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Tuesday, October 28, 2008

Free Internet Press Newsletter - Tuesday October 28 2008 - (813)

Tuesday October 28 2008 edition
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Central Banks Slashing Rates As Investors Flee
2008-10-28 03:23:47

Central banks around the world are moving to further slash interest rates as they seek to contain the damage from the bursting of the biggest credit bubble in history.

The Federal Reserve is poised to cut its benchmark rate for the second time in two weeks at a pivotal meeting in Washington, D.C., on Wednesday, and the European Central Bank Monday suggested that it would do the same next week. South Korea announced a dramatic rate cut Monday, by three-fourths of a percentage point.

Governments worldwide have already approved massive bailouts and stimulus packages to halt financial meltdowns, but the trouble spots in the United States and abroad continue to multiply. Monday, there were growing signs that the U.S. Treasury Department was close to extending its $700 billion rescue program to cover the ailing auto industry.

Analysts said governments are trying to manage what has become the biggest threat to the global financial system - a massive pullout by panicked investors from any holding they see as remotely risky. From consumers to multibillion-dollar hedge funds, investors are cashing out to cover losses or guard against further damage by moving into safe havens such as U.S. Treasurys.

Rate cuts, however, are not packing their usual punch. Normally, when central banks cut rates, it becomes cheaper for businesses and consumers to borrow money. Now, with banks and other financial institutions experiencing a severe crisis, lenders have been reluctant to extend credit at any price.

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In U.S., Foreclosures Open Door To Disorder
2008-10-28 03:23:16

Among the many harsh lessons for mortgage lenders in the housing bust is this one about evictions: Selling a house is far easier than taking it back. Clever opportunists and struggling families have figured this out, too, and the result is a rapidly evolving free-for-all coursing through the Washington, D.C., region's worst foreclosure-racked suburbs.

Defaulting homeowners are taking advantage of banking chaos to live mortgage-free for six months or longer, dragging out the eviction process, according to lenders and real estate agents. Unscrupulous landlords are collecting rent but withholding mortgage payments, leaving a rude surprise for their tenants when repossession comes. And banks are so eager to avoid the hassle of eviction that they are paying occupants $5,000 or more simply to hand over the keys and move out without a fight.

Then there are the illegal squatters, appliance thieves and miscellaneous animals - wild and domestic - that abound amid the disorder.

Someone has to sort out the mess, and that's where people such as John Zampino, a deputy with the Prince William County Sheriff's Office, come in. Zampino is one of hundreds of deputies across the region who increasingly function as the armed couriers of the real estate meltdown, delivering court documents, serving repossession orders and, when necessary, carrying out evictions. He estimates that he has conducted more than 100 evictions this year, up from two in 2006.

"We're never happy about kicking people out of their homes," said Zampino, 36.

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Dow Takes Late Dive, Finishes Over 200 Points Down
2008-10-27 20:58:41

Stocks took a late dive Monday afternoon despite investors' excitement earlier in the day over moves by the U.S. Treasury to help banks recover from the credit crisis.

The Dow Jones industrial closed down 203 points, or 2.4 percent, after a morning spent mostly in the red and an afternoon rally. The broader Standard & Poor's 500-stock index and the tech-heavy Nasdaq posted losses of about 3 percent, down 27 and 46 points, respectively.

Tuesday, the Federal Reserve begins a two-day meeting and is expected to cut the key federal funds rate by half a point, down to one percent.

"That is a legitimate reason to be buying stocks," said Richard Cripps, Stifel Nicolaus chief investment officer in Baltimore. "More importantly, we're seeing coordinated action coming out of Europe."

The European Central Bank could be moving toward an interest rate cut after President Jean-Claude Trichet said today that such a move was "a possibility" as inflation pressures ease up.

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Public Pension Funds Lose Billions In Wall Street Turmoil
2008-10-27 20:58:19

The market downturn is ravaging public pension funds across the United States, with many state and local governments seeing more than 20 percent of their retirement pools swept away in the turmoil.

Even before the financial crisis, many large pension funds were considered to be inadequately funded, according to the Government Accountability Office. The losses could force some states and local governments to ask taxpayers to pay more into the funds or to demand more contributions from the police, teachers and other government employees the pensions cover.

Public pension funds dropped 14.8 percent in value for the year that ended Sept. 30, according to Northern Trust,  the investment company. The funds, which typically have most of their money in stocks, likely have dropped far more because the markets have dropped another 20 percent since then.

