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Sunday, November 16, 2008

Free Internet Press Newsletter - Sunday November 16 2008 - (813)

Sunday November 16 2008 edition
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Experts See Financial Crisis Causing Security Risks
2008-11-15 14:31:26

Intelligence officials are warning that the deepening global financial crisis could weaken fragile governments in the world's most dangerous areas and undermine the ability of the United States and its allies to respond to a new wave of security threats.

U.S. government officials and private analysts say the economic turmoil has heightened the short-term risk of a terrorist attack, as radical groups probe for weakening border protections and new gaps in defenses. A protracted financial crisis could threaten the survival of friendly regimes from Pakistan to the Middle East while forcing Western nations to cut spending on defense, intelligence and foreign aid, said the sources.

The crisis could also accelerate the shift to a more Asia-centric globe, as rising powers such as China gain more leverage over international financial institutions and greater influence in world capitals.

Some of the more troubling and immediate scenarios analysts are weighing involve nuclear-armed Pakistan, which already was being battered by inflation and unemployment before the global financial tsunami hit. Since September, Pakistan has seen its national currency devalued and its hard-currency reserves nearly wiped out.

Analysts also worry about the impact of plummeting crude prices on oil-dependent nations such as Yemen, which has a large population of unemployed youths and a history of support for militant Islamic groups.

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Great Depression In U.S. Defined Lives
2008-11-15 14:31:00
Senior citizens describe the crash - and the parallels to today.

Louise McKenzie was a 14-year-old Girl Scout when she helped prepare dinner for the president of the United States as a way to show the American public that nutritious meals could cost very little during the early years of the Great Depression.

In her Rosslyn home, a yellowed clipping from that April day in 1931 with President Herbert Hoover and his wife has been carefully preserved. She can still recount the meal: "split-pea soup, meatloaf, baked potatoes, tomato salad, bread pudding and tea, for just under 25 cents a person."

Now 91, McKenzie has heard echoes of her past in the economic turmoil of late, which many analysts have described as the worst since the "Black Tuesday" stock market crash of 1929. At the height of the Depression that spanned the 1930s, unemployment rates reached nearly 25 percent.

The common adage of the time, McKenzie recalled, was: "Use it up. Wear it out. Make it do. Do without." The ethic of conserving money - and avoiding credit - stuck with many in her generation for the rest of their lives. Some have never used a charge card or rarely allowed a balance due.

The life experiences of the Depression generation tell an increasingly relevant story about the toll of severe economic crisis and how people persevere in times of extreme hardship. Many who remember that era, or who have studied it, wonder how the current generation would withstand such dire circumstances.

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Alaska Vote: Mark Begich Pulls Farther Ahead Of Sen. Stevens
2008-11-15 14:30:22
Sen. Ted Stevens (R-Alaska), the nation's longest-serving Republican senator, fell further behind his Democratic rival Friday, with most of the ballots still uncounted coming from parts of the state that have favored the challenger.

Mark Begich, the two-term mayor of Anchorage, increased his lead from 814 votes to 1,022 as state election workers counted 17,100 ballots Friday. Begich had 47.4 percent of the vote to Stevens' 47.0 percent.

"With the gap widening slightly in our favor today, I feel even more optimistic that when all the ballots are counted next week, we'll see Alaskans came out to vote for new leadership in Washington, D.C.," Begich said in a statement.

The 25,000 remaining votes will be counted Tuesday. They came mostly from Anchorage and the surrounding area, where Begich is leading, and from the state's southeastern panhandle, where he was doing even better.

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At G20 Talks On Financial Crisis, 20 Different Agendas
2008-11-15 14:29:34
With 20 world leaders in town for 24 hours, there wasn’t much time for grand gestures or bold promises at Saturday’s summit meeting on the global financial crisis, but that did not stop the leaders from bringing 20 different agendas, some more ambitious than others.

There was the French president, Nicolas Sarkozy, without his glamorous wife, Carla, but with a raft of proposals to “change the rules of the game,” as he said last week after a meeting of European leaders.

Also attending is Hu Jintao, the president of China, heading a delegation of 100 people and wielding a fat checkbook -  nearly $2 trillion in foreign exchange reserves - that Beijing could lend to distressed countries.

British Prime Minister Gordon Brown, emboldened by his much-praised response to the banking crisis at home, and fresh from criticizing the proposed bailout of American car makers in a speech in New York on Friday.

Finally, there was President Bush, the reluctant host in his waning months in office. “The crisis was not a failure of the free-market system,” Bush said in his weekly radio address on Saturday, trying to dial back expectations. “The answer is not to try to reinvent that system.”

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10,000 Ordered To Evacuate California's San Fernando Valley Due To Wildfires
2008-11-15 13:20:24
An explosive brush fire driven by gusts that reached 70 mph ripped through the northern San Fernando Valley overnight and into the morning, burning homes before leaping both the 210 and 5 freeways.

An unknown number of houses had been destroyed by morning, with thousands more threatened. The fire had burned more than 2,600 acres. More than 10,000 residents in the path of the Sayre fire remained under mandatory evacuation  orders.

"We know that we've lost dozens of structures," said Los Angeles Mayor Antonio Villaraigosa, speaking Saturday  morning at the fire command center at El Cariso Community Regional Park in Sylmar. Villaraigosa did not know an exact number but said, "It's certainly more than we've lost over the last decade. We have lost some today, there's no question about it."

