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Friday, February 27, 2009

Free Internet Press Newsletter - Friday February 27 2009 - (813)

Friday February 27 2009 edition
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U.S. Plans Bigger Stake In Citigroup
2009-02-27 03:47:57

The federal government plans to take a substantial ownership stake in Citigroup, launching the Obama administration's new strategy to prevent the failure of any more large banks, according to sources familiar with the matter.

The deal, which the sources said was still being negotiated Thursday night, is designed to reassure investors that Citigroup has the resources needed to survive the recession by increasing the company's reserves against future losses.

The deal would not involve new money from taxpayers. The government already has invested $45 billion in the troubled New York bank. Citigroup now will be allowed to repay up to $25 billion by issuing the government shares of its common stock, which carry ownership rights. The government could end up owning about a third of the company, said the sources, who spoke on condition of anonymity because the talks were ongoing.

A key feature of the deal is that Citigroup must find private investors to match the public support. The government will accept common shares equal to the amount accepted by those investors, up to a limit of $25 billion, on a one-for-one basis.

Under the plan, the government would forgo billions of dollars in dividend payments that Citigroup was required to make on the existing investments, which paid annual interest of 5 percent. However, taxpayers would benefit if Citigroup's shares rise in value.

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Fannie Mae's Red Ink Prompts U.S. Aid
2009-02-27 03:47:32
Fannie Mae, the federally run mortgage giant, said last night that it lost $59 billion in 2008, prompting a government cash injection of $15 billion.

The Washington, D.C.-based company said it lost $25.2 billion in the fourth quarter of 2008 on the decline of mortgage-related investments.

The cash injection came in at the higher range of what Fannie Mae said it would need late last month. It represents the first government money invested in Fannie Mae; Freddie Mac, its McLean, Virginia, sibling, has already received $14 billion and said recently that it may need up to $35 billion more when it reports earnings in the coming days.

Fannie Mae's losses are likely to continue, the company said. "We expect the market conditions that contributed to our net loss for each quarter of 2008 to continue and possibly worsen in 2009," the company said. "We now expect that we will experience a peak-to-trough home price decline of 20 percent to 30 percent, rather than the 15 percent to 19 percent decline we predicted last year," the company said.

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Former RBS Chief: 'Minister Approved My Pension And I'm Keeping It'
2009-02-26 18:35:07
An embarrassing squabble broke out Wednesday night between City minister Lord Myners and Sir Fred Goodwin over the refusal by the former Royal Bank of Scotland chief executive to give up his £693,000 (over $1 million) a year pension.

Goodwin insisted that ministers had known about his £16 million ($28 million) pension pot for months and accused Myners of threatening him with more bad publicity if he did not hand back some of the pension he was awarded when he left the loss-making bank last month.

"You highlighted that the absence of such a gesture would give rise to significant adverse media comment," Goodwin wrote in a defiant and combative letter to Myners which explicitly contradicts the government's insistence that it did not know the details of his payoff.

Just hours later Myners issued his own letter telling Goodwin his refusal to reconsider his position was "unfortunate and unacceptable" and that he hoped "that on reflection you will now share my clear view that the losses reported by the bank which you ran until October cannot justify such a huge reward".

RBS had earlier admitted it had made a record-breaking  £24 billion loss in 2008 and that the taxpayers' stake could rise to 95% after a further injection of up to £25.5 billion of government funds.

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Thousands Of Europe's Opel Workers Demonstrate Against GM
2009-02-26 18:34:41

Some 60,000 employees of GM subsidiaries in Europe laid down their tools on Thursday to take part in protests aimed at saving their jobs. Huge losses in Detroit threaten to doom the German car maker Opel, and the workers want a divorce from the parent company.

With American automotive giant General Motors struggling to survive amid the worst car industry downturn since 1982, employees of the company's European subsidiary Opel laid down their tools on Thursday to take part in mass demonstrations in a last ditch effort to save their jobs.