"We expect this is going to be the worst year we've seen since we've been tracking the funds," said William Frieske, of Northern Trust Investment Risk and Analytical Services, which began watching the funds 14 years ago. "It's got all the hallmarks of a bad - really bad - year."

Virginia's retirement fund, for example, has dropped about 20 percent since July 1, plummeting from $55 billion to $44 billion. Most of that fund was invested in stocks.

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Jennifer Hudson's Nephew Found Dead In Missing SUV
2008-10-27 20:57:21
Actress Jennifer Hudson's 7-year-old nephew was found dead on Monday, ending a grim search that began three days ago with the discovery of his murdered grandmother and uncle in the house they shared on Chicago's South Side.

Julian King's body was discovered in the back seat of a missing 1984 Chevrolet Suburban parked on a residential street miles from the original crime scene. He had been shot several times.

Police superintendent Jody Weis somberly announced the news that Chicago residents had feared since the Oscar-winning actress's mother and brother were murdered Friday in the working class Englewood neighborhood on the city's South Side.

"Today, a family and a community are grieving," Weis told reporters this afternoon.

The discovery came one day after Hudson, who won an Academy Award for "Dreamgirls," offered a $100,000 reward for information leading to the safe return of Julian, the son of her sister Julia Hudson.

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U.S. Air Strike Kills 20 People In Pakistan
2008-10-27 20:56:47
An American drone aircraft hit a militant compound in South Waziristan on Sunday night, killing 20 people, including two important local Taliban commanders known for their attacks against American soldiers in Afghanistan, a senior government official and a local resident said Monday.

One of the dead commanders, Eida Khan, was wanted by the Americans for his cross-border attacks from bases in Waziristan, the government official said. The other commander, Wahweed Ullah, worked with Arabs who were part of al-Qaeda, said the local resident.

Ullah, in his late 20s, was known as an ideologically committed fighter who specialized in attacks against Americans in Afghanistan, the resident said.

The drone launched a missile attack on a compound in the village of Manduta, close to Wana, the capital of South Waziristan, about 20 miles from the border with Afghanistan.

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Wall Street Steady After Shares Plunge Overseas
2008-10-27 16:12:27

One of Wall Street’s worst months in history reached its final week on Monday, but the impulse to sell showed some signs of abating.

Shares pushed into positive territory after an encouraging report on sales of new homes, which rose more than expected, and then spent most of the day struggling to stay there

At about 3:30 p.m, the Dow Jones industrials were down about 7 points after dropping more than 150 points at the opening bell. Both Europe and Asia experienced some declines, including a 6.4 percent drop in the Nikkei, sending the Japanese index to its lowest level since 1982.

The Standard & Poor’s 500-stock index was down 0.83 percent, and the Nasdaq composite index was 0.64 percent lower.

The home sales report was the second sign in a week that buyers had begun to move back into the beleaguered housing market. Sales of newly constructed homes rose 2.7 percent in September, rising to an annual rate of 464,000. All the gains came in southern and western states.

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Editorial: As China Goes, So Goes ...
2008-10-27 16:12:00
Intellpuke: This editorial appeared in the New York Times edition for Sunday, Oct. 26, 2008.

As the world tips into recession, China’s economic decisions could affect how other countries fare in the downturn.

Over the last 30 years, China has hitched its economy to the industrial world, exporting cheap goods to the United States and other developed nations, building up an enormous trade surplus that will hit about $400 billion this year. As those industrial economies sputter, China is now in a position to pick up some of the slack: selling more of its own goods at home and buying more from the rest of the world.

To get China’s consumers to spend, the government will need to spend more at home, investing in public works projects and providing more social benefits - including health insurance and pensions - so its citizens don’t feel they have to save so much for a rainy day.

This is clearly in Beijing’s interest, though China’s leaders are still clinging to the old export strategy.

China is already feeling the impact of a slower world economy. Both economic growth and export growth have braked sharply. The slowdown threatens job creation, direly needed to absorb millions of rural Chinese seeking employment in the cities.

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Mobs Attack U.N. Installations In Congo
2008-10-27 16:11:37
A United Nations mission in eastern Democratic Republic of Congo was "under attack" on Monday, said a U.N. spokesman.

A mission staff member inside the U.N. compound, who did not want to give his name for security reasons, said U.N. security forces had returned fire in an attempt to disperse angry crowds near the U.N. compound. Gunshots could be heard as he spoke on the phone.

