemployment insurance, food stamps and other federal aid. The extra spending, a sore point in normal times, has been widely accepted on both sides of the political aisle as necessary to salvage the banking system and avert another Great Depression. “Right now would not be the time to balance the budget,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan Washington, D.C., group that normally pushes the opposite message. Confronted with a hugely expensive economic crisis, Democratic and Republican lawmakers alike have elected to pay the bill mainly by borrowing money rather than cutting spending or raising taxes. While the borrowing is relatively inexpensive for the government in a weak economy, the cost will become a bigger burden as growth returns and interest rates rise. Read The Full Story As Oil Prices Fall, Push For Alternative Energy May Ease 2008-10-20 03:49:15 Just four months ago, a conference here on electric cars drew four times as many people as expected. District fire marshals ordered some of the crowd to leave, and the atmosphere was more like that of a rock concert than an energy conference. A brief film depicted an electric car owner driving off with a beautiful woman to the strains of "The Power of Love" while her original companion struggles to pay for gasoline. The audience cheered. One discordant note in the series of enthusiastic speeches came from Bill Reinert, one of the Toyota Prius designers. He cautioned that designing and ramping up production of a new car takes five years. "If oil goes down to $60 or $70 a barrel and gasoline gets back to $2.50 a gallon, and that very possibly could happen," he said, "will that demand stay the same or will we shift back up?" It didn't take five years to hit those numbers. One type of oil shock has given way to another. Even more swiftly than the price of oil rose, it has tumbled to the range that seemed far-fetched when Reinert spoke and oil was more than $130 a barrel. Now that drop threatens a wide variety of game-changing plans to find alternatives to oil or ways to drastically reduce U.S. consumption. "Declining oil prices can give us an artificial and temporary sense that reducing oil consumption and energy consumption is an issue we can put off," said Greg Kats, a managing director of Good Energies, a multibillion-dollar venture capital firm that invests in global clean energy. The credit crisis is compounding that threat by making it more difficult to finance capital-intensive projects, whether they are new auto assembly lines or solar panels or wind turbines. General Motors has been touting the Chevy Volt as the first mass-marketed, plug-in hybrid vehicle. GM, which has been holding merger talks with Chrysler, believes the project will help justify federal financing. It hopes to deliver the car by the end of 2010. Read The Full Story	New G.I. Bill Is Too Late For Some 2008-10-21 03:29:06 The new G.I. Bill passed by Congress over the summer, which dramatically expands veterans benefits, was lauded as a sign that the country was looking after this generation of warriors; but don't extol its virtues to Grey Adkins, who served two tours with the Navy off the coast of Iraq, is $10,000 in debt and won't see a dime of the new benefits. Even though it is called the Post-9/11 G.I. Bill, the new legislation won't take effect until Aug. 1, 2009 - eight years after jets felled the twin towers and other planes crashed into the Pentagon and a field in Pennsylvania. By then, Adkins will have graduated from Towson University. And because the bill is not retroactive, it won't help him at all. The difference it would make is stark. Currently, he receives $1,600 a month during the school year, or about $15,000. Under the new bill, he would be eligible for up to twice that amount each school year. So far, more than 410,000 Iraq and Afghanistan veterans have used the current G.I. bill, according to the Department of Veterans Affairs - and many, like Adkins, will finish school before the new benefits start. Many advocates for veterans say that it took too long to update a G.I. Bill that has not kept pace with the escalating price of college tuition. But now there is also concern that the V.A. won't be able to meet the August deadline after it abruptly abandoned its plan to hire a private contractor this month and instead will implement the new program itself. Read The Full Story 3 Agencies Vie For Oversight Of Credit-Default Swaps Market 2008-10-21 03:28:40 The government is moving forward with its first significant effort to bring oversight to a vast, unregulated corner of Wall Street that has severely exacerbated the financial crisis. But a turf war is brewing among three leading federal agencies that have contrasting visions for how the $55 trillion market for speculative financial instruments known as credit-default swaps should be regulated. While the credit crisis has upended global financial markets and given a lift to advocates of heightened regulation, it has not resolved traditional disputes in Washington over how deeply the government should be involved in free markets. Some regulators say the market can operate largely on its own but simply needs more transparency. Others say that the credit crisis has exposed wide gaps in oversight that require a much more direct role by the government. The battle has mobilized the financial industry and lawmakers who are holding a hearing today on market regulation. Some industry players are lobbying sympathetic members of Congress for light