"EU bails out German bank for $7.8 billion - EU approves $7.8B rescue for Germany's WestLB bank, which was hit by subprime crisis"

Associated Press

Last updated: 7:12 a.m., Wednesday, April 30, 2008

BRUSSELS, Belgium -- The European Union has approved a $7.8 billion bailout for Germany's regional WestLB bank, which was rattled by it's exposure bad U.S. debt.

The German regional bank had a net loss of 1.6 billion euros ($2.5 billion) last year, significantly higher than predicted because of the crisis.

The state of North Rhine-Westphalia joined the rescue bid to help cover payment defaults.

The EU Commission approved the package to protect the bank from volatile markets Wednesday.

"The Commission's investigation found that the risk shield constitutes state aid, but that the aid is in line with EU rules" since the aid is limited in time and is reversible," the EU said in a statement.

In February, the German state, WestLB's biggest shareholders, moved to shield it from further subprime risks, reaching a deal to provide 3 billion euros ($4.67 billion) to help cover its risks in a struggling securities portfolio.

That came after the Duesseldorf-based bank said its original risk shield of 2 billion euros ($3.11 billion) would not be enough.

"The Commission has demonstrated again that it can move very fast in order to provide legal certainty and financial stability to banks in difficulty," said EU Competition Commissioner Neelie Kroes.

State aid programs must be vetted by the European Commission to make sure it does not impede the rules of fair competition with the 27-nation EU.

Germany now has to present the Commission with a full restructuring plan by Aug. 8.

"Regional growth will keep Asia on track - S&P report says Asian economies will stay on track, but inflation threatens stability"

By GILLIAN WONG, Associated Press

Last updated: 7:02 a.m., Wednesday, April 30, 2008

SINGAPORE -- The economic engines of India and China will help keep Asia-Pacific economies on track amid a global slowdown, but a protracted U.S. slump and rising inflation pose possible hazards, a report said Wednesday.

The most significant threat to the region's macroeconomic stability is inflation, in particular the recent surge in food and oil prices, according to the report by Standard & Poor's Ratings Services.

"There are some visible threats to the region in the form of food and energy prices, which may adversely affect performance over the next couple of years," said S&P Asia-Pacific chief economist, Subir Gokarn, according to a statement.

The most important challenge facing regional policy makers was managing inflation while sustaining economic performance, Gokarn said.

The region's economies are expected to grow more slowly this year and in 2009, although they will maintain a relatively fast pace on the back of strong regional drivers, the S&P report said.

China and India, two of the three largest economies and the fastest growing, will together continue to grow at about 8 percent or more over the next two years, it said.

"This momentum will help sustain a positive growth environment for Asia-Pacific as a whole," S&P said.

"The ability of the region's economies to insulate themselves against a U.S. recession is enhanced by their ability to exploit the opportunities in the region through greater economic integration."

Japan's return to positive growth is another factor in the region's resilience, although the economy is predicted to slow compared to the expansion rates of more than 2 percent in the past two years, the report said.

"Japan's growth, in turn, reinforces the growth impulses in other countries in the region," S&P said.

The report forecasts Japan's real gross domestic product to be above 1 percent this year and as much as 2.2 percent next year.

The report said that Asian economies were also more resilient because they have become less dependent on exports to the U.S. as recent efforts to expand regional integration start to bear fruit.

"Asian countries have been extremely active in entering into trade and broader commercial agreements, both within and outside the region," the report said.

"Fast-growing neighbors, particularly those whose growth is driven from within, offer enormous opportunities for all these countries -- and they are all trying their best to exploit those opportunities."

S&P said, however, that sustained Asian growth depended on the U.S. recession being moderate and brief.

"A prolonged slump in the U.S. economy and the effect it will have on demand for imports, particularly of consumer goods from the region, will impact on wage incomes and investment activity in the region," it said.

HYPE BY THE S&P ...

AND REALITY ..

"Weak exports, high prices hurt Japan - Japan's economy under pressure on weak US demand, high oil and food prices"

By SHINO YUASA, Associated Press

Last updated: 6:32 a.m., Wednesday, April 30, 2008

TOKYO -- Japanese industrial output dropped sharply in March as a slump in exports to the United States and soaring oil and food prices squeezed the world's second-largest economy, the government said Wednesday.

The data, compounded by fall in household consumption, confirmed worries that a slowdown in the U.S. was weighing on the Japanese economy, which depends on exports for 15 percent of gross domestic product.

Industrial output, a key indicator of growth, fell 3.1 percent in March from the previous month, marking the first decline in two months, the Ministry of Economy, Trade and Industry said.

The figure was far worse than a 0.7 percent decline expected by Dow Jones Newswires and Japanese business daily, the Nikkei.

"The March output fall was fairly large and it is a reflection of a fall in exports to the U.S.," Economy Minister Hiroko Ota told reporters.

Adding to the gloom, higher oil and food prices drove Japan's overall household spending down 1.6 percent in March from a year earlier, the Ministry of Internal Affairs and Communications said.

It was the first decline in four months.

Also Wednesday, Japan's central bank decided to keep a key interest rate unchanged at 0.5 percent.

The decision was widely expected amid continued uncertainty over the U.S. economy and its impact on global markets.

The Bank of Japan was noticeably somber in its semiannual outlook report released later in the day.

The policy board expects inflation to rise 1.1 percent this fiscal year through March 2009, compared with a 0.4 percent rise it projected in October.

Members also forecast real domestic product to grow by 1.5 percent, lower than a 2.1 percent rise they expected six months ago.

"Given the current situation, where the outlook for economic activity and prices is highly uncertain, it is not appropriate to predetermine the direction of future monetary policy," the report said, suggesting that the central bank is unlikely to adjust rates anytime soon.

Not all the economic news was negative.

Data also showed the unemployment rate dropped to 3.8 percent in March from 3.9 percent in the previous month.

The total number of jobless in March stood at 2.68 million, down by 130,000 a year before, the ministry said.

But the slump in exports to the U.S., a major market for Japan, has stirred concern.

Tokyo just last week reported a 30 percent drop in its overall trade surplus in March because of surging prices of oil and natural gas imports.

The trade ministry said shipments of transportation products such as passenger cars and trains fell 4.5 percent month-on-month in March.

Exports of communication devices such as mobile phones and video cameras dropped 6.4 percent.

"Weak demand in the U.S. is a major factor of the March industrial output."

"While auto exports grew in other areas such as Russia, U.S.-bound vehicle shipments were falling sharply," said Hideki Matsumura, a senior economist at the Japan Research Institute.

Overall industrial shipments in March declined 3.9 percent from the previous month, while industrial inventories edged up 0.2 percent, the ministry said.

Experts also said the outlook for Japan's household spending would remain bleak amid sluggish domestic consumption weighed down by soaring oil and food prices.

"Given that salary levels being flat, current gasoline and food prices are hitting household spending hard," Matsumura said.

In March, gasoline prices jumped 19 percent from a year earlier, and bread costs soared 37 percent with prices of instant noodles up 17 percent, according to the government.

"7 killed in Kabul gunbattle - Afghan intelligence chief says 7 killed during a raid on militant hideout in Kabul"

By RAHIM FAIEZ, Associated Press

Last updated: 7:12 a.m., Wednesday, April 30, 2008

KABUL, Afghanistan -- Afghan security forces raided a Kabul hideout of militants with suspected links to the weekend attack on President Hamid Karzai, sparking a clash Wednesday that killed seven people, officials said.

Two militants, a woman and a child were among those killed during the clash when the two sides traded rocket-propelled grenade and automatic gunfire for several hours, intelligence chief Amrullah Saleh told a news conference.

Three intelligence agents also died, he said.

The suspects were linked to militants who tried to assassinate Karzai during a military parade Sunday, Saleh said.

The U.S.-backed president survived that attack, but a lawmaker and two other people were killed.

Taliban claimed responsibility.

Security forces launched their raid on the mud-brick house in a densely populated area in western Kabul before dawn Wednesday.

Families evacuated the area as explosions reverberated and gunfire pierced the air.

Saleh said the government troops finally destroyed the two-story house with heavy weapons fire after the third intelligence agent had died and it was clear the militants would not surrender.

One of the dead militants had supplied weapons used in the attack on Karzai, Saleh said.

Wednesday's raid was part of a wider operation, during which six other people were detained in two other locations in the capital, he said.

Afghan security services are under pressure to crack any militant cells in the capital.

Saleh, told Parliament on Tuesday that his agency knew about the plot to kill the president over the weekend but failed to locate the assailants in time.

The Taliban militia that was driven from power by the U.S.-led invasion of Afghanistan in 2001, claimed responsibility for the weekend attack, which underscored the fragile grip of Karzai's government in the face of an escalating insurgency.

The attack also showed the capital's vulnerability to militants who have long been strongest in the volatile south and east.

----

Associated Press reporter Amir Shah contributed to this report.

"Pakistan's leaders to meet for talks on restoring judges - Pakistan's leaders to discuss restoring sacked judges on deadline day"

By MUNIR AHMAD, Associated Press

Last updated: 7:22 a.m., Wednesday, April 30, 2008

ISLAMABAD, Pakistan -- Pakistani leaders were up against a key deadline Wednesday in efforts to restore judges ousted by President Pervez Musharraf and end a spat that has strained their month-old coalition government.

The U.S.-backed president purged the country's Supreme Court last year to stop legal challenges to his continuation in office.

Parties that routed Musharraf's allies in February elections and formed the new coalition government have promised to reinstate the judges by the end of April.

But with the deadline upon them, they remained at odds over how to fulfill their promise, fueling speculation that an alliance that is revising Pakistan's role in the U.S.-led war on terror could crumble and grant a reprieve to the embattled president.

Asif Ali Zardari, the widower and political successor of assassinated ex-leader Benazir Bhutto, and former Prime Minister Nawaz Sharif were to meet Wednesday afternoon in Dubai after their party lieutenants failed to resolve the issue in marathon talks.

Zardari insists he wants to reinstate the judges, but wants to link their return with a reforms that could narrow the powers of deposed Chief Justice Iftikhar Mohammed Chaudhry and prevent judges from getting involved in politics.

Information Minister Sherry Rehman, a party colleague of Zardari, said Tuesday that reinstating the judges required legislation that "needs some time."

"I don't think in this situation the coalition is threatened," she said.

Sharif's party has threatened to pull its ministers from the federal Cabinet if the judges issue drags on, but insists it will remain part of the coalition.

Sadiqul Farooq, a senior official in Sharif's party, said it could consider an extension of the April 30 deadline if Zardari provided "reasonable justification."

Sharif said his accord with Zardari on restoring the judges must be implemented "in letter and spirit" to protect Pakistan's return to democracy.

He also lashed out at Musharraf, who ousted the former prime minister's government in a 1999 coup.

Musharraf retired as army chief in November, but only after declaring emergency rule and removing the judges.

The government had a popular mandate to "remove the man who is responsible for harming the country" by sacking the judges and undermining parliament, Sharif said.

"Such a man should not be pardoned," he told reporters late Tuesday before boarding a flight from Lahore.

Musharraf removed Chaudhry just as the Supreme Court prepared to rule on the legality of his election in October for a new five-year presidential term.

Musharraf accused the judge of corruption and conspiring against him and his plans to guide Pakistan back to democracy.

Chaudhry had shown an unusual degree of independence, blocking government privatization deals and investigating complaints that its spy agencies were holding opposition activists incognito under the cover of fighting international terrorism.

Some analysts predict Musharraf might have to quit if Chaudhry is restored and the court revisits the president's disputed re-election.

If the judges don't return with full powers, lawyers who led yearlong protests for judicial independence will mount "serious agitation" against the new rulers, said Wajihuddin Ahmad, a former judge at the forefront of their movement.

Some analysts argue that Zardari and Sharif are compelled to find a compromise.

Both have suffered under Musharraf and have staked out plans to trim his powers and entrench civilian rule in a country dominated for most of its 60-year history by the military.

Yet Zardari's liberal party has repeatedly hinted that it could govern without Sharif, a traditional archrival of Bhutto with links to religious conservatives.

----

Associated Press writers Zarar Khan and Stephen Graham contributed to this report.

"Dangers remain from Virginians digging through debris left behind by twister that injured 200"

By BOB LEWIS, Associated Press

Last updated: 6:52 a.m., Wednesday, April 30, 2008

SUFFOLK, Va. -- From the governor to the people whose homes were demolished, Virginians were amazed and grateful that a tornado that injured 200 people killed no one.

But in many ways, police and fire officials say, the worst may lie ahead.

In disasters like these, Bob Spieldenner recalls, the aftermath can bring as much danger as the storm itself.

"That's the way it was with Hurricane Isabel," the Virginia Department of Emergency Management spokesman said, referring to the last major natural calamity to hit Suffolk, a city of 80,000 west of Norfolk.

"There were more people injured in the cleanup after Isabel than in the storm itself."

"We had people die of carbon monoxide (from running generators indoors), falling off roofs, falling out of trees," he said.

In September 2003, Isabel killed 25 people in Virginia, most of them in the Tidewater region.

On Wednesday morning, some residents will have the first chance to see the extent of the damage beneath the debris, a prospect that worries state officials.

They don't know if residents will find things they can salvage, or new dangers including electricity and natural gas lines.

"These guys don't know what's under the debris, but that's the way it is in these situations: We like to do these things ourselves," Spieldenner said.

Residents ordered out of their ravaged houses Monday night were horrified to see their shredded homes in Tuesday's bright sunlight.

They wept, consoled one another, and rejoiced that all were alive and accounted for.

Then they began making the first difficult calculations about how -- or whether -- to rebuild.

Firefighters poked through mounds of rubble sometimes 6 to 8 feet high to make sure no one lay beneath them, and utility crews worked round-the-clock to make sure electricity and gas lines presented no danger.

Among those who got the first look at his destroyed home was Tom Becker, who rushed home from a vacation in Atlantic City, N.J., after the tornado.

His house was barely standing and he looked wistfully inside at family portraits still hanging on an interior wall.

There was no ceiling to shelter them.

"I just want to get in there and get the things that are important to me," he said.

"I know now that it's gone."

At least 25 debris cleanup volunteers sanctioned by Operation Blessing -- a Virginia Beach-based charity funded by religious broadcaster Pat Robertson -- will arrive Wednesday, said the Rev. Tony Peak, pastor of Suffolk's nondenominational Open Door Church.

State and local officials were still far from a final estimate of the damages from the Suffolk twister -- the worst of six the National Weather Service says hit Virginia.

Losses from the lesser storms are already at least $3.5 million, Spieldenner said.

In Suffolk, the destruction could be in the tens of millions of dollars.