Over 15,000 workers gathered at Opel's flagship factory in the western German industrial city of Russelsheim near Frankfurt with a total of 60,000 people joining protests at 14 Opel factories across Europe. "It is no longer five to midnight, the clock has already struck midnight," Klaus Franz, head of Opel's works council, told the gathered workers at Opel headquarters. "There is only one single chance, and that is spinning off Opel from the GM group."

Germany's Foreign Minister Frank-Walter Steinmeier, who will be running against Chancellor Angela Merkel in general elections this September, also attended the Thursday protest, saying he was doing everything he could for Opel. "We all agree that it is up to GM management. GM has long earned good money with Opel. It would be obscene were they now to throw away European factories like a squeezed-out lemon."

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Weak Health Care Stocks Drag Stock Market Lower
2009-02-26 16:19:28
Health care stocks, one of the better performers on Wall Street lately, led the market lower Thursday after the White House proposed cutting payments to private insurance plans.

The Obama administration's $3.55 trillion budget plan for 2010 includes cuts to Medicare, and private health insurance plans serving Medicare seniors would take the biggest hit. As investors became aware of the impact the budget, if enacted, could have on the companies, they turned against what had been one of the strongest industries in the stock market recently.

In late afternoon trading, the Dow Jones industrial average fell 90.16, or 1.2 percent, to 7,180.73. The Standard & Poor's 500 index fell 12.36, or 1.6 percent, to 752.54 and the Nasdaq composite index fell 31.87, or 2.2 percent, to 1,393.56.

The Russell 2000 index of smaller companies fell 8.52, or 2.1 percent, to 392.92.

Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 1.07 billion shares.
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667,000 New Jobless Claims In U.S., Continuing Claims Top 5 Million
2009-02-26 14:57:42
New jobless claims rose more than expected last week and the number of laid-off Americans continuing to receive unemployment benefits topped 5.1 million, fresh evidence the recession is increasingly forcing employers to shed jobs.

The Labor Department said Thursday that first-time requests for unemployment benefits jumped to 667,000 from the previous week's figure of 631,000. Analysts had expected a slight drop in claims.

The 667,000 new claims are the most since October 1982, though the labor force has grown by about half since then.

The number of people receiving unemployment insurance for more than one week also increased more than expected to 5.1 million. That's the fifth straight week the figure has set a new record-high on data going back to 1967, and compared with only about 2.8 million people a year ago.

As a proportion of the work force, the number of people continuing to receive benefits has reached its highest point since July 1983.

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Villanueva, Mexico, Fed Up With Violence, Asks Military To Take Over
2009-02-26 14:57:15
The people of Villanueva said they'd had enough. Men in cowboy hats, women with hand-scrawled signs, children on bikes - they gathered outside town and blocked the main interstate highway.

"If you can't do it, quit!" they told their police force. They demanded that the army take over.

The army rolled into this town in Zacatecas state last month and ordered the police to stand down and surrender their weapons. They did.

Things only got worse.

A few days later, Police Chief Romulo Madrid, a former military man said to be eager to cooperate with the army, was shot and killed outside his house at 10:30 on a bright morning. The mayor's chauffeur, a first cousin, was arrested in the shooting.

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U.S. Congress Urged To Change Century-Old Mining Law
2009-02-26 14:56:28
Contradicting a Barack Obama campaign position, a former transition team official said mining companies could pay federal royalties of up to 8 percent for gold, silver and other hard-rock mining on public lands.

John Leshy, who served on the president's Interior Department transition team, told a House panel Thursday that revisions to a 137-year-old hard-rock mining law were long overdue. He said the government should reinstate environmental restrictions for hard-rock mining on public land that were wrongly abandoned by the Bush administration, contending that legislation that would impose environmental controls and first-ever royalty fees would not hurt the industry.

"Gold is, and has been for quite a long time, a very profitable industry," Leshy, a professor at the University of California Hastings College of Law, told the House Natural Resources subcommittee. "Its current position is indeed enviable in comparison to the economic carnage currently being visited across much of the American economy."

