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Sunday, November 09, 2008

Free Internet Press Newsletter - Sunday November 9 2008 - (813)

Sunday November 9 2008 edition
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Obama Positioned To Quickly Reverse Bush Administration Actions
2008-11-09 03:39:22

Transition advisers to President-elect Barack Obama have compiled a list of about 200 Bush administration actions and executive orders that could be swiftly undone to reverse White House policies on climate change, stem cell research, reproductive rights and other issues, according to congressional Democrats, campaign aides and experts working with the transition team.

A team of four dozen advisers, working for months in virtual solitude, set out to identify regulatory and policy changes Obama could implement soon after his inauguration. The team is now consulting with liberal advocacy groups, Capitol Hill staffers and potential agency chiefs to prioritize those they regard as the most onerous or ideologically offensive, said a top transition official who was not permitted to speak on the record about the inner workings of the transition.

In some instances, Obama would be quickly delivering on promises he made during his two-year campaign, while in others he would be embracing Clinton-era policies upended by President Bush during his eight years in office.

"The kind of regulations they are looking at" are those imposed by Bush for "overtly political" reasons, in pursuit of what Democrats say was a partisan Republican agenda, said Dan Mendelson, a former associate administrator for health in the Clinton administration's Office of Management and Budget. The list of executive orders targeted by Obama's team could well get longer in the coming days, as Bush's appointees rush to enact a number of last-minute policies in an effort to extend his legacy.

A spokeswoman said Saturday that no plans for regulatory changes had been finalized. "Before he makes any decisions on potential executive or legislative actions, he will be conferring with congressional leaders on both sides of the aisle, as well as interested groups," said Obama transition spokeswoman Stephanie Cutter. "Any decisions would need to be discussed with his Cabinet nominees, none of whom have been selected yet."

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Editorial: Lame Ducks And Recession Politics
2008-11-09 03:38:49
Intellpuke: This editorial appeared in the New York Times edition for Sunday, November 8, 2008.

The job numbers for October, released by the government on Friday, leave no doubt that the nation is in a recession that will be deep and painful. As President-elect Barack Obama said on Friday, Congress cannot wait for a new administration to take action.

Lawmakers, no matter how lame-duck they may be, have a duty to pass an extension of unemployment benefits and other measures that directly address surging joblessness and shrinking incomes. Mr. Obama was right to endorse this approach, but as he noted, there is already a sitting president. If President Bush and his team care at all about their legacy at this point, they should support a real stimulus plan, or at the very least get out of the way and not block or distort it.

In addition to unemployment pay, the most effective forms of stimulus are bolstered food stamps and federal aid to states and cities so that they can continue to provide health care and other services. Of late, however, the administration has insisted that its bank bailout and inadequate anti-foreclosure plans are the solution to rising joblessness. If Mr. Bush sticks to that script, it will be difficult to enact a stimulus bill that is targeted and timely.

Failure to do so, however, would be derelict. After 10 straight months of job losses, the ranks of the unemployed swelled to 10.1 million in October, for a jobless rate of 6.5 percent, the highest since 1994. Worse, the rate would be 11.8 percent if it included Americans who are working part time because they cannot find full-time work and jobless workers who have given up looking for work because their prospects are so dim. Worse still, well over one in five jobless Americans - some 2.3 million people - have been out of work for six months or more, a level of long-term joblessness not seen in the early stages of any recession since World War II.

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Russian President Call Obama; Kremlin Describes Talk As Upbeat
2008-11-09 03:38:16
President-elect Barack Obama spoke to Russian President Dmitry Medvedev on Saturday, another in a series of phone calls he has received from leaders of other nations.

A Kremlin statement said Obama and Medvedev "expressed the determination to create constructive and positive interaction for the good of global stability and development" and agreed that their countries had a common responsibility to address "serious problems of a global nature."

To that end, according to the Kremlin statement, Medvedev and Obama think an "early bilateral meeting" should be arranged.

Obama's office did not issue a statement describing the call.

