Tuesday, September 30, 2008
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Astounded by the U.S. government's failure to resolve the financial crisis threatening the foundations of the global free market, fingers of blame are pointing at America from around the planet.
Latin American leaders say the U.S. must quickly fix the financial crisis it created before the rest of the world's hard-won economic gains are lost.
"The managers of big business took huge risks out of greed," said President Oscar Arias of Costa Rica, whose economy is highly dependent on U.S. trade. "What happens in the United States will affect the entire world and, above all, small countries like ours."
In Europe, where some blame a phenomenon of "casino capitalism" that has become deeply engrained from New York to London to Moscow, there is more of a sense of shared responsibility. But Europeans also blame the U.S. government for letting things get out of hand.
Amid harsh criticism is a growing consensus that stricter financial regulation is needed to prevent unfettered capitalism from destroying economies around the globe.
And leaders of developing nations that kept spending tight and opened their economies in response to American demands are warning of other consequences — a loss of U.S. influence globally and the likelihood that the world's poor will suffer the most from greed by the biggest players in global finance.
"They spent the last three decades saying we needed to do our chores. They didn't," a grim-faced Brazilian President Luiz Inacio Lula da Silva said Tuesday.
Even staunch U.S. allies like Colombian President Alvaro Uribe blasted the world's most powerful country for egging on uncontrolled financial speculation that he compared to a wild horse with no reins.
"The whole world has financed the United States, and I believe that they have a reciprocal debt with the planet," he said.
It's harder for European leaders to point the finger directly at the United States since many of their financiers participated in the recklessness. London was home to the division of failed insurer AIG that racked up huge losses on credit-default swaps, and many reputable European banks disregarded risk to load up on higher yielding subprime assets.
But the House's rejection Monday of the U.S. bank bailout proposed by Treasury Secretary Henry Paulson provoked a sharper tone and warnings that America must act. Though global markets on Tuesday recovered some of the ground they lost in a worldwide slide the day before, politicians from Europe to South America insisted the risk of a further plunge remains high.
German Chancellor Angela Merkel called on U.S. lawmakers to pass a package this week, saying it was the "precondition for creating new confidence on the markets — and that is of incredibly great significance."
In an unusually blunt statement from the 27-country European Union, EU Commission spokesman Johannes Laitenberger said: "The United States must take its responsibility in this situation, must show statesmanship for the sake of their own country, and for the sake of the world."
The crisis also has strengthened voices in France and Germany calling for EU regulations to eliminate highly deregulated financial markets, despite objections from Britain, which along with the U.S. is considered by some to practice a freer form of "Anglo-Saxon" capitalism.
"This crisis underlines the excesses and uncertainties of a casino capitalism that has only one logic — lining your pockets," said German lawmaker Martin Schulz, chairman of the Socialists in the EU assembly. "It also shows the bankruptcy of 'law of the jungle' capitalism that no longer invests in companies and job creation, but instead makes money out of money in a totally uncontrolled way."
The U.S. government's failure to apply rules that might have prevented the crisis is seen as a betrayal in many developing countries that faced intense U.S. pressures to liberalize their economies. In some developing nations, state enterprises were privatized, currencies were allowed to float against the U.S. dollar and painful measures were taken to bring down debts.
These advances are at risk now that credit is drying up. Countries with commodities-based economies are particularly vulnerable since more industrialized nations could reduce their demand for everything from soy to iron ore.
"It doesn't seem fair to me that those of us who endured so much hunger in the 20th century, who began to improve in the 21st century, should have to suffer due to the international financial system," Silva said. "There are going to be a lot of people going hungry in the world."
Just before meeting with Silva on Tuesday, Venezuelan leader Hugo Chavez said he believes a new economic order is in store for the planet.
"What's to blame? Imperialism, the United States, the irresponsibility of the United States government," said the self-avowed socialist and frequent U.S. critic. "From this crisis, a new world has to emerge, and it's a multi-polar world."
China's influence in the outcome of all this could be profound because it is a huge investor in U.S. debt. It is already calling for strict new international regulatory systems to apply to globalized financial markets.
Liu Mingkang, chairman of the Chinese Banking Regulatory Commission, said Saturday before a weeklong bank holiday in China that debt in the United States and elsewhere has risen to dangerous and indefensible levels.
The rest of the world is taking notice. Many newspapers made references Tuesday to China's increasing importance in global finance. In Algeria, a large cartoon on the front page of the newspaper El-Watan showed Uncle Sam at prayer: "Save us!" he says, kneeling before a portrait of China's Mao Zedong.
In London, Jane Ayerson, a 20-year-old Irish exchange student, said Europeans share the blame.
"The problem started with America, but banks here have been greedy, too," she said.
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Monday, September 29, 2008
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Sunday, September 28, 2008
Friday, September 26, 2008
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As the proposed $700 billion bailout plan met resistance Wednesday on Capitol Hill, billionaire investor Warren Buffett sounded the alarm on the peril of a failed rescue attempt of the financial markets.
“We are looking over a precipice in terms of the economic condition of the country for the next few years,” Buffett said during an interview on the Fox Business Channel. “If Congress doesn't help us on this, heaven help us.”
Congress will likely scale back the massive bailout plan.
Lawmakers have expressed concerns about oversight, as well as over the rushed nature of the bill. Party leaders and the president have shown support for the bailout since it was crafted over the weekend, but an increasing number of both Republican and Democratic members are expressing doubts over the plan.
President Bush is scheduled to speak to the nation on the economy tonight, and John McCain announced that he is suspending his campaign and hoping to postpone Friday night’s debate, to focus on the economy.
But no matter what Bush or the presidential candidates do, Buffett said the fate of the financial system is in the hands of Congress.
“The only thing that counts in the economic world today is the U.S. Congress,” Buffett said. “They hold the fate of the U.S. economy for the next few years in their hands. And I think they'll do the right thing. I have great confidence — I mean, when they recognize what the problem is, they will do the right thing. They won't do the perfect thing. Nobody can do the perfect thing.
“Later on we'll let the historians decide who to blame. I could go around saying I told you so on this or that. But it doesn't make a difference.”
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Thursday, September 25, 2008
Washington Mutual Inc was closed by the U.S. government in by far the largest failure of a U.S. bank, and its banking assets were sold to JPMorgan Chase & Co for $1.9 billion.
Thursday's seizure and sale is the latest historic step in U.S. government attempts to clean up a banking industry littered with toxic mortgage debt. Negotiations over a $700 billion bailout of the entire financial system stalled in Washington on Thursday.
Washington Mutual, the largest U.S. savings and loan, has been one of the lenders hardest hit by the nation's housing bust and credit crisis, and had already suffered from soaring mortgage losses.
Washington Mutual was shut by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver. This followed $16.7 billion of deposit outflows at the Seattle-based thrift since Sept 15, the OTS said.
"With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business," the OTS said.
Customers should expect business as usual on Friday, and all depositors are fully protected, the FDIC said.
FDIC Chairman Sheila Bair said the bailout happened on Thursday night because of media leaks, and to calm customers. Usually, the FDIC takes control of failed institutions on Friday nights, giving it the weekend to go through the books and enable them to reopen smoothly the following Monday.
Washington Mutual has about $307 billion of assets and $188 billion of deposits, regulators said. The largest previous U.S. banking failure was Continental Illinois National Bank & Trust, which had $40 billion of assets when it collapsed in 1984.
JPMorgan said the transaction means it will now have 5,410 branches in 23 U.S. states from coast to coast, as well as the largest U.S. credit card business.
It vaults JPMorgan past Bank of America Corp to become the nation's second-largest bank, with $2.04 trillion of assets, just behind Citigroup Inc. Bank of America will go to No. 1 once it completes its planned purchase of Merrill Lynch & Co.