Kaine said he was not yet certain that the damage qualifies for a presidential disaster declaration, a designation that qualifies a region for low-interest federal loans to help homeowners rebuild.

"We've got to survey the needs and see what can be done," Kaine said during a walking tour of a neighborhood of houses local authorities had condemned.

"I'm going to let my guys who do this for a living tell me what the answer to that is, and it usually takes a day or two," Kaine said.

Other hazards await from scam artists who flock to disaster sites.

Con artists pose as officials or "disaster workers," advertise job opportunities that seem too good to be true, and take money for home repairs they never perform.

Skepticism is healthy for disaster victims, said J. Tucker Martin, press secretary to Attorney General Bob McDonnell.

"Use common sense, and research the contractors and companies before spending any money," Martin said.

"Homes evacuated in Maine because of St. John flooding - St. John River flooding prompts 30 to 40 home evacuations, bridge closing in Maine"

Associated Press

Last updated: 7:12 a.m., Wednesday, April 30, 2008

FORT KENT, Maine -- Authorities say evacuations are under way in Fort Kent, Maine because the St. John River is flooding.

The Aroostook County Emergency Management Agency says residents of about 30 to 40 homes were ordered to evacuate as the river continues to rise because of heavy rain and melting snow.

Officials also say the International Bridge over the river between Fort Kent and Clair, New Brunswick, has been closed.

On Tuesday night, Gov. John Baldacci issued a state of emergency for Aroostook County because of flood conditions in the Fort Kent and Wallagrass areas.

"Obama's Record Has Republicans Dusting Off 'Liberal' Attacks"

Indira Lakshmanan

Wed Apr 30, 12:01 AM ET

April 30 (Bloomberg) -- Democratic presidential hopeful Barack Obama promises to bridge the ideological divide between Red states and Blue states, bringing Republicans and independents into a post-partisan coalition.

Republicans plan to paint Obama as a liberal who is out of step with mainstream Americans on abortion, crime and health care, the same label used against failed Democratic candidates George McGovern and John Kerry.

"For someone who's been in office as little as Barack Obama, the guy has a record that defines the word liberal,'' said Chris LaCivita, a Republican media adviser to the Swift Boat veterans who assailed Kerry's Vietnam War record during the Massachusetts senator's 2004 presidential bid.

Opponents such as LaCivita said Obama's vulnerabilities include his support for gay rights, late-term abortions and benefits for illegal aliens.

They also portray him as soft on crime, tough on guns and as an advocate of socialized medicine.

Obama, 46, has disavowed or tempered some of the stances he or his campaign once espoused, though on the whole, he stands by what he calls a "progressive, pragmatic'' agenda.

Gay Marriage

He opposes gay marriage, while supporting civil unions and gays in the military.

His abortion views adhere to the Supreme Court's Roe v. Wade ruling, which permits procedures in the third trimester when the mother is at risk.

He favors drivers' licenses for undocumented immigrants and state tuition benefits for their children.

On crime, he advocates eliminating mandatory minimum sentencing for non-violent drug offenders.

He said capital punishment is warranted for certain crimes, yet he can't support it due to inequities in its application.

While he backs restrictions on guns, he has never voted to ban ownership.

He wants to repeal President George W. Bush's tax cuts, raise the capital-gains tax rate, expand government's role in health care and advocates greater regulation of financial institutions.

He also favors a less confrontational foreign policy than Bush, 61.

At same time he proposes some tax cuts, would expand government and regulatory powers only modestly and wants to boost the size of the military.

Conservatives claim Obama's positions place him out of sync with most Americans.

They point to the National Journal's 2007 rating of him as the most liberal senator and intend to cite it in advertisements and fundraising appeals.

'Easy Case'

"It's an easy case to make that Barack Obama is both culturally and ideologically way out of the mainstream,'' said Whit Ayres, a Republican pollster.

The National Journal rated Obama's rival for the Democratic nomination, New York Senator Hillary Clinton, as the 16th most liberal, even though the analysis found the two lawmakers differed on just two "key'' bills.

The magazine said Clinton, 60, voted against establishing a Senate office to handle ethics complaints, which Obama supported.

Clinton also opposed a proposal, backed by Obama, that would allow some immigrants to remain in the U.S. while their visas were being renewed.

Karl Frisch, spokesman for Media Matters for America, a Washington-based media watchdog organization, criticized the rating, saying it is "remarkably misleading'' to count Obama votes such as those he cast in favor of the 9/11 Commission's recommendations and ethics overhaul as "liberal.''

Obama's campaign said he is in line with the majority of Americans who support reasonable abortion and gun rights, common sense on immigration and crime and fairness in taxes and health care.

Moderated Positions

For his part, the presumptive Republican nominee, Arizona Senator John McCain, 71, has abandoned stances that are at odds with his party's conservative base -- including his effort to legalize undocumented immigrants and his opposition to Bush's tax cuts.

Similarly, Obama has moderated or qualified positions over the years.

He has been criticized by Clinton for responses to a voters' group questionnaire during his first Illinois state Senate run in 1996.

In the survey, his answers said he supported federal single-payer health care in principle and a ban on handguns.

He opposed capital punishment and restrictions on abortion.

Obama has said his then-campaign manager wrote the answers and they didn't reflect his beliefs then or now.

Lois and Alan Dobry, board members of the Independent Voters of Illinois-Independent Precinct Organization, interviewed Obama when he submitted the questionnaire.

It is inconceivable, they said, that he was unaware of the answers, which he defended.

'Unequivocal'

"He was unequivocal,'' Alan Dobry said.

Obama spokesman Tommy Vietor said the senator never agreed with the controversial answers.

Obama has a record of "reaching across the aisle,'' he said.

The Republicans' attack is "the same playbook they use every four years,'' said Stephanie Cutter, Kerry's communications chief in 2004.

"Whoever the nominee is, they will allege that person is too liberal.''

The assault has begun.

The North Carolina Republican Party is running a television ad that brands him as "too extreme'' by linking him to his former pastor.

Obama yesterday denounced "ridiculous'' comments by Reverend Jeremiah Wright, who repeated contentions this week that the government may have helped spread AIDS and was partly to blame for the Sept. 11 attacks.

"If they think that's bad,'' LaCivita said of the ad, "it's only a matter of time before they see the really bad stuff.''

To contact the reporter on this story: Indira Lakshmanan in Washington at ilakshmanan@bloomberg.net .

"Fed cuts rates as economy slumps, hoping to stop recession - Fed cuts interest rates to lowest level in 4 years to prop up economy on edge of recession"

By JEANNINE AVERSA, Associated Press

Last updated: 6:52 p.m., Wednesday, April 30, 2008

WASHINGTON -- Scrambling to shore up the faltering economy, the Federal Reserve cut interest rates to the lowest point in nearly four years Wednesday as the nation teetered on the edge of recession.

Wall Street rallied at first but then pulled back, concerned that the reduction might be the last for a while.

In fact, the Fed's trim was smaller than those of recent months amid indications the central bank might pause to see if months of powerful rate-cutting medicine and billions of dollars in stimulus checks will be enough to lift the country out of its slump.

Chairman Ben Bernanke led a divided Fed, in an 8-2 vote, in slicing its key rate by one-quarter percentage point to 2 percent.

In turn, the prime lending rate for millions of consumers and businesses fell by a corresponding amount, to 5 percent.

The prime rate applies to certain credit cards, home equity lines of credit and other loans.

Both rates are the lowest since late 2004.

The Federal Reserve, which has been dropping rates since last September, turned much more forceful early this year when housing, credit and financial problems worsened.

Rate reductions in January and March alone marked the most aggressive intervention in a quarter-century in an effort to re-energize consumers and businesses.

"The substantial easing of monetary policy to date ... should help to promote moderate growth over time and to mitigate risks to economic activity," the Fed said, strongly hinting that more cuts may not be needed.

Enthusiastic Wall Street investors drove the Dow Jones industrial average up more than 178 points -- lifting it above 13,000 for the first time since early January -- right after the Fed action.

Then traders' caution returned, and the index ended the day 11.81 points below where it started.

Although the Fed didn't take another reduction off the table, a growing number of economists believe the central bank is winding down its rate-cutting campaign.

Barring another hit to economic growth, they believe rates probably will stay where they are -- perhaps through the rest of this year -- in part because the Federal Reserve is concerned that further cuts could join with galloping energy and food prices and spread inflation dangerously higher.

By all accounts, the country's economic health is fragile.

The economy crawled ahead at a pace of just 0.6 percent from January through March as housing and credit problems forced people and businesses to hunker down, the Commerce Department reported hours before the Fed's action.

Growth had been just as feeble in the prior quarter.

Job losses for the first three months of the year neared the staggering quarter-million mark, and a government report on Friday is expected to show that employers shed jobs again in April.

The unemployment rate, now at 5.1 percent, also could creep higher in April and hit 6 percent early next year, analysts say.

"Recent information indicates that economic activity remains weak," the Fed said.

"Household and business spending has been subdued, and labor markets have softened further."

"Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters."

Two members -- Charles Plosser, president of the Federal Reserve Bank of Philadelphia, and Richard Fisher, president of the Federal Reserve Bank of Dallas -- opposed cutting rates Wednesday, a crack in the usually unified front the Fed often shows the public.

Both men have a reputation for being especially vigilant about fighting inflation.

At the Fed's previous meeting in March, they opposed cutting rates by a whopping three-quarters point and preferred a smaller reduction.

"The Fed didn't completely shut the door on rate cuts but they closed it part way," said Mark Zandi, chief economist at Moody's Economy.com.

"I think the overall message was they've done a lot already to help the economy and think this will be enough."

"But they stand ready to do more if that is needed."

Bernanke's juggling act is getting harder.

Fed policymakers are trying to bolster economic growth, and at the same time they are mindful that they can't let inflation get out of hand.

The very rate reductions the Fed depends on to energize the economy can also sow the seeds of inflation down the road.

At the same time, many economists believe the economy already is declining.

Under one rough rule, if the economy contracts for six straight months it is considered to be in recession.

However, that didn't happen in the last recession -- in 2001.

A panel of experts at the National Bureau of Economic Research that determines when U.S. recessions begin and end uses a broader definition, taking into account income, employment and other barometers.

The bureau's finding is usually made well after the fact.

The Fed's previous rate reductions, which take months to work their way through the economy, should help lift growth in the second half of this year.

The government's $168 billion economic-stimulus package -- including tax rebates that started flowing to bank accounts on Monday -- also should help energize activity, the Bush administration, Bernanke and private economists have said.

The biggest weight on the economy is the housing crisis, which has pushed foreclosures to record highs and caused financial institutions to rack up billions of dollars in losses.

For mortgage rates, the Fed's latest cut probably won't have much, if any, impact.

Rates on longer-term 30-year and 15-year mortgages, which are linked to the 10-year Treasury notes, actually could see rates rise in the weeks ahead in part because of concerns about higher inflation.

Rates on shorter-term mortgages probably won't drop either because investors already had factored in the latest Federal Reserve action.

Still, people with adjustable-rate home loans have been helped by the Fed's series of rate reductions; they would have been socked with much higher rates when their mortgages reset if not for the Federal Reserve cuts, analysts said.

"Going forward, if the Fed holds rate steady, resets in the pipeline would benefit in a similar fashion as still-low interest rates would mean very manageable mortgage-rate resets," said Greg McBride, senior financial analyst at Bankrate.com.

------

On the Net:

Federal Reserve: http://www.federalreserve.gov/

"Economy grows by only 0.6 percent in first quarter - Economy limps ahead at a 0.6 percent pace in first quarter, better pace than expected"

By JEANNINE AVERSA, Associated Press

Last updated: 5:02 p.m., Wednesday, April 30, 2008

WASHINGTON -- The bruised economy limped through the first quarter, growing at just a 0.6 percent pace as housing and credit problems forced people and businesses alike to hunker down.

The country's economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday.

The statistic did not meet what economists consider a definition of a recession -- which is a contraction of the economy.

This means that although the economy is stuck in a rut, it is still managing to grow, even if slightly.

Many analysts were predicting the gross domestic product (GDP) would weaken a bit more -- to a pace of just 0.5 percent -- in the first quarter.

Earlier this year, some thought the economy would actually lurch into reverse during the opening quarter.

Now, they say they believe that will likely happen during the current April-to-June period.

"The economy is weak but not collapsing," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.

"A recession can't be ruled out, although the stars are not lined up at this point to definitively say one way or the other."

On Wall Street, the Dow Jones industrials closed down 11.81 points.

Gross domestic product measures the value of all goods and services produced within the United States and is the best measure of the country's economic health.

Voters are keenly worried about the country's economic problems and so are politicians -- in Congress, in the White House and on the campaign trail.

White House press secretary Dana Perino said the administration was disappointed in the figures.

"This is nothing to crow about," she said.

"It is very slow growth, but it is growth nonetheless."

The housing situation turned more bleak in the first quarter, as record-high foreclosures dumped more unsold homes on the market, adding to builders' headaches.

Builders slashed spending on housing projects by a whopping 26.7 percent on an annualized basis.

That was the most in 27 years and the biggest drag on the economy.

Consumers -- whose spending is vital to the country's economic health -- turned much more cautious, also restraining overall economic growth in the first quarter.

Their spending rose at just a 1 percent pace.

That was down from a 2.3 percent growth rate and was the slowest since the second quarter of 2001, when the United States was suffering through its last recession.

Shoppers did cut spending on such things as cars, furniture, household appliances, food and clothes.

Soaring energy and food prices are walloping people's pocketbooks, leaving them with less to spend on other things.

The credit crunch also has made it harder for people to finance big ticket items, such as cars and homes.

And, many homeowners watching their homes slump in value, also are feeling less wealthy and less inclined to spend.

Another report Wednesday, this one from the Labor Department, showed that workers' compensation -- including wages and benefits -- grew 0.7 percent in the first quarter, the slowest pace in two years.

Many economists were expecting a 0.8 percent rise.

The report suggests the weak labor market is making employers a bit less generous with their compensation.

Businesses, meanwhile, reduced spending on equipment and software at a 0.7 percent pace, the most since the final quarter of 2006.

And, they trimmed spending on commercial construction at a 6.2 percent pace, the most since the third quarter of 2005.

However, growth in businesses' inventories of supplies was a big force adding to GDP.

That could reflect both stronger foreign demand for U.S merchandise and weaker domestic sales, analysts said.

Exports of U.S. goods and services, which increased at a 5.5 percent pace, also helped first-quarter growth.

U.S. exports are being helped by the falling value of the U.S. dollar, which makes U.S. made goods and services less expensive to foreign buyers.

Spending by the government was another factor helping out GDP in the first quarter.

