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Thursday, March 12, 2009

Free Internet Press Newsletter - Thursday March 12 2009 - (813)

Thursday March 12 2009 edition
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U.S. Treasury Seeks Funds To Help Ailing Nations
2009-03-11 22:57:06

The Obama administration is planning to ask Congress to expand the United States' primary line of credit to the International Monetary Fund from about $10 billion to $100 billion to boost emergency support for struggling economies around the world, Treasury Secretary Timothy F. Geithner said Wednesday.

Under the proposal detailed by Geithner, the IMF would be able to borrow up to $500 billion - a ten-fold increase in the line of credit - to bailout countries in crisis. The rest of the money could come from major European states as well as Saudi Arabia and Japan, which typically contribute to the fund, among others. China, which has not been a major contributor to the organization, has been asked for funds as well.

"The global recession is deepening," said Geithner. Given the intricate ties between economies across the world, he said it is critical for leading nations to move together in a "sustained" and "coordinated" fashion.

"We are going to move together to do what it takes," he added.

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U.S. Markets Close Flat After Morning Gains
2009-03-11 22:56:42

Stocks made modest gains Wednesday afternoon, extending a large rally Tuesday that wiped away more than a week's worth of losses.

After surging almost 6 percent Tuesday, the Dow Jones industrial average was flat, up 4 points. The Standard & Poor's 500-stock index was up 0.2 percent, or 2 points, while the tech-heavy Nasdaq was up 1 percent, or 13 points.

Wall Street rallied Tuesday after Citigroup announced it had made an operating profit during the first two months of the year. Investors also cheered signs federal regulators could restrain short selling of stocks, a type of trading blamed by some in the financial services industry for dragging down shares.

It comes as Treasury Secretary Timothy F. Geithner said the Obama administration would ask Congress to expand the United States' primary line of credit to the International Monetary to boost emergency support for struggling economies around the world. Under the proposal, the IMF would be able to borrow up to $500 billion to bail out countries in crisis.

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Update: Germany Shocked By Teenager's Killing Spree
2009-03-11 22:56:08

Germany was in shock on Wednesday after a 17-year-old youth killed 15 people in a shooting rampage that began at his school, where he shot dead 10 pupils and three teachers. He later took a gun to his own head during a shootout with police. His motive remains a mystery.

A 17-year-old youth killed 15 people in a shooting rampage in Germany that began at his former school and ended in a wild shootout in the parking lot of a car dealer. According to the latest information from police, after he was struck in the leg in a shootout with officers, he committed suicide by firing a bullet from his own gun into his head.

As the investigation began in earnest on Wednesday, the one thing that stood out to investigators was that the majority of victims were female. Seven of the victims were girl students, and three were female teachers. However, the interior minister of the German state of Baden-Wurttemberg, where the crime was committed Wednesday, said he didn't want to draw early conclusions given that it could have been based on how classes had been drawn up. He added, however, that the fact that most were killed with shots to the head suggested the killer had not randomly selected his victims.

The crime began when the teenager walked into the Albertville secondary school in the southwestern town of Winnenden at 9.30 a.m and opened fire in two classrooms, killing 10 pupils - all aged 14 and 15 - and three women teachers, as well as wounding several others.

He then fled, shooting dead a further person on his way, as police evacuated the school and mounted a massive, three-hour manhunt with helicopters and sniffer dogs. He hijacked a car and forced the driver to take him to the town of Wendlingen 40 kilometers away.

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Alabama Gunman Left Revenge List Of Those Who Wronged Him
2009-03-11 22:55:31
The gunman who killed 10 people and committed suicide in a rampage across the Alabama countryside had struggled to keep a job and left behind lists of employers and co-workers he believed had wronged him, authorities said Wednesday.

The lists, found in his home, included a metals plant that had forced Michael McLendon to resign years ago, said District Attorney Gary McAliley. Also on the list was a sausage factory where he suddenly quit last week and a poultry plant that suspended his mother, said McAliley.

McAliley said pages torn from a spiral notebook also included the names of co-workers who he felt had wronged him, including one who reported him for not wearing ear plugs, another who made him clean a meat grinder and a supervisor who didn't like the way he cut pork chops.

