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Sunday, February 08, 2009

Free Internet Press Newsletter - Sunday February 8 2009 - (813)

Sunday February 8 2009 edition
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Obama's National Security Council Will Get New Powers
2009-02-08 03:51:14

President Obama plans to order a sweeping overhaul of the National Security Council, expanding its membership and increasing its authority to set strategy across a wide spectrum of international and domestic issues.

The result will be a "dramatically different" NSC from that of the Bush administration or any of its predecessors since the forum was established after World War II to advise the president on diplomatic and military matters, according to national security adviser James L. Jones, who described the changes in an interview. "The world that we live in has changed so dramatically in this decade that organizations that were created to meet a certain set of criteria no longer are terribly useful," he said.

Jones, a retired Marine general, made it clear that he will run the process and be the primary conduit of national security advice to Obama, eliminating the "back channels" that at times in the Bush administration allowed Cabinet secretaries and the vice president's office to unilaterally influence and make policy out of view of the others.

"We're not always going to agree on everything," said Jones, and "so it's my job to make sure that minority opinion is represented" to the president. "But if at the end of the day he turns to me and says, 'Well, what do you think, Jones?,' I'm going to tell him what I think."

The new structure, to be outlined in a presidential directive and a detailed implementation document by Jones, will expand the NSC's reach far beyond the range of traditional foreign policy issues and turn it into a much more elastic body, with Cabinet and departmental seats at the table - historically occupied only by the secretaries of defense and state - determined on an issue-by-issue basis. Jones said the directive will probably be completed this week.

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In Florida, Despair And Foreclosures
2009-02-08 03:50:45
Desperation has moved into this once-middle-class exurb of Fort Myers, Florida, where hammers used to pound.

Its straight-ahead stare was hidden amid the chatter of 221 families waiting for free bread at Faith Lutheran Church on a recent Friday morning; and it appeared a block away a few days earlier, as laid-off construction workers in flannel shirts scavenged through trash bags at a home foreclosure, grabbing wires, CDs, anything that could be sold.

“I knew it was coming,” said Gloria Chilson, 56, the former owner of the house, as she watched strangers pick through her belongings. “You take what you can; you try not to care.”

Welcome to the American dream in high reverse. Lehigh Acres is one of countless sprawling exurbs that the housing boom drastically reshaped, and now the bust is testing whether the experience of shared struggle will pull people together or tear them apart.

The changes in these mostly unincorporated areas outside cities like Charlotte, North Carolina, Las Vegas, Nevada,  and Sacramento, California, have been swift and vivid. Their best economic times have been immediately followed by their worst, as they have generally been the last to crest and the first to crash.

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Bipartisan Deal Could Lead To Stimulus Passage Next Week
2009-02-07 15:48:33

Against a backdrop of rising unemployment, Senate Democrats struck a hard-won deal Friday with a handful of Republican moderates to scale back spending in a massive economic stimulus bill, virtually guaranteeing Senate passage of the legislation but also ensuring arduous final negotiations with the House.

The compromise represented a dramatic finale to a tumultuous and frustrating week for Democrats pushing the package, as Senate Majority Leader Harry M. ReidD-Nevada) saw the limitations of an expanded majority and a band of Republican centrists came to appreciate the very high price they can extract for their votes on key measures.

The bipartisan deal was cut after two days of talks and would cut more than $100 billion from the $920 billion bill, dropping its cost to about $820 billion, if amendments added on the Senate floor are retained.

Most Republicans remained strongly opposed to the compromise bill, saying it was too costly and ineffective, and Democratic leaders were counting on just three Republican votes for the plan as of last night but hoped to expand the number before a final vote.

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U.S. Regulators Close Failed Banks In California, Georgia
2009-02-07 15:48:11
Regulators on Friday closed FirstBank Financial Services in Georgia and two California banks, Alliance Bank and County Bank, marking nine failures this year of federally insured institutions.

The Federal Deposit Insurance Corp. (FDIC) was appointed receiver of the three banks. FirstBank Financial, based in McDonough, Georgia, had $337 million in assets and $279 million in deposits as of Dec. 31. Alliance Bank, based in Culver City, California, had about $1.14 billion in assets and $951 million in deposits as of year's end. Merced, California-based County Bank had around $1.7 billion in assets and $1.3 billion in deposits as of Feb. 2.