That spending rose at a 2 percent pace for the second quarter in a row.

To bolster the economy, the Federal Reserve lowered a key interest rate by one-quarter percentage point to 2 percent Wednesday.

That marked a more moderate-sized rate reduction after a recent string of hefty cuts.

Many economists believe the Fed, which started dropping rates last September, may be nearing the end of its rate-cutting campaign because policymakers don't want to aggravate inflation.

Those rate reductions, which take months to affect economic activity, can sow the seeds of inflation down the road.

An inflation measure linked to the GDP report showed that prices grew at a rate of 3.5 percent in the first quarter, down from a 3.9 percent pace in the prior quarter.

Another gauge showed that the core prices excluding food and energy rose at a rate of 2.2 percent in the first quarter.

That was a lower than the 2.5 percent pace registered in the fourth quarter but still outside the Fed's comfort zone.

The upper level of the Fed's inflation tolerance is 2 percent.

Gas and food prices, however, have moved higher since the start of the year, adding to inflation pressures.

Gasoline prices, which have recently set new record highs, have climbed to $4 a gallon in some parts of the country.

A growing number of economists believe the economy is in a recession and is indeed contracting now.

Under one rough rule, if the economy contracts for six straight months it is considered to be in a recession.

That didn't happen in the last recession -- in 2001-- though.

A panel of experts at the National Bureau of Economic Research that determines when U.S. recessions begin and end uses a broader definition, taking into account income, employment and other barometers.

That finding is usually made well after the fact.

During the first three months of this year, job losses neared the staggering quarter-million mark.

The unemployment rate has climbed to 5.1 percent and is expected to move higher in the coming months.

Fed Chairman Ben Bernanke, earlier this month, acknowledged for the first time that a recession this year was possible.

President Bush on Tuesday said the country was dealing with "difficult times."

Bush said he understood Americans' anxiety over soaring gas prices, record-high home foreclosures and other economic woes.

The government's $168 billion economic-stimulus package -- including tax rebates that started flowing to bank accounts on Monday -- should help energize the economy in the second half of this year, the Bush administration and Federal Reserve officials say.

Democrats in Congress insist more relief needs to be provided, including additional unemployment benefits to cushion the pain of joblessness.

The administration has resisted, saying the rebates and other stimulative efforts should be sufficient once they fully kick in.

"GM loses $3.3 billion in 1Q, lowers sales outlook - GM reports 1Q loss of $3.3B on weak US market, charges, lowers US sales outlook"

By DEE-ANN DURBIN, Associated Press

Last updated: 5:22 p.m., Wednesday, April 30, 2008

DETROIT -- Bowing to grim reality, General Motors Corp. followed Ford's lead and cut its U.S. sales forecast Wednesday after a tough first quarter that saw a $3.3 billion loss.

But unlike Ford, GM faces more unknowns that could complicate its North American turnaround and drag down strong results overseas, including a strike at supplier American Axle, the protracted bankruptcy case of its former parts division, Delphi Corp., and unresolved labor talks in Canada.

GM's loss for the January-March period amounted to $5.74 per share, reflecting $2.9 billion in one-time charges.

That compares with a profit of $62 million, or 11 cents per share, in the first quarter of 2007.

Without the one-time charges, GM lost $350 million, or 62 cents per share, handily beating Wall Street's expectations.

On that news, investors sent GM's shares up 9.4 percent, or $2, to close at $23.20.

Analysts surveyed by Thomson Financial had expected a loss of $1.60 per share.

Ray Young, GM's chief financial officer, said analysts may be underestimating the company's overseas growth.

GM said revenues rose 20 percent outside North America thanks to strong expansion in China, Russia, Brazil and India.

A record 64 percent of sales came from outside the U.S. in the quarter.

But problems persist in GM's home market.

The Detroit-based automaker cut its industrywide U.S. sales outlook for 2008 to between 15.3 million and 15.5 million light vehicles from 16 million at the beginning of the year, largely due to plummeting sales of trucks and sport utility vehicles.

That's still higher than Ford Motor Co., which is forecasting 15 million sales.

Young said GM believes the second quarter will be weak but that things will improve later in the year as lower interest rates and federal stimulus measures kick in.

"We want to run our business conservatively."

"We want to be realistic," Young said.

Some analysts say GM's biggest problem has been its failure to plan for the weak U.S. market, where 2008 sales are expected to drop to a 14-year low.

"In our view, GM entered this year too optimistically, thus failing to manage its production and inventory appropriately," Calyon Securities analyst Mark Warnsman said in a note to investors.

But Lehman Brothers analyst Brian Johnson said he was encouraged by the company's decision to lower its forecast as well as its announcement this week that it will cut production at four U.S. truck and SUV plants, affecting 3,500 jobs.

Johnson said those moves show GM's management recognizes how tough the U.S. sales environment has gotten.

The one-time items included a $1.45 billion charge to reflect a change in the value of GM's 49 percent share in GMAC Financial Services.

Young said the company revalued its stake because of losses in GMAC's residential mortgage division.

GM also took a $731 million charge to reflect liabilities at Delphi.

GM said it has taken $8.3 billion in Delphi-related charges to date as the supplier struggles to emerge from bankruptcy protection after two and a half years.

Ford, which reported a surprise $100 million first-quarter profit last week, helped its former parts division Visteon Corp. avoid bankruptcy with a 2005 bailout.

It also hasn't been affected by the two-month strike at Detroit-based American Axle and Manufacturing Holdings Inc., which is in the midst of contentious labor negotiations with the United Auto Workers.

American Axle spokeswoman Renee Rogers said talks were continuing Wednesday.

GM said the strike, which has affected 30 plants, cost it $800 million and 100,000 vehicles in the first quarter -- although several analysts said GM would have had to cut that production anyway.

GM President and Chief Operating Officer Fritz Henderson said despite the losses, GM doesn't want to intervene.

"What we've tried to do is be helpful where we could be with the UAW and American Axle, but we really do not want to be involved," he said in a conference call.

Ford has another advantage: It already has agreed to a preliminary labor agreement with the Canadian Auto Workers.

GM and Chrysler LLC have yet to reach theirs, but will now be pressured by the union to accept Ford's terms.

Henderson said he doesn't measure GM's progress against other automakers.

"I'm not going to get into the business of trying to compare us with Ford or us with anybody else."

"We've got to get the business turned around," he said.

He added that all U.S. automakers will struggle this year with high gas prices and consumers' rapid switch to smaller, less profitable vehicles.

GM's revenue for the quarter totaled $42.7 billion, down from $43.4 billion a year ago.

The company lost $812 million in North America, compared with a loss of $208 million in the year-ago quarter.

Its North American market share dropped from 22.5 percent to 21.7 percent.

Jonathan Steinmetz, an analyst with Morgan Stanley, expressed concern about GM's $3.4 billion cash burn for the quarter, and said the company should consider cutting its dividend and raising more capital.

GM ended the quarter with $23.9 billion in cash and $7 billion in credit facilities.

By comparison, Ford ended the quarter with total liquidity of $40.6 billion.

GM sold 2.25 million vehicles worldwide in the first quarter, down less than 1 percent from a year ago.

------

On the Net:

General Motors Corp.: http://www.gm.com

"Stocks dip with investors flummoxed over Fed - Wall Street gives up steep advance after Fed cuts key rate, leaves rate outlook open"

By MADLEN READ, Associated Press

Last updated: 6:02 p.m., Wednesday, April 30, 2008

NEW YORK -- Wall Street gave up sharp gains and closed lower Wednesday after the Federal Reserve cut interest rates by a quarter point but left investors guessing about the central bank's next move.

The Dow Jones industrial average, momentarily soaring above 13,000 for the first time since early January, ended the session with a modest loss.

The Fed's statement Wednesday made it clear the central bank is less worried about economic growth than in March, when it pointed to "downside risks to growth."

The Fed said Wednesday that while the economy remains weak and the inflation outlook is still uncertain, its rate cuts and lending efforts over the past several months "should help promote moderate growth over time and to mitigate risks to economic activity."

But what was less certain was whether the central bank is confident enough about the economy to make inflation a top priority and keep interest rates on hold.

"It feels as if they're going to pause," said Kim Caughey, equity research analyst at Fort Pitt Capital Group.

She said, though, that she was surprised the Fed stated that it "expects inflation to moderate in the coming quarters."

"I think they're being clear that they're not 100 percent sure about what the next step is," Caughey said.

With economic data in recent weeks coming in anemic but not as bad as expected, inflation has appeared to Wall Street to be the growing threat, due to rising food prices, crude oil near $120 a barrel and U.S. roadside gasoline prices surging above $3.60 a gallon.

"The market had wanted to hear tougher talk on inflation, and some sort of talk that the easing has been adequate for a while, for the foreseeable future," said Scott Wren, equity strategist for Wachovia Securities.

The Dow Jones industrial average fell 11.81, or 0.09 percent, to 12,820.13, after trading up 178 points shortly after the Fed's announcement.

Broader stock indicators also closed down, having given up steep gains.

The Standard & Poor's 500 index fell 5.35, or 0.38 percent, to 1,385.59, and the Nasdaq composite index fell 13.30, or 0.55 percent, to 2,412.80.

The benchmark 10-year Treasury note rose after the Fed's decision.

Its yield, which moves opposite its price, fell to 3.73 percent from 3.82 percent late Tuesday.

The dollar dropped against most other major currencies, while gold prices turned higher.

Crude oil for June delivery fell $2.17 to settle at $113.46 a barrel on the New York Mercantile Exchange, after falling more than $3 a barrel on Tuesday.

The stock market had rallied in the hours before the Fed decision thanks to stronger-than-anticipated economic and corporate reports -- a weeks-long trend that has helped the three major indexes post their first monthly gain after five straight months of losses.

The Dow climbed 4.54 percent for the month of April; the S&P rose 4.75 percent; and the Nasdaq jumped 5.9 percent.

The Dow remains down 3.35 percent for the year, however, while the S&P is down 5.64 percent for the year and the Nasdaq is down 9.03 percent.

The Commerce Department estimated Wednesday that the gross domestic product rose at a modest seasonally adjusted annual rate of 0.6 percent during the first quarter, while the Chicago purchasing managers' index showed another month of contraction in Midwest manufacturing.

However, many economists had forecast a lower rise in first-quarter GDP -- some had even predicted a contraction -- and on average, they had anticipated a reading of 48.0 for the April purchasing managers' index instead of the reported 48.2.

Another report that beat lowered expectations came from General Motors Corp., whose quarterly loss of $3.3 billion due to supplier strike and weak U.S. sales was milder than Wall Street predicted.

Shares of the Dow component jumped $2, or 9.4 percent, to $23.20.

Procter & Gamble Co., another Dow component, said price increases and cost controls helped offset higher commodity costs, pushing its third quarter profit up 8 percent.

P&G lifted its full-year outlook, and its shares rose $1.15 to $67.05.

But the technology sector got extra downward pressure after software maker SAP AG said its profit slipped in the first quarter because of the weaker dollar and its takeover of another software company, Business Objects.

Though sales were higher and SAP raised its 2008 outlook, shares fell $2.22, or 4.2 percent, to $50.23.

Meanwhile, Dow component Citigroup Inc. priced $4.5 bilion of common stock to sell to boost its cash levels.

Citigroup shares fell $1.05, or 4 percent, to $25.27.

The Russell 2000 index of smaller companies fell 2.75, or 0.38 percent, to 716.18.

Advancing issues outnumbered decliners by about 8 to 7 on the New York Stock Exchange.

Consolidated volume totaled 3.66 billion shares, the same as on Tuesday.

Overseas, Japan's Nikkei stock average fell 0.32 percent.

Britain's FTSE 100 closed down 2.10 percent, Germany's DAX index rose 0.92 percent, and France's CAC-40 rose 0.39 percent.

------

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

"Agriculture futures advance broadly on weather concerns, Fed decision; oil falls below $114"

By STEVENSON JACOBS, Associated Press

Last updated: 5:52 p.m., Wednesday, April 30, 2008

NEW YORK -- Agriculture futures mostly rose Wednesday after the Federal Reserve cut interest rates and frigid, rainy weather in the U.S. Midwest threatened corn crops.

Other commodities were mixed Wednesday, with crude oil falling below $114 a barrel and copper rising.

Corn prices have shot up about 20 percent this year amid dwindling stockpiles and surging demand to feed livestock and make alternative fuels such as ethanol.

Cold, rainy weather in parts of the Midwest have left fields too wet for planting, putting farmers far behind schedule and sending prices for the grain to record levels above $6 a bushel.

U.S. farmers were expected to plant about 86 million acres of corn in 2008 -- an 8 percent drop from last year.

But the mix of frigid temperatures and heavy rain could cut the already reduced corn crop by a further 7 percent, according to weather risk management firm Storm Exchange.

Corn for July delivery jumped 7.75 cents to settle at $6.1225 a bushel on the Chicago Board of Trade.

Other agriculture futures traded mixed.

Wheat for July delivery fell 7.5 cents to settle at $8.01 a bushel, while July soybeans jumped 20.5 cents to settle at $13.14 a bushel.

Wheat has fallen below $8 a bushel for the first time in five months, but analysts say prices could spike again as the U.S. crop comes to market heading into the summer.

U.S. wheat is among the cheapest in the world, and the weak dollar makes the grain appear cheaper to overseas investors.

"The wheat crop looks pretty good so prices have come down, but you're going to see export demand for wheat improve, possibly in a big way," said Northstar Commodity analyst Jason Ward.

The Federal Reserve's decision Wednesday to lower its benchmark federal funds rate by a quarter point to 2 percent also weighed on commodity prices, weakening the dollar and boosting the allure of hard assets.

Agriculture and precious metals markets were already closed when the decision came, but prices generally moved higher in aftermarket trading.

Lower interest rates can boost the economy but tend to weaken the dollar, encouraging investors to buy hard assets like agriculture and precious metals, which are known for holding their value.

In energy markets, oil futures fell sharply Wednesday as investors digested a surprise rise in crude oil and distillate fuel inventories last week.

The Energy Department's Energy Information Administration said crude oil inventories rose 3.8 million barrels, more than double the increase that analysts expected.

Following the Fed cut, light, sweet crude for June delivery fell $2.17 to settle at $113.46 a barrel on the New York Mercantile Exchange.

Other energy futures also fell Wednesday.

May gasoline futures fell 0.8 cents to settle at $2.9312 a gallon and May heating oil futures fell 5.15 cents to $3.195 a gallon.

In precious metals, gold sank further Wednesday, falling to a new four-month low as investors bet that a slightly stronger dollar will diminish the metal's appeal as an inflation hedge.

