Free Internet Press Newsletter - Wednesday December 10 2008 - (813)

Wednesday December 10 2008 edition
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As Markets Waver, Treasury Yields Turn Negative 2008-12-09 19:38:33 A mixed day on Wall Street threatened to turn sour on Tuesday afternoon as stocks moved lower and investors fled to the safety of Treasury bills, sending the Dow Jones industrials down 242.85 points to 8,691.33. Investors were so desperate to put their cash into government notes that they were willing to pay a penalty for the privilege: three-month notes traded at a negative yield, meaning that investors will receive about 99 cents on the dollar in return after the note matures. The news sends a sobering signal: in this environment, losing only a small amount of money on an investment is tantamount to coming out ahead. Four-week Treasury bills, considered one of the safest possible short-term investments, traded at zero percent yields, and investors snapped up $30 billion worth. It was the lowest yield since the Treasury began issuing the notes in 2001. A scramble into Treasury notes helps to line the federal coffers, providing money at a time when the government is embarking on ambitious stimulus projects with a price tag in the billions. Bank bailouts, credit facilities and public works programs will all be helped by the influx of investors’ cash. The primary impetus behind the move into Treasuries is a flight to safety, but seasonal factors are also at work. Read The Full Story Commentary: 'Omni-President' Sarkozy Fritters Away French Democracy 2008-12-09 19:38:08 Intellpuke: This commentary was written by Ullrich Fichtner and appeared in Spiegel's online edition for Tuesday, December 9, 2008. Mr. Fichtner's commentary follows: Instead of living up to his promise to be the president of all Frenchmen, Nicolas Sarkozy is splitting France right down the middle between those who love him and those who loathe him. His policy of "division instead of reconciliation" is now threatening to tear apart the fabric French democracy. The question of when and if Nicolas Sarkozy ever sleeps has been raised once again in recent weeks, with the French president apparently embarking on a campaign to save the world. He has been seen on most television channels and cover pages, with Merkel and Barroso, Brown and Zapatero, Bush and Medvedev. He has sat at round tables, a serious expression on his face, stood wide awake at lecterns, and spoke to the United Nations and the European Parliament, his voice as loud and clear as ever. He has talked about plans, projects and proposals for prevailing over the financial and global economic crisis, and about ideas and packages intended to restart the global system after the crash. Even those who have paid only fleeting attention to Sarkozy's activity must conclude that he is truly a man of action, one of the most dynamic political leaders of our time. Soon, when France's European Council presidency ends, Sarkozy will have to lower his sights once again. Last Thursday, he returned to domestic policy and, with much ado, unveiled a national bailout plan designed to reassure the people. Economists, though, were hardly convinced. France was already in crisis even before the big crisis arrived. For years, the French political and economic world has been chasing after missed reforms, while the trade deficit and national debt have climbed to dizzying heights. An ominous realization is taking hold that France is poorly prepared for the tough times ahead, and even the cascade of energetic appearances by Sarkozy cannot hide the fact that, as Prime Minister Francois Fillon soberly concluded more than a year ago, France is practically bankrupt. Meanwhile, Sarkozy, variously described as the "tele-president," the "omni-president" and the "hyper-president," has consistently touted a rosy picture completely out of synch with reality since he came into office in May 2007. This has led to an unfortunate division of French society into two hostile camps. If the opinion polls are to be believed, just under half of the French are satisfied with the president, while roughly the other half are convinced that he is a disaster for the country. The latter group has good or at least better arguments on its side. Unlike Germany, a democracy built on consensus, France is headed for confrontation, and Sarkozy himself has allowed that genie to escape from the bottle by declaring a policy of "rupture" as the dominant aim of his actions. Read The Full Story Turkey's Faltering Reform Drive - Erdogan Striking Nationalist Tones 2008-12-09 19:37:27 Amid corruption scandals and stagnating reform, Turkey's Prime Minister Recep Tayyip Erdogan, praised in Europe as a modernizer, is seeking refuge in nationalist rhetoric, adopting a tougher stance on the Kurds and moving closer to the country's military leaders. The public prosecutor in Adana, a city in southern Turkey, has clear ideas on how the