oversight. Powerful financial firms, eying new fees, are campaigning to play a major role in running the market for swaps, which originated as a form of insurance against bond defaults but grew into a wildly popular vehicle for speculation. Read The Full Story Surprise! - NOT! Bush Decides To Keep Guantanamo Open 2008-10-21 03:27:15 Despite his stated desire to close the American prison at Guantanamo Bay, Cuba, President Bush has decided not to do so, and never considered proposals drafted in the State Department and the Pentagon that outlined options for transferring the detainees elsewhere, according to senior administration officials. Bush’s top advisers held a series of meetings at the White House this summer after a Supreme Court ruling in June cast doubt on the future of the American detention center. Bush adopted the view of his most hawkish advisers that closing Guantanamo would involve too many legal and political risks to be acceptable, now or any time soon, said the officials. The administration is proceeding on the assumption that Guantanamo will remain open not only for the rest of Bush’s presidency but also well beyond, the officials said, as the site for military tribunals of those facing terrorism-related charges and for the long prison sentences that could follow convictions. The effect of Bush’s stance is to leave in place a prison that has become a reviled symbol of the administration’s fight against terrorism, and to leave another contentious foreign policy decision for the next president. Both presidential candidates, Senators John McCain and Barack Obama, have called for closing Guantanamo and could reverse Bush’s policy, though probably not quickly since neither has spelled out precisely how to deal with some of the thorniest legal consequences of shutting the prison. Read The Full Story Lloyds TSB Chief To Staff: You'll Still Get Bonuses 2008-10-21 03:26:14 Bank boss says Britain's bailout imposes "very, very few restrictions". The chief executive of Lloyds TSB, one of the banks participating in the British government's £37 billion ($70 billion) bank bailout, has promised staff they will receive bonuses this year despite Prime Minister Gordon Brown's promise of a crackdown on bankers' pay following the investment by taxpayers. Eric Daniels has told employees that the historic government intervention will not change the behavior of Lloyds, which is in the throes of the rescue takeover of HBOS brokered by the prime minister. In a recorded message to employees, Daniels stressed that the bank faced "very, very few restrictions" in its behavior despite the injection of up to £5.5 billion ($10 billion) of taxpayers' funds. "If you think about it, the first restriction was not to pay bonuses. Well Lloyds TSB is in fact going to pay bonuses. I think our staff have done a terrific job this year. There is no reason why we shouldn't," said Daniels. The emergence of these assurances adds to the pressure on Brown over the banking bail-out as a Guardian/ICM poll reveals he is winning praise but not votes for his handling of the financial crisis. The poll shows the Conservatives maintaining a double-digit lead, enough for a Commons majority, despite the transformation of the prime minister's reputation at Westminster. Read The Full Story Commentary: God Bother In Wasilla 2008-10-21 03:25:05 Intellpuke: This commentary was written by Geoffrey Wheatcroft and appeared in the Guardian edition for Tuesday, October 21, 2008. The resurgence of religion now marks the widest divide between U.S. and European politics. Of all the dramatic changes history has witnessed since 1945 - the economic miracle in postwar western Europe, the collapse of Communism and now the latest boom and bust - none was more unforeseen than the resurgence of religion. A new "revolt of Islam" was quite unexpected 50 years ago, when secular Arab nationalism seemed the rising force, and when, for that matter, secular Israelis didn't guess that "religious Zionists" would one day make the running in their country. And yet what may be the most striking and important development is the renewed role of religion in the U.S., and its political implications. John McCain has tried to negatively associate Barack Obama with Jeremiah Wright, his fire-eating radical pastor (or former pastor), but much less attention has been paid to Sarah Palin's membership of the Assembly Church of God in Wasilla and to her own pastor, Ed Kalnins. When Colin Powell endorsed Obama on Sunday, he said Palin was not yet ready to be president. He might have added that her religious opinions also raised questions about her fitness for high office. Religion may now be the largest gulf between Europe and the U.S. Mitt Romney, the Mormon who ran for the Republican nomination, spoke of the empty cathedrals of Europe, and Tony Blair was the oddity among European politicians in his public protestations of faith. Maybe Blair would be more at home in the U.S., if not quite at Saddleback, the "evangelical megachurch" in California, where McCain and Obama bared their sinful souls. Obama blamed his early "experiments" with alcohol and drugs on "a certain selfishness", and McCain confessed to his "greatest moral failing" with the end of his first marriage. Yet, weird and embarrassing as this sounded to Europeans, it would have done so to Americans also not long ago. For Herbert Hoover and Franklin Roosevelt to have taken part in any such event during the 1932 presidential campaign would have seemed quite absurd, or Harry Truman