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Tuesday, March 17, 2009

Free Internet Press Newsletter - Tuesday March 17 2009 - (813)

Tuesday March 17 2009 edition
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Fighting The Recession: America Is From Mars, Europe Is From Venus
2009-03-17 00:15:53

As the global economic downturn worsens, the industrialized nations are at odds over how to fight the crisis. Obama wants the Europeans to introduce additional stimulus programs, but Merkel insists Germany is already doing enough.

The most important aspect of a political encounter is often the joint photo op. The parties shake hands and smile into the cameras, signaling to the public that they understand each other perfectly and everything is on track.

Seen from this perspective, the first meeting of U.S. President Barack Obama and German Chancellor Angela Merkel last summer was a moderate catastrophe. Before withdrawing for a one-on-one conversation, the two politicians posed at the door of the chancellor's office.

Obama reached cautiously for Merkel's lower arm, while she apparently considered if she should pat him on the shoulder. Then the chancellor extended her hand to the then-senator, who, at that very moment, happened to be looking in the other direction. By the time he tried to extend his hand to her, she had already turned around. As one observer noted, there was clearly a certain "sense of trepidation" between the two.

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Commentary: If We Behave As If It's Too Late, Then Our Prophecy Is Bound To Come True
2009-03-17 00:15:24
Intellpuke: This commentary was written by Prof. George Monbiot and appeared in the Guardian edition for Tuesday, March 17, 2009. In his commentary, Prof. Monbiot writes: "However unlikely success might be, we can't afford to abandon efforts to cut [greenhouse gas] emissions - we just don't have any better options." His commentary follows:

Quietly in public, loudly in private, climate scientists everywhere are saying the same thing: it's over. The years in which more than 2 degrees Celsius of global warming could have been prevented have passed, the opportunities squandered by denial and delay. On current trajectories we'll be lucky to get away with 4 degrees Celsius. Mitigation (limiting greenhouse gas pollution) has failed; now we must adapt to what nature sends our way. If we can.

This, at any rate, was the repeated whisper at the climate change conference in Copenhagen, Denmark, last week. It's more or less what Bob Watson, the environment department's chief scientific adviser, has been telling the British government. It is the obvious if unspoken conclusion of scores of scientific papers. Recent work by scientists at the Tyndall Centre for Climate Change Research, for instance, suggests that even global cuts of 3% a year, starting in 2020, could leave us with 4 degrees Celsius of warming by the end of the century. At the moment, emissions are heading in the opposite direction at roughly the same rate. If this continues, what does it mean? Six? Eight? Ten degrees? Who knows?

Faced with such figures, I can't blame anyone for throwing up their hands. But before you succumb to this fatalism, let me talk you through the options.

Yes, it is true that mitigation has so far failed. Sabotaged by Clinton, abandoned by Bush, attended halfheartedly by the other rich nations, the global climate talks have so far been a total failure. The targets they have set bear no relation to the science and are negated anyway by loopholes and false accounting. Nations like the U.K., which is meeting its obligations under the Kyoto protocol, have succeeded only by outsourcing their pollution to other countries. And nations like Canada, which is flouting its obligations, face no meaningful sanctions.

Lord Stern made it too easy: he appears to have underestimated the costs of mitigation. As the professor of energy policy Dieter Helm has shown, Stern's assumption that our consumption can continue to grow while our emissions fall is implausible. To have any hope of making substantial cuts we have both to reduce our consumption and transfer resources to countries like China to pay for the switch to low carbon technologies. As Helm notes, "there is not much in the study of human nature - and indeed human biology - to give support to the optimist".

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British Revenue Investigating Alleged Tax-Avoidance Schemes By Barclays Bank
2009-03-17 00:14:42
Her Majesty's Revenue & Customs was Monday night investigating explosive allegations about tax avoidance schemes operated by Barclays Bank, made by a whistleblower in the firm and apparently substantiated by leaked documents.

HMRC's moves came as the government announced steps to try to discourage tax avoidance by Britain's banks, now frequently dependent on state aid. The chancellor launched plans for a code of practice in which banks would be expected to abide by the "spirit of the law".