Gold for June delivery lost $11.70 to settle at $865.10 an ounce on the Nymex, after earlier falling as low as $864.10, its lowest level since Jan. 2.

The contract later rebounded after the Fed's cut, trading up $2.50 to $879.30 in aftermarket trading.

Other precious metals traded mixed.

May silver dropped 3.8 cents to settle at $16.502 an ounce on the Nymex, while May copper added 3.45 cents to settle at $3.934 a pound.

"Treasurys gain as Fed statement stirs concern about economy, leaves some investors guessing"

By JOE BEL BRUNO, Associated Press

Last updated: 5:52 p.m., Wednesday, April 30, 2008

NEW YORK -- Treasury prices advanced Wednesday after the Federal Reserve announced a quarter-point interest rate cut and indicated it was taking a neutral stance toward future reductions amid concerns about the economy.

Policymakers lowered the Fed's benchmark fed funds rate by a quarter point to 2 percent.

In its accompanying economic statement, the central bank said it "will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability" -- a sign that another rate cut isn't guaranteed when the Fed's Open Market Committee meets again June 25.

Many investors were expecting the Fed to pause in its rate-cutting campaign after the Wednesday meeting because of concerns about inflation.

The Fed has cut rates a total of eight times, or 3.25 percentage points, since last summer, when the protracted credit crisis began paralyzing U.S. financial markets and hobbling the nation's economy.

"I was disappointed, mainly from the standpoint that they gave no acknowledgment about the financial market improvements and liquidity," said Joe Balestrino, a portfolio manager at Federated Investors who expected the Fed to indicate a pause was on the way.

"It was more neutral than I would have thought."

"... I guess they are taking more of a wait-and-see approach."

Treasurys, which at first fell after the Fed announcement, rose as investors sought some defensive positions.

Treasurys have shot higher in recent months, sending their yields tumbling, as investors sought the safety of government debt.

The benchmark 10-year Treasury note rose 23/32 to 98 3/32 and yielded 3.74 percent, down from 3.80 percent late Tuesday, according to BGCantor Market Data.

Prices and yields move in opposite directions.

The 30-year long bond rose 1 11/32 to 98 12/32 and yielded 4.47 percent, down from 4.55 percent late Tuesday.

The 2-year note rose 6/32 to 99 23/32 and yielded 2.26 percent, down from 2.36 percent late Tuesday.

In late trading, the 10-year yield fell to 3.73 percent and yields for the 30-year and 2-year note were unchanged.

The 3-month Treasury bill's yield was at 1.37 percent, down from 1.49 percent late Tuesday, while its discount rate was at 1.347 percent.

In its statement, the Fed said "recent information indicates that economic activity remains weak."

However, it also said its rate cuts so far and steps it has taken to restore stability to the credit markets "should help to promote moderate growth over time and to mitigate risks to economic activity."

The Fed's decision followed a government report that indicated the economy continues to be hampered by higher energy and food prices.

The Commerce Department estimated that the U.S. gross domestic product during the first quarter rose at a very modest seasonally adjusted annual rate of 0.6 percent during the first quarter, though the figure came in better than the market anticipated.

The Treasury Department said Wednesday it plans to sell $21 billion of new securities in its quarterly refunding.

The government plans to auction $15 billion of 10-year notes on May 7 and $6 billion of 29 1/2-year bonds on May 8.

In addition, the Treasury said it plans to revive the sale of one-year bills as a way to raise money to combat the federal budget deficit.

The government said the economy's decline has hurt tax receipts, and increased its funding needs.

"Energy futures drop on government report of unexpected jump in crude and distillate supplies"

By ADAM SCHRECK, Associated Press

Last updated: 5:12 p.m., Wednesday, April 30, 2008

NEW YORK -- Oil prices fell sharply Wednesday after the government reported U.S. fuel supplies rose more than expected last week and the Federal Reserve cut interest rates but gave no clues about further reductions.

Meanwhile, the pain at the pump continued.

Retail gas prices set yet another record, rising to a national average of nearly $3.62 a gallon.

Oil finished at its lowest point in more than two weeks after the central bank said it would cut the federal funds rate by a quarter percentage point to 2 percent.

"It doesn't really change anything," Tim Evans, an energy analyst at Citigroup Inc., said of the rate cut.

"The market had already largely priced in a quarter-point cut."

"It got a quarter-point cut."

Light, sweet crude for June delivery fell $2.17 to settle at $113.46 on the New York Mercantile Exchange.

Crude closed at $113.79 on April 14.

Interest rate cuts tend to weaken the dollar, and investors buy commodities such as oil as a hedge against inflation when the greenback falls.

A weaker dollar also makes oil cheaper for overseas buyers.

The wording of the statement accompanying the Fed's announcement left traders wondering whether future cuts are likely.

While signaling it is concerned about weak economic growth, the central bank also cited worries about inflation -- a risk propelled in large part by higher energy prices.

"Traders might be leaving the possibility open that they may just be keeping rates at this level for a while," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill.

Leaving rates unchanged, he added, could put further pressure on the dollar.

"This currency factor is still alive as a supportive force," Ritterbusch said.

Oil prices were already down earlier in the session after the government reported a surprising jump in crude oil and distillate fuel inventories last week.

In its weekly inventory report, the Energy Department's Energy Information Administration said crude oil inventories rose by 3.8 million barrels, more than double the increase that analysts surveyed by energy research firm Platts had expected.

Meanwhile, inventories of distillates, which include heating oil and diesel fuel, rose by 1.1 million barrels, more than seven times the expected increase.

Investors shrugged off a 1.5 million barrel decline in gasoline inventories, nearly double the drop that analysts forecast.

In part, that's because despite the decline, supplies of gasoline remain high for this time of year.

Also, demand for gasoline fell slightly over the last four weeks, on average, compared with the same period last year, EIA data show.

"The demand just isn't there, and there's plenty of supply," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

Analysts say record gas prices are depressing gasoline demand.

At the pump, the national average price of a gallon of regular gas rose a cent overnight to a record $3.617, according to a survey of stations by AAA and the Oil Price Information Service.

Diesel fuel rose 0.6 cent to a new record of $4.25 a gallon.

At some point, falling demand will pull prices down, analysts say, though few are willing to predict when that will happen.

Gas prices are following crude prices higher.

But because gasoline demand has fallen for several months, refiners have not been able to raise gas prices fast enough to keep up with the rising cost of crude, which they must buy to turn into fuel.

Crude prices are about 76 percent higher than they were a year ago, but gas prices are only 22 percent higher.

That is putting refining margins under pressure, and as a result, many refiners have cut gasoline production in recent weeks.

Refinery activity fell slightly last week, while analysts were expecting a slight increase.

In other Nymex trading Wednesday, May gasoline futures fell 0.8 cents to settle at $2.9312 a gallon and May heating oil futures fell 6.95 cents to settle at $3.1770 a gallon.

June natural gas futures rose 0.1 cents to settle at $10.843 per 1,000 cubic feet.

In London, Brent crude futures fell $2.07 to settle at $111.36 a barrel on the ICE Futures exchange.

------

AP Business Writer John Wilen contributed to this report.

"A Tough Drill to Swallow - President Bush stumps for ANWR drilling and dirty-energy expansion"

Posted at 3:17 PM on 29 Apr 2008

In a speech Tuesday, President Bush aimed to pacify Americans' concerns about skyrocketing fuel and food prices with the assurance that it's all Congress' fault.

Bush advocated tackling energy prices by throwing environmental protection to the winds (in not quite those words), urging Congress to open the Arctic National Wildlife Refuge to oil drilling and rah-rah-ing new coal and nuclear power plants.

Bush also expressed openness, though not support, to a summer-long gas-tax suspension, an idea backed by presidential contenders John McCain and Hillary Clinton but not Barack Obama.

sources: Reuters, Houston Chronicle

http://grist.org/news/2008/04/29/bush_speech/

REUTERS

"Bush says no magic wand to lower fuel prices"

Tue Apr 29, 2008 7:11pm EDT

By Jeremy Pelofsky and Chris Baltimore

WASHINGTON (Reuters) - U.S. President George W. Bush said on Tuesday there was no "magic wand" to bring down record-high fuel prices but would consider a proposal to suspend federal gasoline taxes this summer -- an idea that has divided the 2008 presidential candidates.

Trying to calm anxious Americans facing $3.60 a gallon gasoline and soaring grocery bills, Bush again prodded Congress to open an Alaska wildlife refuge to oil drilling and allow construction of more nuclear and coal plants.

"I firmly believe that, you know, if there was a magic wand to wave, I'd be waving it, of course," he said during a news conference.

"I've repeatedly submitted proposals to help address these problems, yet time after time Congress chose to block them."

Crude oil prices have surged more than five-fold since 2002, heaping more pressure on a waning U.S. economy besieged by dropping home values and rising food prices.

Oil prices are up nearly 25 percent since the start of 2008, logging a record near $119.93 a barrel on Monday, and gasoline prices are above the key $4 a gallon mark in some U.S. cities like San Francisco.

Giant U.S. oil company Exxon Mobil Corp will report its quarterly profits this week, after ConocoPhillips, Royal Dutch Shell and BP all reported quarterly profit increases from a year ago.

Presumed Republican presidential nominee Sen. John McCain and Democratic rival Hillary Clinton have both endorsed suspending an 18.4 cent per gallon federal gasoline tax this summer, but fellow Democratic hopeful Barack Obama has argued that it would make little difference.

Clinton, a New York senator and former first lady, has used the gas tax issue to differentiate herself from Obama, an Illinois senator, as they fight ahead of the nominating contests in Indiana and North Carolina next week.

In Indiana, Clinton argued McCain's plan for the gasoline tax holiday did not cover the costs to the federal government and said she would do that by taxing oil company profits.

"That money would then go in to replenish the highway trust fund," she said.

The McCain campaign disputed her charge, saying his legislation now pending in Congress would cover the money for the trust fund via general revenue.

Obama said the tax holiday plan would only save drivers a total of $25-$30 and may not reduce prices.

"This isn't an idea designed to get you through the summer, it's an idea designed to get them through an election," he told a town hall-style meeting in Winston-Salem, North Carolina.

Bush said he was willing to consider suspending gasoline taxes.

"We'll let the candidates argue out their ideas," Bush said.

"If it's a good idea, we embrace it."

"If not, we're analyzing the different ideas coming forward."

However, Bush again rebuffed calls from U.S. lawmakers to suspend filling the nation's emergency oil stockpile to boost supplies -- saying that U.S. reserve shipments amount to one-tenth of 1 percent of global oil demand.

Senate Democrats are pursuing legislation that would bar the federal government from socking away oil until prices fall, and 16 Republican senators on Tuesday said oil shipments should stop.

All three presidential hopefuls support such a move.

Instead, Bush has repeatedly called on OPEC -- source of about a third of global oil supplies -- to boost production to tame record prices, but so far cartel members have rejected output hikes.

Bush declined to say whether he will pressure Saudi Arabia -- OPEC's top exporter -- to boost output when he visits the kingdom next month.

"To your question on the Saudis, look, I have made the case that, you know, the high price of oil injures economies," Bush said.

"But I think we better understand that there's not a lot of excess capacity in this world right now."

(Additional reporting by Jeff Mason and Ellen Wulfhorst; editing by David Wiessler)

HOUSTON CHRONICLE

April 29, 2008, 11:02AM

"Bush again calls for drilling in Alaska wildlife preserve"

By DAVID IVANOVICH

WASHINGTON — With gasoline prices reaching yet another new high today, President Bush reiterated his call to open the Arctic National Wildlife Refuge to drilling and defended his policy of adding crude to the nation's emergency oil stockpile.

But Bush declined to jump into the political fray over whether the federal government should give motorists a tax holiday on federal excise tax on gasoline.

"One of the main reasons for high gas prices is that global oil production is not keeping up with growing demand," Bush said during a Rose Garden news conference.

"If Congress is truly interested in solving the problem, they can send the right signal by saying we're going to explore for oil and gas in the U.S. territories, starting with ANWR," Bush said.

"And we can do so in an environmentally friendly way."

Lawmakers have blocked exploration in the refuge, Bush argued, despite Energy Department estimates the area could yield a million barrels of oil a day — enough to make 27 million gallons of gasoline and diesel fuel.

"That would be about a 20 percent increase of ... crude oil production over U.S. levels, and it would likely mean lower gas prices," Bush said.

"And yet such efforts to explore in ANWR have been consistently blocked."

Bush argued that opening more domestic areas to drilling "sends a signal to the world that ... we're going to try to become less reliant upon foreign oil."

At the same time, Bush defended his administration's strategy of continuing to inject oil into the Strategic Petroleum Reserve, despite record oil prices, arguing the amount of oil going into the stockpile is too small to affect oil prices.

"We're buying, at the moment, about 67,000 to 68,000 barrels of oil per day" to fill the reserve, Bush said.

"World demand is 85 million barrels a day."

"So the purchases for the (reserve) account for 0.1 percent of global demand, and I don't think that's going to affect price."

Bush refused to say whether he would support a proposal backed by Republican presidential candidate Sen. John McCain of Arizona and Democratic candidate Sen. Hillary Rodham Clinton of New York to relax the 18.4-cent per gallon federal tax on gasoline.

"What I'm not going to do is jump right in the middle of a presidential campaign," Bush said.

"We'll let the candidates argue out their ideas."

But Bush said he would consider the suggestion.

On the economy, Bush declined to call the current slowdown a recession, even though many economists say the nation is already in one.

"You know, the words on how to define the economy don't reflect the anxiety the American people feel," Bush said.

"The average person doesn't really care what we call it."

"The average person wants to know whether or not we know that they're paying higher gasoline prices and they're worried about staying in their homes."

Asked if he thought government figures due out Wednesday on the nation's gross domestic product for the period from January through March would show the country was indeed in a recession, Bush said, "I think they'll show we're in a very slow economy."

On other subjects, Bush:

• Said he believes the NATO-led mission in Afghanistan is making strides in tamping down "a very resilient enemy."

Bush said that he believes the NATO-led mission in the country is succeeding.

"We're making progress, but it's also a tough battle,"Bush said. "

• Declined to openly criticize former President Carter for his meetings last week with representatives of Hamas, the Palestinian group the State Department considers a terrorist organization.

"Anybody can talk to whomever they want, but I want people to understand the problem is Hamas," said Bush.

"Foreign policy and peace is undermined by Hamas."

"... That's the reason I'm not talking with them," he said.

• Spoke about intelligence that was released alleging that Syria and North Korea were cooperating on a clandestine nuclear reactor.