Twenty-five U.S. banks failed last year, far more than in the previous five years combined. The six failures announced in the last two weeks are double the total for all of 2007.

It's expected that many more banks won't survive this year amid the pressures of tumbling home prices, rising mortgage foreclosures and tighter credit. Some may have to merge with other institutions.

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Banks Lean On Friends, Lobbyists, Lawmaker For Bailout Money
2009-02-07 15:47:41

The e-mail arrived at the Office of Thrift Supervision (OTS) just after 5 p.m. from an aide to New Mexico Sen. Jeff Bingaman.

"Earlier today, Sen. Bingaman met with Treasury Secretary nominee, Timothy Geithner," the staffer wrote. "The Senator raised concerns regarding New Mexico based Thornburgh Mortgage and their efforts to access TARP funding and convert to a savings and loan holding company."

Thornburg had been fighting off bankruptcy, and its best chance at a piece of the $700 billion federal bailout known by its initials as TARP could hinge on transforming itself into a regulated thrift and persuading the OTS to recommend it as a candidate for rescue. Bingaman's aide wanted to schedule a call between her boss and OTS Director John M. Reich.

That short Dec. 9 e-mail offers a glimpse of the flurry of activity involving lawmakers and federal regulators as firms have pursued hundreds of billions of dollars from the Troubled Assets Relief Program (TARP) and waited for details of how the Obama administration will disperse even more. With so much money at stake and so much uncertainty about who will get it, beleaguered companies fearful of being left behind are scurrying from Capitol Hill to K Street, trying to find a way to the front of the line.

In response to the e-mail from Bingaman's staff, an agency employee replied: "We would be happy to talk to Senator Bingaman regarding publicly available information," but, "be advised that this meeting will not influence any decisions pertaining to any pending applications."

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Halliburton Spinoff KBR Prepares To Admit Bribery
2009-02-07 15:47:08
A spinoff of Halliburton Co. is on the verge of pleading guilty to federal bribery charges.

Court papers filed in Houston on Friday show Kellogg, Brown & Root LLC is preparing to plead guilty to violating the Foreign Corrupt Practices Act for promising and paying tens of millions of dollars in bribes to officials in Nigeria in exchange for engineering and construction contracts between 1995 and 2004.

The government filed a criminal information in federal court, a document which is often used as part of a plea deal.

KBR, a major engineering and construction services company with operations around the world, was split off as a separate public company from Halliburton in 2007.

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At Munich Summit, Biden Urges Fresh Start With Iran, Russia
2009-02-07 15:46:46
Vice President Joe Biden held out an olive branch Saturday to Iran and Russia, and reassured European allies that the Obama administration would treat them as equals but emphasized that "America will ask its partners to do more as well."

In a major-foreign policy address Saturday to an international security conference here, Biden told an audience of world leaders that the White House was willing to engage the government in Tehran if it heeded calls to end its nuclear-weapons program and changed its policies in the Middle East.

"This much is clear: We will be willing to talk," said Biden, but he added a warning to Iran: "continue down your current course and there will be pressure and isolation."

Biden also said the White House wanted a fresh start with the Kremlin, which under Vladimir Putin had seen a steady deterioration in relations with the Bush administration.

"The last few years have seen a dangerous drift in relations between Russia and members of our alliance," he said, referring to the NATO military alliance. "The United States rejects the notion that NATO's gain is Russia's loss, or that Russia's strength is NATO's weakness."

"As President Obama has said, 'It's time to press the reset button'," he added.

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Russia Allows Transit Of U.S. Non-Lethal Military Supplies
2009-02-07 15:46:07
Russia granted transit rights Friday to non-lethal U.S. military supplies headed to Afghanistan but only after apparently pressuring a former Soviet state to close an air base leased to the Americans.

The signal from Moscow: Russia is willing to help on Afghanistan, but only on the Kremlin's terms.

Kyrgyzstan announced the closure of the Manas air base but American officials suspect that Russia was behind the decision, having long been irritated by the U.S presence in central Asia.

The Russian decision to let U.S. supplies cross its territory opened another route to those through Pakistan now threatened by militant attacks, but U.S. officials were still left scrambling for alternatives to Manas.

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Alaska State Senate Finds Palin's Husband, 9 Others In Contempt
2009-02-07 15:44:58
The Alaska Senate on Friday found Gov. Sarah Palin's husband and nine state employees, including some of her top aides, in contempt for ignoring subpoenas to testify in a legislative investigation.