The bailout also fulfills JPMorgan Chief Executive Jamie Dimon's long-held goal of becoming a retail bank force in the western United States. It comes four months after JPMorgan acquired the failing investment bank Bear Stearns Cos at a fire-sale price through a government-financed transaction.
On a conference call, Dimon said the "risk here obviously is the asset values."
He added: "That's what created this opportunity."
JPMorgan expects to incur $1.5 billion of pre-tax costs, but realize an equal amount of annual savings, mostly by the end of 2010. It expects the transaction to add to earnings immediately, and increase earnings 70 cents per share by 2011.
It also plans to sell $8 billion of stock, and take a $31 billion write-down for the loans it bought, representing estimated future credit losses.
The FDIC said the acquisition does not cover claims of Washington Mutual equity, senior debt and subordinated debt holders. It also said the transaction will not affect its roughly $45.2 billion deposit insurance fund.
"Jamie Dimon is clearly feeling that he has an opportunity to grab market share, and get it at fire-sale prices," said Matt McCormick, a portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati. "He's becoming an acquisition machine."
The transaction came as Washington wrangles over the fate of a $700 billion bailout of the financial services industry, which has been battered by mortgage defaults and tight credit conditions, and evaporating investor confidence.
"It removes an uncertainty from the market," said Shane Oliver, head of investment strategy at AMP Capital in Sydney. "The problem is that markets are in a jittery stage. Washington Mutual provides another reminder how tenuous things are."
Washington Mutual's collapse is the latest of a series of takeovers and outright failures that have transformed the American financial landscape and wiped out hundreds of billions of dollars of shareholder wealth.
These include the disappearance of Bear, government takeovers of mortgage companies Fannie Mae and Freddie Mac and the insurer American International Group Inc, the bankruptcy of Lehman Brothers Holdings Inc, and Bank of America's purchase of Merrill.
JPMorgan, based in New York, ended June with $1.78 trillion of assets, $722.9 billion of deposits and 3,157 branches. Washington Mutual then had 2,239 branches and 43,198 employees. It is unclear how many people will lose their jobs.
Shares of Washington Mutual plunged $1.24 to 45 cents in after-hours trading after news of a JPMorgan transaction surfaced. JPMorgan shares rose $1.04 to $44.50 after hours, but before the stock offering was announced.
The transaction ends exactly 119 years of independence for Washington Mutual, whose predecessor was incorporated on September 25, 1889, "to offer its stockholders a safe and profitable vehicle for investing and lending," according to the thrift's website. This helped Seattle residents rebuild after a fire torched the city's downtown.
It also follows more than a week of sale talks in which Washington Mutual attracted interest from several suitors.
These included Banco Santander SA, Citigroup Inc, HSBC Holdings Plc, Toronto-Dominion Bank and Wells Fargo & Co, as well as private equity firms Blackstone Group LP and Carlyle Group, people familiar with the situation said.
Less than three weeks ago, Washington Mutual ousted Chief Executive Kerry Killinger, who drove the thrift's growth as well as its expansion in subprime and other risky mortgages. It replaced him with Alan Fishman, the former chief executive of Brooklyn, New York's Independence Community Bank Corp.
WaMu's board was surprised at the seizure, and had been working on alternatives, people familiar with the matter said.
More than half of Washington Mutual's roughly $227 billion book of real estate loans was in home equity loans, and in adjustable-rate mortgages and subprime mortgages that are now considered risky.
The transaction wipes out a $1.35 billion investment by David Bonderman's private equity firm TPG Inc, the lead investor in a $7 billion capital raising by the thrift in April.
A TPG spokesman said the firm is "dissatisfied with the loss," but that the investment "represented a very small portion of our assets."
The deal is the latest ambitious move by Dimon.
Once a golden child at Citigroup before his mentor Sanford "Sandy" Weill engineered his ouster in 1998, Dimon has carved for himself something of a role as a Wall Street savior.
Dimon joined JPMorgan in 2004 after selling his Bank One Corp to the bank for $56.9 billion, and became chief executive at the end of 2005.
Some historians see parallels between him and the legendary financier John Pierpont Morgan, who ran J.P. Morgan & Co and was credited with intervening to end a banking panic in 1907.
JPMorgan has suffered less than many rivals from the credit crisis, but has been hurt. It said on Thursday it has already taken $3 billion to $3.5 billion of write-downs this quarter on mortgages and leveraged loans.
Washington Mutual has a major presence in California and Florida, two of the states hardest hit by the housing crisis. It also has a big presence in the New York City area. The thrift lost $6.3 billion in the nine months ended June 30.
"It is surprising that it has hung on for as long as it has," said Nancy Bush, an analyst at NAB Research LLC.
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WASHINGTON - How did it happen, America's grave financial crisis? President George W. Bush offered a bunch of explanations but held Washington completely blameless, painting a picture of a government standing innocently on the sidelines as the economy went off the rails.
Somehow, under Bush's scenario, the country wound up at the precipice of "a long and painful recession" at a time when, apparently, the Congress, the White House, the regulators and the Fed were doing exactly what they were supposed to be doing. Now that the economy has tanked, Bush says the federal government is responding with "decisive action."
Shouldn't the people in charge have been doing that before everything became such a mess? "Our entire economy is in danger," Bush said in an address to the nation Wednesday night.
Nowhere in his 13-minute speech did the president suggest that the people in Washington who are supposed to keep an eye on the economy missed a step, failed to raise alarms or hesitated to intervene. The guilty parties in Bush's script were overseas lenders flush with cash, American borrowers reaching for more than they could afford, easy credit terms, a banking system eager to cooperate and too much optimism about rising home values.
Bush spoke vaguely about investment banks that "found themselves saddled with" toxic assets and banks that "found themselves" with questionable balance sheets.
The economic collapse — well, it happened. "The gears of the American financial system began grinding to a halt," Bush said, talking to the country as if he were an economics professor in a freshman course.
But now, there's plenty of action with federal takeovers and bailouts that have reshaped America's financial industry and left the concept of free enterprise in the dust. In Congress, key Republicans and Democrats reported agreement in principle Thursday on the outlines of a bailout package and prepared to show it to Bush for his endorsement of their changes to the plan.
Bush is a sharp-elbows politician, fiercely partisan and combative. The eight years of his presidency are filled with no-holds-barred, blame-game, finger-pointing attacks on Democrats. But not on Wednesday night. Not when Bush desperately needs Democratic votes to pass the $700 billion (that's with a b) plan to buy distressed assets from financial institutions to shore up the banking system and unlock the nation's severe credit crunch.
He could not risk offending Democrats because so many Republicans are balking at his proposal. Bush held his tongue and spoke instead of the spirit of bipartisan cooperation between Democrats and Republicans. He invited presidential rivals John McCain and Barack Obama to an extraordinary White House meeting with congressional leaders on Thursday to find a way forward.
Appearing before the nation Wednesday night, the president had a formidable challenge to persuade anxious Americans to swallow the bitter medicine of digging in their pockets to pay for a rescue package that could exceed the advertised costs and soar beyond $1 trillion. The painful truth is, no one knows how big the price tag will be.
Across the country, Americans are losing their homes or watching neighbors fall into mortgage foreclosure. Small businesses can't borrow money. But the answer from Washington is to bail out the titans on Wall Street, not the people on Main Street. Americans are anxious and angry and the politicians know it.
Bush's argument is that rescuing the huge financial companies will preserve America's overall economy and help consumers and businesses get the credit they need. That is a tough sell.
Democrats demanded — and got — the administration's acceptance of limits on the pay of executives whose companies would be rescued. McCain has said he would fire the head of the Securities and Exchange Commission, which is supposed to oversee Wall Street, but the White House has shot that down.