The whistleblower in Barclays' apparently troubled structured-finance department at Canary Wharf has disclosed to the Liberal Democrats the existence of a scheme condenamed "Project Knight".

In memos seen by the Guardian, executives from SCM, Barclays' structured capital markets division, sought approval for a 2007 plan to sink a total of more than $16 billion into U.S. loans.

Tax benefits were to be generated by an elaborate circuit of Caymans companies, U.S. partnerships and Luxembourg subsidiaries, in a $4 billion deal with North Carolina Branch Banking & Trust Co (BB&T).

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In U.S., Mortgage Fraud Increases By 26 Percent
2009-03-16 18:15:46

Mortgage fraud in the U.S. rose last year even though fewer loans were issued nationwide, and Maryland ranked among the top five states with the most serious problems, according to an industry study released Monday.

Fraud jumped by 26 percent in 2008 from the previous year, the study concluded, based on data collected from roughly 70 percent of the nation's lenders as well as mortgage insurance companies and mortgage investors. The study was prepared by the Mortgage Asset Research Institute, an arm of LexisNexis, for the Mortgage Bankers Association.

Rhode Island topped the list of most troubled states, trailed by Florida, which held the number one slot in 2007. Reports of fraud in Rhode Island were three times what was expected given the number of loans made there.

Next on the list were Illinois, Georgia and Maryland, which landed among the top 10 for the first time in the study's 11-year history and stood out as having the highest percentage of fraud on tax returns and financial statements. It shot up from the 15th slot in 2007.

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U.S. Rep. Murtha's Earmarks Questioned; Federal Funds Went To Supporters
2009-03-16 18:15:25

A Pennsylvania defense research center regularly consulted with two "handlers" close to U.S. Rep. John Murtha (D-Pennsylvania) as it collected nearly $250 million in federal funding through the lawmaker, according to documents obtained by the Washington Post and sources familiar with the funding requests. The center then channeled a significant portion of the funding to companies that were among Murtha's campaign supporters.

The two advisers included a lobbyist for PMA, a firm with close ties to Murtha that is the subject of a federal probe into whether it made illegal contributions by reimbursing donors to the Pennsylvania lawmaker and other members of Congress. The Electro-Optics Center also relied on advice from a longtime Murtha friend who now works on the congressman's appropriations staff.

Federal agents are also exploring how the center obtained its funds after receiving dozens of internal documents last year. It is unclear whether the records have become a central focus of the Justice Department's ongoing probe, but they open a window into a largely hidden process in which powerful lawmakers can direct funds to pet projects.

The Electro-Optics Center, created by Murtha a decade ago under the auspices of Pennsylvania State University, was envisioned as a way to spur a new high-tech industry and create jobs in economically depressed western Pennsylvania. Last year, the U.S. attorney in Pittsburgh received a packet of budget materials, memos and e-mails from inside the center documenting how closely its managers conferred with PMA about the best ways to get its projects funded in the federal budget, according to two sources familiar with the information.

The center was supposed to help contractors in researching laser and optics technology to improve products for the military, and center officials said contractors were supposed to benefit from some of the federal funds.

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Obama Orders Treasury Dept. To Try To Block A.I.G. Bonuses
2009-03-16 13:55:41
President Obama vowed to try to stop the faltering insurance giant American International Group from paying out hundreds of millions of dollars in bonuses to executives, as the administration scrambled to avert a populist backlash against banks and Wall Street that could complicate Obama’s economic recovery agenda.

“In the last six months, A.I.G. has received substantial sums from the U.S. Treasury,” said Obama, adding that he had asked Treasury Secretary Timothy F. Geithner “to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole.”

In strongly-worded remarks delivered in the White House East Room before small business owners, Obama called A.I.G. “a corporation that finds itself in financial distress due to recklessness and greed.”

“Under these circumstances, it’s hard to understand how derivative traders at A.I.G. warranted any bonuses at all, much less $165 million in extra pay,” said Obama. “How do they justify this outrage to the taxpayers who are keeping the company afloat?”