He said the industry "can readily absorb the modest royalties levied."

Leshy also expressed support for legislative provisions that would direct the Interior secretary to veto any mining proposal that causes substantial environmental harm. As the Interior Department's top lawyer in the Clinton administration, Leshy issued a 1999 legal opinion that said such mining proposals must be blocked by the department under current law - only to see it reversed during the Bush administration.

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JPMorgan To Cut 12,000 Jobs
2009-02-26 14:55:12
JPMorgan Chase & Co. said Thursday it expects to realize about $2 billion in savings related to its acquisition of Washington Mutual Inc. (WaMu), the failed Seattle, Washington, thrift the bank acquired at the end of September.

The majority of the savings will be realized by the end of this year, according to slides on the company's Web site from an investor day presentation. This includes about $1.35 billion related to job cuts, said the bank.

JPMorgan said about 12,000 jobs will be eliminated related to the acquisition. In December, the bank said it would cut a total of 9,200 jobs related to the WaMu deal. The 12,000 figure includes 2,800 jobs expected to be lost through attrition. At the end of December, the bank had a total of 224,000 employees worldwide.

Shares jumped $1.83, or 8.4 percent, to $23.56 in afternoon trading amid a rise in the banking sector as a whole.

JPMorgan's purchase of Washington Mutual, the largest bank ever to fail in U.S. history, added massively to the bank's consumer banking business and helped the company book a $1.1 billion gain in the fourth quarter.

However, analysts and investors have been worried that corroding loans, particularly soured mortgages, inherited from WaMu could mar JPMorgan's results going forward.

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Former CIA Official Gets 3-Year Prison Sentence
2009-02-26 14:54:35
A former high-ranking CIA official has been sentenced to more than three years in prison for a fraud scheme in which he steered procurement contracts to an old friend.

The 37-month sentence for Kyle "Dusty" Foggo, who held the CIA's No. 3 rank from 2004 to 2006, matched prosecutors' recommendations. He pleaded guilty to a single count of fraud.

Defense lawyers had argued for probation and cited Foggo's good deeds over two decades with the CIA, many of which remain classified.

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Obama Budget Anticipates Revenue From Auto Emission Limits
2009-02-26 03:01:15

A mandatory cap on the nation's greenhouse gas emissions, which President Obama embraced on Tuesday as central to his domestic agenda, would be designed to generate badly needed revenue for the government while addressing arguably the world's most pressing environmental issue.

Thursday, the White House will unveil a budget that assumes there will be revenue from an emissions trading system by 2012.

Sources familiar with the document said it would direct $15 billion of that revenue to clean-energy projects, $60 billion to tax credits for lower- and middle-income working families, and additional money to offsetting higher energy costs for families, small businesses and communities.

In testimony to Congress in September, Peter Orszag - then director of the Congressional Budget Office and now Obama's budget director - estimated that revenue from a cap-and-trade bill that died on the Senate floor last year would have reached $112 billion by 2012 and would have kept rising afterward. By 2020, Orszag estimated, a cap-and-trade program might generate $50 billion to $300 billion a year.

But only hours after Obama's speech Tuesday to Congress, the cap-and-trade proposal triggered a heated exchange among senators on a key committee, underscoring that efforts to come up with a system that limits emissions, puts a price on carbon and allows industries to trade pollution allowances will be a difficult sell on Capitol Hill, especially in the current economic crisis.

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Stimulus Aid Set Aside To Help Military Families Avoid Foreclosure
2009-02-26 03:00:55

The orders came while Navy Lt. Adam Diaz was winding down a one-year stint in Baghdad: Report to the Navy Annex in Arlington, Virginia, for a new assignment in April.  Given the military lifestyle, the prospect of a move came as no surprise to Diaz, 31, who has spent his adult life in the Navy.

The shock came when he spoke with his wife, Stephanie Diaz, about the value of the Jacksonville, Florida, home they bought in June 2006, near the height of the housing bubble. "Hey, by the way," she recalls telling him. "The house has been valued for about 50 grand less than when we bought it."