In his address, Bush said Americans "deserve clear answers" about how the whole crisis happened. But government accountability was not among them.
Borrowers and lenders? They got the presidential spotlight.
"Easy credit, combined with the faulty assumption that home values would continue to rise, led to excesses and bad decisions," Bush said.
"Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on."
But whose job is it to regulate the questionable lending? That would be the government. And Bush is in charge of it.
Bush came into office eight years ago complaining that he had inherited a recession. It was brief and mild.
When he delivered his speech Wednesday night, Bush had 118 days left before the next president is sworn in on Jan. 20.
If Bush leaves, his successor will inherit a problem of historic proportions.
JPMorgan Chase & Co is expected to acquire the deposits of Washington Mutual Inc, the largest U.S. savings and loan, in a government-brokered bailout, the Wall Street Journal reported on Thursday.
The purchase could be a major step in cleaning up a U.S. financial system littered with toxic mortgage debt.
Acquiring the deposits could fulfill JPMorgan Chief Executive Jamie Dimon's long-held goal of becoming a retail banking force in the western United States. It comes six months after JPMorgan, the No. 3 U.S. bank, agreed to acquire the failing investment bank Bear Stearns Cos at a fire-sale price. Branches would also be included in the transaction, the newspaper said.
JPMorgan said it would hold an investor conference call at 9:15 p.m. EDT on Thursday, but it did not say why. Neither company returned calls for comment.
The deposit acquisition is not likely to affect the roughly $45.2 billion insurance fund of the Federal Deposit Insurance Corp (FDIC), which analysts expect will be tapped dozens of times in the next few years to cover bank failures.
It also comes as Washington wrangles over the fate of a $700 billion bailout of the financial services industry, which has been battered by mortgage defaults and tight credit conditions.
"Jamie Dimon is clearly feeling that he has an opportunity to grab market share, and get it at fire-sale prices," said Matt McCormick, a portfolio manager at Bahl & Gaynor Investment Counsel in Cincinnati. "He's becoming an acquisition machine."
JPMorgan ended June with $1.78 trillion of assets, $722.9 billion of deposits and 3,157 branches.
Washington Mutual ended June with $309.7 billion of assets, $181.9 billion of deposits, 2,239 branches and 43,198 employees.
Shares of Washington Mutual plunged 80 cents to 89 cents in after-hours trading after falling 57 cents to $1.69 in regular trading on the New York Stock Exchange.
A transaction would follow more than a week of negotiations over the fate of Seattle-based Washington Mutual, which attracted interest from several large North American and European banks, as well as private equity firms, despite soaring mortgage losses and evaporating investor confidence.
It also appears to be a costly defeat for David Bonderman and his private equity firm TPG Inc, which in April invested $2 billion in Washington Mutual as part of a $7 billion capital-raising by the thrift. TPG was not available for comment.
Washington Mutual's $227 billion book of real estate loans, more than half of which comes from home equity loans, and adjustable-rate and subprime mortgages now considered risky, ensconced the thrift on the critical list of financial institutions needing help, analysts said.
Its fate appeared to grow more precarious after problems with mortgage-related debt led to last week's bankruptcy filing by Lehman Brothers Holdings Inc and the near demise of insurance company American International Group Inc.
The addition of Washington Mutual would make JPMorgan close in size to Citigroup Inc, now the largest U.S. bank by assets. It would trail Bank of America Corp assuming that bank, which now ranks second in assets, completes its planned purchase of Merrill Lynch & Co.
Once something of a golden child at Citigroup Inc before Sanford "Sandy" Weill engineered his ouster in 1998, Dimon has been carving for himself something of a role as a Wall Street savior.
Some historians see parallels with the legendary financier John Pierpont Morgan, who ran J.P. Morgan & Co and was credited with intervening to end a banking panic in 1907.
Bank of America Chief Executive Kenneth Lewis has also been credited with helping steady Wall Street, or at least reduce damage, with his acquisitions this year of Merrill Lynch and Countrywide Financial Corp, the troubled mortgage lender that was once the nation's largest.
It was not immediately clear how much of Washington Mutual's loans might have been eligible for the bailout. The thrift has a significant presence in California and Florida, two of the states hardest hit by the nation's housing crisis. It also has a significant presence in the New York City area.
The thrift had long been expected to sell itself after amassing $6.3 billion of losses in the previous three quarters. It had also projected $19 billion of mortgage losses through 2011, but many analysts said that was too low.
Washington Mutual earlier this month ousted Chief Executive Kerry Killinger, who spearheaded the thrift's growth as well as its expansion in subprime and other risky mortgages, and replaced him with Alan Fishman, the former chief executive of Brooklyn, New York's Independence Community Bank Corp.
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Rise seen in ‘hardship withdrawals’ — despite the tax penalty.
Economic and stock-market tremors are rattling the nest egg.
With stocks falling, credit tightening and unemployment rising, small investors have been raiding their 401(k) accounts or slashing contributions to the popular retirement plans, according to the latest tallies of plan administrators. Others, eager to shield their portfolios from further damage, are reducing their exposure to stock mutual funds to near record lows.
The behavior — described by some market watchers as panicky in the past week — has led to worries that the retirement prospects are dimming further for Americans, most of whom no longer have private-sector pensions to rely on.
Recent 401(k) winnowing is coming in the form of "hardship withdrawals" — removing cash from the fund, with a 10 percent tax penalty, for exigencies such as job loss, the prospect of losing your home to foreclosure or a big medical expense.
T. Rowe Price Group Inc. in Baltimore saw a 14 percent increase in hardship withdrawals in the first eight months of this year, compared with the same time last year. Boston-based Fidelity Investments says the number of workers with hardship withdrawals rose 7 percent from April through June, compared with the same time period a year earlier. Principal Financial Group Inc., in Des Moines, Iowa, says that requests for hardship withdrawals are up 5 percent this year through Sept. 18, over last year, and that the withdrawal amounts are larger.
All three said they could furnish no withdrawal information about last week, when traffic on their Web sites was up sharply. On Friday, visits to the Fidelity.com Web site were 25 percent higher than the previous high. TIAA-CREF, the big college-retirement fund manager, said calls rose 30 percent over normal last week.
Massachusetts' Secretary of State William Galvin says his office received numerous calls from people who were in a "panic state" and liquidated portions of their 401(k) accounts last week when the market tumbled, not realizing they triggered tax penalties. Mr. Galvin, the state's chief securities regulator, is urging Congress to eliminate the 10 percent penalty on such withdrawals — which comes on top of regular tax rates — for investors who may have acted without knowing the consequences.
Mr. Galvin said relief for individual investors is especially appropriate given the $700 billion bailout fund being proposed to aid financial institutions in the crisis. "If we are providing amnesty to financial services," then "we ought to provide a few breaks to these people."
With the decline of the traditional pension, 401(k)s are the main source of retirement coverage for roughly 60 percent of U.S. workers in the private sector. Currently, about $3 trillion in assets are held in 401(k) plans, according to the Investment Company Institute, the industry group for mutual-fund companies. Many investors are now watching that nest egg shrink, with the Standard & Poor's 500-stock index down 23 percent this year. Headed into the financial crisis, typical retirement accounts were heavily weighted toward stock mutual funds.
At the same time, 401(k) participants fear they won't have the time, or the financial wherewithal, to replenish their accounts. In a change of priorities from a year ago, full-time workers now worry more about "just getting by" — meeting day-to-day expenses — than saving for retirement, according to a survey of nearly 1,000 U.S. employees scheduled for release this month by Transamerica Center for Retirement Studies, a nonprofit corporation funded by Aegon NV's Transamerica Life Insurance Co.
But many investors are up against their credit-card limits or, because of the credit crunch, are no longer able to tap their home equity for that needed cash. Instead, they are increasingly turning to their retirement accounts to stay current.