state ought to treat teenagers who protest by throwing stones. In his view, they should be arrested and locked away, preferably for life. Last week the prosecutor demanded up to 58 years in prison for six young Kurds between the ages of 13 and 16. During a demonstration in October, the students threw stones at police officers, shouted illegal slogans and unfurled posters touting the banned Kurdistan Workers' Party (PKK). Because such teenagers, in his view, had to be the "children of terrorists," the provincial governor recommended punishing the families and canceling their claims for pension and social benefits. For months, trouble has been brewing once again in Turkey's Kurdish regions, and both sides are reacting in the customary way. Adolescents incited by the PKK are setting car tires on fire and committing acts of violence. In response, the military has brought in tanks and the courts are threatening the demonstrators with increasingly grotesque punishments. Read The Full Story Fannie Mae, Freddie Mac Knew Of Risks 2008-12-09 15:38:52 Internal Freddie Mac documents show that senior executives at the company were warned years ago that they were offering mortgages that could pose dangers to the firm, hurt borrowers and generate more risky loans throughout the industry. At Fannie Mae, top executives were told it was necessary to develop "underground" efforts to buy subprime mortgages because of competitive pressures, although there were growing risks and borrowers often didn't understand the terms of the loans, documents show. The House Committee on Oversight and Government Reform, which has the documents, is holding a hearing now to discuss Fannie and Freddie's downfall. The companies were seized by the government three months ago after nearly collapsing in the wake of billions of dollars of losses on mortgages. In a memo to former Freddie chief executive Richard Syron and other top executives, former Freddie chief enterprise risk officer David Andrukonis wrote that the company was buying mortgages that appear "to target borrowers who would have trouble qualifying for a mortgage if their financial position were adequately disclosed." Read The Full Story Sen. Craig Loses Appeal In Airport Bathroom Sting Case 2008-12-09 15:38:26 A Minnesota appeals court Tuesday rejected Sen. Larry Craig's (R-Idaho) latest effort to withdraw his guilty plea, 18 months after he was arrested in a Minneapolis, Minnesota, airport bathroom during an undercover sex sting. Since pleading guilty in August 2007 to disorderly conduct charges, Craig has tried to pull back that plea, arguing that his behavior was not illegal and that he was pressured into the plea by police. The Hennepin County District Court denied that petition in October 2007, and the Minnesota state Court of Appeals Tuesday affirmed that decision. In his appeal, Craig argued that the district court fundamentally erred in its decision, that the state's disorderly conduct statute was unconstitutionally broad, and that his behavior in the airport bathroom stall should be considered legally protected speech. The Appeals Court rejected all three arguments. "Appellant has not shown that the district court abused its discretion in denying his petition to withdraw his guilty plea, and neither he nor amici have shown that the disorderly conduct statute is unconstitutionally overbroad," wrote Edward Toussaint, Jr., the appeals court's chief judge. Read The Full Story Illinois Governor Arrested, Charged With Corruption 2008-12-09 15:04:11 Illinois Gov. Rod R. Blagojevich was arrested by federal authorities on Tuesday morning on corruption charges, including an allegation that he conspired to effectively sell President-elect Barack Obama's seat in the United States Senate to the highest bidder. Blagojevich, a Democrat, called his sole authority to name Obama’s successor “golden,” and he sought to parlay it into a job as an ambassador or secretary of Health and Human Services, or a high-paying position at a nonprofit or an organization connected to labor unions, said prosecutors. He also suggested, they said, that in exchange for the Senate appointment, his wife could be placed on corporate boards where she might earn as much as $150,000 a year, and he tried to gain promises of money for his campaign fund. If Blagojevich could not secure a deal to his liking, prosecutors said, he was willing to appoint himself. “If I don’t get what I want and I’m not satisfied with it, then I’ll just take the Senate seat myself,” the governor said in recorded conversation, said prosecutors. Read The Full Story 3 Killed As F/A-18 Military Jet Slams Into San Diego Neighborhood 2008-12-09 01:24:53 It was meant to be a routine training mission: a young Marine pilot sharpening his skills flying an F/A-18D Hornet from the aircraft carrier Abraham Lincoln off the San Diego, California, coast. But as the plane had lifted off the carrier deck, the pilot quickly knew he was in trouble, possibly