He said the intelligence was made public to step up pressure on North Korea to end its own nuclear program and to pressure Syria to stop destabilizing the Middle East by aiding insurgents in Iraq and Hamas in Lebanon.

He said it was also meant to send a message to Iran.

The Associated Press contributed to this report.

david.ivanovich@chron.com

http://www.chron.com/disp/story.mpl/hotstories/5738784.html

"Starbucks 2nd-quarter profit falls 28 percent, US store traffic declines"

By JESSICA MINTZ, Associated Press

Last updated: 4:52 p.m., Wednesday, April 30, 2008

SEATTLE -- Starbucks Corp. said Wednesday its fiscal second-quarter profit fell 28 percent as U.S. consumers responded to rising food and gas prices by making fewer latte runs.

For the quarter ended March 30, Starbucks' net income sank to $108.7 million, or 15 cents per share, from $150.8 million, or 19 cents a share in the same period last year.

Revenue rose 12 percent to $2.53 billion from $2.26 billion in the year-ago quarter, the company said Wednesday.

Starbucks warned last week that results would fall short of Wall Street's expectations.

Analysts, on average, had forecast a profit of 21 cents per share on $2.63 billion in sales, according to a Thomson Financial survey.

Charges for closing stores or not moving forward with planned openings, as well as costs associated with Starbucks' plan to reinvigorate U.S. sales, cut earnings by about 3 cents per share.

U.S. same-store sales, a key measure of retail health, fell in the mid-single digits as traffic declined.

Starbucks' past guidance called for 3 percent to 5 percent growth in same-store sales, or sales at locations open at least a year.

Starbucks added 266 U.S. stores in the quarter, and 470 outside the country, bringing the worldwide total to 16,226.

For the full fiscal year, Starbucks said earnings would fall below the 87 cents per share it earned in 2007, and that revenue will grow 13 percent to 14 percent.

Previously, it had said fiscal-year profit would grow year-over-year, albeit in the low double digits.

Starbuck's shares slipped to $16.18 in after-hours trading, after ending the day up 3 cents to 16.23.

"Fed interest rate statement - Federal Reserve's statement explaining decision to lower key interest rate one-quarter point"

Associated Press

Last updated: 2:42 p.m., Wednesday, April 30, 2008

The Federal Reserve's interest rate statement Wednesday:

The Federal Open Market Committee decided today to lower its target for the federal funds rate 25 basis points to 2 percent.

Recent information indicates that economic activity remains weak.

Household and business spending has been subdued and labor markets have softened further.

Financial markets remain under considerable stress, and tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters.

Although readings on core inflation have improved somewhat, energy and other commodity prices have increased, and some indicators of inflation expectations have risen in recent months.

The Committee expects inflation to moderate in coming quarters, reflecting a projected leveling-out of energy and other commodity prices and an easing of pressures on resource utilization.

Still, uncertainty about the inflation outlook remains high.

It will be necessary to continue to monitor inflation developments carefully.

The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time and to mitigate risks to economic activity.

The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; Gary H. Stern; and Kevin M. Warsh.

Voting against were Richard W. Fisher and Charles I. Plosser, who preferred no change in the target for the federal funds rate at this meeting.

In a related action, the Board of Governors unanimously approved a 25-basis-point decrease in the discount rate to 2-1/4 percent.

In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Cleveland, Atlanta, and San Francisco.

AND AS THE FAILED AND INCOMPETENT ADMINSTRATION OF AMERICAN PRESIDENT GEORGE W.(orthless) BUSH CONTINUES TO PLOW OUR AMERICAN ECONOMY HARD INTO THE GROUND ....

BORROWING YET MORE MONEY TO GIVE US A SUPPOSED "REBATE" IN AN EFFORT TO PULL OUR TANKING ECONOMY OUT OF THE NOSEDIVE INTO THE TOILET THE PECKERWOOD HAS GOT US INTO WITH ALL OF HIS PROFLIGATE SPENDING FOR HIS WARS OF DOMINATION IN THE MIDDLE EAST ...

WE HAVE ...

"Administration brings back one-year Treasury bill to cope with soaring budget deficits"

By MARTIN CRUTSINGER, Associated Press

Last updated: 12:42 p.m., Wednesday, April 30, 2008

WASHINGTON -- The Bush administration, moving to cope with soaring budget deficits, says it is bringing back the one-year Treasury bill that it stopped issuing seven years ago when the budget was in surplus.

The administration said Wednesday it would begin selling the one-year bill, also referred to as a 52-week bill, at an initial auction in June.

New one-year securities will be auctioned every four weeks.

The government is looking for various ways to borrow the billions of dollars in extra cash it will need to cover a budget deficit that is expected to jump to an all-time high this year, surpassing the old mark of $413 billion set in 2004.

Private economists are projecting that the deficit for this year could surge as high as $500 billion.

A big part of the increased borrowing reflects the need to pay for economic-stimulus rebates to 130 million households.

The government began disbursing the payments on Monday in an effort to give the economy a jump start.

The government stopped issuing the one-year securities in February 2001, a year when the government recorded a surplus of $127 billion.

That was the fourth consecutive surplus but was also the last time the government's books were in the black.

The budget was pushed back into the red by a recession, increased spending to fight wars in Afghanistan and Iraq and, Democrats contend, by President Bush's first-term tax cuts.

The return of the one-year security was announced as officials reported the government's borrowing needs for the current quarter, which will include separate auctions next week to raise $15 billion with the sale of 10-year Treasury notes on May 7 and $6 billion in the sale of 30-year Treasury bonds on May 8.

"Over the last several months, changes in economic conditions, financial markets and monetary and fiscal policy have impacted Treasury's marketable borrowing needs," said Anthony Ryan, Treasury's assistant secretary for financial markets.

"Financial market strains have impacted the real economy and the nation has experienced lower economic growth, lower receipts and increased outlays."

Officials reported that the decision to lower the minimum amount that can be purchased at a Treasury auction to $100 had been a success, sparking increased demand.

They said exact figures on the increase were still being compiled.

The Treasury Department began earlier this year allowing investors to purchase Treasury securities in amounts as low as $100 as a way of boosting demand among small investors.

The reduction was the first since 1998, when the purchase minimum amount was reduced to $1,000.

WHOSE PUPPET IS PECKERWOOD GEORGE W. BUSH?

WHAT'S UP WITH THE PECKERWOOD CALLING THIS IRAQINAMI POLITICIAN WHILE THE PECKERWOOD HAS OUR AMERICAN MILITARY EXTERMINATING HIS POLITICAL FOES AHEAD OF REGIONAL ELECTIONS UPCOMING IN IRAQINAM?

WAS ABDUL-AZIZ al-HAKIM, HEAD OF THE SUPREME ISLAMIC IRAQ COUNCIL IN IRAQINAM CALLING THE PECKERWOOD ON THE CARPET FOR BEING INCOMPETENT WITH THE PACE OF THE EXTERMINATION?

And so ...

"US troop deaths hit 7-month high in Iraq as Baghdad fighting flares"

By KIM GAMEL, Associated Press

Last updated: 5:22 p.m., Wednesday, April 30, 2008

BAGHDAD -- The U.S. military death toll hit a seven-month high of 49 on Wednesday -- with more than half the losses in Baghdad as American forces wage growing street battles against Shiite fighters.

Iraqi civilian deaths also remained high following the Iraqi government crackdown on Shiite militia factions -- accused by Prime Minister Nouri al-Maliki of using residents as human shields during close combat in the teeming Sadr City slum.

The clashes in Sadr City -- a base for the powerful Mahdi Army militia -- show little sign of easing as Iraqi and U.S. troops try to exert control over an area containing nearly half of the Baghdad's population.

In the deadliest skirmish Wednesday, suspected Shiite extremists first attacked with mortars and machine guns, then drove up to a U.S. checkpoint and opened fire.

The U.S. military said seven militants were killed.

At least 10 other militiamen died in other clashes, the military said.

But the growing violence in Baghdad also has taken a toll on U.S. forces.

At least five soldiers have been killed in the city since Tuesday, bringing the monthly count to at least 49 -- 27 in Baghdad -- in the deadliest month since September when 65 U.S. troops died.

Since the U.S.-led invasion in 2003, at least 4,061 U.S. military personnel have died in Iraq, according to an Associated Press count.

Around Iraq, at least 1,080 Iraqi civilians and security forces were killed nationwide this month, or an average of 36 a day, according to an AP tally.

That's down from March's total of 1,269, or an average of 41 per day.

But nearly 40 percent of the April deaths -- 413 -- occurred in Baghdad as violence returned to the capital, according to the AP figures compiled from reports from Iraqi police, hospital officials and government offices.

Civilian deaths have steadily risen this year, and spiked sharply after al-Maliki launched the offensive on Shiite militias on March 25 in the southern city of Basra.

Fighting soon flared in Sadr City, which has become the epicenter of the battles.

It's difficult to determine the civilian toll from the ongoing clashes in Sadr City.

An Interior Ministry official, who spoke on condition of anonymity because he wasn't authorized to release the information, said a total of 479 people have been killed in Sadr City since the clashes began in late March.

But the official could not break down the number of militants, Iraqi security forces and civilians.

Tahseen al-Sheikhly, the spokesman for the civilian side of Baghdad security operations, said 925 people had died and 2,605 were wounded in Sadr City.

But he gave no timeframe or details about how the figure was reached.

The U.S. military blamed the increase in deaths to an effort by both Shiite and Sunni militants to reverse recent security gains.

The fighting intensified after al-Sadr last week threatened to unleash an "open war" against U.S.-led forces.

"We have said all along that this will be a tough fight and there will be periods where we see these extremists, these criminal groups and al-Qaida terrorists seek to reassert themselves," U.S. military spokesman Maj. Gen. Kevin Bergner told reporters in Baghdad.

"So, the sacrifice of our troopers, the sacrifice of Iraqi forces and Iraqi citizens reflects this challenge," Bergner added.

The Iraqi prime minister also showed no indications of backing down.

Al-Maliki vowed that "no one can stop" the drive to disarm Shiite and Sunni extremists, including the Mahdi Army -- which he accused of using civilians as human shields and hiding in residential areas.

"We can't build a state along with militias," he said during a news conference.

"We want to build a single national army."

Al-Maliki said gunmen had killed the nephew of police Maj. Gen. Abdul-Karim Khalaf, an Interior Ministry spokesman who has overseen operations in Basra, by hanging him from an electricity pole in Sadr City.

Local officials also claimed a school in Sadr City was hit by a U.S. airstrike.

AP Television News footage showed a collapsed girls' school, with desks hanging from the slanting floors.

The U.S. military did not specifically comment about the school.

In Washington, the White House confirmed that President Bush on Tuesday called Abdul-Aziz al-Hakim, head of the Supreme Islamic Iraqi Council, the most powerful Shiite party backing the Iraqi government and a chief rival of al-Sadr's movement.

------

Associated Press writer Qassim Abdul-Zahra in Baghdad and the AP News Research Center in New York contributed to this report.

"7 killed during raid on militant hideout in Afghan capital - Raid on militant hideout in Kabul destroys house, battle kills 7"

By RAHIM FAIEZ and MATTHEW PENNINGTON, Associated Press

Last updated: 3:12 p.m., Wednesday, April 30, 2008

KABUL, Afghanistan -- Hundreds of intelligence agents on Wednesday raided the hideout of militants with suspected links to an attack on President Hamid Karzai, as the Afghan capital was sucked deeper into the war against the Taliban.

Terrified residents hid from booming guns and grenades that destroyed the mud-brick house.

The battle claimed seven lives -- a woman and a child who were in the house, three intelligence agents and two militants.

One of the dead militants had supplied weapons used in Sunday's attack on Karzai, intelligence chief Amrullah Saleh told reporters.

Afghan security services are under pressure to crack militant cells after the assassination attempt, which came during a military parade in Kabul that was also attended by foreign ambassadors.

The attack highlighted the president's weak grip on the country.

The U.S.-backed leader escaped injury, but a lawmaker and two other people were killed.

Saleh said Wednesday's raid on a densely populated hillside in western Kabul was part of a wider operation in which six other militant suspects were detained elsewhere in the city.

He said the border regions of neighboring Pakistan were the source of the militant threat.

Saleh alleged that militants involved in the gun and mortar assault on Karzai were exchanging cell phone text messages with people in Pakistan's Bajur and North Waziristan regions and the main northwestern Pakistani city of Peshawar.

Although he did not directly implicate Pakistan's government, Saleh's comments could dampen recently improved relations between the countries, relations often strained over allegations that Pakistan helps the Taliban.

"We have no evidence whether ... the operation has had any mercy or go-ahead from the government of Pakistan and (its) special agencies," Saleh said.

"There (is) very, very strong evidence suggesting that Pakistan's soil once again has been used to inflict pain on our nation."

Pakistan army spokesman Maj. Gen. Athar Abbas called the allegation "baseless."

"Anybody can say that militants (in the tribal areas) have done this or that," he said.

"How can one validate such claims?"

The Taliban has claimed responsibility for the attempt on Karzai's life.

It was at least the fourth attempt to assassinate him since he came to power six years ago.

That attack exposed how despite the presence of more than 40,000 U.S. and NATO-led troops and rapidly expanding Afghan security forces, Karzai is struggling to contain the insurgency.

At least 1,000 people have died in fighting in 2008.

The U.N. says more than 8,000 people, most of them militants, died in insurgency-related violence in 2007.

The Taliban, whose hard-line regime was driven from power by U.S.-led forces in late 2001, are now strongest in the volatile south and east of the country.

Kabul has often been hit by Taliban suicide bombers, but gunbattles between security forces and militants are still rare in the capital.

Wednesday's operation began in the early hours.

The first gunfire rang out before dawn.

Standing about 500 feet away, an Associated Press reporter watched armed agents gradually close in through the warren of homes on the hillside near the historic Babur Gardens, a popular public park.

The two sides traded assault rifle and machine-gun fire.

Puffs of dust burst up from around the targeted house during the battle.

Some families evacuated their nearby homes, but most stayed as explosions reverberated and gunfire pierced the air.

The firing subsided after 8 a.m. following three big explosions -- two from rocket-propelled grenades fired by agents and a third, larger blast that apparently collapsed part of the two-story mud-brick building.

By about 10 a.m., the fighting was over.

Saleh said security forces used heavier weapons fire when it was clear the militants in the house would not surrender.

"In the beginning we thought that this could be solved by a soft-knock," Saleh said.

"However we found out very soon that we needed to use various types of weapons to dislodge them."

Residents emerged from their homes as calm returned.

Mohammed Ajmal, a man in his mid-20s, appeared pale and shaken.

"We kept hearing gunfire and the intelligence officials would not let us out of the house," he said.