Taxes on 401(k) contributions and investment gains are typically deferred until the funds are withdrawn after age 59½. The Internal Revenue Service permits hardship withdrawals for critical financial situations, but also for other reasons, such as meeting a child's college tuition or buying a primary residence. Plan sponsors vary in the requirements they place on participants to show such a need, with some requiring documentation.
Because of penalties, financial advisers generally don't recommend the withdrawals. But they acknowledge that some people may have no other good options. Unlike with a loan taken from your 401(k) plan, the money doesn't have to be repaid.
Jill Schlesinger, a Providence, R.I., fee-only registered investment adviser who manages 401(k) plans for clients, says, "If it's the best of the worst options, you should do it. I'd certainly prefer you do that than lose your house or get into some kind of terrible loan situation with your credit-card company." David Wyss, chief economist at S&P, says that with access to education and home-equity loans down, he's hearing about more people "tapping their accounts to pay for their kids' education."
Mr. Galvin says he has asked two Massachusetts Democrats, Rep. Barney Frank, chairman of the House Financial Services Committee, and Rep. Richard Neal, a senior member of the Ways and Means Committee, to look at temporarily relaxing the rules. Representatives for both congressmen said they would look at Mr. Galvin's proposal.
Jim Wharton, a 65-year-old retired Sears Holding Corp. manager in Queen Creek, Ariz., says he moved his entire 401(k) balance of $357,000 to certificates of deposits insured by the Federal Deposit Insurance Corp. recently. The money had been invested in a "stable-value" fund, typically a low-risk, low-yield fund that invests in bonds and interest-bearing contracts backed by insurance companies. He says his next move may be "under the mattress."
According to Hewitt Associates Inc., a Lincolnshire, Ill., consulting firm, the total stock allocation among 401(k) participants is at a five-year low, declining to 62 percent in August from 68 percent a year earlier. Hewitt attributes the decline to an unusually high number of investors transferring money into fixed-income funds. It said it believes the trend continued into September.
Plan administrators are also seeing a wave of employees who are lowering their 401(k) contribution rates — the pretax amounts deducted from paycheck — says Tracy Tucker, spokeswoman for the National Association of Government Defined Contribution Administrators Inc., the Lexington, Ky., organization of plan administrators from local governments. She says some administrators are now "offering presentations on how to survive marketing fluctuations."
Ms. Schlesinger, the Providence investment adviser, says many workers who were too heavy on stock mutual funds going into the crisis have taken hits on their balance and now wonder what to do.
If they are young, she advises them to rotate slowly into more conservative investments — to avoid selling their investments at a low price.
But, she says, if they are five years or less from retirement she is advising them to immediately protect their portfolio from further decline by moving at least 30% or 40% into fixed-income accounts. For many investors, that will mean "taking a loss," she says. She says, "I tell them, 'I'd like to think that the rescue plan is at the bottom of the market, but what if it's isn't? We can't gamble with that.'"
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ANCHORAGE, Alaska - A grainy YouTube video surfaced Wednesday showing Sarah Palin being blessed in her hometown church three years ago by a Kenyan pastor who prayed for her protection from "witchcraft" as she prepared to seek higher office.
The video shows Palin, the Republican vice presidential candidate, standing before Bishop Thomas Muthee in the pulpit of the Wasilla Assembly of God church, holding her hands open as he asked Jesus Christ to keep her safe from "every form of witchcraft."
"Come on, talk to God about this woman. We declare, save her from Satan," Muthee said as two attendants placed their hands on Palin's shoulders. "Make her way my God. Bring finances her way even for the campaign in the name of Jesus. ... Use her to turn this nation the other way around."
Palin filed campaign papers a few months later, in October 2005, and was elected governor the next year.
Palin does not say anything on the video and keeps her head bowed throughout the blessing. The Republican vice presidential candidate was baptized at the church but stopped attending regularly in 2002.
A spokesman for the McCain campaign declined to comment. A person who answered the phone at the Wasilla church confirmed the video was from May 2005 but declined further comment.
Palin was baptized Roman Catholic as a newborn.
Pentecostals are conservative in their reading of the Bible. Unlike most other Christians — including most evangelicals — Pentecostals believe in "baptism in the Holy Spirit." That can manifest itself through speaking in tongues, modern-day prophesy and faith healing, which includes the laying on of hands.
Maria Comella, a spokeswoman for the McCain-Palin campaign, has said Palin attends different churches and does not consider herself Pentecostal.
On a visit to the church in June 2008, Palin spoke fondly of the Kenyan pastor and told a group of young missionaries that Muthee's prayers had helped her to become governor.
"Pastor Muthee was here and he was praying over me, and you know how he speaks and he's so bold," she said. "And he was praying 'Lord make a way, Lord make a way' ... He said, 'Lord make a way and let her do this next step.' And that's exactly what happened."
The Rev. Zipporah Ndiritu, who studied under Muthee in the Kiambu, Kenya-based Word of Faith Church, said the bishop is revered among evangelicals there. In a phone interview from Mombasa, Kenya, she said church doctrine focuses on ridding the world of demons — and witches.
"Even in the days of Jesus Christ, according to the Bible there were witches who were manifesting through demonic forces," she said. "You can seek from the Lord, and if you find demonic forces you cast them out."
Ndiritu said she did not know Palin.
Apparel maker Hanesbrands Inc. said Wednesday it will close nine plants across five countries and cut about 12 percent of its work force as it restructures its operations in order to cut costs.
The moves will eliminate the jobs of about 8,100 workers in the U.S. and Central America, while the company plans to add 2,000 jobs in Asia. Hanes has about 50,000 employees in 25 countries.
The maker of Hanes and Champion apparel said it is expanding production in Asia and consolidating into fewer and larger plants in lower-cost countries.
"Globalizing our supply chain, and eventually balancing production between Asia and the Western Hemisphere, is a critical plank in our strategic efforts to reduce costs, improve product flow and increase our competitiveness," said Hanesbrands Chief Executive Richard A. Noll in a statement.
The moves will cost $76 million, with about two-thirds of that recorded in the third quarter of 2008.
Since it was spun off from food maker Sara Lee Corp. in 2006, Hanesbrands has focused on restructuring its business, cutting jobs, closing plants and distribution centers, and moving production to sites in Asia and Central America.
With the latest restructuring costs, Hanesbrands says it has now taken about $204 million of the $250 million in such charges it expects to incur in the three years following its spinoff.
As part of the current restructuring the company plans to close seven plants this year. Those include sewing plants in El Salvador, Honduras and Costa Rica, as well as two yarn plants in Eden, N.C. and Gastonia, N.C., a knit-fabric textile plant in Forest City, N.C., and an inventory storage warehouse in Rockingham, N.C.
By the end of next summer, it will close a sewing plant in Mexico and its last large knit-fabric textile plant in the U.S., located in Eden.
Textile production from the plants closed will be absorbed into existing plants in Central America. Most of the sewing production from Central American plants that are closing will be moved to the company's Vietnam and Thailand plants. Hanesbrands expects to increase its work force in Asia from 4,000 today to 6,000 by the end of 2008.
The company is also building a textile fabric plant in Nanjing, China, which is expected to begin to ramp up production in 2009 to supply fabric to the company's expanding Asian sewing network.
Hanesbrands shares fell 56 cents, or 2.4 percent, to $23.27.
An unusual surge in Goldman Sachs' share price in the last 10 minutes of trading on Tuesday raised eyebrows on Wall Street, as it came two hours before news of Warren Buffett's big investment in the bank.
Goldman Sachs (GS.N) shares rose more than $5 heading into the close of trading even as the rest of the market tumbled, leaving traders suspicious that inside information was used to make a profit.