A Bush administration plan for setting up a missile shield close to Russia's borders has been a sore point with the Kremlin and has added to troubles in its relationship with the United States.

On Wednesday, the day after Obama's election, Medvedev threatened to move short-range missiles to Russia's borders with NATO allies.

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Canadian Journalist Set Free By Afghan Abductors
2008-11-09 03:37:36
A Canadian journalist kidnapped in Afghanistan was released Saturday after four weeks in captivity, according to Afghan and Canadian officials.

Mellissa Fung was abducted Oct. 12 while reporting for the Canadian Broadcasting Corp. Fung, 35, who worked with the CBC on a freelance basis, was traveling with a translator and driver when she was seized after interviewing refugees in a sprawling camp about five miles west of Kabul.

Few details about Fung's abductors or where she was held were released Saturday, but an official with CBC in Kabul said Fung was returned to the capital about 7:30 p.m. and appeared to be in good health.

Jamie Purdon, director of news gathering for CBC, said Fung was probably held by the same captors for the duration of the ordeal.

Fung, who was taken to the Canadian Embassy after her release, will undergo a full medical examination before returning to her family in Canada, said CBC.

"We are very, very relieved," said Purdon.

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Citing Workload, Public Defenders Reject New Cases
2008-11-08 20:35:08
Public defenders’ offices in at least seven states are refusing to take on new cases or have sued to limit them, citing overwhelming workloads that they say undermine the constitutional right to counsel for the poor.

Public defenders are notoriously overworked, and their turnover is high and their pay low. Now, in the most open revolt by public defenders in memory, many of the government-appointed lawyers say that state budget cuts and rising caseloads have pushed them to the breaking point.

In September, a Florida judge ruled that the public defenders’ office in Miami-Dade County could refuse to represent many of those arrested on lesser felony charges so its lawyers could provide a better defense for other clients. Over the last three years, the average number of felony cases handled by each lawyer in a year has climbed to close to 500, from 367, officials said, and caseloads for lawyers assigned to misdemeanor cases have risen to 2,225, from 1,380.

“Right now a lot of public defenders are starting to stand up and say, ‘No more: We can’t ethically handle this many cases’,” said David J. Carroll, director of research for the National Legal Aid and Defender Association.

The Miami-Dade case, which is being closely watched across the country, was appealed by the state, which says that defender offices must share the burden of falling revenues. On Friday, the Florida Supreme Court sent the case to an appellate court for a ruling. If the judge’s decision is upheld, it will force courts here to draw lawyers from a smaller state office and contract with private lawyers to represent defendants, at greater expense.

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Editorial: Money Really Is Fungible
2008-11-08 20:34:27
Intellpuke: This editorial appeared in the New York Times for Saturday, November 8, 2008.

Just weeks after the Treasury Department gave nine of the nation’s top banks $125 billion in taxpayer dollars to save them from unprecedented calamity, bank executives are salting money away in billionaire bonus pools to reward themselves for their performance.

Outraged? The bankers (who didn’t anticipate the subprime crisis) were ready for that. So they are assuring everyone that this self-directed largess won’t be paid with the same dollars they got from taxpayers. They’ll use other ones.

What we want to know is will they be marking the bills so they can be sure which is which?

Unfortunately, the legislation that created the $700 billion rescue fund barely touched on the problem of executive compensation - limiting bonuses only when they are found to have been based on inaccurate statements of earnings or when they are deemed to encourage bankers to take “unnecessary and excessive risks”. The new Congress should impose tighter limits on executive pay at banks taking taxpayer money.

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At Least 20 Killed In Russian Nuclear Submarine Accident
2008-11-08 20:33:58
At least 20 people have died and 21 been injured in an accident on board a Russian nuclear-powered submarine in the Pacific Ocean, a Russian naval spokesman said on Sunday.

Radiation levels on board were normal, he said.

Russia's navy has suffered a string of fatal accidents, including the loss of the Kursk nuclear submarine in the Barents Sea in August 2000. All 118 sailors aboard died.