Villaraigosa declared a local emergency shortly before 8 a.m. and said he had asked the state to issue a similar declaration. Calling the winds "treacherous," the mayor warned that expected heat in the 90s combined with threats to power lines from the fire could cause significant interruptions to electrical service in the city.

"We may have to move to rolling blackouts," said Villaraigosa, pleading with residents to conserve energy.
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UBS Is Closing Down Accounts - U.S. Clients At Risk Of Exposure
2008-11-15 14:31:13

Swiss banking giant UBS, under investigation by the U.S. government for allegedly helping Americans hide money from the Internal Revenue Service (IRS), is closing thousands of accounts, putting clients at greater risk of being exposed, tax lawyers say.

UBS clients have been receiving calls and letters telling them that their Swiss accounts will soon be liquidated. Those who have concealed funds from the IRS have two basic choices: They can take new and potentially difficult steps to hide the money, heightening their risk of being caught and punished severely, or they can come clean, say lawyers.

The backdrop for UBS's action is that the U.S. government has been pressing UBS and the Swiss government to disclose the names of thousands of Americans with undeclared accounts, while the Swiss have vowed to uphold Swiss legal protections for bank clients.

However, as a practical matter, whether or not the Swiss formally give up the names, UBS's decision to close the accounts undermines Switzerland's legendary code of bank secrecy, said lawyers.

"I think the bank's actions here are likely to compel clients to come out into the open," said Scott D. Michel, an attorney with the law firm Caplin & Drysdale. "It is a step in the direction of the erosion of bank secrecy," he said.

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Eurozone Slips Into Recession For First Time
2008-11-15 14:30:41

The economy of the 15-nation eurozone has shrunk over the past three months and is now considered to be in recession, the first such prolonged contraction since the adoption of the euro as a common currency a decade ago.

The Eurostat statistics agency reported Friday that growth in the economic zone shrank 0.2 percent from July through October, compared with the prior three months. Following a similar decline from April through June, the euro-zone economy has met one of the common definitions of recession - two consecutive quarters of decline.

European leaders initially thought that the financial crisis would be confined largely to the United States, but they now face the most serious test to date of the economic integration symbolized by their use of the euro. The European Central Bank was slower to begin cutting interest rates than the Federal Reserve, the Bank of England and other major central banks, and has moved in smaller steps even after acknowledging that it needed to try to stimulate growth.

Analysts now regard further rate cuts in the eurozone as a given.

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Editorial: Saving Detroit's Automakers From Themselves
2008-11-15 14:29:54
Intellpuke: This editorial appeared in the New York Times edition for Saturday, November 15, 2008.

We have seen a lot of posturing, but we haven’t heard a lot of sense in the debate over whether the government should spend even more to bail out Detroit’s foundering automakers.

Senator Richard Shelby, a Republican of Alabama, is wrong when he says that the troubles of the Big Three are “not a national problem.” The Detroit companies support nearly 250,000 workers and more than a million retirees and dependents, as well as millions of workers at part makers and dealerships. A messy bankruptcy filing by any of the big car companies, in the midst of this recession, would likely cost the government and the economy more than trying to keep them afloat.

At the same time, Congressional Democrats and President-elect Barack Obama, who are pushing for many billions worth of emergency aid for the nation’s least-competent car makers, must ensure that tough conditions are attached to any rescue package. If not, the money will surely be wasted.

This goes beyond firing top management, forbidding the payment of dividends to stockholders and putting limits on executive pay - all necessary steps. The government should insist on a complete restructuring of any company it pours billions of public funds into.

All three car companies have been hamstrung by the legacy costs of providing pensions and health care to hundreds of thousands of retirees. But Detroit’s problems are mostly of its own making.

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Washington, D.C., Area Under Tornado Watch Until Saturday Evening
2008-11-15 14:29:03

The National Weather Service has put the D.C. metro area under a Tornado Watch until 7 p.m. as a showery and potentially stormy afternoon takes shape:


While everyone should be on the look out, we think the best chance for severe weather is from along I-95 toward points east.

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California's Montecito Fire Consumes 111 Homes
2008-11-15 13:20:10
As a wildfire that devastated the wealthy enclave of Montecito settled down late Friday, a second blaze erupted in Sylmar amid heavy winds and destroyed at least three structures and scorched 100 acres, authorities said.

The Montecito blaze destroyed 111 residences and damaged nine near Santa Barbara before flame-stoking winds died down and the fire stabilized. However, authorities cautioned that the totals could go higher; 1,500 homes were still threatened, and the fire was not contained. Flames had consumed 1,800 acres, according to the California Department of Forestry and Fire Protection.

Meanwhile, in Sylmar, heavy Santa Ana winds stoked a fire in the hills above Veterans Memorial Park that began around 10:30 p.m., officials said. Winds quickly pushed the fire toward a line of nearby homes, burning at least three structures by midnight and threatening many more, authorities said.

The Los Angeles City Fire Department - which had sent strike teams to fight the fire in Montecito on Thursday night - sent 100 firefighters to the Sylmar blaze. Additional crews from Angeles National Forest joined them.
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