"Obviously someone knew the Buffett news that was coming out. I noticed it yesterday and I was telling my colleagues something is going on with Goldman," said Dave Rovelli, managing director of US Equity Trading at Canaccord Adams in New York.
Securities and Exchange Commission spokesman John Nester declined to comment on whether the incident is being investigated. Goldman Sachs could not immediately be reached for comment.
Just before 6 p.m. EDT, Goldman Sachs said it would get a $5 billion investment from Buffett's Berkshire Hathaway Inc (BRKa.N) (BRKb.N), which investors welcomed as a much needed vote of confidence in the bank.
Goldman's shares have since risen about 6 percent. If someone with inside knowledge of the deal was snapping up the bank's shares they would have made a significant, and illegal, profit.
"Someone is going to get caught, because that is easy to track, they can find out who did that," said Rovelli.
Goldman Sachs' stock rose from $119.53 at 3:50 p.m. to $125.05 at the close. The S&P financials sub-index meanwhile fell from 273.79 to 273.61 in the same time frame.
"That share move at Goldman was a clear outlier. It got everybody's attention. It was clear that there was something specific going on in that stock that wasn't going on in any other stock in that space," said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.
When a stock moves so sharply against the rest of the market, it is usually either due to company-specific news or a big seller of the stock taking a break also known as "a seller's strike," said Kenny.
Given that volume increased in Goldman's stock in the last 10 minutes, the "seller's strike" explanation seems unlikely.
Steve Claussen, chief investment strategist at OptionsHouse, a subsidiary of PEAK6 Investments, an options trading firm in Chicago noted that while options in Goldman were not particularly active, "it does raise eyebrows that the stock would attract so many buyers given that the Standard & Poor's 500 index closed near its lows."
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Wednesday, September 24, 2008
NEW YORK, N.Y. – John McCain's campaign has floated the possibility that Sarah Palin may also suspend her campaign, matching McCain’s announcement that he would cease campaigning for president to return to Washington to try to hammer out a fix for the nation’s financial meltdown.
As the governor of Alaska, Palin cannot participate in the high-level federal government deliberations on the economy that McCain gave as his reason for suspending his campaign.
Yet, after McCain’s dramatic announcement, his campaign chief Steve Schmidt suggested Palin, the Republican vice presidential nominee, would also suspend her campaign.
“We're going to take the ads down. They won't be traveling. There won’t be rallies,” Schmidt said when asked about Palin’s campaign, according to a rough transcription provided to reporters.
Democrats have blasted McCain’s move, which includes a call to reschedule his planned Friday debate with Democratic rival Barack Obama, as political posturing, rather than a genuine effort to address the economic crisis.
Asked about Schmidt’s comment, given Palin’s inability to participate in congressional deliberations, spokeswoman Tracey Schmitt told reporters on a Wednesday evening conference call “We are part of the McCain-Palin campaign. It is one ticket.”
But she demurred when asked specifically whether Palin, too, would be suspending her campaign.
“I think Sen. McCain was clear about what it meant that he was suspending his campaign,” Schmitt said, “So, if we have any announcements, any updates about her schedule, we will certainly let you know.”
Schmitt pointed out that Palin’s schedule has only been released through Friday and said that she has no public events planned after she attends a Thursday morning speech McCain is slated to deliver here to the Clinton Global Initiative.
McCain’s announcement puts Palin in a tricky spot.
If Palin continues campaigning, even at a less-than-full schedule, she will be in the mostly unaccustomed position of doing so without McCain by her side and would likely face more criticism if she continued evading the press on the campaign trail.
But if she suspends her campaign, Democrats are sure to pounce on the move as more evidence that the suspension is political.
Even before McCain’s announcement, Palin’s campaign schedule was far from rigorous.
Since Palin was selected as McCain’s running mate in late August, she’s appeared at 21 rallies, most of which were at McCain’s side, has yet to hold a press conference, has conducted less than a handful of national media interviews and has pulled out of several fundraising appearances.
Tuesday, September 23, 2008
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Prime Minister Yasuo Fukuda and his Cabinet handed in their resignations Wednesday to pave the way for former Foreign Minister Taro Aso to become Japan's third leader since 2006.
Aso, a wisecracking conservative who clinched the presidency of the ruling party earlier this week, was all but guaranteed to be elected prime minister later in the day. His Liberal Democratic Party dominates the powerful lower house of parliament.
Fukuda had announced he would step down three weeks ago after only a year in office, citing slumping support ratings and the strain of dealing with strong political opposition.
Parliament was to hold a vote in both houses later Wednesday. Aso was expected to lose in the upper house, which is controlled by the opposition, but win in the lower house, which has the final say. He was expected to then set up his new Cabinet and hold a late night press conference.
With Aso's ascension widely seen as a certainty, attention Wednesday turned to who he would tap to serve in his administration.
Kaoru Yosano, who ran against Aso in the latest race, was expected to keep his previous post in charge of economic and fiscal policy. Former defense minister Shigeru Ishiba, another opponent, was widely reported to be Aso's choice for agriculture minister.
Shoichi Nakagawa, a former economic minister, was seen as the leading candidate to become the new minister of finance.
Aso, 68, and his Cabinet will take office in tumultuous times.
The former Olympic skeetshooter — and Japan's first Catholic leader — will inherit a government wracked by scandals, paralyzed by gridlock and divided over how to deal with growing economic instability.
The parliamentary vote Wednesday should reflect the turmoil. The opposition-controlled upper house is expected to vote for Ichiro Ozawa, the leader of the minority Democratic Party of Japan.
The LDP-run lower house, however, will most likely vote for Aso, requiring a lengthy parliamentary process to sort out the impasse in which the ruling party by force of numbers will triumph.
Once in office, Aso will confront political and economic difficulties.
One of the first things on the agenda will be deciding whether to call early elections for the lower house to prove his party — which has governed for nearly all the past 53 years — still has a mandate to rule.
Such an election would be a major gamble for the party, which is bleeding public support and suffering widespread anger over mismanagement of pension funds and a general dissatisfaction with the status quo.
Elections can be called by the prime minister at any time, but must be held by next September.
The economy will be another challenge. Growth has stalled, ending a lengthy expansion, and inflation is picking up. The financial meltdown in the United States threatens to pull Japan down with it.
He has also said that he will continue to place relations with Washington as Japan's top diplomatic priority, while trying to improve ties with neighboring China, whose growing economic and military clout Aso once described as a "major threat."
Iran's president addressed the U.N. General Assembly Tuesday declaring that "the American empire" is nearing collapse and should end its military involvement in other countries.
Iranian President Mahmoud Ahmadinejad said terrorism is spreading quickly in Afghanistan and that "the occupiers" are still in Iraq nearly six years after Saddam Hussein was ousted from power in Iraq.
"American empire in the world is reaching the end of its road, and its next rulers must limit their interference to their own borders," Ahmadinejad said.
He accused the U.S. of starting wars in Iraq and Afghanistan to win votes in elections and blamed a "few bullying powers" for trying to undermine Iraq's nuclear program.
Ahmadinejad's hardline rhetoric came as no surprise and offered little in the way of compromise at the U.N., where he faces a new round of sanctions if no agreement is reached on limiting Iran's nuclear capabilities.
While he reiterated that the country's nuclear program is purely peaceful, the U.S. and others fear it is aimed at producing enriched uranium to make nuclear weapons.
Iran already is under three sets of sanctions by the U.N. Security Council for refusing to suspend uranium enrichment. Washington and its Western allies are pushing for quick passage of a fourth set of sanctions to underline the international community's resolve, but are likely to face opposition from Russia.
"A few bullying powers have sought to put hurdles in the way of the peaceful nuclear activities of the Iranian nation by exerting political and economic pressures against Iran," he said.
