Free Internet Press Newsletter - Wednesday March 18 2009 - (813)

Wednesday March 18 2009 edition
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Wall Street Builds On Optimistic Housing Report - Dow Up 178 Points 2009-03-17 17:11:57 Unemployment may still be rising and the economy may be nowhere near a bottom, but Wall Street’s manic mood bubbled higher on Wednesday. Cheered by reports showing a surprising increase in home-building last month, stock markets climbed in the last half-hour of trading, with major market indexes rising to their highest levels since late February. Construction companies like KB Home, the Centex Corporation and Toll Brothers paced gains in the broader financial markets after the government reported that new-home construction in February rose 22 percent from January to a seasonally adjusted annual pace of 583,000. It was the biggest percentage gain since January 1990 and the first increase since April. Economists had expected housing starts to decline slightly as home builders pulled back in the face of dwindling demand and competition from a flood of foreclosed properties. At the close, the Dow Jones industrial average was up 178 points or 2.4 percent while the broader Standard & Poor’s 500-stock index was 3.2 percent or 24.22 points higher. The technology-heavy Nasdaq gained 58.09 points or 4.1 percent. Bank stocks, including Citigroup and Wells Fargo, rose moderately while Bank of America was off slightly. Read The Full Story From Arctic Soil, Fossils Of A Giant That Ruled Jurassic Seas 2009-03-17 17:11:21 There were monstrous reptiles in the deep, back in the time of dinosaurs. They swam with mighty flippers, two fore and two hind, all four accelerating on attack. In their elongated heads were bone-crushing jaws more powerful than those of a Tyrannosaurus rex. They were the pliosaurs, heavyweight predators at the top of the food chain in ancient seas. Much of this was already known. Now, after an analysis of fossils uncovered on a Norwegian island 800 miles from the North Pole, scientists have confirmed that they have found two partial skeletons of a gigantic new species, possibly a new family, of pliosaurs. This extinct marine reptile was at least 50 feet long and weighed 45 tons, the largest known of its kind. Its massive skull was 10 feet long, and the flippers, more like outsize paddles, were also 10 feet. The creature - not yet given a scientific name but simply called the Monster or Predator X - hunted the seas 150 million years ago, in the Jurassic Period. “Everything we are finding is new to science,” said Jorn H. Hurum, a paleontologist at Norway's University of Oslo who directed the excavations on the Arctic island of Spitsbergen in the Svalbard archipelago. He described new details of the find in a telephone interview last week. Read The Full Story New York Attorney General Details Million-Dollar Bonuses At A.I.G. 2009-03-17 15:11:50 Seventy-three employees were paid more than $1 million in the newly minted bonuses at the insurance giant, American International Group, according to the New York attorney general, Andrew M. Cuomo. The attorney general provided some new details on Tuesday about some of the $160 million in bonuses that A.I.G. paid out last week in a letter sent to U.S. Representative Barney Frank, the chairman of the House Committee on Financial Services. “A.I.G. made more than 73 millionaires in the unit which lost so much money that it brought the firm to its knees forcing a taxpayer bailout,” Cuomo wrote in the letter. “Something is deeply wrong with this outcome.” Cuomo did not name the bonus recipients, but the numbers are eye-popping, given A.I.G.’s fragile state. The highest bonus was $6.4 million, and six other employees received more than $4 million, according to Cuomo. Another 15 people received bonuses of more than $2 million, and another 51 people received bonuses between $1 million and $2 million, said Cuomo. Eleven of those who received “retention” bonuses of $1 million or more are no longer working at A.I.G., including one who received $4.6 million, he said. A.I.G., which is now 80 percent owned by the government, paid out the so-called retention payments, saying the bonuses were needed to persuade workers to stick around in its financial products unit to stick around. The payouts have caused a public furor, and the White House said on Monday that the Treasury would write new requirements about the bonus money in the next $30 billion that it provides to the insurance giant. Already, the government has given A.I.G. $170 billion. Read The Full Story Polar Bears Fighting For Survival In The Arctic 2009-03-17 15:11:27 The more ice that melts in the Arctic, the shorter is the winter seal-hunting season. That is bad news for polar bears. This week, a number of Arctic nations are gathering to find ways to save this majestic creature. The polar bear looks sad. Its white fur is dripping wet, lying flat against its thin body. The ice is melting under its paws. The creature looks desperate as it wanders around on the last remaining ice floes. Such photos and TV images have turned this dangerous predator into a touching symbol of climate change. "The polar bear has become an icon," says Geoffrey York, who studies the animals in Alaska for the World Wide Fund for Nature (WWF). The giant panda has been the symbol of the WWF for many years. "If we were looking for a logo today," says York, "we would certainly choose the polar bear." This week York will travel from Anchorage, Alaska, to Tromso, Norway to attend the polar bear meeting sponsored by the Norwegian Polar Institute. In Norway, York plans to fight to save the animal that shares the distinction of being the world's largest land predator with the Kodiak bear. "But we will only be successful if we finally curb emissions of greenhouse gases, which lead to rising temperatures in the Arctic," says