with a malfunction in one of the plane's engines. He radioed the air controller at Miramar, who ordered the emergency landing attempt. As the plane crossed over land at Torrey Pines en route to Marine Corps Air Station Miramar, more problems struck, possibly "flame-out" of a second engine. The plane lost altitude and began to wobble. Residents of the University City neighborhood west of Miramar, accustomed to the sight of warplanes overhead, looked up and knew something was terribly wrong. Within seconds, the plane nosed downward and picked up speed, clipping the top of a jacaranda tree and smashing into a Cather Avenue home where a mother, a grandmother and two children lived. Skid marks could be seen on the driveway. Three of the persons in the home were later confirmed dead, and the fourth missing. Burning debris and the smell of jet fuel spread in all directions. Read The Full Story Commentary: 'Cyberspace Has Buried Its Head In A Cesspit Of Climate Change Gibberish' 2008-12-09 01:24:29 Intellpuke: This commentary was written by author and Professor George Monbiot, who lives and works in the U.K. We all create our own reality, and shut out the voices we do not want to hear. But there is no issue we are less willing to entertain than man-made climate change. Here, three worlds seem to exist in virtual isolation. In the physical world, global warming appears to be spilling over into runaway feedback: the most dangerous situation humankind has ever encountered. In the political world - at the climate talks in Poznan, for instance - our governments seem to be responding to something quite different, a minor nuisance that can be addressed in due course. Only the Plane Stupid protesters who occupied part of Stansted airport in the U.K. Monday appear to have understood the scale and speed of this crisis. In cyberspace, by contrast, the response spreading fastest and furthest is flat-out denial. The most popular article on the Guardian's website last week was the report showing that 2008 is likely to be the coolest year since 2000. As the Met Office predicted, global temperatures have been held down by the La Nina event in the Pacific Ocean. This news prompted a race on the Guardian's comment thread to reach the outer limits of idiocy. Of the 440 responses posted by lunchtime Monday, about 80% insisted that man-made climate change is a hoax. Here's a sample of the conversation: "This is a scam to get your money ... The only people buying into 'global warming' have no experience with any of the sciences." "If we spend any money or cost one person their job because of this fraud it would be a crime. When will one of our politicians stand up and call this for what it is, bullshit!" "What a set of jokers these professors are ... I think I understand more about climate change than them and I don't get paid a big fat salary with all the perks to go with it." And so on, and on and on. The new figures have prompted similar observations all over the web. Until now, the "skeptics" have assured us that you can't believe the temperature readings at all; that the scientists at the Met Office, who produced the latest figures, are all liars; and that even if it were true that temperatures have risen, it doesn't mean anything. Now the temperature record - though only for 2008 - can suddenly be trusted, and the widest possible inferences be drawn from the latest figures, though not, of course, from the records of the preceding century. This is madness. Read The Full Story Convoy Attacks Trigger Race To Open New Afghan Supply Lines 2008-12-09 01:23:27 NATO countries are scrambling for alternative routes as far afield as Belarus and Ukraine to supply their forces in Afghanistan, which are increasingly vulnerable to a resurgent Taliban, the Guardian reported. Four serious attacks on U.S. and NATO supplies in Pakistan during the past month, including two in the past three days, have added to the sense of urgency to conclude pacts with former Soviet republics bordering Afghanistan to the north. NATO is negotiating with Turkmenistan, Uzbekistan and Tajikistan to allow supplies for NATO forces, including fuel, to cross borders into Afghanistan from the north. The deal, which officials said was close to being agreed, follows an agreement with Moscow this year allowing NATO supplies to be transported by rail or road through Russia. The deal could allow more fuel for NATO forces to be transported from refineries in Baku, Azerbaijan, and Turkmenistan. Most of the 75 million  gallons of fuel estimated to be used by NATO forces annually in Afghanistan comes from refineries in Pakistan. Germany and Spain, whose troops are based in more peaceful northern Afghanistan, have negotiated separate bilateral air transport agreements with Russia. Read The Full Story Falling Sales In Russia Force Ford To Idle Its Plant 2008-12-09 01:22:53 Hopes that Russia and other emerging markets could help support the automotive industry despite a