"More than 20 people were killed on a nuclear submarine in the Pacific Ocean during routine testing as a result of the unsanctioned functioning of the fire extinguishing systems," the navy spokesman, Igor Dygalo, said by telephone.

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Can Barack Obama Undo Bush's Tangled Legal Legacy?
2008-11-08 15:54:27
When Barack Obama becomes president in January, he'll confront the controversial legal legacy of the Bush administration.

From expansive executive privilege to hard-line tactics in the war on terrorism, Obama must decide what he'll undo and what he'll embrace.

The stakes couldn't be higher.

On one hand, civil libertarians and other critics of the Bush administration may feel betrayed if Obama doesn't move aggressively to reverse legal policies that they believe have violated the Constitution and international law.

On the other hand, Obama risks alienating some conservative Americans and some - but by no means all - military and intelligence officials if he seeks to hold officials accountable for those expansive policies.

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Wall Street Decamps To K Street To Work On Bailout
2008-11-08 15:54:02
For the past three years, Larry Wolk commuted four days a week on the Acela train from his home in Potomac to New York, where he drew up contracts and loan documents for multimillion dollar real estate deals.

With the New York real estate market suffering, his business has come to a standstill. So instead of commuting to New York, the Holland & Knight attorney is now driving to his firm's office on Pennsylvania Avenue where he's part of a new team that's advising clients on how to deal with the federal government's $700 billion bailout plan.

Wolk is in the vanguard of an army of accountants, financial advisers, asset managers, lobbyists and others descending on Washington as part of the government's attempts to rescue the economy and bail out industries.

Big consulting firms like PriceWaterhouseCoopers and Ernst & Young have booked extended-stay apartments and blocks of hotel rooms. Out-of-town financial experts are scouting for office space, expecting to lease it for several months as they help do work for Treasury and others.

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Inspector General Says FBI Needs To Improve Tracking System
2008-11-08 15:53:35

The FBI's main electronic system that tracks terrorist threats and suspicious incidents amounts to a "significant improvement" over earlier computer packages, but the bureau could do more to improve its accuracy, the Justice Department inspector general said Friday.

The system stored 108,000 threats and suspicious incidents between July 2004 and November 2007, the "overwhelming majority" of them bum leads, according to the report by Inspector General Glenn A. Fine. Agents ultimately opened 600 criminal investigations based on the tips.

Fine said that the bureau generally handled high-priority tips quickly. Still, his report faulted the bureau for allowing low-priority incidents to remain in the computer tracking system for longer than a month. He also said that FBI supervisors should have reviewed more of the false leads before line agents decided to close the cases.

"The FBI's policy to investigate every credible terrorist threat that it receives requires the FBI to ensure that it uses its resources as effectively as possible," said the report.

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Specter Of Gun Regulation Prompt Sales
2008-11-08 15:52:59
Barack Obama said he would improve the economy. Turns out he already has, at least in one retail niche: gun sales.

Starting in the days before the election, gun shops across the state have been mobbed by buyers who fear that Obama and a larger Democratic majority in Congress will restrict firearm sales.

Many were stocking up on things such as assault rifles, high-capacity magazines and handguns that they think would be the most likely targets of new laws, though practically everything related to shooting has been selling more quickly.

"It's been an absolute madhouse," said Trey Pugh, a manager at Jim's Pawn Shop in Fayetteville, Arkansas, which is selling 15 to 20 AR-15 assault rifles a day. "I'm getting guys come in and say I always wanted that gun, and give me that one too and that one and, oh, I need a gun safe, too."

Distributors are running out of assault rifles, he said, and prices are rising.

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U.S. Economy: How The Thundering Herd Stumbled And Fell
2008-11-09 03:39:05
“We’ve got the right people in place as well as good risk management and controls.” - E. Stanley O'Neal, 2005.

There were high-fives all around Merrill Lynch headquarters in Lower Manhattan as 2006 drew to a close. The firm’s performance was breathtaking; revenue and earnings had soared, and its shares were up 40 percent for the year.