"But we knew they were firing at this one house, not at us."

Ajmal said people inside the targeted house had rented it three months ago, but he did not know them or where they came from.

"They looked like regular people and we thought they were very poor," he said.

Afghan lawmakers on Tuesday passed a vote of no-confidence against the country's three top security officials -- including Saleh -- after they revealed they had been aware of the assassination plot against Karzai but failed to stop it.

The officials retained their jobs.

----------

Associated Press writer Amir Shah contributed to this report.

"Pakistan's leaders fail to agree on reinstating ousted judges, but predict success by Thursday"

By MUNIR AHMAD, Associated Press

Last updated: 2:52 p.m., Wednesday, April 30, 2008

ISLAMABAD, Pakistan -- Pakistan's new leaders failed to meet their Wednesday deadline to restore judges ousted by President Pervez Musharraf, but said they would keep trying to resolve a dispute that is threatening their month-old coalition government.

After seven hours of talks in the Persian Gulf state of Dubai, "there has been progress," said Chaudhry Nisar Ali Khan, a senior official in the party led by former Prime Minister Nawaz Sharif.

He and others predicted an agreement would be reached during further talks Thursday.

The main pro-Musharraf party, meanwhile, said it would start work on its own proposal for restoring the judges to office and consider the possibility of joining a new ruling coalition if the current one breaks apart.

Musharraf purged the Supreme Court in November to stop legal challenges to his continuation as president.

Allies of the U.S.-backed leader were routed in February parliamentary elections by the parties that formed the new government.

The new ruling coalition promised to reinstate the judges by the end of April, but its leaders have yet to agree on exactly how.

The dispute has fueled speculation that the alliance, which has been easing Musharraf's military confrontation with Islamic militants, could crumble and bring more instability to a country considered key to U.S. goals in the war on terrorist groups.

The larger coalition party, led by Asif Ali Zardari, the widower of assassinated former prime minister Benazir Bhutto, wants to link the restoration of judges to a proposed package of judicial reforms that could narrow the powers of deposed Chief Justice Iftikhar Mohammed Chaudhry and prevent judges from getting involved in politics.

Zardari has accused Chaudhry and other judges of "playing politics" and failing to deliver justice to him during the years he spent in jail on unproven corruption charges.

On his way to the meeting, Sharif said the two parties must honor a pledge to use a parliamentary resolution to restore the judiciary and urged Zardari to "de-link" the resolution from the proposed broader reforms.

"The resolution is a simple resolution ... we will be very happy to look at the constitutional package whenever it comes to us," Sharif told reporters.

Sharif's party has threatened to pull its ministers from the Cabinet if the judges issue drags on, but insists it will remain part of the coalition.

Officials from both parties sought to play down the Wednesday deadline.

Farhatullah Babar, a spokesman for Zardari's party, told Dawn News television that the Wednesday night deadline was "not critically important" as long as a deal eventually reached was smoothly implemented.

Khan, of Sharif's party, said as Wednesday's talks ended that the need for additional time wasn't serious.

"A few hours here and there doesn't matter."

"But the fact of the matter is the final decision would be made tomorrow and I am saying this very categorically," he said.

Musharraf removed Chaudhry just as the Supreme Court was preparing to rule on the legality of his October election by the previous parliament to a new five-year presidential term.

Musharraf accused the chief justice of corruption and conspiring against him and his plans to guide Pakistan back to democracy.

Chaudhry had shown an unusual degree of independence, blocking government privatization deals and investigating complaints that its spy agencies were holding opposition activists secretly under the cover of fighting international terrorism.

Some analysts predict Musharraf might have to quit if Chaudhry is restored and the court revisits the president's disputed re-election.

Sharif, whose government was ousted in Musharraf's 1999 coup, is demanding the ex-general's ouster.

Yet Zardari's liberal party has repeatedly hinted it could govern without Sharif, a traditional rival with links to religious conservatives.

The political squabble has stirred talk in Pakistani media about the possible revival of a power-sharing deal that was being discussed by Musharraf and Bhutto before she was slain in December.

The main pro-Musharraf party, now in the minority, was considering its options Wednesday.

Spokesman Tariq Azeem said the party would start work on a resolution aimed at restoring the judiciary -- including Chaudhry -- if the current coalition could not offer a proposal.

Asked if Musharraf agreed with the intended move, Azeem said that "much water has passed under the bridge and the ground reality has now changed."

Azeem also said the party would consider whether to join Zardari's party in a coalition if Sharif's party quit the government.

"We will see as to what are the terms and conditions for doing so," Azeem said.

"We cannot rule it out."

Also Wednesday, Bhutto's party agreed to share power in the southern province of Sindh with a Karachi-based party that backed the previous pro-Musharraf government.

Officials said there were no plans for it to join the federal coalition.

------

Associated Press writers Barbara Surk in Dubai and Zarar Khan and Stephen Graham in Islamabad contributed to this report.

"AP IMPACT: Prosecutors demand more witness-protection money - Prosecutors complain that witness-protection programs are getting shortchanged"

By TODD RICHMOND, Associated Press

Last updated: 4:22 p.m., Wednesday, April 30, 2008

MILWAUKEE -- Maurice Pulley agreed last fall to testify against the thug accused of shooting him in the face in an argument over a parking spot.

But before Pulley ever took the stand, two gunmen ran up to him and killed him in his mother's driveway.

Pulley's family is blaming the dismantling of Milwaukee's witness-protection program 4 1/2 years ago.

"My son is laying there like an animal."

"Like a deer," said the young man's father, Maurice Pulley Sr.

"He stuck up for right and justice."

"When things start to happen, you need to act to get people safe."

"It's unconscionable."

"There should be no price too great to pay for somebody's protection."

Around the country, prosecutors say tight budgets are hamstringing their ability to keep witnesses safe at a time when intimidation on the streets appears to be surging, particularly in gang cases.

"The most basic thing we should be able to do is assure them they'll be safe while their case is proceeding," Milwaukee District Attorney John Chisholm said.

"We can't guarantee your safety."

Florida's witness protection efforts took a hit after a budget shortfall forced lawmakers in 2007 to reduce $500,000 originally appropriated for the program to $100,000.

Atlanta prosecutors get no state help for witness protection, instead scraping by with money from forfeitures, Fulton County District Attorney Paul Howard said.

The money is so inadequate that he plea-bargains some cases because he can't afford to protect witnesses in long trials, he said.

"It's a very serious problem," Howard said.

"And that's why I think it's something we should get some assistance for from the state."

"Here in the county our budgets are shrinking, as with everybody."

In Chicago, the Cook County State's Attorney's office got some state dollars in 2003 and 2004 for witness relocation and protection, but since then has been running its program out of its own budget.

Since 2003 the office has spent nearly $520,000 to relocate 199 witnesses.

In Philadelphia, spending by the district attorney's office on relocating witnesses increased from $413,290 in 2004 to $1 million in 2007.

Nevertheless, District Attorney Lynne Abraham said that is not enough.

Abraham said her office can afford only to move a limited number of people from place to place until they can testify.

She would like more money to help cover witnesses' living expenses and perhaps provide them with job training.

"When we put you someplace else, you're cut off from family, friends, jobs."

"How are you going to make money?" she asked.

Prosecutors say witness intimidation is surging.

"Stop Snitching" T-shirts have been sold in cities around the country.

In 2004 NBA star Carmelo Anthony appeared in an underground Baltimore DVD that warned people they could be killed if they cooperated with police.

A Web site titled "Who's a Rat?" offers a national database of informants.

Many jurisdictions do not keep figures on cases dismissed because of intimidation or the number of witnesses hurt or killed.

But prosecutors tell stories of how witness intimidation has damaged cases.

In Philadelphia, where the number of cases that involved witness relocation increased from 35 in 2004 to 84 last year, one of the most egregious examples came in 2006, when eight witnesses recanted testimony about who shot Faheem Thomas-Childs, a 10-year-old boy who walked into gang crossfire in front of dozens of people.

Levels of local protection vary.

Some metropolitan areas, such as New York City, Miami and Chicago, have full-fledged programs or provide short-term relocation and protection on an informal, case-by-case basis.

The money typically comes from prosecutors' budgets or state reimbursements.

The U.S. Marshals Service runs an elaborate witness protection program in which people are permanently relocated and given brand-new identities, but it is generally reserved for federal witnesses in major cases.

In Milwaukee, detectives believe that Pulley had turned down $75,000 to keep his mouth shut, and had also brushed off threats on his life.

Pulley's family said detectives warned that they could not offer the 24-year-old man protection.

The Sheriff's Department ran Milwaukee's protection unit with state and county dollars, but costs rose, reaching more than a half-million a year early this decade.

With Wisconsin lawmakers grappling with billion-dollar budget deficits, the state's contribution dropped.

By 2003 the county was picking up 40 percent of the tab. Sheriff David Clarke disbanded the unit that year, saying it was too expensive.

The district attorney has been soliciting donations from private foundations to protect witnesses in big cases, but said he needs a full-fledged unit.

Milwaukee, a city of about 600,000, averaged around 100 homicides and more than 6,500 violent crimes annually between 2002 and 2006.

In the four years since the witness protection unit ended, Chisholm's office on average charged someone with intimidating a witness every six days.

"Something's got to be done," Chisholm said.

"You say, 'In 15 minutes I'm going to call you to the stand' and they'll just look at you and say, 'I'm not doing it.'"

Reps. Elijah Cummings, D-Md., and Michael Arcuri, D-N.Y., have introduced bills in Congress that would authorize federal marshals to provide short-term protection in state cases and dispense witness protection grants.

"Cities simply do not have the money," Cummings said.

"When Milwaukee does away with its program, it sends a very loud message: The government is not going to protect you if you come forth."

Meanwhile, Pulley's father has bought his first gun, saying he needs protection against the people who killed his son.

"At least I'm in a position to do something," he said.

"I'm not in the same predicament my son was."

AND AS THE REPUBLICANS RAMP UP THEIR EFFORTS TO BEGIN A MILITARY ACTION AGAINST IRAN BEFORE THE PRESIDENTIAL ELECTIONS IN AMERICA THIS FALL, WE HAVE ....

THE SOUNDS OF WAR DRUMS BEATING LOUDER AND LOUDER ...

2004 ALL OVER AGAIN ...

And so ...

"US officials: Decision on confronting Iran up to Iraq - US officials says Iraqis have latest US evidence on Iran and will decide the next step"

By ROBERT BURNS, Associated Press

Last updated: 7:22 p.m., Wednesday, April 30, 2008

WASHINGTON -- Iraqi leaders have been given the latest U.S. evidence of Iranian support for militias inside Iraq, and Baghdad will decide what to do about it, two senior Pentagon officials said Wednesday.

Marine Lt. Gen. John Sattler, director of strategy, plans and policy for the Joint Chiefs of Staff, said Prime Minister Nouri al-Maliki possesses the evidence, which other officials said contradicts Tehran's stated commitment to stop providing arms, weapons technology and training to Shiite militias inside Iraq.

"It's in Prime Minister al-Maliki's hands right now, the evidence as to whether or not he's been lied to -- bald-faced lied to -- by the Iranian government," Sattler told a Pentagon news conference.

"The evidence inside Baghdad has been shared with the Iraqi leadership, and that's where it stands right now," he added.

The Iraqi leaders are hoping to pressure Iran to stop aiding militias by presenting Tehran with the latest evidence, another senior defense official said.

The official, speaking on condition of anonymity because of the sensitivity of the information, said it's not clear whether the Iranians have agreed to meet to discuss the evidence.

But the official said the Iraqis want to press the Iranians to stop.

CIA Director Michael Hayden said Wednesday that Iran's policy is to help kill Americans in Iraq.

Hayden made the statement in response to a student question while speaking at Kansas State University.

"It is my opinion, it is the policy of the Iranian government, approved to highest level of that government, to facilitate the killing of Americans in Iraq," Hayden said.

U.S. military officials have said its evidence that Iran is aiding Iraqi militias includes caches of weapons that have date stamps showing they were produced in Iran this year.

The weapons include mortars, rockets, small arms, roadside bombs and armor-piercing explosives -- known as explosively formed penetrators, or EFPs -- that troops have discovered in recent months, according to another senior military official who spoke on condition of anonymity because the evidence has not yet been made public.

According to one official, plans for U.S. officials to publicly present the evidence of Iranian support for the militias have been delayed to give the Iraqis time to speak directly to Tehran about the problem.

Defense Secretary Robert Gates and other U.S. government officials have asserted that Iranian-trained Iraqi Shiite militiamen are carrying out attacks in Baghdad and elsewhere in Iraq -- using weapons supplied by Iran -- that are killing not only Iraqis but U.S. troops as well.

Appearing with Sattler at the Pentagon was the Joint Chiefs' operations chief, Army Lt. Gen. Carter Ham, who said the Iraqis will play "a leading role" in determining how to deal with the problem.

"The government of Iran ... made a commitment to stem the flow of fighters and material from Iran into Iraq," Ham said, adding that U.S. military commanders in Baghdad "have stated that they're not seeing evidence that that is, in fact, the case."

"I think it now is a matter for the government of Iraq."

Asked more directly what the U.S. government intends to do about the Iranian actions in Iraq, Ham replied, "Clearly the Iraqis have a leading role, but it is necessarily an international effort to which the United States clearly is a significant factor in this."

Adm. Michael Mullen, chairman of the Joint Chiefs of Staff, said last week that U.S. officials in Baghdad planned to publicly release evidence of continuing lethal Iranian assistance to militias inside Iraq.

That plan is on hold to give the Iraqis time to speak directly to Tehran about the problem, one official said.

Gates said Tuesday that the U.S. is not laying the groundwork for an attack against Iran.

Addressing the same issue, Sattler said he knows of "no order or stepped-up effort to plan" for military action against Iran, adding that in his position as head of planning for the Joint Chiefs, he would know.

The U.S. briefly had two Navy aircraft carriers in the Persian Gulf this week -- a move that Gates said Tuesday could be seen as a "reminder" to Iran.

The Pentagon has routinely said that moving ships to the Gulf is a way of showing countries there that the U.S. remains committed to the region.

The USS Abraham Lincoln entered the Gulf in a normal rotation of forces, and the USS Harry Truman and its battle group began heading toward their home base at Norfolk, Va., officials said.

Ham said the two carriers were together in the Gulf for only a day, and that they conducted joint air exercises in the northern Gulf.

------

Associated Press writer Lolita C. Baldor, traveling with Defense Secretary Robert Gates in Mexico City and Texas, contributed to this report.