slumping performance in the United States and Europe dimmed on Monday as the Ford Motor Company followed Volkswagen and Renault in suspending production at its Russian assembly line. While Ford's fortunes were less than glittering elsewhere, the automaker had deftly anticipated a surge in demand for cars in Russia over the last decade. As sales fell in the United States, Russia remained an engine of growth for both imports and the domestically assembled sedans. In fact, the Focus was the best-selling brand in Russia, easily outpacing its Japanese and European competition and proving Ford could do what it had struggled to achieve in the United States - efficiently build a popular, compact family car. Ford opened its largest dealership in Europe outside Moscow; demand exploded so quickly that the company at one point had a six-month backlog of orders for Focus cars built at an assembly plant near St. Petersburg. The company said Monday that it would idle that plant from Dec. 24 until Jan. 21 for an extended New Year’s holiday, citing poor sales; Focus sales were down 30 percent in October from a year earlier, the Interfax news agency reported. Read The Full Story	Italian Banks Surge Past Rivals 2008-12-09 19:38:19 Because of their conservative business models, Italy's banks have done better than their larger continental peers over the past 18 months. European banks will be happy to put 2008 behind them. From the $48 billion (€37.3 billion) in writedowns suffered by Swiss financial giant UBS to the €4.9 billion ($6.3 billion) trading scandal that rocked France's Societe Generale, the Old World's banking sector has been at the center of the global financial crisis this year. Indeed, European financial institutions have booked $1.2 trillion in mark-to-market losses since the credit crunch began - not far short of the $1.6 trillion loss recorded by U.S. banks, according to the biannual Financial Stability Report from the Bank of England. To make matters worse, analysts don't expect Europe's financial-services sector to pick up until the second half of next year at the earliest. Yet despite the bleak outlook, one European country has bucked the trend of multibillion-dollar writedowns and government bailouts: It's Italy, Europe's fourth-largest economy, whose banks have outperformed larger continental rivals over the past 18 months. Don't attribute it to management foresight, sharper risk analysis tools, or fatter coverage ratios, though. Italian banks such as Intesa Sanpaolo and UniCredito Italiano have outpaced European heavy hitters such as Barclays and BNP Paribas primarily due to their extremely conservative business models. The Italians steered clear of securitized assets and subprime loans, forgoing the windfall profits that boosted rivals' balance sheets in the salad days, but also avoiding the huge losses that later ensued. Instead, Italian banks have remained squarely focused on traditional retail operations and corporate lending, relying on customer deposits to fund day-to-day operations. Even when the country's banks expanded to other countries, they moved mainly into nearby Eastern European markets that have outperformed Western European economies since the mid-1990s. "They don't make the same level of money as other European banks, but their business model certainly isn't broken," says Credit Suisse analyst Andrea Vercellone. "Italian banks didn't get into the securities business in a major way because frankly they just didn't understand it." Read The Full Story Sinking Economy: Germany's Merkel Urged To Act Before It's Too Late 2008-12-09 19:37:50 With dismal economic news continuing to roll in, pressure is mounting on German Chancellor Angela Merkel's government to take additional steps aimed at boosting Germany's flagging economy. Still, nothing is likely before Easter - which experts fear may be too late. It's not often that one sees German Finance Minister Peer Steinbruck blushing. Until recently, after all, he had been showered with a certain amount of praise for his steady-handed approach to the financial crisis currently enveloping Germany, Europe and the world. Last Thursday, Steinbruck was on the stage at the "Tipi," a theater tent next to the Chancellery in Berlin, holding a silver trophy after being chosen as this year's winner of the Politician of the Year award. And his cheeks were bright red. Steinbruck and Chancellor Angela Merkel have taken it upon themselves to show the world how to solve an economic crisis without significant spending programs - and by ignoring the experts' advice and going it alone. It is a bold experiment, and being given such an award was encouraging, even a partial victory. The award itself is not an important one. The silver statuette presented to Steinbruck was donated by a publishing company called Helios Media, but this didn't seem to bother the minister. "Steinbruck is straightforward, reliable and smart," said the man presenting the award, Hesse