The Senate said it would seek no punishment for the witnesses' failure to appear before a committee last fall as it looked into the governor's firing of her public safety commissioner, Walt Monegan.

"During the Monegan investigation, we were reminded that the legislative branch's power of subpoena is an important one and must be respected by the executive branch," said Sen. Hollis French (D). "With this resolution, the Senate is making it clear that we are a coequal branch of state government."

The witnesses later provided sworn written statements after a lawsuit filed on behalf of seven of the state employees by state Attorney General Talis Colberg was dismissed in Superior Court. The case was appealed to the state Supreme Court.

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Time Is Of Essence On Financial Crisis, Economists Agree
2009-02-08 03:50:59

With Congress moving closer to adopting a $820 billion stimulus package and the Obama administration poised to unveil a new bank bailout plan, economists say that the federal government is taking its biggest role in the economy in a generation.

States that once aspired to blaze trails independent from Washington, D.C., are turning to it for money, banks and businesses that once decried regulation now are seeking federal capital, grants or tax cuts and individuals are looking for tax relief.

"This is a seismic shift in the role of government in our society," said Allen Sinai, chief global economist for Decision Economics. "Those who believe the government can be an effective, positive instrument for good will have another chance to try it," said Sinai, a political independent.

While economists remain divided on the role of government generally, an overwhelming number from both parties are saying that a government stimulus package - even a flawed one - is urgently needed to help prevent a steeper slide in the economy.

Many economists say the precise size and shape of the package developing in Congress matter less than the timing, and that any delay is damaging.

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Death Toll Reaches 65, Expected To Rise, In Australia's Worst Bushfires In Decades
2009-02-08 03:50:33
Towering flames razed entire towns in southeastern Australia and burned fleeing residents in their cars as the death toll from the country's worst fire disaster in a quarter-century reached 65 on Sunday.

At least 640 homes were destroyed in Saturday's inferno when searing temperatures and wind blasts produced a firestorm that swept across a swath of the country's Victoria state, where all the deaths occurred.

"Hell in all its fury has visited the good people of Victoria in the last 24 hours," Prime Minister Kevin Rudd told reporters as he toured the fire zone on Sunday. "It's an appalling tragedy for the nation."

Thousands of exhausted volunteer firefighters were still battling about 30 uncontrolled fires Sunday in Victoria, officials said, though conditions had eased considerably.

Government officials said the army would be deployed to help out, and Rudd announced immediate emergency aid of 10 million Australian dollars ($7 million).

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U.S. Coast Guard: 150 People Trapped On Lake Erie Ice
2009-02-07 15:48:21

About 150 people were trapped on a slab of ice about 8 miles wide that had broken free and floated away from the Ohio shoreline of Lake Erie, the Coast Guard said Saturday.

Coast Guard Petty Officer William Mitchell says about 55 had been rescued by mid-afternoon, and authorities were worried the ice floe could break up.

Several ships and helicopters from Toledo and Marblehead were sent to rescue the people from the ice floe. Coast Guard Petty Officer George Degener said there were no reports of injuries, but WTOL-TV in Toledo said one person was taken to a hospital after falling into the water.

Authorities said fishermen apparently used wooden pallets to create a bridge over a crack in the ice so they could go farther out on the lake, but the planks fell into the water when the ice shifted, stranding the fishermen about 1,000 yards off shore.

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New Plan To Help Banks Sell Bad Assets
2009-02-07 15:47:57
After weeks of internal debate, the Obama administration has settled on a plan to inject billions of dollars in fresh capital into banks and entice investors to purchase their most troubled assets.

The new financial industry rescue plan, to be outlined in broad terms on Monday in a speech by the Treasury secretary, Timothy F. Geithner, will not require banks to increase their lending. That is despite criticism that institutions that already received money from the Troubled Asset Relief Program, or TARP, either hoarded it or used the funds to acquire other banks.

The incentives to investors could be in the form of commitments to absorb some of the losses from any assets they purchase, should their values continue to decline. The goal is to relieve the banks of their worst assets so that private investors might then provide more capital.

Officials hope that that part of the plan is not labeled a “bad bank” administered by the government, although they expect that some might call it that.