The housing crisis is hitting military families particularly hard, according to real estate agents and service member advocacy groups. Many who bought during the boom and must now relocate because of fresh orders are faced with selling their homes at a big loss. They are finding few buyers, or even renters, particularly in the hardest-hit markets. That is leaving some families facing options including renting at a loss, separation from their loved ones or, in some cases, foreclosure.

The issue has caught the attention of Congress, which included language in the economic stimulus package to compensate service members who sell their home at a loss or have been foreclosed upon because they were forced to move after a base closure, reassignment or a combat wound required them to be relocated near a health facility. The program also covers surviving spouses of those killed in combat.

Under the new provision, the government will cover 95 percent of a loss if a service member is forced to sell. The government can also choose to acquire the title of a home by paying off the balance of a service member's mortgage or paying the owner up to 90 percent of the home's previous value. No dollar ceiling has been set.

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Housing Report Drags Down Stocks
2009-02-26 03:00:27

Stocks fell Wednesday in volatile trading as new details emerged about how the government will test the stability of some of the country's largest banks and poor housing data were released.

The Dow Jones industrial average fell 80.05 points, or 1.1 percent, to 7270.89, while the Standard & Poor's 500-stock index fell 8.24 points, also 1.1 percent, to 764.90. The tech-heavy Nasdaq composite index lost 16.40 points, or 1.1 percent, to 1425.43.

Prices have swung wildly this week, with stocks plunging Monday on fears that the government could be forced to nationalize banks, then rebounding sharply Tuesday. But, analysts said, investors remain concerned about the state of the economy.

Most of the market's focus Wednesday was on details of the "stress test" the Obama administration will use to measure how much capital many of the largest banks will need to survive. Under the plan, the government could purchase preferred shares of bank stocks that could be converted to common shares, a change meant to give financial markets greater confidence.

That helped address some of the uncertainty that has been plaguing Wall Street, said analysts.

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Democrats In Congress Complain About Iraq Withdrawal
2009-02-27 03:47:47

President Obama sought Thursday to quell growing complaints from members of Congress about his plans for drawing down troops in Iraq, inviting lawmakers to a White House meeting on the eve of a North Carolina speech in which he is expected to announce that he will pull out many combat troops by August of 2010.

After House Speaker Nancy Pelosi (D-California) complained that the level of troops - 50,000 - who would remain in Iraq is too high, other senior Democrats voiced similar concerns. Not one member of the Democratic leadership, except for Sen. Richard J. Durbin (Illinois), defended the new Obama plan, which will take three months longer than he promised and still leave a significant force structure on the ground.

White House officials said Obama had reached his decision after consulting with military commanders and would unveil the details in his address today during a trip to Camp Lejeune, North Carolina. Yet even before making the plan official, Obama faced stiff resistance from members of his party as well as from some Republicans who said the idea of a withdrawal would not have been possible without the additional troops - or "surge" - that he opposed.

Most lawmakers left the White House quickly after the event. Aides later said that Democrats seemed no more pleased during the meeting than before. Sen. John McCain (R-Arizona) issued a positive statement, saying he "supports the plan to leave 50,000 troops in Iraq as briefed by Admiral Mullen and Secretary Gates at the White House this afternoon."

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Britain's Defense Secretary Admits U.K. Aided Iraq Terror Renditions
2009-02-26 18:35:54

The British government admitted Thursday that its troops in Iraq handed over terror suspects to the U.S., which then secretly rendered them to a prison in Afghanistan.

After a year of allegations and repeated ministerial assurances to the contrary, the admission was made in the Commons by John Hutton, the defense secretary, who apologized to Parliament members for inaccurate information ministers had previously given them.

He said British soldiers, believed to have been SAS troops, handed over two terrorist suspects to the U.S. in Iraq in February 2004. The men had been captured outside the U.K.-controlled zone covering southeastern Iraq.