White House officials said that the administration is not looking to take A.I.G. to court to stop the company from paying out the bonuses. They said the Treasury Department would be trying to figure out what they can do to block A.I.G. from making the payments within the legal confines of A.I.G.’s contractual obligations to the executives.

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New York Attorney General Seeks A.I.G. Bonus Information
2009-03-16 13:55:16

New York State Attorney General Andrew M. Cuomo on Monday sent a letter to the American International Group,  demanding more information about the employees who are set to receive about $165 million in bonus payments.

Cuomo’s letter, demanding the information by 4 p.m. on Monday under threat of subpoena, is the latest instance of outrage by a public official regarding the plan. At a speech before small business owners Monday afternoon, President Obama said he is asking the Treasury Department to pursue “every single legal avenue to block” the bonuses.

A.I.G. has said that the payments, to employees at the financial products unit responsible for billions of dollars in losses, are bound by contracts. Government advisers like Lawrence H. Summers of the National Economic Council had also said that their hands are tied.

In his letter, sent to Edward M. Liddy, A.I.G.’s government-appointed chief executive, Cuomo said that he has investigated the insurance company’s compensation plan since last fall. The attorney general is seeking the list of employees who will receive these bonuses, as well as their job information and performances. Cuomo said that the company had failed to heed a previous request for this list.

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El Salvador's Leftist F.M.L.N. Party Wins Presidential Election
2009-03-16 13:54:41
El Salvador's F.M.L.N., the leftist party of the country’s former guerrillas, won the presidential election Sunday after a bruising election campaign, marking a turning point after two decades of rule by the right.

Mauricio Funes, a former television reporter, declared himself the winner before F.M.L.N. campaign workers chanting “yes, we could” at the Sheraton Hotel as supporters on the street waved flags and honked car horns in celebration.

“This is the happiest night of my life,” said Funes. “And I hope it is also the night of greatest hope for El Salvador .”

Two hours later, Funes’ conservative opponent, Rodrigo Avila, conceded defeat. “These are the ups and downs of democracy,” said Avila , the former national police chief. His party, the Nationalist Republican Alliance, known as Arena, had won the presidency four times since 1989.

The victory marked the culmination of nearly two decades of political efforts by the F.M.L.N., the Farabundo Martí National Liberation Front, to defeat Arena, which was on the opposite side during this nation’s 12-year civil war which ended in 1992.

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Scientists: U.K. Government Carbon Targets 'Too Weak' To Prevent Dangerous Climate Change
2009-03-17 00:15:36

Proposed government carbon targets are too weak to prevent dangerous levels of global warming, according to a new analysis by leading scientists. Ministers are poised to introduce strict limits on U.K. carbon pollution when they announce Britain's first carbon budget next month; but experts from the Tyndall Centre for Climate Change Research warned Tuesday that official advice used to set the budget is "naively optimistic" and will not stop dangerous climate change.

It comes after scientists at a global warming conference in Copenhagen, Denmark, last week warned that emissions are rising faster than expected,and that climate change could strike harder and faster than predicted.

The Tyndall Centre report analyses the conclusions of the Committee on Climate Change (CCC), which said in December that ministers should aim to cut U.K. emissions 34% by 2020, as part of worldwide efforts to limit temperature rise to 2 degrees Celsius.

The Tyndall scientists say the committee's report is "inevitably and significantly compromised" because it focuses on limiting temperature rise to 2 degrees Celsius above pre-industrial levels, which the European Union defines as dangerous. The committee was forced to use "highly optimistic and sometimes unclear assumptions" to hit the 2C target, they say.

Chief among these, they say, was that global emissions of greenhouse gases would peak in 2016, despite little evidence that such a U-turn in soaring emissions within seven years is "in any way viable". A peak of emissions in 2020, which the Tyndall Centre says is more realistic, would leave governments facing an impossible challenge to hit the 2 degrees Celsius target, it adds.