He said the attack had resulted in several deaths, but that could not be confirmed.

The assault died down later in the day, a U.N. spokesman said, but people continued to pelt the building.

It was unclear who was doing the attacking, but the staff member told CNN that the people were from a village that had been taken over by the CNDP, a Congolese renegade group led by Gen. Laurent Nkunda that seized a major military camp and gorilla park in a renewed bout of heavy fighting Sunday.

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Police Probing Hudson Case Find Boy's Body
2008-10-27 15:17:42
Investigators were working Monday to identify the body of a child found in a car on Chicago's West Side, while family members of Oscar-winning singer and actress Jennifer Hudson assumed the worst--that this was her missing nephew.

The body was found in the back seat of the white Chevrolet Suburban police were looking for in their search for 7-year-old Julian King, three days after the bodies of Jennifer Hudson's mother and brother were found shot to death in the mother's house in Englewood.

Law enforcement sources said that the boy was shot multiple times in the back of the vehicle. Police are testing the clothing of a man in custody for gunshot residue.

Hudson family members were expected at the medical examiner's office this afternoon to identify the body. Police Superintendent Jody Weis will hold a press conference at 4 p.m. Monday.

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Mystery Writer Tony Hillerman Dies At 83
2008-10-27 15:17:09
Tony Hillerman, author of the acclaimed Navajo Tribal Police mystery novels and creator of two of the most unlikely of literary heroes - Navajo police officers Joe Leaphorn and Jim Chee - died Sunday of pulmonary failure. He was 83.

Hillerman's daughter, Anne Hillerman, said her father's health had been declining in the last couple years and that he was at Presbyterian Hospital in Albuquerque, New Mexico, when he died at about 3 p.m.

Hillerman lived through two heart attacks and surgeries for prostate and bladder cancer. He kept tapping at his keyboard even as his eyes began to dim, as his hearing faded, as rheumatoid arthritis turned his hands into claws.

"I'm getting old," he declared in 2002, "but I still like to write."

Anne Hillerman said Sunday that her father was a born storyteller.

"He had such a wonderful, wonderful curiosity about the world," she said. "He could take little details and bring them to life, not just in his books, but in conversation, too."

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U.S. Treasury Dept. To Use Bailout Money For Auto Industry
2008-10-28 03:23:36

The Bush administration is in negotiations to broaden its $700 billion financial rescue plan to include U.S. auto companies, potentially opening the door to an array of industries to seek federal aid.

Detroit's Big Three are eligible for aid under a broad interpretation of the law that authorized the $700 billion financial rescue, Treasury Department officials said Monday, but they declined to discuss the details of any assistance.

"The law grants the secretary broad authority to purchase troubled assets that he deems important to improving financial stability," said Treasury spokeswoman Jennifer Zuccarelli.

Ford and General Motors are eligible because they are both chartered as thrift holding companies, so they can establish banks to make car loans nationwide. Other businesses, such as General Electric, Nordstrom, John Deere and Macy's, are chartered in the same way to issue credit cards or make loans to their customers. Chrysler would also be eligible, said Treasury officials.

Helping such businesses could put the Treasury in the tricky situation of picking winners and losers within the economy, a far cry from restoring the free flow of credit in the financial system, which was the original intention of the rescue package, some analysts said. It could lead to a long line of companies heading to the Treasury for aid, especially if the holiday shopping season is as disastrous as retailers are forecasting.

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Syria Vows To Defend Territory Against Attack
2008-10-28 03:22:58

Syria Monday condemned the U.S. for launching "criminal and terrorist aggression" on its soil, while the Iraqi government defended action against foreign jihadis amid warnings it might complicate plans for a controversial security agreement between Baghdad and Washington.

Walid al-Muallem, Syria's foreign minister, used a visit to London to lambast the U.S. for its "cowboy politics" and hinted that Sunday's raid was designed to halt Syria's gradually improving relations with the European Union and Britain. Iran and Russia also condemned the U.S. for aggravating tensions in the region.

Syria reported that U.S. troops, backed by helicopters, launched the attack five miles into its territory, killing eight people, including four children. At the funerals of the victims, where angry crowds chanted anti-American slogans, an Associated Press photographer said he saw the bodies of seven men.