Hutton said the pair, believed to be Pakistanis, were still being held in Afghanistan. He said they were members of Lashkar-e-Taiba, a banned organization that he said was linked to al-Qaeda. The U.S. had assured Britain the two continued to represent "significant security concerns" and it was "neither possible or desirable to transfer them to either their country of detention or country of origin", Hutton told Parliament members.

The U.S. had assured him the men were being held in humane conditions and had access to the Red Cross, Hutton said.

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Geronimo Descendant Sues Yale University, Skull And Bones
2009-02-26 18:34:55
The great-grandson of Apache warrior Geronimo argues in a lawsuit that a secretive society at Yale University holds the remains of his great-grandfather.

Harlyn Geronimo has sued Yale and the society - the Order of Skull and Bones - to try to recover the remains.

"I think what would be important is that the remains of Geronimo be with his ancestors," he said.

Skull and Bones, a collegiate society that's been around since 1832, includes alumni such as former President George W. Bush and his grandfather, Prescott Bush.

Author Alexandra Robbins said evidence backs up the younger Geronimo's claim that Skull and Bones has the Apache warrior's remains.

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Anti-Globalization Campaigner: 'We're Not Paying For Your Crisis!'
2009-02-26 18:34:20
Anger rises in Germany as the economy falls. Trade unions and globalization-critical protesters are planning demonstrations in Berlin and Frankfurt under the banner: "We're not paying for your crisis." Alexis Passadakis, 31, an activist from the group Attac, tells Spiegel what's wrong with the system.

SPIEGEL: What do you mean with your battle cry, "We're not paying for your crisis"? Don't you want to pay taxes anymore?

Passadakis: We believe that the cost of the economic crisis should be footed by those who profited most from globalization.

SPIEGEL: As a leading exporter, Germany too has profited.

Passadakis: No, the majority of people have not earned much from the boom - instead they have had to deal with restraint in their wage agreements. The rich, on the other hand, have seen strong increases in their wealth. So it is only fair that they should pay extra duties.

SPIEGEL: You want to fleece the Aldi brothers and the Klatten and Otto families (Germany's richest people) among others?

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Obama Plans Major Shifts In Government Spending
2009-02-26 14:57:58
President Obama's new budget blueprint estimates a stunning deficit of $1.75 trillion for the current fiscal year, which began five months ago, then lays out a wrenching change of course as he seeks to finance his own priorities while stanching the flow of red ink.

By redirecting enormous streams of deficit spending toward programs like health care, education and energy, and paying for some of it through taxes on the rich, pollution surcharges, and cuts in such inviolable programs as farm subsidies, the $3.55 trillion spending plan President Obama is undertaking signals a radical change of course that Congress has yet to endorse.

The deficit he inherited, a shortfall of more than $1 trillion as the current fiscal year began, has continued to swell in recent months with additional bank bailouts, the first wave of spending from a newly enacted stimulus plan and the continuing costs of the wars in Iraq and Afghanistan.

The administration, as it had announced, will try to cut that amount sharply by 2013, when Obama’s first term ends, to $533 billion, even as it escalates spending on crucial priorities.

“There are times when you can afford to redecorate your house,” Obama said on Thursday morning as he released an outline of the budget for the next fiscal year, which begins in October, “and there are times when you have to focus on rebuilding its foundation.”

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U.S. FDA Knew Of Firm's Bacteria-Tainted Syringes
2009-02-26 14:57:29
The operators of a company that shipped bacteria-tainted syringes linked to at least five deaths had been warned by the U.S. Food and Drug Administration about serious problems at a previous plant.

The Aug. 11, 2005, warning letter, provided by the FDA on Wednesday, foreshadowed the legal problems now facing AM2PAT Inc. and its officials, who have been charged with falsifying sterility records on pre-filled heparin and saline syringes that sickened more than 100.

The violations, which arose while AM2PAT operated its plant south of Raleigh, North Carolina, on Ransdell Road, were "symptomatic of serious underlying problems" in the company's quality control system, the FDA's warning letter stated.