Merrill’s decision to invest heavily in the mortgage industry was paying off handsomely. So handsomely, in fact, that on Dec. 30 that year, it essentially doubled down by paying $1.3 billion for First Franklin, a lender specializing in risky mortgages.

The deal would provide Merrill with even more loans for one of its lucrative assembly lines, an operation that bundled and repackaged mortgages so they could be resold to other investors.

It was a moment to savor for E. Stanley O’Neal, Merrill’s autocratic leader, and a group of trusted lieutenants who had helped orchestrate the firm’s profitable but belated mortgage push. Two indispensable members of O’Neal’s clique were Osman Semerci, who, among other things, ran Merrill’s bond unit, and Ahmass L. Fakahany, the firm’s vice chairman and chief administrative officer.

A native of Turkey who began his career trading stocks in Istanbul, Semerci, 41, oversaw Merrill’s mortgage operation. He often played the role of tough guy, former executives say, silencing critics who warned about the risks the firm was taking.

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Commentary: Put Away The Wish List, And Help Households Bounce Back
2008-11-09 03:38:39
Intellpuke: This commentary was written by Peter Bernstein, a financial consultant, economic historian and editor of the Economics & Portfolio Strategy newsletter. His commentary appeared in the New York Times edition for Saturday, November 8, 2008.

Campaign talk was all very well, but the new president will have to start his administration with serious business. He should begin his Inaugural Address by saying that most campaign promises must be put on a wait list while he gives his full attention to the critical condition of the economy. There is no time for lengthy deliberation and debate.

The restoration of some kind of liquidity and order to the financial sector is the first step to recovery. The departing administration has properly made the financial sector its priority, and its efforts appear to be bearing fruit. But these efforts have not been enough.

The president’s most important priority should be to support the household sector. Households and their mortgages were the key to the onset of crisis. Now, with unemployment rising and home prices still falling, the new administration must help households first if we are to have any hope of reversing the devastating course of a recession. Households are the primary customers of American business.

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Powerful Hurricane Paloma Roars Over Cuba, Bahamas Could Be Next
2008-11-09 03:37:48
Ferocious Hurricane Paloma roared across Cuba on Sunday, downing power lines, flooding the coast and forcing hundreds of thousands of people to evacuate on an island still recovering from two other devastating storms.

Early reports of damage were limited, but Cuban state media said the late-season storm toppled a major communications tower on the southern coast, interrupted electricity and phone service, and sent sea surges of up to 700 meters along the coast.

Paloma made landfall near Santa Cruz del Sur late Saturday as an extremely dangerous Category 4 storm on Saturday evening, but quickly weakened into a Category 2 storm with torrential rains and winds of 100 mph (155 kph), according to the National Hurricane Center in Miami.

It was expected to continue to lose strength as it moved across Cuba and was forecast to hit the central Bahamas by Sunday night or Monday.

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The Election Prognosticators: How Wrong They Were
2008-11-08 20:35:21
"He cannot win," and other chestnuts. Spiegel remembers an election season full of fabulously wrongheaded predictions.

"If (Hillary Clinton)gets a race against John Edwards and Barack Obama, she's going to be the nominee. Gore is the only threat to her ... Barack Obama is not going to beat Hillary Clinton in a single democratic primary. I'll predict that right now." - Bill Kristol, "Fox News Sunday" -- Dec. 17, 2006

On Hillary Clinton: "The Democrats are going to choose a nominee. I believe it's going to be her. That's their business…But I think she's going to be the nominee." - Karl Rove, "Fox News Sunday" - Aug. 19, 2007

"In this case conventional wisdom is not just wrong but comically so. (Fred) Thompson will win the Republican nomination for two reasons. First, he's a very impressive candidate. Second, there's no realistic alternative. He will win the general election for the same two reasons." - Peter Mulhern, Real Clear Politics - Oct. 1, 2007

"I think it's probably going to be Romney for the Republicans, Hillary for the Democrats." - Ann Coulter, "Hannity & Colmes" on Fox News - Dec. 20, 2007