Ahmadinejad also lashed out at Israel on Tuesday, saying "the Zionist regime is on a definite slope to collapse, and there is no way for it to get out of the cesspool created by itself and its supporters."
The Iranian president is feared and reviled in Israel because of his repeated calls to wipe the Jewish state off the map, and his aggressive pursuit of nuclear technology has only fueled Israel's fears.
Ahmadinejad accused "a small but deceitful number of people called Zionists ... (of) dominating an important portion of the financial and monetary centers as well as the political decision-making centers of some European countries and the U.S."
In discussing Afghanistan, he suggested that the presence of U.S. and NATO forces has contributed to a sharp rise in terrorism and a huge increase in the production of narcotics.
He predicted that the war would end in the alliance's defeat.
"Throughout history every force that has entered Afghanistan has left in defeat," Ahmadinejad said.
His speech came just hours after President Bush made his eighth and final appearance before the U.N. General Assembly, urging the international community to stand firm against the nuclear ambitions of Iran and North Korea.
"A few nations, regimes like Syria and Iran, continue to sponsor terror," Bush said. "Yet their numbers are growing fewer, and they're growing more isolated from the world. As the 21st century unfolds, some may be tempted to assume that the threat has receded. This would be comforting. It would be wrong. The terrorists believe time is on their side, so they've made waiting out civilized nations part of their strategy."
At one point during Bush's 22-minute speech, Ahmadinejad turned to Iranian Foreign Minister Manouchehr Mottaki and gave a thumb's down.
As in past years, the United States only had a low-level note-taker sitting in a rear seat reserved for the U.S. delegation during the Iranian president's address, said Richard Grenell, spokesman for the U.S. Mission to the United Nations. The U.S. and Iran do not have diplomatic relations.
During interviews ahead of his speech Tuesday, Ahmadinejad blamed U.S. military interventions around the world in part for the collapse of global financial markets. He said the campaign against his country's nuclear program was solely due to the Bush administration "and a couple of their European friends."
"The U.S. government has made a series of mistakes in the past few decades," Ahmadinejad said an interview with the Los Angeles Times. "The imposition on the U.S. economy of the years of heavy military engagement and involvement around the world ... the war in Iraq, for example. These are heavy costs imposed on the U.S. economy.
"The world economy can no longer tolerate the budgetary deficit and the financial pressures occurring from markets here in the United States, and by the U.S. government," he added.
Those responsible for the crisis that has swept global financial markets should be punished, French President Nicolas Sarkozy said overnight in his first reaction to the latest bout of economic turmoil.
In an acceptance speech at an award ceremony attended by U.S. and French business leaders, Sarkozy called for the "truth" on the crisis to be uncovered.
"Today, millions of people across the world fear for their savings, for their apartment, for the funds they have put in banks. It is our duty to give them clear answers," he said.
"Who is responsible for this disaster? May those who are responsible be punished and held accountable," he said hours before he was due to give a speech to the U.N. General Assembly.
The U.S. government has unveiled a $700 billion bailout package for Wall Street firms to rid them of the toxic mortgage-related debt which felled investment bank Lehman Brothers and threatens to wreak further financial havoc.
The plan, which has yet to be approved by Congress, has been criticized by some observers, who argue that it is unfair for the bankers who sparked the crisis not to bear the full brunt of its consequences.
U.S. Treasury Secretary Henry Paulson, however, argues that his bailout plan will prove cheaper for taxpayers than leaving companies to suffer the cost of the crisis themselves.
Sarkozy's comments earned him a lukewarm reaction from the members of the business community who had paid $1,500 to $75,000 each to see Sarkozy receive a "humanitarian award" at a black-tie gala event and eat a light meal.
The French president is due to give an economic speech on Thursday, in which he is expected to speak at greater length on the market turmoil and outline elements of the 2009 draft budget, which will be unveiled the following day.
Monday, September 22, 2008
TOP MAFIA FIGURE, TONY GAMBINO, IMPLICATES VATICAN AND BUSH IN PRIOR KNOWLEDGE AND COMPLICITY IN 9/11 MASS MURDER
The grandson of Lucky Luciano, Gambino, 63, just released from prison also sets the record straight about the JFK and Hoffa assassinations.
By Greg Szymanski
Sept. 26, 2007
The grandson of Lucky Luciano, Gambino made a guest appearance Tuesday on Greg Szymanski's radio show, The Investigative Journal on Liberty Radio at www.libertyradiolive.com The entire interview can be heard at www.arcticbeacon.com as well as Liberty Radio.
The high-level former mobster talked openly for an hour, indicting top Vatican and U.S. government officials with complicity in high crimes, treason and assassinations as they worked together "like a tight-knit happy family" with the Gambino and other Mafia families.
With America's fascination of the Mafia, Gambino's statements should shake the halls of St. Peter's Basilica, as well as Capitol Hill, since he talked about his first hand knowledge of George Bush, the Pope and other high level Jesuits complicity and knowledge of 9/11.
"When you grow up in "The Family" like I did, you learn right off the bat that protection comes from everywhere, including the CIA, FBI and blessings from the Vatican who are at the top of the ladder when it comes to benefiting from Mafia street crime," said Gambino, who became a "Made Man" at the age of five, a Mafia term used for their top street captains.
"The Vatican officials, federal judges, top politicians all used to get regular pay-offs from the Gambino Family and, in fact, the Vatican and U.S. government make more money off the illegal drug trade then we did.
"That is why I am talking after just getting out of jail after 20 years. I am talking because people need to know the U.S. government and the Vatican are more dangerous and corrupt then the Mafia ever was.
"For example, I know for a fact the Cardinal in Palermo runs the Sicilian mob and former Cardinal Spellman of New York was considered the Vatican's American Godfather since he pulled the strings and had his hands deep into organized crime.
"I know for a fact Bush, the Pope and other top Vatican and U.S. government leaders had prior knowledge and help organize 9/11. They did it for many obvious reason, one being instigating the war in Iraq. But they also did it to get their hands on all the gold that was hidden below in the Twin Towers.
"My grandfather's construction company built the Twin Towers and after it was completed, I know they went in and put in big underground vaults to house an enormous amount of gold which is now in Bush's and Vatican hands in order to fund the war."
Besides implicating the Vatican and Bush in 9/11, Gambino set the record straight about the JFK assassination, saying he was in Dallas when Kennedy was shot and the fatal bullet came from a shooter located in an underground storm drain.
"I was there when he was shot and I know for a fact Rosselli was in the storm drain doing the shooting and Frank Sturgiss was also part of the hit team," said Gambino. "The same group of guys we have talked about in the Vatican and U.S. government gave the orders and asked the Mafia families for help in taking down Kennedy."
Growing up on the streets of New York in one of the top crime families, Gambino recalls getting his first lesson of Mafia life at the age of 13.
"My grandfather was Lucky Luciano so I had it made," said Gambino, now 63 and living on the East Coast with a probation stipulation that he can't associate or talk with any organized crime figures. "Lucky had all the politicians and even the Vatican heads in his pocket. He was making $55 to $100 million a week and when Vegas opened the money really started to roll in.
"He got Frank Sinatra and many others like Marylin Monroe, Tony Bennett, Dean Martin, Clint Eastwood, Sammy Davis started in Hollywood. He then would take a percentage of their earnings and this went on for their entire careers.
"Remember, the horse's head being cut-off in Godfather I and then put in the Hollywood producer's bed? That really happened and it had to do with forcing a Hollywood producer to star Sinatra in one of his movies."
Gambino also had inside information about how union boss Jimmy Hoffa was really killed, saying his time ran out when a huge Mafia debt wasn't repaid.