Investigators noted lax documentation of sterility tests, workers untrained for their jobs, and slack efforts to maintain and monitor a sterile environment.

"Evidence of improperly trained personnel included an employee chewing gum while filling syringes and an employee improperly gowning during sterility test," the warning letter stated.

In all, the 2005 letter cited nine serious breaches, suggesting a company in chronic violation of FDA rules designed to assure that drug devices are safe.

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CIA Adds Economy To Security Threat Updates
2009-02-26 14:56:59

The daily White House intelligence report that catalogs the top security threats to the nation has a grim new addition, reflecting the realities of the age: a daily update on the global financial crisis and its cascading effects on the stability of countries through the world.

The first Economic Intelligence Briefing report was presented to the White House Wednesday by the CIA, the agency's new director, Leon Panetta, revealed at a news conference. The addition of economic news to the daily roundup of terrorist attacks and surveillance reports appears to reflect a growing belief among intelligence officials that the economic meltdown is now preeminent among security threats facing the United States.

"We've seen the impact of a worldwide recession occur throughout the world," said Panetta, who described the agency's newest product at his first news briefing since his confirmation. Instigated at the request of the White House, the daily report will ensure that U.S. policymakers are "not surprised" by the aftershocks from bank failures and rising unemployment, he said.

The spy agency is following worrisome trends in many corners of the globe, from East Asia to Latin America. In private meetings Wednesday, Latin American intelligence officials warned their U.S. counterparts of a crisis spreading throughout the hemisphere, particularly in Argentina, Ecuador and Venezuela, said Panetta.

"Clearly, it's related: What happens in the economy, and what's happening as a result of that, is affecting the stability of the world," he said.

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GM Posts $9.6 Billion Loss, Burns Through $6.2 Billion Cash
2009-02-26 14:55:25
General Motors Corp. posted a $9.6 billion fourth-quarter loss and said it burned through $6.2 billion of cash in the last three months of 2008 as it fought the worst U.S. auto sales climate since 1982 and sought government loans to keep the century-old company running.

The nation's biggest domestic automaker said Thursday it lost $30.9 billion for the full year and expects to state in its upcoming annual report whether its auditors believe the company remains a "going concern." GM and its auditors must determine whether there is substantial doubt about the automaker's ability to continue it operations.

Chief Financial Officer Ray Young said the determination will depend a lot on whether GM gets further government loans and whether it can accomplish its restructuring goals.

Young said that auditors are studying the future of the company because "there's uncertainty with how the Treasury will view our viability plan," and "uncertainty on whether we're going to be able to execute the terms of our loan agreement."

The company has received $13.4 billion in federal loans since Dec. 31 and says it needs up to $30 billion to stay out of Chapter 11 bankruptcy protection. Top GM executives were in Washington, D.C., Thursday to meet with the Obama administration's auto task force to talk about restructuring and additional loans.

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Obama Budget Would Cap Civilian Federal Employee Pay Raises
2009-02-26 14:54:54

Civilian employees of the federal government will be limited to a 2 percent pay increase in 2010 under the proposed budget released this morning by the Obama administration.

The administration describes the proposed increase as reflective of the current economic crisis and bringing federal pay and benefit practices more in line with what workers in the private sector are experiencing.

The fiscal 2010 budget summary released this morning notes that Obama has ordered a freeze of White House senior staff pay. "In this budget, federal employees also will be asked to do their part," the summary states.

The proposed increase compares with a 3.9 percent increase for federal workers in 2009 and 3.5 percent in 2008.

A senior official for the nation's largest federal employee union described the small increase as understandable.

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Science Fiction Writer Philip Jose Farmer Dies At 91
2009-02-26 14:54:20

Philip José Farmer, a science fiction writer who shocked readers in the 1950s by depicting sex with aliens and who went on to challenge conventional pieties of the genre in caustic fables set on bizarre worlds of his own devising, died Wednesday. He was 91 and lived in Peoria, Illinois.