McLendon, who killed his mother to start the rampage, took his own life at Reliable Metals, where he worked until 2003. McAliley said he believes McLendon had planned more violence at the Pilgrim Pride plant in Enterprise, where his mother worked before she was suspended, and at Kelly Foods in Elba, where he recently quit.

The district attorney said a piece of paper found in the mother's house also included the names of nine lawyers in the area. He said McLendon apparently wanted to hire a lawyer in a dispute with members of his family over getting a family Bible returned to him, but details weren't clear.

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Alaska Gov. Palin's Daughter Breaks Up With Boyfriend
2009-03-11 22:54:50
Levi Johnston and Bristol Palin, the teenage daughter of Gov. Sarah Palin, have broken off their engagement, he said Wednesday, about 2 1/2 months after the couple had a baby.

Johnston, 19, told the Associated Press that he and 18-year-old Bristol Palin mutually decided "a while ago" to end their relationship. He declined to elaborate as he stood outside his family's home in Wasilla, about 40 miles north of Anchorage.

He also said some details of the breakup, rumors of which had been swirling on the Internet, were inaccurate.

Bristol Palin said in a statement issued through a spokeswoman for her mother's political action committee that she was "devastated."

"Unfortunately, my family has seen many people say and do many things to `cash in' on the Palin name," she said. "Sometimes that greed clouds good judgment and the truth."

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Asian Markets Rise In Early Trading
2009-03-11 03:34:30
Equity markets across Asia rose sharply in early trading Wednesday, buoyed by positive news from Citigroup and by one of the biggest one-day gains in the Dow Jones industrial average in more than 60 years.

By midday, 17 of the 20 leading indices in the Asia-Pacific region were higher.

Japan’s Nikkei average was up more than 4 percent, and the broader Topix index was 3 percent higher. The Hang Seng index in Hong Kong shot up 4.6 percent early in the day and despite some pullback, was 2.8 percent higher by midday. The markets in Shanghai, Taiwan, South Korea and Singapore also posted solid increases.

The Nikkei was trying to come back from dismal results that had sent it to a 26-year low on Tuesday.

Three major Japanese banks - Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group - were up more than 6.7 percent, as banks and financial services companies throughout the region registered significant gains.

Toshiba rose 8 percent on speculation that aggressive cost-cutting measures could help lead to an operating profit next year. Canon, Seiko Epson and Honda also rocketed upward in morning trading in Tokyo.

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50 Years Later, Beijing Still Fails To Control Tibet
2009-03-11 03:34:06

Tuesday marks the 50th anniversary of the 1959 revolt in Tibet against China and the Dalai Lama's flight from the country. Despite decades of repression, the Tibetans living under Chinese control still dare to voice their demands for more autonomy - and the return of their exiled spiritual leader

It was 6.30 a.m., and the sun had not yet risen when they left wearing their red robes to march along the narrow paths between the fields. Then they turned left at the Petro China gas station onto Democracy Street and continued in the direction of the Guinan local government offices.

It was Feb. 25, the first day of the Tibetan New Year. The monks from the Lutsang monastery had heeded the Dalai Lama's advice to his compatriots in China that, this year, they should forgo loud and joyful celebrations. The religious leader had made it known from his place of exile in India that - in the light of the "immense difficulties and misery" faced by Tibetans - the time had come for reflection.

It was this call that led roughly 100 monks to light candles on this particular morning and to present their demands to the local officials: That China should understand the hopes and thoughts of the Tibetans better.

There has probably never been a lonelier place for a protest. The streets to Guinan trail like an endless ribbon through the high plains of Qinghai Province, where herds of yaks, goats and sheep, overseen by shepherds on horses and mopeds, graze on the blades of grass. Yet the action was not without consequences.

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Congressional Audit: Energy Dept. Erred On Coal Project
2009-03-11 03:33:25
The Energy Department made a $500 million math error a year ago when it withdrew its support from a “near-zero emissions” coal plant in Illinois, Congressional auditors will say in a report to be released Wednesday.

The error led the department to say mistakenly that the project, known as FutureGen, had nearly doubled in cost - an increase the Bush administration deemed too expensive.