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Britain's Prime Minister: 'Laissez-Faire Government Is Over'
2009-03-17 00:15:05
Britain's Prime Minister Gordon Brown attempts to launch a political fightback Tuesday by declaring that he takes "full responsibility" for his role in the banking failures that led to the global recession, and claims that the downturn marks the end of the era of laissez-faire government.

In an interview with the Guardian newspaper, the prime minister concedes that in retrospect he wishes he had mounted a popular campaign 10 years ago to demand more responsible regulation of the world's financial markets. He attempts to draw a line under calls for him to make an apology by admitting that the national system of regulation he helped establish in 1997 could not keep pace with the massive global financial flows.

In some of his most extensive comments on his role in the recession, Brown said: "I take full responsibility for all my actions, but I think we're dealing with a bigger problem that is global in nature, as well as national. Perhaps 10 years ago after the Asian crisis when other countries thought these problems would go away, we should have been tougher ... keeping and forcing these issues on to the agenda like we did on debt relief and other issues of international policy."

Brown spoke at the start of a major Guardian series on the Labor party's future. David Cameron, the Conservative leader, has exploited the prime minister's reluctance to make an apology, a tactic which has helped give him a double-digit lead in the polls.

Brown's remarks will, he hopes, give the party a launchpad to retaliate, insisting that it "is essential for the sake of the country" that Labor wins a fourth term at the next general election, likely to be held next year.

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White House Budget Director Rejects Governor's Proposed Use Of Stimulus Funds
2009-03-16 18:15:58
White House Budget Director Peter Orszag on Monday rejected South Carolina Gov. Mark Sanford's request to use up to $700 million of his state's economic stimulus funds to pay down state government debt.

Sanford thanked the White House and said he would send the Obama administration another, "more narrowly tailored" request Tuesday to use stimulus money to reduce his state's debt.

Sanford also accused President Barack Obama of playing a "game of good cop, bad cop" by allowing the Democratic National Committee to begin Monday airing a TV ad criticizing the governor for opposing the $787 billion stimulus, which the president signed last month.

Orszag, responding to a letter Sanford sent to Obama last week, said the $787 billion stimulus bill Obama signed into law last month doesn't allow governors to use money intended for other purposes to instead make debt payments.

"During this severe economic downturn, Congress and the president wanted to provide states and localities with emergency funding in order to prevent the layoffs of teachers, police officers and other vital public servants," Orszag wrote to Sanford.

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Dow Closes Down 7 Points
2009-03-16 18:15:36

Stock markets broke their four-day rally Monday, dipping into negative territory after a volatile day of trading.

Both the blue-chip Dow Jones industrial average and the broader Standard & Poor's 500-stock index started the day strong, soaring more than 2 percent amid renewed confidence in the financial sector; but those gains evaporated about half-hour before closing as investors hedged their bets, said analysts, sending the two major indexes to close flat.

The Dow closed down .1 percent, or 7 points, at 7,216.97. The S&P fell .3 percent, or 2.7 points, to 753.89. The tech-heavy Nasdaq had swung wildly for most of the day, dragged down by Microsoft and Intel. It dropped 1.9 percent, or 27.48 points, to 1,404.02.

"This is sort of the thing that has been standing in our way for the last several months," said Carl Beck, partner with Harris Financial Group in Richmond. "Every time you get a good rally going, you start running out of steam."

The declines come after last week's rally boosted the markets out of 12-year lows, providing the best performance since November. Investors had hoped the momentum would continue, especially after Federal Reserve Chairman Ben S. Bernanke said expressed confidence during a "60 Minutes" interview over the weekend that the country's largest banks would not fail.

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Florida's Emergency Management Chief To Head FEMA
2009-03-16 18:15:06

As Florida's chief of emergency management, he has literally been in the eye of the hurricane, over and over again. Now, as President Barack Obama's pick to run the Federal Emergency Management Agency, he carries decades of in-the-trenches experience to a high-profile job with no margin for error.

"The best decision I ever made in my professional life was to hire him," said Joe Myers, who preceded Fugate (FEW-gate) as Florida's emergency management director. "I wasn't looking for someone who sugarcoated everything. In a disaster, you don't want that."