His official web site announced his death, saying he “passed away peacefully in his sleep.”

Mr. Farmer’s distinctive blend of intellectual daring and pulp-fiction prose found a worldwide audience. His more than 75 books have been translated into 22 languages and published in more than 40 countries.

Though he wrote many admired short stories, he was best known for his multi-novel series. These sprawling, episodic works gave him room to explore every nuance of a provocative premise while indulging his taste for lurid, violent action.

In his Riverworld series Mr. Farmer imagined a river millions of miles long on a distant planet where virtually everyone who has died on Earth is physically reborn and given a second chance to make something of life. In his Dayworld series, Earth’s overpopulation crisis has been relieved by a technical fix; each person spends one day of the week awake and the other six days in suspended animation. In his World of Tiers series, mad demigods create pocket universes for their own amusement, only to face rebellion from their putative creatures.

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U.S. Is A Vast Arms Bazaar For Mexican Drug Cartels
2009-02-26 03:01:06
The Mexican agents who moved in on a safe house full of drug dealers last May were not prepared for the fire power that greeted them.

When the shooting was over, eight agents were dead. Among the guns the police recovered was an assault rifle traced back across the border to a dingy gun store here in Phoenix, Arizona, called X-Caliber Guns.

Now, the owner, George Iknadosian, will go on trial on charges he sold hundreds of weapons, mostly AK-47 rifles, to smugglers, knowing they would send them to a drug cartel in the western state of Sinaloa. The guns helped fuel the gang warfare in which more than 6,000 Mexicans died last year.

Mexican authorities have long complained that American gun dealers are arming the cartels. This case is the most prominent prosecution of an American gun dealer since the United States promised Mexico two years ago it would clamp down on the smuggling of weapons across the border. It also offers a rare glimpse of how weapons delivered to American gun dealers are being moved into Mexico and wielded in horrific crimes.

“We had a direct pipeline from Iknadosian to the Sinaloa cartel,” said Thomas G. Mangan, a spokesman for the U.S. federal Bureau of Alcohol, Tobacco, Firearms and Explosives in Phoenix.

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U.S. Interior Secretary Salazar Scraps Oil-Shale Leasing
2009-02-26 03:00:38
In a second reversal of the Bush administration, Interior Secretary Ken Salazar said Wednesday he is scrapping leases for oil-shale development on federal land in Colorado, Utah and Wyoming.

Salazar rescinded a lease offer made last month for research, development and demonstration projects that could have led to oil-shale works on 1.9 million acres in the three states, greatly expanding the program.

"I am withdrawing that Jan. 14 solicitation because in my view it was a midnight decision, and it was flawed," Salazar told reporters on a teleconference call from Washington, D.C.

He said he also is scrapping an initial 5 percent royalty rate on oil-shale production that "sells taxpayers short." Conventional oil and gas production on public land produces royalties of up to 18.8 percent.

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FDA: India's Largest Drug Firm Faked Tests On Generic Drugs Sold In U.S.
2009-02-26 02:59:43

India's largest drug maker has falsified laboratory tests for generic drugs that had been approved for sale in the United States, say officials at the U.S. Food and Drug Administration.

The FDA cited the fraudulent laboratory tests Wednesday as it took the unusual step of stopping its review of all pending applications from Ranbaxy Laboratories. Federal investigators said the problems centered on the company's plant in Paonta Sahib, which has produced 25 drugs that have been approved by the FDA. Most of those medications are not thought to be on U.S. pharmacy shelves; since September, Ranbaxy has been prevented from exporting more than two dozen drugs to the United States.

The FDA is not seeking a recall, because regulators do not believe the drugs pose a health risk.

"There is no concern about the safety or efficacy of Ranbaxy's drugs on the U.S. market," said Deborah Autor, director of compliance at the FDA. The affected drugs include medications for high cholesterol and an antihistamine, but the FDA would not provide a specific list.

Patients using the drugs should not stop, said Douglas Throckmorton, deputy director of the FDA's Center for Drug Evaluation and Research.

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