At the time, FutureGen was the leading effort to capture and sequester carbon dioxide, the main heat-trapping gas linked to global warming.If the project were resumed and proved successful, it could provide a model for curbing the carbon dioxide that coal adds to the atmosphere.

The new energy secretary, Steven Chu, has said that he will consider renewing support for FutureGen but that changes will be needed. He did not specify what those might be.

The report was prepared by the Government Accountability Office for Representative Bart Gordon, chairman of the House Science Committee. The panel’s subcommittee on energy and environment will hold a hearing on the issue on Wednesday.

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5 Years After It Halted Weapons Program, Libya Sees U.S. As Ungrateful
2009-03-11 03:31:49
When Libya gave up its nuclear and chemical weapons programs in late 2003, President George W. Bush pointed to the decision as a victory in Washington’s so-called war on terror and as a potential model for pressing Iran and North Korea to give up their weapons programs, too.

Now, Libyan officials say they are dissatisfied with the way the deal worked out, insisting that the United States has done too little to reward Libya’s concessions. Officials here say they believe that Libya’s limited payoff undermines the credibility of the United States as it presses other nations to abandon weapons programs.

Libya’s discontent suggests potential hurdles for the Obama White House as it tries to engage with nations the United States has shunned, like Iran and Syria, as part of a broader strategy reassessment in the Middle East.

While Libya says it does not plan to restart the weapons programs, its disaffection signals the need to manage expectations and reveals the unexpected challenges of developing relations with the former pariah state, which has been isolated for decades and remains run by an eccentric, enigmatic strongman, Col. Muammar el-Qaddafi. 

“We gave some devices, some centrifuges, for example for America, but what do you give us? Nothing,” said Abdelrahman Shalgham, who served as foreign minister for eight years before being named ambassador to the United Nations this month. “That’s why we think North Korea and Iran are hesitating now to have a breakthrough regarding their projects.”

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Scientists: Amazon Forest Could Shrink By 85 Percent Due To Global Warming
2009-03-11 22:56:55

Global warming will wreck attempts to save the Amazon rainforest, according to a devastating new study which predicts that one-third of its trees will be killed by even modest temperature rises.

The research, by some of Britain's leading experts on climate change, shows that even severe cuts in deforestation and carbon emissions will fail to save the emblematic South American jungle, the destruction of which has become a powerful symbol of human impact on the planet. Up to 85% of the forest could be lost if spiraling greenhouse gas emissions are not brought under control, the experts said. But even under the most optimistic climate change scenarios, the destruction of large parts of the forest is "irreversible".

Vicky Pope, of the Met Office's Hadley Center, which carried out the study, said: "The impacts of climate change on the Amazon are much worse than we thought. As temperatures rise quickly over the coming century the damage to the forest won't be obvious straight away, but we could be storing up trouble for the future."

Tim Lenton, a climate expert at the University of East Anglia, called the study, presented at a global warming conference in Copenhagen today , a "bombshell". He said: "When I was young I thought chopping down trees would destroy the forest, but now it seems that climate change will deliver the killer blow."

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Freddie Mac Takes $50 Billion Beating, Seeks Another $30.8 Billion In Taxpayer Assistance
2009-03-11 22:56:25
Freddie Mac reported Wednesday that it lost $50.1 billion last year, almost half of it in the final three months of 2008, and would need an additional $30.8 billion in taxpayer assistance to stay solvent.

With turmoil continuing this year, Freddie Mac also announced Wednesday it had named its chairman, John A. Koskinen, to serve as an interim chief executive after the government's first choice for the job quit six months into his tenure. Koskinen is a former deputy mayor of the District and former top official in the Clinton administration's Office of Management and Budget.

The announcements showed how the downturn in the nation's economy and the difficulties of having the government run a private company were buffeting the McLean mortgage finance giant and its thousands of local employees.

The federal government, which seized Freddie Mac and its counterpart, Fannie Mae, last fall, has agreed to cover $200 billion in losses at each firm. Freddie Mac has already received $13.8 billion. Fannie Mae has asked for nearly $15 billion.