"Hoffa was working behind the scenes with crack head and truck hi-jacker, John Gotti," recalls Gambino. "That's all Gotti was good at and when they brought in a $5 million drug truckload, Hoffa got deeper in debt to the other Mafia bosses.
"He never gave his courtesy calls to the bosses for repayment and finally his time ran out so he was killed. They picked him up, put him in a body bag alive and then dumped his body in one of the concrete abutments at the George Washington Bridge while the concrete was being poured. All they did was pay the concrete man $150,000 and the whole thing has been covered up. But that is where Hoffa's body is today and I know that for a fact."
Although Gambino knows he's crossing a sensitive line for going public about the inner-workings of the Mafia and its complicity with the Vatican and U.S. government, he added that it's important for Americans to finally understand how things "really work on the streets" and how Church, State and big business are working together to destroy America.
And if there remains any doubters that the Vatican and Jesuit Order have had its dirty hands in organized crime in order to destroy the moral and financial fabric of the U.S., Gambino's confessions should lay that to rest.
"If you don't believe the hard facts and the hundreds of researchers who have implicated the Vatican to the demise of America, then believe Gambino because he learned it first hand from being on the streets and working with the top crime bosses. He has nothing to gain from lying since he has already served his time and wants to set the record straight once and for all regarding who are the real controllers of the New World Order," said one patriot close studying and alerting America of Vatican and Jesuit intrigue.
A Russian navy squadron set off for Venezuela Monday, an official said, in a deployment of Russian military power to the Western Hemisphere unprecedented since the Cold War.
The Kremlin recently has moved to intensify contacts with Venezuela, Cuba and other Latin American nations amid increasingly strained relations with Washington after last month's war between Russia and Georgia. During the Cold War, Latin America became an ideological battleground between the Soviet Union and the United States.
Russian navy spokesman Igor Dygalo said the nuclear-powered Peter the Great cruiser accompanied by three other ships sailed from the Northern Fleet's base of Severomorsk on Monday. The ships will cover about 15,000 nautical miles to conduct joint maneuvers with the Venezuelan navy, he told The Associated Press.
The deployment follows a weeklong visit to Venezuela by a pair of Russian strategic bombers and comes as Venezuelan President Hugo Chavez — an unbridled critic of U.S. foreign policy who has close ties with Moscow — plans to visit Moscow this week. It will be Chavez's second trip to Russia in about two months.
The intensifying contacts with Venezuela appear to be a response to the U.S. dispatch of warships to deliver aid to Georgia which angered the Kremlin.
Chavez said in an interview with Russian television broadcast Sunday that Latin America needs a strong friendship with Russia to help reduce U.S. influence and keep peace in the region. In separate comments on his Sunday TV and radio program, he joked that he will be making his international tour to Russia and other countries this week aboard the "super-bombers that Medvedev loaned me," a reference to Russian President Dmitry Medvedev. "Gentlemen of the CIA, to be clear, I'm joking," Chavez said with a laugh.
Chavez has repeatedly warned that the U.S. Navy poses a threat to Venezuela.
Russia has signed weapons contracts worth more than $4 billion with Venezuela since 2005 to supply fighter jets, helicopters, and 100,000 Kalashnikov assault rifles. Chavez's government is in talks to buy Russian submarines, air defense systems and armored vehicles and more Sukhoi fighter jets.
Russian and Venezuelan leaders also have talked about boosting cooperation in the energy sphere to create what Chavez has called "a new strategic energy alliance."
Russian Deputy Prime Minister Igor Sechin, who visited Venezuela last week, announced that five of Russia's biggest oil companies are looking to form a consortium to increase Latin American operations and to build a $6.5 billion refinery to process Venezuela's tar-like heavy crude. Such an investment could help Venezuela, the world's ninth-biggest oil producer, wean itself from the U.S. refineries on which it depends to process much of its crude.
Sechin warned the United States that it should not view Latin America as its own backyard. "It would be wrong to talk about one nation having exclusive rights to this zone," he said in an interview broadcast Sunday.
One capital murder trial is under way and another is about to start in New Hampshire, a state that last executed someone in 1939, has no one on death row and has no death chamber.
The first trial began Sept. 8 and involves John "Jay" Brooks, a millionaire businessman accused of orchestrating the 2005 kidnapping and murder of someone whom Brooks believed had stolen from him.
In the other case, jury selection was to begin Monday in the trial of Michael "Stix" Addison, who is charged with fatally shooting a Manchester police officer in 2006.
Death penalty opponents hope the simultaneous trials will focus attention on their cause, though they aren't planning another attempt to repeal the state's capital murder law when the Legislature convenes in January.
Both the House and Senate voted to repeal the death penalty in 2000, but then-Gov. Jeanne Shaheen vetoed the bill. Last year, under the threat of a veto from Gov. John Lynch, the bill failed by 12 votes in the House.
New Hampshire's narrow capital murder law applies to a half dozen crimes, including killing a police officer, murder for hire and killing during a kidnapping. Prisoners who kill another while serving a life sentence, murder during a rape, and certain drug crimes also qualify.
"It's extremely rare for New Hampshire to have a homicide that qualifies as a death penalty case," said Michael Ramsdell, a former head of the attorney general's homicide division.
No one has been executed in nearly 70 years, and the gallows at the state prison were dismantled long ago. The law now calls for lethal injection.
The most recent convictions came in 1959, when two men were sentenced to death for murdering a Rhode Island businessman, but their lives were spared by a 1972 U.S. Supreme Court ruling that held death penalty laws as then written unconstitutional.
Since then, prosecutors have brought capital murder charges in three cases. In one, the charge was reduced to first-degree murder before trial; in another, charges were reduced for two defendants and dismissed for a third due to lack of evidence.
In the most recent case, a defendant pleaded guilty to capital murder in a deal in which he avoided facing execution for fatally shooting an Epsom police officer in 1997.
Such cases are rare not only because the state's capital murder law is narrow, but because its first-degree murder law is broad, said Ramsdell, who was involved in prosecuting the last two capital murder cases. And New Hampshire just doesn't have that many murders to begin with, he said.
With so few cases going to trial, and none since the law was last amended, neither prosecutors nor defense lawyers have an established formula for handling such cases.
"There are challenges that can be made to New Hampshire's statute and process that have never actually been decided by either the New Hampshire Supreme Court or a federal court," said Ramsdell. "Unlike places like Texas or Florida or places where there are far more executions and a lot of the law has been tested already by the highest courts, in New Hampshire you really have a pretty clean slate."
Richard McNamara, a former prosecutor, was appointed to represent the defendant in a 1982 murder-for-hire case. He remembers well the weighty responsibility of the case, which ended with his client being acquitted of a lesser charge.
"At every step you can't help but think of the magnitude of what you're doing," he said. "I can remember waking up in the middle of the night wondering what would happen if I was actually looking at a death penalty stage of a trial."
Having two concurrent cases now is just a coincidence, he said, but interesting, given that New Hampshire has narrowed its law over the years and the Legislature has moved closer to abolishing it.
"It will be very interesting to see what the population thinks of all this," he said.
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Sunday, September 21, 2008
Uncertainty about the workings of the government's $700 billion bank bailout drove U.S. stock index futures and bond futures lower Sunday evening as Asian markets got ready to start the week.
The dollar weakened against the yen on concerns that government borrowing will exacerbate the U.S. budget deficit as it needs to issue more debt to finance its rescue plan to buy bad mortgages from financial institutions.
Negotiations between Congress and U.S. Treasury Secretary Paulson ratcheted up over the weekend after the administration and U.S. congressional leaders began swapping proposals.
S&P 500 futures fell 11.80 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures dropped 201 points and Nasdaq 100 futures shed 18.75 points.
The drop in stock index futures came on the heels of Friday's massive rally in stocks worldwide -- the largest ever one-day advance as measured by market value. The MSCI main world equity index (.MIWD00000PUS) added more than $1.5 trillion in value on the day.