"CIA director says Iranian policy at highest level is to kill Americans in Iraq"

By JOHN MILBURN, Associated Press

Last updated: 7:22 p.m., Wednesday, April 30, 2008

MANHATTAN, Kan. -- CIA Director Michael Hayden said Wednesday that Iranian policy, at the highest government level, is to help kill Americans in Iraq, the boldest pronouncement of Iranian involvement by a U.S. official to date.

Hayden made the statement in response to a student question while delivering the Landon Lecture at Kansas State University.

"It is my opinion, it is the policy of the Iranian government, approved to highest level of that government, to facilitate the killing of Americans in Iraq," Hayden said.

"Just make sure there's clarity on that."

In recent weeks, U.S. officials have ratcheted up their complaints that Iran is increasing its efforts to supply weapons and training to militants in Iraq.

Military commanders in Baghdad are expected to roll out evidence of that support soon, including date stamps on newly found weapons caches showing that recently made Iranian weapons are flowing into Iraq at a steadily increasing rate.

Another senior military official said the evidence will include mortars, rockets, small arms, roadside bombs and armor-piercing explosives -- known as explosively formed penetrators or EFPs -- that troops have discovered in caches in recent months.

The official, who spoke on condition of anonymity because the evidence has not yet been made public, said dates on some of the weapons were well after Tehran signaled late last year that it was scaling back aid to insurgents.

Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, has said the U.S. prefers to resolve the issue through other pressures, but that it has the combat capability to strike Tehran, if necessary.

Hayden also said the recent Iraqi offensive in the southern Iraqi city of Basra should stand as a clear indication to Iraq's neighbors that it intends to be a credible force in the region.

He added that such activities boost the credentials of the Prime Minister Nouri al-Maliki's government.

During his 40 minute lecture, Hayden said China was likely to be a political and economic competitor by the middle of the century but should not be treated as an "inevitable enemy" of the United States.

He warned, however, that China likely would be viewed as an adversary if Beijing uses its growing global influence in support of its own narrow interests at the cost of peace and economic stability.

"If Beijing begins to accept greater responsibility for the health of the international system -- as all global powers should -- we will remain on a constructive, even if competitive, path."

"If not, the rise of China begins to look more adversarial," he said.

China's military buildup, which is intended both to counter U.S. military capabilities and to intimidate an independence-minded Taiwan, is as much about projecting an image of strength and "great power status" as it is to gain a tactical or strategic military advantage, he said.

"After two centuries of perceived Western hegemony, China is determined to flex its muscle," Hayden said.

He also predicted continued tension between the United States and Europe, an old alliance now strained by different views about terrorism.

It is not yet clear when or if the United States and Europe will come to share the same views of 21st-century threats -- as we did for the last half of the 20th century -- and then forge a common approach to security," Hayden said.

The United States considers itself a nation at war, in pursuit of terrorists wherever they are, he said.

"In much of Europe, terrorism is seen differently: primarily as an internal, law enforcement problem, and solutions are focused more narrowly on securing the homeland," Hayden said.

Sharp population growth over the coming decades, particularly in Asia, Africa and the Middle East, will strain resources, increase immigration and could result in an increase in violent extremism and civil unrest, he said.

The populations of Afghanistan, Liberia, Niger and the Democratic Republic of Congo are expected to triple in 40 years, and those of Ethiopia, Nigeria, and Yemen will more than double, he said.

Demographic changes, a rising China, and the evolving trans-Atlantic alliance will shape American security and foreign policy through the middle of this century, Hayden said.

He called on Americans to learn the languages and cultures needed to meet the new challenges, in the same way the United States developed its Soviet expertise during the Cold War.

"Large parts of the world -- including those that will hold more sway in the future -- do not share all of our ideas," Hayden said.

"While we cherish and live our own values, we must know and appreciate those of others."

------

Associated Press writer Pamela Hess contributed to this report.

------

On the Net:

CIA: http://www.cia.gov

"Housing package advances - Democrats hold off GOP challenges to housing rescue"

By JULIE HIRSCHFELD DAVIS, Associated Press

Last updated: 7:12 p.m., Wednesday, April 30, 2008

WASHINGTON -- Democrats turned back a slew of Republican challenges to their housing rescue package Wednesday as they moved toward committee approval of the plan.

Republicans, targeting virtually every element of a measure they characterized as an unfair and risky taxpayer-funded bailout, failed to win adoption of any major changes.

The bill would allow the Federal Housing Administration to back up to $300 billion in new mortgages for distressed homeowners now too financially strapped to qualify for such loans.

The plan by Rep. Barney Frank, D-Mass., the Financial Services Committee chairman, would require that borrowers show they could make payments on refinanced fixed-rate loans, while lenders would have to agree to take losses on the existing mortgages.

On mostly party-line votes, the panel rejected several GOP-proposed changes, including those that would have excluded people with bad credit or histories of missing payments, limited the program to low- and middle-income people, and removed the requirement that lenders accept losses.

Republicans said the changes were needed to ensure that the measure was fair to the vast majority of people who had kept up with their house payments, and wouldn't open the government to undue risk to help borrowers who had fallen behind.

"It's not fair to ask the American taxpayer to insure loans to the riskiest borrowers, who may not be able to pay their mortgages no matter what," said J. Gresham Barrett, R-S.C.

His amendment to allow the FHA to reject a borrower solely based on a bad credit score or history of delinquency was rejected 36-33.

The bill is picking up support among some Republicans from areas hardest-hit by the mortgage meltdown, but most Republicans side with the Bush administration, which calls it an overly risky bailout.

The panel rejected a proposal by Rep. Randy Neugebauer, R-Texas, that would have allowed mortgage holders to potentially recover some or all of their losses, rather than letting the FHA share a portion of the proceeds should a homeowner sell or refinance.

Those "who should be getting some opportunity to get some of their money back (are) the lenders," Neugebauer said.

His bid was rejected 47-22.

Republicans also failed in their attempts to add penalties on lenders if borrowers default on their refinanced loans -- an attempt to discourage mortgage holders from unloading their worst-performing loans on the federal government.

Without it, said Rep. Michele Bachmann, R-Minn., "lenders will cherry-pick only their worst loans and ship them off to a taxpayer-backed never-never land without a second glance."

Bachmann's amendment failed by a 36-33 vote.

Also turned back, 39-30, was a measure by Rep. Scott Garrett, R-N.J., that would have changed an element of the bill that essentially gives distressed borrowers who refinance an automatic 10 percent equity stake in their home.

"What about the person who has been patiently sitting on the sidelines over the last several years, saving up and waiting for these unsustainable prices to come down and paying rent every month while getting no equity?" Garrett said.

"We are now rewarding someone who undertook an irresponsible loan and bought something they can't afford."

Although the overall bill is expected to cost between roughly $3 billion and $6 billion, the two parties spent the bulk of Wednesday tussling over how to allocate $210 million for pre-foreclosure counseling.

And $35 million would be earmarked for legal counseling, raising concerns among Republicans and some conservative Democrats that taxpayer money could go to trial lawyers to sue lenders.

Still, the panel ultimately endorsed the money unanimously after Democrats added language allowing it to be used for counseling for veterans.

It turned back several attempts by Rep. Tom Price, R-Ga., to remove it or shift all the money instead to veterans' counseling.

"White House admits fault on 'Mission Accomplished' banner - White House says it has paid a price for Iraq 'Mission Accomplished' banner 5 years ago"

By TERENCE HUNT, Associated Press

Last updated: 7:12 p.m., Wednesday, April 30, 2008

WASHINGTON -- The White House said Wednesday that President Bush has paid a price for the "Mission Accomplished" banner that was flown in triumph five years ago but later became a symbol of U.S. misjudgments and mistakes in the long and costly war in Iraq.

Thursday is the fifth anniversary of Bush's dramatic landing in a Navy jet on an aircraft carrier homebound from the war.

The USS Abraham Lincoln had launched thousands of airstrikes on Iraq.

"Major combat operations in Iraq have ended," Bush said at the time.

"The battle of Iraq is one victory in a war on terror that began on Sept. 11, 2001, and still goes on."

The "Mission Accomplished" banner was prominently displayed above him -- a move the White House came to regret as the display was mocked and became a source of controversy.

After shifting explanations, the White House eventually said the "Mission Accomplished" phrase referred to the carrier's crew completing its 10-month mission, not the military completing its mission in Iraq.

Bush, in October 2003, disavowed any connection with the "Mission Accomplished" message.

He said the White House had nothing to do with the banner; a spokesman later said the ship's crew asked for the sign and the White House staff had it made by a private vendor.

"President Bush is well aware that the banner should have been much more specific and said `mission accomplished' for these sailors who are on this ship on their mission," White House press secretary Dana Perino said Wednesday.

"And we have certainly paid a price for not being more specific on that banner."

"And I recognize that the media is going to play this up again tomorrow, as they do every single year."

She said what is important now is "how the president would describe the fight today."

"It's been a very tough month in Iraq, but we are taking the fight to the enemy."

At least 49 U.S. troops died in Iraq in April, making it the deadliest month since September when 65 U.S. troops died.

Now in its sixth year, the war in Iraq has claimed the lives of at least 4,061 members of the U.S. military.

Only the Vietnam War (August 1964 to January 1973), the war in Afghanistan (October 2001 to present) and the Revolutionary War (July 1776 to April 1783) have engaged America longer.

Bush, in a speech earlier this month, said that "while this war is difficult, it is not endless."

------

On the Net:

White House: http://www.whitehouse.gov

OF COURSE IT DOESN'T ....

THE FAMOUS "DAME SNOW JEOPARDY" IN ACTION HERE ...

PICK THE CONCLUSION THAT YOU WANT TO REACH ...

AND THEN ARRANGE THE "FACTS" IN SUCH A WAY THAT THEY WILL SUPPORT THE PRE-DETERMINED CONCLUSION ...

AND THROW OUT EVERYTHING THAT DOESN'T FIT THE "MODEL" ...

ESPECIALLY THE DISSENTING VIEWPOINTS ...

AND THEN TELL EVERYONE THAT "WE NEED MORE STUDY" ...

THAT KEEPS THE PEOPLE IGNORANT ...

AND IT KEEPS THE CASH FLOW COMING IN, UNTIL YOU CAN RETIRE ...

And so ...

"Report questions link between pollution, health problems - Updated report finds no certain link between Great Lakes pollution, health problems"

By JOHN FLESHER, Associated Press

Last updated: 6:12 p.m., Wednesday, April 30, 2008

TRAVERSE CITY, Mich. -- After researching the question for seven years, a federal agency said Wednesday it cannot draw broad conclusions about how industrial pollution in the Great Lakes region has affected human health.

The Agency for Toxic Substances and Disease Registry called for more study -- and better organization and analysis of information -- so the area's citizens and governments can deal with potential dangers from environmental contaminants.

The ATSDR is affiliated with the U.S. Centers for Disease Control, which released an updated version of a report by agency scientists about health problems in 26 highly polluted "areas of concern" around the lakes.

"The major conclusion of this report is that we need better data to allow us to assess threats to human health," said Dr. Howard Frumkin, director of the CDC's Agency for Toxic Substances and Disease Registry.

It is impossible to know the extent of the problem from currently available information, he said.

The report had been scheduled for release in July 2007 but was withheld after senior officials questioned its methodology and conclusions.

The holdup drew accusations of a cover-up from members of Congress.

"The fact that this report was delayed for almost a year raises serious questions about whether this is another example of the administration suppressing science for political purposes," said Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee.

That was not the intention, said Dr. Henry Falk, who oversees CDC research on environmental health hazards.

Critics had noted problems in the report that needed fixing -- particularly its use of data that might have implied unproven cause-and-effect relationships between toxins and illness in the area, he said.

"We're being as open and cooperative as we can," Falk said.

CDC officials have asked the Institute of Medicine, an independent scientific advisory organization, to review the report's various drafts and assess their quality.

The panel's first session begins Thursday.

After getting feedback from the institute and the public, the CDC will produce a final version.

The study originally was requested in 2001 by the International Joint Commission, a U.S.-Canadian agency that advises the two nations on issues affecting the Great Lakes and other boundary waters.

It didn't generate new data, but pulled together existing information from a variety of sources, including the U.S. Environmental Protection Agency's Toxic Release Inventory and state reports on how pollution has degraded resources such as wildlife and water.

Earlier drafts noted elevated levels of cancer, premature births and other health concerns in counties where some heavily tainted sites are located.

But Falk said those drafts made flawed correlations between countywide health data and environmental measures drawn from areas sometimes larger or smaller than a county.

The new version removes some material that senior agency scientists decided was irrelevant or misleading -- including the countywide health statistics -- while updating or improving other data, Falk said.

The only health data it includes comes from previous ATSDR assessments of about 150 hazardous waste sites within the areas of concern.

Of those, 86 were described as posing a potential problem; 47 were classified as hazards; and two were labeled "urgent" hazards.

But that information provides little insight on whether people were actually exposed to toxins, the report acknowledges.

"For exposure to occur, there needs to be a completed pathway from a source to people's bodies," it says.

"Discharge of a pollutant into a stream ... does not mean that people are exposed to that pollutant, or if so, how much."

"Use of a chemical in a factory ... does not mean that people are exposed to the chemical, or if so, to what extent."

Peter Orris, a scientist who reviewed previous drafts and called for their public release, praised the updated version and endorsed its plea for further research.

"We have the capability to do the environmental monitoring and the health monitoring today that would give us these answers with a good deal more confidence than the current databases provide," said Orris, professor of occupational and health sciences at the University of Illinois School of Public Health in Chicago.

Rep. Bart Stupak, chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations, said the panel would continue looking into the CDC's handling of the report and the deletion of the county-level data.

"The revised draft begs the question of why CDC is just now seeking public comment on a watered-down third draft of a report that was commissioned seven years ago," said Stupak, D-Mich.

------

On the Net:

--CDC report posted at http://www.atsdr.cdc.gov/grtlakes

"Fearing stigma, US soldiers hide mental problems: study"

30 APRIL 2008

WASHINGTON (AFP) - A majority of US soldiers who have done tours of duty in Iraq or Afghanistan say they suffer from stress-related troubles linked to their deployments, a study showed Wednesday.

But most keep their psychological problems to themselves for fear of being stigmatized or seeing their careers take a nose-dive, the study conducted by Harris Interactive for the American Psychiatric Association (APA) showed.

Nearly six in 10 US military members said their deployment in a war zone has caused them to suffer from "negative experiences" associated with stress.

But a mere 10 percent have sought treatment for mental health concerns, according to the study, which surveyed 347 members of the US military and their spouses.

Just over 60 percent said they avoided seeking help for mental health problems because they feared doing so would impact negatively on their career.