The investments are slated to continue until the companies start to turn a profit. Depending on the decisions of Congress and the Obama administration, the two may never be restored as private firms.

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Austria Feels Pinch Of Eastern European Downturn
2009-03-11 22:55:55

Major Vienna, Austria, banks wanted to capture the Eastern European market and benefit from its growth. Now they are waking up to the hangover caused by what could end up being a series of bad loans. The government, while trying to reassure the banks, is also seeking international assistance.

Vienna has felt like a changed place since the unmentionable words first began slipping off the tip of people's mouths - terms like "crisis in Austria," and "impending government bankruptcy." The bad news seems to affect everything and everyone.

The once-proud national airline Austrian Airlines? It's up for sale, because, among other problems, its managers miscalculated when they speculated on kerosene prices. If the European Commission approves the deal, German national carrier Lufthansa will soon acquire the Austrian airline, with the government in Vienna even throwing in €500 million ($625 million) in state aid as part of the dowry.

Vienna's old-fashioned streetcars, popular among local residents and tourists alike? It is said that they are only still running due to the fact the the U.S. investor the city leased its streetcars to, in a deal worth millions, still wants the trolleys to operate.

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Merrill Lynch To Pay $7 Million Fine For Squawk Box Abuse
2009-03-11 22:55:12

One day in 2003, an announcement was blasted over an internal intercom at investment bank Merrill Lynch that a big institutional customer was planning to buy 405,800 shares of a stock.

At a retail branch away from headquarters, a Merrill Lynch broker unconnected to the trade left his phone open next to the internal intercom, known as a squawk box, which allows the company to communicate internal information about upcoming stock orders among the firm's traders. Over the next two minutes, day traders on the other side of the phone line bought 52,400 shares of the stock, knowing that a big purchase by Merrill on behalf of an institutional customer would boost the stock's price, according to federal authorities.

Within the hour, the day traders had profited $8,000.

For a failure to have policies and procedures that would prevent these types of activities, Merrill Lynch agreed to pay a $7 million fine in a settlement with the Securities and Exchange Commission today. It is the second largest settlement of its kind. Merrill Lynch did not admit or deny wrongdoing. The firm was bought by Bank of America last fall.

"Merrill Lynch ... lacked written policies or procedures to limit which employees within the firm had access to the equity squawk box, to track which employees had access, or to monitor employees for possible misuse of the order information," said Kay Lackey, an enforcement official in the SEC's New York office. "This created conditions that rogue brokers could exploit, as happened here."

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At Least 16 Killed In Teenager's Gun Attack At German School
2009-03-11 12:51:34
At least 16 people were killed when a teenage gunman clad in black stormed into his former school near Stuttgart on Wednesday morning and opened fire before fleeing to another town where the police fatally shot him.

Erwin Hetger, the state police chief, said that an emergency call came from the Albertville Technical School in the town of Winnenden at 9:33 a.m. But when officers arrived on the scene, the shooter, identified by police as Tim Kretschmer, had already fled in the direction of the town center, he said.

Rainer Koller, a police spokesman, said the attacker opened fire in three classrooms, killing nine students and three teachers instantly. A tenth student later died of her wounds, the Associated Press reported.

The 17-year-old, who police identified as Tim Kretschmer, fled from the school and then turned his gun on an employee of a nearby psychiatric clinic, shooting dead one more person, Koller said in a telephone interview.

Firefighters, paramedics and columns of heavily armed commandos swarmed the school in the shooting’s aftermath, and sealed off Winnenden’s small downtown area. Psychologists and clergy counseled the school’s students and their parents. Other schools were evacuated, and local media reported that up to 10 helicopters were circling the town of some 27,000 residents.

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Interview: 'Window Of Opportunity' For U.S.-Russia Relations
2009-03-11 03:34:20

Ties between Washington and Moscow have been frosty in recent years; but former U.S. Ambassador Thomas Pickering sees a golden opportunity for improvement. He spoke with Spiegel Online about how Russia could help with Iran and Afghanistan.

SPIEGEL ONLINE: Secretary of State Hillary Clinton, Vice President Joe Biden, President Barack Obama himself - they all promise to press the "reset button" on ties with Russia. Is that realistic?