and Thomas Dewey in 1948. Four years later, Dwight Eisenhower had so little religious upbringing that he needed to be discreetly baptized before he reached the White House. Read The Full Story In Britain, Mortgage Lending Drops 42 Percent In 1 Year 2008-10-20 16:04:18 Mortgage lending in Britain slumped by 10% in September to its lowest level for more than three-and-a-half years as the housing market slowdown stifled demand for new loans, figures showed Monday. The U.K.'s Council of Mortgage Lenders (CML) said its members advanced loans worth £17.7 billion ($34 billion) over the month, a decline of 42% on September 2007. Over the course of 2008 net mortgage lending, which takes into account repayments and redemptions, could fall to around a third of last year's figure, it said. September's gross lending figure is the lowest since January 2005 and reflects a sharp drop-off in loans to new borrowers, as both lenders and buyers pull out of the housing market. The CML said a seasonal fall was typical between August and September, but this was the lowest September figure for seven years. Gross mortgage lending for the three months from July to September was estimated to total £62 billion ($134 billion), down 16% on the second quarter of this year and 37% down on the same period last year. Read The Full Story Testimony Ends In Sen. Ted Stevens' Trial 2008-10-20 16:03:52 Testimony in the corruption trial of Sen. Ted Stevens concluded Monday, with a Justice Department attorney trying to undermine the credibility of the Alaska Republican by questioning why he didn't return items of value that friends had left at his homes in Washington and Alaska. U.S. District Judge Emmet G. Sullivan said closing arguments by the government and Stevens' lawyers would be heard Tuesday; Sullivan indicated that the federal jury would begin deliberations Wednesday. Stevens is charged with failing to disclose more than $250,000 in home improvements and gifts, including a gas grill, bronze art work and a reclining massage chair, to the Senate. Public integrity attorney Brenda Morris repeatedly challenged Stevens on the witness stand Monday, saying his explanation that the items in question were not gifts, even though they remained at his homes, was not plausible. Morris asked Stevens about a $2,700 Brookstone massage chair that was delivered to his home in Washington in 2001. Stevens has taken the position that the chair was a loan from a friend, but he acknowledged on cross-examination that it remains in his home to this day. "How is that not a gift?" asked Morris. Read The Full Story Global Warming Linked To Disease 2008-10-20 03:49:28 When a 1991 cholera outbreak that killed thousands in Peru was traced to plankton blooms fueled by warmer-than-usual coastal waters, linking disease outbreaks to epidemics was a new idea. Now, scientists say, it is a near-certainty that global warming will drive significant increases in waterborne diseases around the world. Rainfalls will be heavier, triggering sewage overflows, contaminating drinking water and endangering beachgoers. Higher lake and ocean temperatures will cause bacteria, parasites and algal blooms to flourish. Warmer weather and heavier rains also will mean more mosquitoes, which can carry the West Nile virus, malaria and dengue fever. Fresh produce and shellfish are more likely to become contaminated. Heavier rainfalls are one of the most agreed-upon effects of climate change. The frequency of intense rainfalls has increased notably in the Midwest, the Northeast and Alaska, and the trend will accelerate, said the 2007 report of the United Nations' Intergovernmental Panel On Climate Change (IPCC). The consequences will be particularly severe in the 950 U.S. cities and towns - including New York, the District, Milwaukee and Philadelphia - that have "combined sewer systems," archaic designs that carry storm water and sewage in the same pipes. During heavy rains, the systems often cannot handle the volume, and raw sewage spills into lakes or waterways, including drinking-water supplies. Read The Full Story ING Bank Accepts 10 Billion Euro Dutch Cash Injection 2008-10-20 03:48:47 ING, the Dutch savings bank which has more than a million savers in the U.K., is to get a €10 billion capital injection from the Netherlands authorities, the latest bank to be affected by the global credit crisis. ING is the Netherlands' largest listed bank, with 85 million customers worldwide, and is one of the world's top 20 financial institutions. It operates under its own name in this country, and recently took control of 180,000 accounts from failed Icelandic banks Kaupthing Singer & Friedlander and Heritable Bank. ING has grown strongly in the U.K. on the back of its well-received savings products and has become a household name, regularly appearing in best-buy tables. It also took over the failed U.K. investment bank Barings in the 1990s. At a press conference tonight the Dutch finance minister, Wouter Bos, said the government would get preference shares in ING worth €10bn in return for the cash injection. The shares will pay the government annual interest of 8.5%. The Dutch government will also appoint two members of the bank's supervisory board - the equivalent of its board of directors. The bank is scrapping its dividend payout to shareholders and its senior executives have agreed to forfeit their annual bonuses and limit their pay-offs to a maximum of one year's salary. Read The Full Story
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