York. Long-Term Survival The conference begins on Tuesday, and will include representatives from Norway, Denmark/Greenland, the United States, Canada and Russia. These countries reached an agreement to protect the polar bear in 1973, when excessive hunting threatened to wipe out the species. Today, the threat of global warming has brought together politicians and scientists in Norway once again to discuss ways to ensure the long-term survival of the polar bear. Read The Full Story U.S. Economic Data Offers A Balm As Fed Reserve Meets 2009-03-17 15:10:53 An unexpected rise in housing starts and a more moderate increase in wholesale prices offered some brighter economic news on Tuesday as the Federal Reserve's Open Market Committee met to assess its policy course. Economists expect the Fed, in a statement to be released Wednesday afternoon after the meeting, to restate its expectation for continuing low interest rates and to largely recommit itself to the programs it has set up to try to loosen credit markets and restore confidence in lending. The Fed has already lowered interest rates to nearly zero and expanded its balance sheet as it tries to stem the pain of what the Fed chairman, Ben S. Berenanke, has called the worst global financial crisis since the Depression. It has flirted with the idea of buying up long-term Treasury debt to help lower mortgage rates, but economists said the Fed was unlikely to take that step at this point. “This is like the last major arrow in their quiver,” said Steven Ricchiuto, chief economist at Mizuho Securities. “It’s a very simple, easy thing to do. And you might want to hold off until you really need it.” Read The Full Story Cash-Strapped U.N. To Halt West Africa Aid Flights 2009-03-17 15:10:12 The United Nations will shut down its humanitarian air services in much of West Africa because of a shortage of funds, a spokeswoman said on Tuesday. Emilia Casella of the World Food Program (WFP) said the chartered helicopters and aircraft used to ferry aid workers and supplies to remote parts of Guinea, Sierra Leone, Liberia and the Ivory Coast would stop on Friday, March 20. "In areas that are not reachable by land ... aid workers will not be able to reach vulnerable people with medical care, food, water and sanitation, and other crucial services," she told a news briefing in Geneva. "The U.N. will also not be in a position to carry out timely medical and security evacuations of humanitarian personnel, if and when needed," said the spokeswoman. Read The Full Story Iran's Khatami Drops Presidential Bid, Endorse Former Prime Minister 2009-03-17 15:09:43 President Mahmoud Ahmadinejad's main challenger in Iran's June presidential election pulled out of the race Tuesday and threw his support to a less prominent candidate. Mohammad Khatami, a Shiite Muslim cleric and former president who is popular among youths and women, issued a statement in which he pledged his support for former prime minister Mir Hossein Mousavi, who announced his candidacy a week ago. "I believe that Mr. Mousavi has the necessary competence to change the current situation," Khatami said, according the semi-official Fars News agency. "Despite differences in our opinions and actions, the important thing is that Mousavi seriously defends and will defend the fundamental rights and freedoms of people and the country's international reputation." Both Khatami and Mousavi, a former architect, have repeatedly criticized Ahmadinejad's foreign, domestic and economic policies. Joining their criticism has been the other main candidate opposing the president, Mehdi Karrubi, a former head of parliament. "We need an urgent, constructive change in the present method of management of the country," Khatami said in his statement. Read The Full Story 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. Read The Full Story 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. Read The Full Story	Mistrial By iPhone: Juries Web Research Upends Trials 2009-03-17 17:11:42 Last week, a juror in a big federal drug trial in Florida admitted to the judge that he had been doing research on the case on the Internet, directly violating the judge’s instructions and centuries of legal rules; but when the judge questioned the rest of the jury, he got an even bigger shock. Eight other jurors had been doing the same thing. The federal judge, William J. Zloch, had no choice but to declare a mistrial, wasting eight weeks of work by federal prosecutors and defense lawyers. “We were stunned,” said the defense lawyer, Peter Raben, who was told by the jury that he was on the verge of winning the case. “It’s the first time modern technology struck us in that fashion, and it hit us right over the head.” It might be called a Google mistrial. The use of BlackBerrys and iPhones by jurors gathering and sending out information about cases is wreaking havoc on trials around the country, upending deliberations and infuriating judges. Last week, a building products company asked an Arkansas court to overturn a $12.6 million judgment against it after a juror used Twitter to send updates during the civil trial. Read The Full Story U.S. Moves To Replace Contractors In Iraq 2009-03-17 15:12:01 Blackwater losing security role; other jobs being converted to public sector. The decision not to renew Blackwater Worldwide's security contract in Iraq when it expires in early May has left the State Department scrambling to fill a protection gap for U.S. diplomats and civilian officials there. Two other U.S. security contractors with a far smaller presence in Iraq - DynCorp International and Triple Canopy - have been asked to replace the ousted company, according to State Department and company officials. To meet time, training and security-clearance pressures, said officials, one or both of the firms are likely to undertake the task by rehiring some personnel now working for Blackwater. The Iraqi government refused to issue Blackwater a license to perform security services after a 2007 incident in which company guards on a diplomatic protection mission shot and killed 17 civilians in Baghdad. U.S. prosecutors have indicted five of the guards on charges of manslaughter. Blackwater (which recently changed its name to Xe) still has State Department contracts for air transport in Iraq and security for U.S. diplomats in Afghanistan. Meanwhile, fallout from the shootings - including a new U.S.