Thomas Pickering: I think there is a real window of opportunity to jumpstart the relationship between Moscow and Washington. The expectations are extremely low after the standstill of the past years. And the Obama administration is off to a good start. They really seem determined to engage in a new dialogue.

SPIEGEL ONLINE: But Moscow reacted rather coolly to Obama's letter to Russian President Dmitry Medvedev, in which he seemed to offer to abandon the U.S. missile shield in Europe in exchange for more Russian cooperation on the nuclear dispute with Iran.

Pickering: I have not seen that letter; I have only seen what the Russians said to the press. But I was not really surprised that the Russians were not too enthused. One has to remember: Russian politicians always welcome the opportunity to criticize the Americans. Former Russian President Vladimir Putin brilliantly used this to help his political standing at home, and it was not much different when I served as U.S. ambassador in Moscow in the 1990s. That is just the way Russians look at the relationship with Washington - and that won't change all of a sudden.

SPIEGEL ONLINE: Were you surprised that the Obama administration seemed to offer a complete abandonment of the missile shield in the letter to Medvedev?

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Madoff To Plead Guilty - Life Sentence Likely
2009-03-11 03:33:42
Bernard L. Madoff, the New York financier accused of masterminding the biggest Ponzi scheme ever, plans to plead guilty this week to 11 felony charges that will likely put him behind bars for the rest of his life, his lawyer said Tuesday.

Madoff, 70, will admit to running a fraud dating back to the 1980s. He solicited billions of dollars from pension funds, charities and other investors, at times promising annual returns of as much as 46 percent, according to court documents filed Tuesday afternoon in U.S. District Court in Manhattan.

He set up accounts in London, England, in part to make it look like he was investing in European securities. To give his business an air of legitimacy, said the documents, Madoff hired numerous employees with little or no relevant training and had them generate false documents, including trading records and monthly statements to clients. Prosecutors didn't say whether his staff was aware of the fraud.

The new details about Madoff's operations were collected by government investigators after Madoff's Dec. 11 arrest. Prosecutors had charged him with a single count of securities fraud after, they said, Madoff admitted to running a $50 billion Ponzi scheme.

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Car Loan Delinquencies Rising Amid Signs Of Fraud
2009-03-11 03:32:07
Many car buyers are having the same kind of trouble obtaining and paying off loans that plagued America's housing market, new data show.

Some 3.25 percent of all indirect auto loans were at least 30 days overdue in the third quarter, the American Bankers Association reports. That's the worst showing since the group began compiling such numbers in 1980. Indirect loans are those arranged by a third party, typically an auto dealer, and they account for 90 percent of all car loans.

"Many car buyers have fallen victim to many of the same subprime, predatory lending practices that have caused so many home foreclosures and our current economic recession," said Rep. Doris Matsui, D-California.

Not only are their payments starting to lag, but "evidence suggests that fraudulent practices with regard to both the condition and financing of used cars are on the rise," said Rep. Bobby Rush, D-Illinois, the chairman of the House Subcommittee on Commerce, Trade and Consumer Protection.

He and others, including the National Consumer Law Center, say this trend is affecting the poor disproportionately.

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GV20 Deal At Risk As U.S.-Europe Rift Grows
2009-03-11 03:31:32

British Prime Minister Gordon Brown's hopes of achieving a deal on the international handling of the financial crisis in London next month have been dealt a blow by signs of a growing split between America and Europe, and an admission by Britain's most senior civil servant that it is very hard to get decisions from the Obama administration. 

America's idea of another co-ordinated fiscal stimulus to lift the world out of recession is being resisted by Germany and France, both worried by the scale of their projected public deficits.

The faultline was becoming visible as Sir Gus O'Donnell, head of the U.K. civil service, said U.S. Treasury Secretary  Tim Geithner told him there was no one in the U.S. Treasury Department because of delays in appointing a new administration. "There is nobody there," he told a civil service conference in Gateshead. "You cannot believe how difficult it is."

Sir Gus made his remarks in defense of a permanent civil service, pointing out that he had known Geithner for many years, but had been unable to get decisions from the administration.

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