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Lawyers In Both Political Camps Ready To Keep Eye On Polls
2008-10-27 20:58:30

With heavy voter turnout expected on Election Day, both parties are amassing thousands and thousands of lawyers to keep an eye on the polls.

Senator Barack Obama's campaign is expected to send at least 5,000 lawyers to Florida alone. The first recruitment e-mail message the campaign sent out nationally received 6,000 responses from lawyers willing to volunteer. Meanwhile, Senator John McCain's campaign has lined up “Lawyers for McCain” to spread out at polling places in closely contested states as advocates for the ticket.

Both campaigns plan to use the lawyers to protect their supporters at the polls, help untangle ballot problems and run to court should litigation be necessary. Given the heated ballot challenges in the 2000 and 2004 elections, getting legal talent on the ground on Election Day is becoming as common a tool for the campaigns as advertising and polling.

“Both sides are assembling literally thousands of lawyers at the state level,” said Kenneth Gross, a campaign finance lawyer at Skadden, Arps in Washington who represents both parties. “We’re not talking about Laurence Tribe or David Boies, but there will be no shortage of lawyers looking for any kind of imperfection in the process.”

“There’s been a tremendous mobilization effort,” said Gross.

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Countries Scramble To Shore Up Economies
2008-10-27 20:57:50

Policy makers around the world, unnerved by the relentless sell-offs of shares, scrambled to support their economies on Monday.

In South Korea, the central bank, at an emergency meeting, slashed its key rate by three-quarters of a percentage point, to 4.25 percent. The bank also announced that it would further shore up local banks by purchasing their domestic bonds.

The Australian central bank intervened in the currency markets for a second day by buying Australian dollars to prop up the exchange rate. The Bank of Israel lowered interest rates by a quarter of a point, and the Bank of Canada said that it would add 6 billion Canadian dollars, or $4.7 billion in liquidity to that country’s markets.

In Japan, Prime Minister Taro Aso said the government would expand a program that gives banks access to public funds and would strengthen regulation on the short-selling of shares. But that was not enough to head off another sharp slide in shares in Tokyo.

In Europe, with evidence mounting that the Continent is lurching into a recession, the European Central Bank president, Jean-Claude Trichet,said it was “possible” that the bank would lower interest rates for a second time in as many months, after making its first move alongside other central banks on Oct. 8.

“It is not a certainty, it is a possibility,” said Trichet.

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U.S. Officials Confirm Commando Raid In Syria
2008-10-27 20:57:01
A raid into Syria on Sunday was carried out by American Special Operations forces who killed an Iraqi militant responsible for running weapons, money and foreign fighters across the border into Iraq, American officials said Monday.

The helicopter-borne attack into Syria was by far the boldest by American commandos in the five years since the United States invaded Iraq and began to condemn Syria’s role in stoking the Iraqi insurgency. The timing was startling, not least because American officials had praised Syria in recent months for its efforts to halt traffic across the border.

In justifying the attack, American officials said the Bush administration was determined to operate under an expansive definition of self-defense providing a rationale for strikes on militant targets in sovereign nations without those countries’ consent.

Together with a similar American commando raid into Pakistan seven weeks ago, the operation on Sunday appeared to reflect an intensifying effort by the White House to find a way during the administration’s waning months to attack militants even beyond the borders of Iraq and Afghanistan, where the United States is now at war. Administration officials declined to say whether the emerging application of self-defense could lead to strikes against camps inside Iran that have been used to train Shiite “Special Groups” that have fought with the American military and Iraqi security forces.

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BREAKING NEWS: Sen. Ted Stevens Found Guilty In Corruption Trial
2008-10-27 16:36:57
Alaska Sen. Ted Stevens was convicted of seven corruption charges Monday in a trial that tainted the 40-year Senate career of Alaska's political patriarch. The verdict, coming barely a week before Election Day, added further uncertainty to a closely watched Senate race. Democrats hope to seize the once reliably Republican seat as part of their bid for a filibuster-proof majority in the Senate.

Stevens, 84, was convicted of all the charges he faced of lying about free home renovations and other gifts from a wealthy oil contractor. Jurors began deliberating last week.

The senator showed no emotion as the jury foreman said "guilty" seven times. After the verdicts, Stevens sat in his chair and stared at the ceiling as attorney Brendan Sullivan put his arm around him.

Stevens faces up to five years in prison on each count when he is sentenced, but under federal guidelines he is likely to receive much less prison time, if any. The judge originally scheduled sentencing for Jan. 26 but then changed his mind and did not immediately set a date.