Governor Roland Koch. "And he is cutting a fine figure in the current financial crisis." Then came Steinbruck's acceptance speech, and it, like almost all of his recent public pronouncements, turned into a lecture. The debate over the economic crisis, he intoned, is getting out of hand and he finds it increasingly difficult to stomach. A steadily growing number of proposals to combat the crisis have turned into a bidding war, he said, and it must stop. Read The Full Story Clashes, Looting Rock Greek Cities For 4th Straight Night 2008-12-09 19:37:12 Masked youths and looters marauded through Greek cities for a fourth night Tuesday, in an explosion of rage triggered by the police shooting of a teenager that has unleashed the most violent riots in a quarter century. The nightly scenes of burning street barricades, looted stores and overturned cars have threatened to topple the country's increasingly unpopular conservative government, which faces mounting calls for Prime Minister Costas Karamanlis to resign. Police fired tear gas at protesters Tuesday following the funeral of 15-year-old Alexandros Grigoropoulos, who was laid to rest in an Athens burial attended by about 6,000 people. The rioting - which has engulfed cities from Thessaloniki in the north to the holiday island of Corfu and Crete in the south - threatens the 52-year-old Karamanlis, who already faced growing dissatisfaction over financial and social reforms at a time of deep anxiety over growing economic gloom. Opposition Socialist leader George Papandreou called for early elections, charging the conservatives were incapable of defending the public from rioters. Read The Full Story Foreclosure Epidemic Infecting Rental Market 2008-12-09 15:38:41 Of all the things that can go wrong on moving day, few could be worse than arriving at your new home to find another family already living there. Then again, in today's Darwinian housing market, worse things do indeed occur. Like when a devious foreclosure agent tried to trick a Fairfax County, Virginia, teenager into handing over her family's house keys. Or when a "landlord" collecting security deposits and rent turned out to be an impostor with no legal claim to the property whatsoever. In the past 18 months, the foreclosure debacle has pushed tens of thousands of Washington, D.C., area residents into the rental market, many with crippled credit and a desperate need for housing. Waiting for them is a new cast of swindlers, cheats and real estate sharks ready to prey on the weak and needy. Scams of various stripes are thriving in the foreclosure mess and flourishing at the margins of landlord-tenant laws. Rental scams have generally been more of an urban problem, but the high incidence of foreclosure in the Washington region's suburbs and the relative lack of tenants' rights organizations there have helped create areas of vulnerability in such places as Prince William County. Opportunities are rife: The county and the adjacent cities of Manassas and Manassas Park have tallied 7,672 foreclosures this year through November, according to court records, up from 3,344 in 2007 and 282 the year before. Many of those homes are bank-owned and vacant, and investors have been buying them at deep discounts and converting them into rental properties. But houses that remain vacant present some of the ripest targets for fraud, officials said. Read The Full Story Debt-Saddled Tribune Co. Files For Bankruptcy Protection 2008-12-09 15:38:15 Media giant Tribune Co. Monday became the first major newspaper or chain in several decades to enter Chapter 11 bankruptcy protection, as the debt-saddled company fights sharply dropping advertising revenue and an ongoing recession. The move will allow Tribune to stay in business while it seeks better terms from its creditors. The company stressed that all of its businesses, which include eight major daily newspapers and 23 television stations, will continue their day-to-day operations while Tribune restructures its debt. According to Tribune's bankruptcy filing in a Delaware court Monday, the company has $12.9 billion in debt and $7.6 billion in assets. Tribune's largest creditor is J.P. Morgan Chase, which is owed $8.6 billion. Merrill Lynch is second, at $1.6 billion, and Deutsche Bank is third, at $900 million. Chicago-based Tribune owns properties in most of the nation's largest cities. Its holdings include the Chicago Tribune and Los Angeles Times;cable television superstation WGN in Chicago; the Baltimore Sun; and WDCW-50 in Washington, a CW affiliate. The company also owns Major League Baseball's Chicago Cubs and Wrigley Field, which are for sale and outside of bankruptcy protection. Read The Full Story Indian Police Disclose More Suicide Attackers 2008-12-09 15:04:00 The Mumbai police said Tuesday that the 10 men who carried out the terrorist attacks here belonged to a group of 30 recruits of the Lashkar-e-Taiba Pakistani militant organization who had been selected for