"I think it's worth imagining a certain scenario. Imagine the Democrats do rally around Obama. Imagine the media invests as heavily in him as I think we all know they will if he's the nominee - and then imagine he loses. I seriously think certain segments of American political life will become completely unhinged. I can imagine the fear of this social unraveling actually aiding Obama enormously in 2008. Forget Hillary's inevitability. Obama has a rendezvous with destiny, or so we will be told. And if he's denied it, teeth shall be gnashed, clothes rent and prices paid." - Jonah Goldberg, National Review - Jan. 4, 2008

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Stunned Icelanders Struggle After Economy's Fall
2008-11-08 20:34:48
The collapse came so fast it seemed unreal, impossible. One woman here compared it to being hit by a train. Another said she felt as if she were watching it through a window. Another said, “It feels like you’ve been put in a prison, and you don’t know what you did wrong.”

This country, as modern and sophisticated as it is geographically isolated, still seems to be in shock but, if the events of last month - the failure of Iceland’s banks; the plummeting of its currency; the first wave of layoffs; the loss of reputation abroad - felt like a bad dream, Iceland has now awakened to find that it is all coming true.

It is not as if Reykjavik, where about two-thirds of the country’s 300,000 people live, is filled with bread lines or homeless shanties or looters smashing store windows; but this city, until recently the center of one of the world’s fastest economic booms, is now the unhappy site of one of its great crashes. It is impossible to meet anyone here who has not been profoundly affected by the financial crisis.

Overnight, people lost their savings. Prices are soaring. Once-crowded restaurants are almost empty. Banks are rationing foreign currency, and companies are finding it dauntingly difficult to do business abroad. Inflation is at 16 percent and rising. People have stopped traveling overseas. The local currency, the krona, was 65 to the dollar a year ago; now it is 130. Companies are slashing salaries, reducing workers’ hours and, in some instances, embarking on mass layoffs.

“No country has ever crashed as quickly and as badly in peacetime,” said Jon Danielsson, an economist with the London School of Economics.

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FDIC Shuts Down Security Pacific Bank
2008-11-08 20:34:14
Crippled by loans to Inland Empire developers and home builders, Security Pacific Bank of West Los Angeles was shut down Friday by regulators, who said Los Angeles-based Pacific Western Bank would take over its four branches.

Depositors of the failed bank will have their $450 million in accounts transferred to 60-branch Pacific Western, which also is buying some of Security Pacific's loans, said the California Department of Financial Institutions and the Federal Deposit Insurance Corp.

Most of the loans will be taken over by the FDIC, which will seek to sell them.

The net cost to the federal deposit insurance fund from the failure is estimated at $210 million, said FDIC spokesman David Barr.

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Obama Faces Big Policy Decisions On Iran, N. Korea And Middle East
2008-11-08 15:54:36

President-elect Barack Obama stepped carefully Friday when he was asked about the unusual letter of congratulations that Iranian President Mahmoud Ahmadinejad sent him - the first time an Iranian leader has congratulated the victor of a U.S. presidential election since the 1979 Islamic revolution.

"I will be reviewing the letter from President Ahmadinejad, and we will respond appropriately," he said, leaving open the question about whether he will reply. President Bush chose not to respond to a rambling 18-page letter he received from Ahmadinejad in 2006, but during the campaign Obama indicated he would be willing to meet with Iranian leaders.

"Iran's development of a nuclear weapon, I believe, is unacceptable," Obama said Friday. "And we have to mount an international effort to prevent that from happening."

Diplomatic issues rarely begin or end cleanly with a change of administrations, but Bush will be leaving his successor an extensive list of foreign policy processes. The new administration will have to quickly evaluate them and decide whether to continue along Bush's path, make minor modifications or forge ahead in a different direction. Obama will inherit at least three foreign policy structures, built largely by Bush and Secretary of State Condoleezza Rice, aimed at thwarting Iran's development of a nuclear weapon, eliminating North Korea's nuclear arsenal and promoting Israeli-Palestinian peace talks.