The month-long trial revealed that employees for VECO Corp., an oil services company, transformed Stevens' modest mountain cabin into a modern, two-story home with wraparound porches, a sauna and a wine cellar.

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Second-Guessing The Palin Pick
2008-10-27 16:12:15

Last week, Tom Ridge, the former Pennsylvania governor, said that Senator John McCain might now be on the verge of winning Pennsylvania - the mainly Democratic state where McCain is investing considerable time and energy in these final days of his presidential campaign - had he chosen Ridge as his running mate.

Senator Lindsey Graham, the senator from South Carolina and one of McCain’s closest friends and advisers, has in recent days been quite direct in saying that he counseled McCain to choose Senator Joseph I. Lieberman, of Connecticut, for the second spot. Lieberman, he said, would have been a breakthrough choice, winning McCain plaudits and support from independent voters who are weary of partisanship.

McCain may still win the election. Still, anticipating that he will fall short, the pre-postmortems have already begun, both inside and outside his campaign headquarters. And without question, the biggest one is whether he would have been in a better position today had he not chosen Alaska Gov. Sarah Palin as his running-mate.

The answer, in the view of many Republicans and Democrats, is almost certainly yes.

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Two Shot Dead On Arkansas Campus
2008-10-27 16:11:50
Two students were killed and a third person was wounded in a shooting on Sunday night outside a dormitory on the campus of the University of Central Arkansas, in Conway, said college officials.

The shooting at the university, a liberal arts institution about 30 miles north of Little Rock, occurred shortly after 9 p.m. and prompted police to lock down the entire campus. Classes were canceled on Monday and scheduled to resume on Tuesday.

University officials identified the student victims as Ryan Henderson, an 18-year-old from Little Rock who was pronounced dead at a local hospital, and Chavares Block, 19, from Dermott, Arkansas, who died at the scene. The third victim, Martrevis Norman, a 19-year-old from Blytheville, Arkansas, was treated at Conway Regional Medical Center for a gunshot wound to his leg and released late Sunday night. Officials said he is not a student at the university.

The police said there were four suspects in the shooting, two of whom have already been taken into custody. One was stopped in a car near the campus Sunday night by police officers acting on information from witnesses, and the other walked into the university police department hours after the shooting. All four are men from central Arkansas, investigators said. Presten Gumbles, a spokesman for the university police, said the motivation for the shooting was unclear, but added, “We do not believe at this time that it was a random act.”

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'Possible Verdict' In Sen. Stevens' Trial
2008-10-27 16:11:26
Jurors in Sen. Ted Stevens' corruption trial passed a note with "a potential verdict" to a federal judge Monday, said a courthouse spokesman.

The jury has been beset by problems since deliberations began Wednesday. Courthouse spokesman Sheldon Snook said the panel sent a note Monday. Attorneys for both sides were called back to court Monday for a reading of the note.

The ambiguity of the note's description, though, apparently leaves open the possibility that jurors have been unable to reach a unanimous verdict. If so, the judge likely would send them back to continue deliberating.

In a tight election year, the verdict has the potential to alter the nation's political landscape. The Senate's longest-serving Republican is fending off an aggressive Democratic challenger. If Stevens is convicted, it would hurt his chance of keeping a seat he's held for generations. And it could push Democrats toward a filibuster-proof majority in the Senate.

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U.S. Helicopter Shot Down In Afghanistan By Insurgents
2008-10-27 15:17:20
Insurgents Monday downed a U.S. helicopter in a province near the capital, the American military said - a highly unusual feat for the Taliban. The crew survived and was rescued, an American military spokesman said.

Also Monday, a suicide bomber disguised as an Afghan policeman killed two American soldiers at a police station in northern Afghanistan, said provincial officials. The Taliban claimed responsibility for the attack, which also injured some Afghan officers, according to police in Baghlan province.

The U.S. military confirmed the deaths of two members of the U.S.-led coalition in the bombing in Baghlan's provincial capital, Pul-e-Khumri, but did not immediately confirm their nationalities. Three coalition soldiers were hurt, a spokesman said.

The downed helicopter had been flying over Wardak province, west of Kabul, when it came under small-arms fire from insurgents, said U.S. spokesman Lt. Cmdr. Walter Matthews. The crew returned fire, but the craft was forced down, he said.

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