suicide missions, and that the whereabouts of the other 20 were unknown. It was the first time that that the Indian police had disclosed the larger number of suicide recruits, and while they said there was no reason to believe that the other 20 were in India, they expressed concern about such a possibility. "Another 20 were ready to die," said Deven Bharti, a Mumbai Police deputy commissioner, in an interview. “This is the very disturbing part of it.” The Indian police have consistently maintained that only 10 gunmen participated in the Nov. 26-29 attacks in Mumbai that left 171 people dead and raised tensions between the nuclear-armed neighbors India and Pakistan to the the highest in years. Bharti said the information about the other recruits came from the sole surviving attacker, Mohammed Ajmal Kasab, who was arrested during the attacks and has been in police custody ever since. Read The Full Story Scientist: Oil Giants Face Lawsuits Over Climate Change 2008-12-09 01:24:44 People affected by worsening storms, heat waves and floods could soon be able to sue the oil and power companies they blame for global warming, said a leading climate expert. Myles Allen, a physicist at Oxford University, said a breakthrough that allows scientists to judge the role man-made climate change played in extreme weather events could see a rush to the courts over the next decade. "We are starting to get to the point that when an adverse weather event occurs we can quantify how much more likely it was made by human activity," he said. "And people adversely affected by climate change today are in a position to document and quantify their losses. This is going to be hugely important." Allen's team has used the new technique to work out whether global warming worsened the U.K. floods in autumn 2000, which inundated 10,000 properties, disrupted power supplies and led to train services being canceled, motorways closed and 11,000 people evacuated from their homes - at a total cost of £1 billion. He would not comment on the results before publication, but said people affected by floods could "potentially" use a positive finding to begin legal action. Read The Full Story A Lobbying Frenzy For Federal Dollars 2008-12-09 01:24:04 Last week it was auto industry suppliers. Monday it was mayors from the nation's biggest cities. Now, auto dealers from across the country have arrived in Washington, D.C. With Congress poised to vote on a rescue for the nation's auto industry and President-elect Barack Obama promising to launch a massive public spending program, Capitol Hill has once again become the scene of a lobbying free-for-all, with industry and local governments alike seeking some of the billions in taxpayer dollars that Congress is likely to spend in the not-too-distant future. While some of the lobbying has been conducted by the usual hands on K Street, a parade of trade groups, unions and business owners have chosen to voice their pleas in person. Some of the most determined lobbying has come from representatives of the auto industry, who have converged on Washington in an all-out effort to build support for a rescue of the Big Three. Their arrival follows that of the chief executives of General Motors, Chrysler and Ford, who have twice tried to press lawmakers for emergency loans. Brian Swanson, the general manager of a metal forming company based in Plymouth, Mich., recently joined 50 other auto industry suppliers in a small procession by the Capitol Reflecting Pool. He said the gathering was intended to show Congress that a bailout for automakers "was not a Detroit issue." Read The Full Story Greek Authorities Pledge Crackdown On Rioters After 3rd Night Of Chaos 2008-12-09 01:23:06 Greek police are braced for more violence around the funeral Tuesday of a teenage boy shot dead by police, after rioting youths brought a third night of chaos to Greek cities. The government denied reports it would declare a state of emergency, but last night the interior minister, Prokopis Pavlopoulos, signaled the authorities will take a firmer stance against rioters in the worst disturbances to hit the country since the collapse of military rule in 1974. Emerging from a three-hour emergency cabinet meeting, he said: "What is happening both for the economy of our country and our democracy is unacceptable. We will not tolerate these events. We will do what we must." Yet thousands took to the streets again, burning shops and buildings and even setting alight a Christmas tree in the center of Athens. One hotel's windows were smashed and guests evacuated. The four-story Olympic Airways office in central Athens was completely burned, as well as a bank and more than 130 shops. Rioters threw rocks and petrol bombs at riot police and set up barricades across downtown streets. Smoke rose above the city center, mingling with clouds of teargas. Broken glass littered the streets. Read The Full Story
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