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Editorial: Those Who Ignore History ...
2009-02-07 15:47:18
Intellpuke: This editorial appeared in the New York Times edition for Friday, February 6, 2009.

With the global economy staggering, wealthy countries need to pull together to produce a concerted economic stimulus, protect the free flow of trade and rescue the poor and small countries that cannot possibly make it on their own. What the world is getting - from the United States Congress and other governments - is the kind of policy blunders and retrenchment that unleashed the global depression almost 80 years ago.

The beggar-thy-neighbor policy-making that spread in late 1920s and early 1930s should provide a bleak warning. The United States first sparked depression across the world when it started raising interest rates in 1928 to curb stock-market speculation, forcing other countries, whose currencies were fixed under the gold standard, to do the same to stem an exodus of reserves. But it spread and deepened as the United States and other countries responded to slower growth and falling exports by erecting trade barriers.

World trade contracted 60 percent between 1929 and 1932. Industrial production in the United States and European countries fell by more than 35 percent. Unemployment topped 30 percent in Germany. The price of Malaysian rubber fell 84 percent, and that of Argentine wool tumbled 72 percent. Beginning in 1931, all big Latin American countries defaulted on their debt. Japan invaded Manchuria in 1931. Hitler came to power in 1933.

The world is different today. Economic links have deepened as companies have set up worldwide production networks. Multilateral institutions, including the World Trade Organization and the International Monetary Fund, police an open economic order. We have learned some of history’s lessons. But not enough.

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New RNC Chairman Steele's Campaign Spending Questioned
2009-02-07 15:46:59

Michael S. Steele, the newly elected chairman of the Republican National Committee (RNC), arranged for his 2006 Senate campaign to pay a defunct company run by his sister for services that were never performed, his finance chairman from that campaign has told federal prosecutors.

Federal agents in recent days contacted Steele's sister, a spokesman for Steele said Friday.

The claim about the payment, one of several allegations by Alan B. Fabian, is outlined in a confidential court document. Fabian offered the information last March as he was seeking leniency for himself during plea negotiations on unrelated fraud charges. It is unclear how extensively his claims have been pursued. Prosecutors gave him no credit for cooperation when he was sentenced in October.

Steele spokesman Curt Anderson said he did not know what information the federal agents were seeking, but he dismissed Fabian's allegations as patently false. "It's from, what, a convicted felon? And it has no substantiation in fact," he said.

Fabian's claims emerge as Steele begins his new role at the RNC, where he oversees the raising and spending of hundreds of millions of dollars in party money. The former Maryland lieutenant governor has faced questions about his handling of campaign money in prior elections and was twice fined for missing filing deadlines.

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After 84 Infant Deaths, Nigerians Collect Teething Formula Laced With Poison
2009-02-07 15:46:24
Nigerian health workers hunted down bottles of a poisonous teething formula Friday as the government reported that 84 infants and children have died after swallowing a syrup laced with a chemical normally found in antifreeze.

The children were stricken with fever, convulsions, diarrhea and vomiting and were unable to urinate after being given the My Pikin Baby Teething Mixture.

The dead ranged from 2 months to 7 years old, said the Health Ministry, adding that at least 111 children have been sickened since the tainted batch hit store shelves in mid-November.

"The death of any Nigerian child is a great loss to the nation," Health Minister Babatunde Oshotimehin said in a statement. "The federal ministry of health sincerely regrets this painful incidence and sympathizes with the nation and the families."

Health officials said in early December that 34 children had died and stores were returning stocks of the formula meant to stop teething pain.

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At Least 14 Killed In Australian Bushfires
2009-02-07 15:45:50
Australian bushfires killed at least 14 people in the southern state of Victoria on Saturday as a heat wave touched off more than 40 blazes across the state and neighboring New South Wales, said the police, who feared that as many as 40 people may have died.

The BBC reported that firefighters were battling dozens of fires in parks and bush land as temperatures in the heatwave were expected to reach 117 degrees.

Victoria’s deputy police commissioner Kieran Walshe said the 14 deaths were in a huge fire 50 miles north of Melbourne in rural towns - six at Kinglake, four at nearby Wandong, three at Strathewen and one in Clonbinane.

"This is an absolute tragedy for the state and we believe the figure may even get worse," said Walshe. “We base that on the fact we’re only just getting into these areas now to search buildings. The figure could get into the 40s."

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