Myers, who now runs an emergency-management consulting firm, hired Fugate in 1997 as a bureau chief helping Florida prepare for hurricanes, tornadoes, droughts and wildfires. The two men hit it off so well that the job interview lasted five hours.

"I asked him, 'What is your weakness?' " Myers recalled. "He said, 'I don't suffer fools.' I said, 'That's the man I need'."

Fugate is known for plain talk and a direct manner. Friends have urged him not to change his ways when he gets to Washington.

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Red Cross Described 'Torture' At CIA Jails
2009-03-16 13:55:29

The International Committee of the Red Cross (ICRC) concluded in a secret report that the Bush administration's treatment of al-Qaeda captives "constituted torture," a finding that strongly implied that CIA interrogation methods violated international law, according to newly published excerpts from the long-concealed 2007 document.

The report, an account alleging physical and psychological brutality inside CIA "black site" prisons, also states that some U.S. practices amounted to "cruel, inhuman or degrading treatment." Such maltreatment of detainees is expressly prohibited by the Geneva Conventions.

The findings were based on an investigation by ICRC officials, who were granted exclusive access to the CIA's "high-value" detainees after they were transferred in 2006 to the U.S. detention camp at Guantanamo Bay, Cuba. The 14 detainees, who had been kept in isolation in CIA prisons overseas, gave remarkably uniform accounts of abuse that included beatings, sleep deprivation, extreme temperatures and, in some cases, waterboarding, or simulating drowning.

At least five copies of the report were shared with the CIA and top White House officials in 2007 but barred from public release by ICRC guidelines intended to preserve the humanitarian group's strict policy of neutrality in conflicts. A copy of the report was obtained by Mark Danner, a journalism professor and author who published extensive excerpts in the April 9 edition of the New York Review of Books, released Sunday. He did not say how he obtained the report.

"The ill-treatment to which they were subjected while held in the CIA program, either singly or in combination, constituted torture," Danner quoted the report as saying.

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Pakistan's Protesters Rejoice At Chief Justice's Reinstatement
2009-03-16 13:55:04
It was a day of rejoicing, of drum playing, and of smiling at strangers. Pakistan's chief justice had just been reinstated after a two-year struggle, and for those assembled in the country’s capital to celebrate, anything seemed possible.

“We’re watching history,” said Javed Ali Khan, a 45-year-old who had traveled for days with his wife and six children to participate in a national march of lawyers and opposition political parties. It was the opposition’s perseverance in the face of government attempts to quash the march that led to the reinstatement.

Hassan Akhtar, a lawyer who grew up in England, gushed: “It’s really wonderful. It’s a once in a lifetime experience. I couldn’t even dream of this.”

In the crowd, whose members included a radio announcer who was researching homosexuality and an illiterate mechanic who wore a flower pot on his head to stay cool and admitted to stealing monkeys to get by, one word was on everybody’s lips.

“Justice,” said Khan’s wife, Rubina Javed, smiling broadly. “We came for justice.”

The word was apt for the victory at hand: the restoration of the chief justice, Iftikhar Muhammad Chaudhry, to his court; but others in a jubilant crowd celebrating on Chaudhry’s lawn on Monday were working from a broader interpretation.

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Oil Rises Above $47 A Barrel On Equities Rally
2009-03-16 13:54:28
Oil rose to more than $47 on Monday, reversing earlier losses, on the view that OPEC cuts had started to take effect and a rally in equity markets.

A production outage in Nigeria and security concerns about Iran also helped prices to reverse a 5 percent fall that was triggered by an OPEC decision on Sunday to leave existing output targets unchanged.

U.S. light crude was trading 84 cents up at $47.09 a barrel by 1617 GMT, after falling to as low as $43.62 a barrel. London Brent crude was trading down by 90 cents at $44.03.

Full compliance with OPEC's cuts would take more than 800,000 barrels per day from the market. OPEC's compliance has been estimated at about 80 percent.

"In view of the still fragile global economy, downside risks to the oil price will not be eliminated until the very end of 2009," Adam Sieminski, Deutsche Bank's chief energy economist, said in a research note.

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