Robert Loest, senior portfolio manager at Integrity Mutual Funds in Minot, North Dakota said the drop in futures was a combination of short-term profit-taking and second-guessing how the bailout plan will ultimately be come out.
"Congress hasn't written the legislation and the devil is in the details. The taxpayers are on the hook for an awful lot of money," Loest said.
The dollar was little changed against the euro but weakened against the Japanese yen in early trading as Asian markets opened the week. It last crossed at 1.4459 euro compared with 1.4464 late Friday and at 106.95 yen versus 107.42 on Friday.
"This is partially people looking at the plan and trying to figure out what it all means. I don't know the plan is a save all," said Joe Saluzzi, partner at Themis Trading in Chatham, New Jersey.
"It may have stopped us from the death spiral, but equities in general are still going to have a tough time. You still have to pay the piper -- where are the earnings, unemployment."
Saluzzi noted that Friday's big rally was partly driven by short sellers buying back shares to cover their bets stocks will fall, after the U.S. temporarily banned short selling in almost 800 financial stocks.
On Friday the Dow Jones industrial average (.DJI) closed up 368.75 points, or 3.35 percent, at 11,388.44. The Standard & Poor's 500 Index (.SPX) advanced 48.57 points, or 4.03 percent, to 1,255.08. The Nasdaq Composite Index (.IXIC) shot up 74.80 points, or 3.40 percent, to 2,273.90.
Late Sunday in electronic trading, U.S. interest rate futures were mostly lower on the view the government's mortgage bailout plan would bring down short-term borrowing costs.
The price of oil was down 85 cents to $103.70 after Nigeria's main militant group began a unilateral ceasefire. Spot gold rose $5.65 an ounce to $876.80.
New Zealand's stock market (.NZ50), the first to open the new week, rose 2.6 percent in early trading.
The Federal Reserve said Sunday it had granted a request by the country's last two major investment banks — Goldman Sachs and Morgan Stanley — to change their status to bank holding companies.
The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.
The change continued the biggest restructuring on Wall Street since the Great Depression.
Shares of both institutions had come under pressure ever since the bankruptcy filing last week by investment bank Lehman Brothers and the forced sale of investment bank Merrill Lynch to Bank of America.
Investors feared that the last remaining independent investment banks would not be able to survive in their current form. There had been speculation that both institutions would be acquired by commercial banks, whose ability to take deposits would give them a stable source of funding.
The decision by the two giants of finance to get approval from the Fed to change their own status represented another dramatic development in one of the most turbulent periods in Wall Street history.
In the surprise announcement late Sunday, the central bank said that to provide increase funding support to the two institutions during the transition period, they would be allowed to get short-term loans from the Federal Reserve Bank of New York against various types of collateral.
The Fed said its action would take final effect after a five-day waiting period required under law.
The decision means that the Goldman and Morgan Stanley will be able not only to set up commercial bank subsidiaries to take deposits, giving them a major resource base, but they will also have the same access as other commercial banks to the Fed's emergency loan program.
After the collapse of Bear Stearns and its forced sale to JP Morgan Chase last March, the Fed used powers it had been granted during the Great Depression to extend its emergency loans to investment banks as well as commercial banks. However, that extension was granted on a temporary basis.
But as commercial banks, Goldman Sachs and Morgan Stanley will have permanent access to emergency loans from the Fed, the same privilege that other commercial banks enjoy.
The action by the Fed's board of governors in Washington came on a day when the Bush administration continued to campaign for quick congressional approval of its request for authority to use $700 billion to purchase a mountain of bad mortgage debt held by financial companies. The effort represented the boldest action yet aimed at stabilizing chaotic financial markets.
Democrats in Congress said they would demand provisions in the bailout measure to protect people in danger of losing their homes as well as seeking to cap executive compensation at firms who get to unload their bad mortgages debt onto the government. But the proposal was expected to win quick congressional passage because both parties are concerned about the adverse reaction in financial markets should the measure look like it was being delayed.
There's a slow poison out there that's severely damaging our children and threatening to tear apart our culture. The ironic part is, it's a "health food," one of our most popular.
Now, I'm a health-food guy, a fanatic who seldom allows anything into his kitchen unless it's organic. I state my bias here just so you'll know I'm not anti-health food.
The dangerous food I'm speaking of is soy. Soybean products are feminizing, and they're all over the place. You can hardly escape them anymore.
I have nothing against an occasional soy snack. Soy is nutritious and contains lots of good things. Unfortunately, when you eat or drink a lot of soy stuff, you're also getting substantial quantities of estrogens.
Estrogens are female hormones. If you're a woman, you're flooding your system with a substance it can't handle in surplus. If you're a man, you're suppressing your masculinity and stimulating your "female side," physically and mentally.
In fetal development, the default is being female. All humans (even in old age) tend toward femininity. The main thing that keeps men from diverging into the female pattern is testosterone, and testosterone is suppressed by an excess of estrogen.
If you're a grownup, you're already developed, and you're able to fight off some of the damaging effects of soy. Babies aren't so fortunate. Research is now showing that when you feed your baby soy formula, you're giving him or her the equivalent of five birth control pills a day. A baby's endocrine system just can't cope with that kind of massive assault, so some damage is inevitable. At the extreme, the damage can be fatal.
Soy is feminizing, and commonly leads to a decrease in the size of the penis, sexual confusion and homosexuality. That's why most of the medical (not socio-spiritual) blame for today's rise in homosexuality must fall upon the rise in soy formula and other soy products. (Most babies are bottle-fed during some part of their infancy, and one-fourth of them are getting soy milk!) Homosexuals often argue that their homosexuality is inborn because "I can't remember a time when I wasn't homosexual." No, homosexuality is always deviant. But now many of them can truthfully say that they can't remember a time when excess estrogen wasn't influencing them.
Doctors used to hope soy would reduce hot flashes, prevent cancer and heart disease, and save millions in the Third World from starvation. That was before they knew much about long-term soy use. Now we know it's a classic example of a cure that's worse than the disease. For example, if your baby gets colic from cow's milk, do you switch him to soy milk? Don't even think about it. His phytoestrogen level will jump to 20 times normal. If he is a she, brace yourself for watching her reach menarche as young as seven, robbing her of years of childhood. If he is a boy, it's far worse: He may not reach puberty till much later than normal.
Research in 2000 showed that a soy-based diet at any age can lead to a weak thyroid, which commonly produces heart problems and excess fat. Could this explain the dramatic increase in obesity today?
Recent research on rats shows testicular atrophy, infertility and uterus hypertrophy (enlargement). This helps explain the infertility epidemic and the sudden growth in fertility clinics. But alas, by the time a soy-damaged infant has grown to adulthood and wants to marry, it's too late to get fixed by a fertility clinic.
Worse, there's now scientific evidence that estrogen ingredients in soy products may be boosting the rapidly rising incidence of leukemia in children. In the latest year we have numbers for, new cases in the U.S. jumped 27 percent. In one year!
There's also a serious connection between soy and cancer in adults – especially breast cancer. That's why the governments of Israel, the UK, France and New Zealand are already cracking down hard on soy.
In sad contrast, 60 percent of the refined foods in U.S. supermarkets now contain soy. Worse, soy use may double in the next few years because (last I heard) the out-of-touch medicrats in the FDA hierarchy are considering allowing manufacturers of cereal, energy bars, fake milk, fake yogurt, etc., to claim that "soy prevents cancer." It doesn't.
P.S.: Soy sauce is fine. Unlike soy milk, it's perfectly safe because it's fermented, which changes its molecular structure. Miso, natto and tempeh are also OK, but avoid tofu.
World Net Daily Article-Jim Rutz