-Iraq status-of-forces agreement that places contractors under Iraqi legal jurisdiction for the first time - has led both the Pentagon and the State Department to create new categories of "full-time, temporary" federal jobs to handle some tasks currently done by contractors. Read The Full Story Medvedev: Russia Plans 'Large-Scale Rearming' 2009-03-17 15:11:41 President Dmitri A. Medvedev said on Tuesday that Russia would begin a “large-scale rearming” in 2011 in response to what he described as threats to the country’s security. In a speech before generals in Moscow, Medvedev cited encroachment by NATO as a primary reason for bolstering the armed and nuclear forces. Medvedev did not offer specifics on how much the budget would grow for the military, whose capabilities deteriorated significantly after the fall of Soviet Union. Russia has increased military spending sharply in recent years, but with the financial crisis and the drop in the price of oil, the country’s finances are under pressure, suggesting that it would be hard to lift these expenditures further. Even so, Medvedev’s timing was notable. He is expected to hold his first meeting with President Obama in early April in London on the sidelines of the summit of the Group of 20 industrialized and developing countries. Read The Full Story Aided By Downturn, China's Businesses Go Shopping 2009-03-17 15:11:13 Chinese companies have been on a shopping spree in the past month, snapping up tens of billions of dollars' worth of key assets in Iran, Brazil, Russia, Venezuela, Australia and France in a global fire sale set off by the financial crisis. The deals have allowed China to lock up supplies of oil, minerals, metals and other strategic natural resources it needs to continue to fuel its growth. The sheer scope of the agreements marks a shift in global finance, roiling energy markets and feeding worries about the future availability and prices of those commodities in other countries that compete for them, including the United States. Just a few months ago, many countries were greeting such overtures from China with suspicion. Today, as corporations and banks in other parts of the world find themselves reluctant or unable to give out money to distressed companies, cash-rich China has become a major force driving new lending and investment. On Feb. 12, China's state-owned metals giant Chinalco signed a $19.5 billion deal with Australia's Rio Tinto that will eventually double its stake in the world's second-largest mining company. In three other cases, China has used loans as a way of securing energy supplies. On Feb. 17 and 18, China National Petroleum signed separate agreements with Russia and Venezuela under which China would provide $25 billion and $4 billion in loans, respectively, in exchange for long-term commitments to supply oil. And on Feb. 19, the China Development Bank struck a similar deal with Petrobras, the Brazilian oil company, agreeing to a loan of $10 billion in exchange for oil. Read The Full Story I.R.S. Plans A Deduction For Madoff Victims 2009-03-17 15:10:31 The U.S. Internal Revenue Service will allow victims of Bernart L. Madoff's investment fraud to claim a tax deduction related to the bulk of their losses, the I.R.S. commissioner told the Senate Finance Committee on Tuesday. The commissioner, Douglas H. Shulman, told lawmakers that the agency was offering guidelines for taxpayers who are victims of losses from Ponzi schemes like Madoff’s. The plan represents the first time that the I.R.S. has come forward with a policy regarding how it will treat Madoff’s victims. The subject has been a point of debate and anxiety for the victims and their accountants, given the uncertainty and lack of clarity in the tax code over how the matter should be dealt with. The plan, which applies to victims of all Ponzi schemes, will probably provide major relief to the victims of Madoff, who pleaded guilty last week to orchestrating what prosecutors say was the largest Ponzi scheme ever - one that could reach $65 billion and cover 13,000 investors. Read The Full Story U.S. Downed Iranian Drone Over Iraq 2009-03-17 15:09:55 American warplanes shot down an unmanned Iranian aircraft last month as it flew over Iraqi territory, U.S. and Iraqi officials said Monday. The U.S. military said it had tracked the drone for about an hour and 10 minutes before shooting it down Feb. 25 about 60 miles northeast of the capital, Baghdad. "This was not an accident on the part of the Iranians," said the military. U.S. military officials in Washington, D.C., speaking on the condition of anonymity because of the sensitivity of the subject, said they could not recall the United States ever before publicly acknowledging the downing of an unmanned Iranian aircraft. The incident comes at a delicate time in Iranian-U.S. relations, which have grown strained at times over allegations that Iran has supported groups fighting American troops here. In a departure from Bush administration policy, President Obama has said he would be open to engaging Iran, which borders both Iraq and Afghanistan. Read The Full Story 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. Read The Full Story 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". Read The Full Story 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). Read The Full Story
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