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G-20 International Finance Conference Opens In Brazil
2008-11-08 15:54:14
Brazil's President Luiz Inacio Lula da Silva opened a meeting of international finance ministers Saturday by demanding that developing countries be given a larger role in finding solutions to the world financial crisis.

"This is a global crisis and demands global solutions," Lula said in his opening remarks of the Group of 20 conference of financial officials from 20 large world economies. "The crisis started in advanced economies. It is a result of the blind belief in the market's self-regulation capacity and, by and large, of the lack of control of the activities of financial agents."

During the two-day gathering at a Sao Paulo hotel, officials are expected to discuss how the economic downturn has affected their countries and how government's can coordinate their responses and stimulus efforts. Lula called on the group to come up with proposals for "substantial change of the world's financial architecture" because the global credit crunch is hurting the world's poor.

Many of these developing countries, such as Brazil, want to be included in the meetings of the largest industrial nations where the recent crisis originated. The G-20 began in 1999 during the Asian financial crisis, but their meetings, until an emergency session next week in Washington, have not included presidents and prime ministers, something the developing countries want to make a regular occurrence. Brazil's Finance Minister Guido Mantega said Saturday that his country refused to be "mere coffee drinkers" on the sidelines of the richer nations meetings.

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Hurricane Paloma Grows To Category 4 Strength
2008-11-08 15:53:45
Paloma became an extremely dangerous Category 4 hurricane on Saturday and was threatening to strike hurricane-ravaged Cuba, after knocking out power across much of Grand Cayman Island.

The National Hurricane Center in Miami predicted Paloma will make landfall in Cuba as a major hurricane late Saturday or early Sunday with maximum sustained winds of at least 111 mph (178 kph).

Cayman Brac, to the east of Grand Cayman, was still experiencing hurricane force winds that blew roofs off some buildings, although there were no reports of casualties, said Donovan Ebanks, chairman of the Hazard Management Committee.

Cleva Jackson, a hotel owner on Grand Cayman, said she was still trying to get in touch with relatives in Cayman Brac who sought refuge in an emergency shelter where the roof partially collapsed.

"The roof had caved in and everyone was trying to find shelter in the kitchen, but I haven't heard anything from them," she said. "We just can't get through."

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In U.S., Schism Over Drilling Heats Up
2008-11-08 15:53:19
The isolated outpost of Cold Bay, Alaska, where grizzly bears outnumber people and the one-page phone book is dubbed "the yellow page," is fast emerging as a flash point in the nation's debate over drilling.

A plan to construct 45 miles of road through the virgin tundra of the Izembek National Wildlife Refuge has turned into a heated battle between area residents, who say they need better access to the airport here, and environmentalists, who suspect, without concrete evidence, that the oil industry is secretly behind the effort.

In a state still recovering from the bruising fight over opening the Arctic National Wildlife Refuge to oil exploration, all eyes have turned to Congress, which is expected to vote during a lame-duck session this month on a land swap that would open the way for road construction.

The road proposal began more than a decade ago as a strictly local concern. Aleut residents of a nearby fishing hamlet sought a single-lane gravel road so they could travel over land to Cold Bay's airport, the only one in the region capable of airlifting sick people to hospitals during unpredictable hurricane-force winds and blinding snows.

Critics see other motives.

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Mexican Army Finds Largest Drug Cartel Weapons Cache
2008-11-08 15:52:30
The Mexican army on Friday announced that it has made the largest seizure of drug-cartel weapons in Mexico's history.

The cache of 540 rifles, 165 grenades, 500,000 rounds of ammunition and 14 sticks of TNT were seized on Thursday at a house in the city of Reynosa, across the border from McAllen, Texas, said Mexican Assistant Attorney General Marisela Morales.

"The seizure ... is the largest in the history of Mexico involving organized crime," Morales told reporters at Defense Department headquarters, where the army displayed hundreds of rifles, pistols, and shotguns, and laid out rows of grenades and crates of ammunition.

Morales said the largest previous bust involved a cache of 280 weapons found in 1984.

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