Fifty-three percent said they felt others would think less of them if they were to seek help for psychological troubles resulting from their deployment.

Two-thirds of military members said they rarely, if ever, talk about their mental health with family and friends.

Nearly half (48 percent) of the soldiers said they had difficulty sleeping, half reported feeling depressed, and one-third reported a lack of interest in daily activities, the study showed.

All of those problems are symptomatic of post traumatic stress disorder (PTSD), which, along with major depression and traumatic brain injury, afflict nearly one in five of the 1.6 million US soldiers who have fought in Iraq and Afghanistan, according to a separate study released by the RAND Corporation earlier this month.

In the APA study, around two-thirds of military spouses said running a home alone while their partner was deployed caused them stress, and more than half reported stress related to being a single parent while the soldier-spouse was at war.

Nearly twice as many poll respondents -- 65 percent -- said they were unfamiliar with the warning signs of mental health problems that might result from being in a war zone as those who said they knew what to look for -- 35 percent.

The mental injuries US soldiers are bringing back from Iraq and Afghanistan have been dubbed the "invisible wounds" of war.

The RAND Corporation study estimated the cost of treating soldiers diagnosed with PTSD or depression in the first two years following their return from Iraq or Afghanistan at up to 6.2 billion dollars.

HILLARY provokes an international incident ...

With HILLARY, ALL options but Armageddon are totally off the table ...

Fire all of your guns at once and explode into space ...

HILLARY is the female version of George W. Bush and John McCain ...

WAVE THAT SWORD, HILLARY ...

RATTLE THAT SABER ...

You'll scare them, alright ...

Because you sure do scare me ...

And by the way, HILLARY ...

WHERE IS IRAN GETTING THIS NUCLEAR WEAPON FROM IN THE FIRST PLACE?

From al-Qaida?

Who got it from Saddam Hussein, as everybody who listens to George W. Bush believes ...

All five or ten of them, anyway ...

One of whom is HILLARY ...

And HILLARY is going to be president for the next TEN YEARS, God help us ...

And so ...

"Iran complains to U.N. about Clinton comment"

By Claudia Parsons Thu May 1, 1:18 AM ET

UNITED NATIONS (Reuters) - Iran complained to the United Nations on Wednesday about U.S. presidential candidate Hillary Clinton's comment the United States could "totally obliterate" Iran in retaliation for a nuclear strike against Israel.

Iran's deputy ambassador to the United Nations sent a letter to U.N. Secretary General Ban Ki-moon and the president of the Security Council expressing Iran's condemnation of "such a provocative, unwarranted and irresponsible statement."

Clinton made the remarks last week while campaigning for the Democratic presidential nomination.

The New York senator said she wanted to make clear to Tehran what she was prepared to do if she becomes president in the hope that this warning would deter any Iranian nuclear attack against the Jewish state.

"I want the Iranians to know that if I'm the president, we will attack Iran (if it attacks Israel)," Clinton said in an interview on ABC's "Good Morning America."

"In the next 10 years, during which they might foolishly consider launching an attack on Israel, we would be able to totally obliterate them," she said.

"That's a terrible thing to say but those people who run Iran need to understand that because that perhaps will deter them from doing something that would be reckless, foolish and tragic," Clinton said.

Iran, which Washington and its allies charge is seeking nuclear arms, has voiced war-like rhetoric in recent years amid speculation its nuclear facilities could face U.S. or Israeli military action.

Tehran denies it is trying to acquire nuclear weapons and says it needs nuclear technology to generate electricity.

Israel is widely believed to have nuclear weapons but, as part of a policy of "strategic ambiguity," has not confirmed or denied the nature of its arsenal.

Iranian President Mahmoud Ahmadinejad outraged the international community in 2005 by saying "Israel should be wiped off the map."

In the letter dated April 30, Deputy Ambassador Mehdi Danesh-Yazdi said he wanted to reiterate Iran's rejection of all weapons of mass destruction including nuclear weapons.

"Moreover, I wish to reiterate my government's position that the Islamic Republic of Iran has no intention to attack any other nations," he said.

"Nonetheless .... Iran would not hesitate to act in self-defense to respond to any attack against the Iranian nation and to take appropriate defensive measures to protect itself."

(Editing by Chris Wilson)

REST IN PEACE ...

AND ...

WELCOME HOME!

"A tragic close to a painful life - Vietnam veteran Howard Hammond hit by car near motel where he lived"

By LEIGH HORNBECK, Staff writer, Albany, New York Times Union

First published: Saturday, May 3, 2008

WILTON -- Howard Hammond liked to drink a little Bud Light, watch sports on TV and listen to Patsy Cline on the jukebox.

But by the time of his death Thursday, the Vietnam veteran's daily life had shrunk to a small rented room and a painful shuffle across the street to the bar.

State Police said Hammond, 59, was lying in the roadway when he was struck by a car about 11 p.m. on Route 9.

He had been drinking at McGregor Pub shortly before the accident, police said.

No one has been charged in the accident and the identity of the motorist that struck Hammond was not released.

Hammond's estranged wife, Bonnie, and her sister, Mindy Burch, started cleaning out his cluttered room at the McGregor Motel Friday.

He had lived there for years, they said, and grew up nearby.

Hammond worked at Mount McGregor Correctional Facility as a maintenance assistant from 1985 to 2003.

"He'd wake up, go across the street for a couple beers, order take out, go back for a couple beers," said Burch, who lives nearby and checked in on her brother-in-law occasionally.

Hammond walked with a cane and often fell, she said.

At McGregor Pub, where owner Jim Parillo said he knew Hammond for 25 years, he was a welcome presence.

He was friendly and well-liked, Parillo said.

And even though he always wore a jacket that said "Vietnam" on it, he never talked about his time there.

But Burch and Bonnie Hammond knew the full story.

Hammond's three tours in Vietnam wrecked him, they said.

"He couldn't get over the war, and I couldn't compete with that," Bonnie Hammond said.

"It was worse than another woman; at least you can fight another woman."

The couple split up 19 years ago, after 16 years of marriage and four children together, but never divorced.

Bonnie Hammond said her husband tried rehabilitation and counseling.

"He loved his children, but he couldn't bring himself to have an emotional connection with them," Bonnie Hammond said.

Among six packs of empty bottles, clothes and empty cigarette packs, the women found a creased photograph of three children.

Hammond pointed out a little boy in the middle, one of the couple's seven grandchildren.

It was the only photo in the room.

The women were searching for Hammond's Army discharge papers to bring to the funeral home.

"He'll have a full military burial at Saratoga National," Bonnie Hammond said.

OF COURSE THERE IS ....

IT KEEPS THE CASH FLOW COMING IN IF THERE IS ....

BILLIONS OF DOLLARS WORTH OF CASH FLOW ...

And so ...

"Afghan officials: Al-Qaida link in assassination plot"

By FISNIK ABRASHI, Associated Press Writer

1 May 2008

KABUL, Afghanistan - The weekend plot to kill Afghan President Hamid Karzai was masterminded by militants with links to al-Qaida members who reside in Pakistan's lawless tribal areas, an Afghan intelligence official said Thursday.

Saeed Ansari, a spokesman for the Afghan intelligence service, said that one of those killed during a raid on a militant hideout in Kabul on Wednesday was also linked to a deadly suicide attack on the city's luxurious Serena Hotel in January.

Ansart identified him as Humayun.

After the Serena attack, in which eight people died, intelligence officials said Humayun had links to a network led by a militant leader Siraj Haqqani.

Haqqani's network is believed to have links with al-Qaida members who operate from Pakistan's tribal areas, where Afghan officials say Haqqani is also based.

The U.S. military has a $200,000 bounty out on him.

Intelligence chief Amrullah Saleh has said those killed in the raid Wednesday and three other gunmen who tried to assassinate Karzai on Sunday, were in contact with militants inside Pakistan's tribal regions.

Pakistan army spokesman Maj. Gen. Athar Abbas called the allegation "baseless."

Although Saleh said there was no evidence that the attack had the go-ahead from the Pakistani government, his comments will likely irk Islamabad.

They could put a damper on recently improved relations between the two countries — relations often strained over allegations that Pakistan helps the Taliban and other militants.

The Taliban has claimed responsibility for the attempt on Karzai's life during a military parade on Sunday.

Karzai survived unharmed, but three people, including a lawmaker, were killed.

Three assailants also died.

Afghan lawmakers on Tuesday passed a vote of no-confidence against the country's three top security officials — including Saleh — after they revealed they had been aware of the assassination plot against Karzai hatched last month but failed to stop it.

The officials, however, retained their jobs.

Sunday's assault was at least the fourth attempt to assassinate Karzai since he came to power six years ago.

That attack exposed how despite the presence of more than 40,000 U.S. and NATO-led troops and rapidly expanding Afghan security forces, Karzai is struggling to contain the insurgency.

AND AS I STRUGGLE TO GET BACK UP TO DATE, FOLLOWING THE TRIALS AND TRIBULATIONS OF THE AMERICAN ECONOMY, ESPECIALLY AFTER THE FORUM WAS DOWN YESTERDAY AND THIS MORNING, WE HAVE FROM LAST THURSDAY AS FOLLOWS ...

THE BALD-AS -A-CUE-BALL HANK PAULSON AND THE BANK OF ENGLAND ARE SPEWING HYPE IN AN EFFORT TO JAZZ UP WALL STREET ...

BY BULL-******** THE INVESTOR CLASS ....

WHICH SEEMS TO LIKE BEING BULL-******* BY PEOPLE LIKE HANK PAULSON .......

And so ...

"Wall Street heads to higher on optimism about credit crisis - Stocks head to higher open on hope credit crisis might be nearing an end"

By JOE BEL BRUNO, Associated Press

Last updated: 7:42 a.m., Thursday, May 1, 2008

NEW YORK -- Wall Street headed toward a higher open Thursday amid growing optimism that the credit crisis that pummeled global markets might be nearing an end.

Investors, one day after the Federal Reserve cut interest rates by a quarter point, are more confident about the financial system's recovery.

Fresh comments from Treasury Secretary Henry Paulson and the Bank of England only helped to bolster that point.

The BOE issued a report Thursday that said credit markets will gradually recover in coming months amid an eventual realization that risks from the subprime crisis have been exaggerated.

Meanwhile, Paulson said in an interview Wednesday with business news program Nightly Business Report that the U.S. is "closer to the end of this period of turmoil."

The latest comments about the credit crisis might help assuage investors' fears about the economy, and help offset negative manufacturing data expected early in the session.

The Institute for Supply Management, a trade group of purchasing executives, is forecast to report manufacturing activity declined in April for the third consecutive month.

The report will be issued at 10 a.m. EDT.

Investors will also get data on March personal income and spending data, as well as weekly jobless claims and March construction spending.

Dow Jones industrial average futures rose 37, or 0.31 percent, to 12,844.

Standard & Poor's 500 index futures were up 2.50, or 0.18 percent, at 1,388.60, while Nasdaq 100 index futures rose 4.25, or 0.22 percent, to 1,927.50.

Bond prices fell in overnight trading.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, edged up to 3.75 percent from 3.73 percent late Wednesday.

Light, sweet crude fell 26 cents to $113.20 a barrel in electronic trading on the New York Mercantile Exchange.

In corporate news, Starbucks Corp. reported fiscal second-quarter profit sank 28 percent as U.S. consumers responded to rising food and gas prices.

The coffee purveyor slashed 30 additional store openings from its already-scaled-back plan for 2008 and said it will open fewer than 400 stores per year in 2009 through 2011.

Wall Street is also waiting for reports from Exxon Mobil Corp. and Sun Microsystems Inc.

Overseas, Japan's Nikkei stock average fell 0.60 percent.

In morning trading, Britain's FTSE 100 rose 0.06 percent, Germany's DAX index added 0.92 percent, and France's CAC-40 rose 0.39 percent.

------

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

AND FROM THE DEPARTMENT OF WISHFUL THINKING, WE HAVE ...

"Consumers may get benefits in terms of lower gas and food costs from a pause in Fed rate cuts"

By MARTIN CRUTSINGER, Associated Press

Last updated: 6:22 a.m., Thursday, May 1, 2008

WASHINGTON -- While the Federal Reserve's aggressive drive to lower interest rates appears to be over, there could be benefits for consumers in other places -- like some relief from soaring gasoline and food costs.

"With the Fed on hold and the dollar firming, oil and gasoline and food prices may all top out some time in the next few months," said Mark Zandi, chief economist at Moody's Economy.com.

On Wednesday, the Fed cut interest rates for a seventh straight time.

But the reduction was a much smaller quarter-point move -- not the half-point and three-fourths-point moves of earlier this year.

It pushed the federal funds rate down to 2 percent.

Commercial banks immediately followed suit by cutting the prime lending rate, the benchmark for millions of consumer and business loans, to 5 percent, the lowest level since late 2004.

That may be as low as consumer rates go during this Fed easing cycle because the central bank sent a number of signals that it believed it may have done enough to keep the economic slowdown from deepening into a severe recession.

Several analysts said the central bank was recognizing the realities of the situation that it may have done all it should do to try to boost growth through rate cuts, given growing threats from inflation.

"The Fed may have gotten to the point where it could start hurting economic prospects in terms of the value of the dollar and oil prices and grain prices," said Sung Won Sohn, an economics professor at California State University.

"I think it was time for the Fed to slow down and take a pause."

Lower U.S. interest rates tend to make the dollar's value against other currencies weaker because investors dump their U.S. holdings in favor of investments in other countries where they can earn a higher interest rate.

As the dollar falls, that tends to drive the cost of oil higher because oil is priced in dollars and producers start demanding higher prices to compensate for a weaker dollar.

Those forces are also at work in terms of driving up other globally trade commodities such as metals and food including wheat and other grains.

With the Fed lowering the prospects for further rate cuts, the dollar can be expected to stabilize and perhaps rebound from the record lows it had hit in recent weeks against the euro and other currencies.

That should help various commodities including oil and food to backtrack from their recent record highs, a process that may have already started.

Oil closed on Wednesday at $113.46 per barrel, its lowest point in more than two weeks and down significantly from the record near $120 per barrel set two days earlier.

Analysts attributed part of the drop to Fed's signals Wednesday that it was pausing in its rate cuts.

Analysts said it will take time, however, for motorists to see the benefits in lower gasoline costs, which hit a record nationwide average of nearly $3.62 per gallon on Wednesday, according to a survey of stations by AAA and the Oil Price Information Service.

Analysts said gasoline is likely to keep heading higher for a time because refiners have not been able to raise their prices fast enough to recoup the crude oil surge that has already occurred.

But private economists believe that if the dollar does stabilize and oil and other commodities begin to fall in a sustained way, consumers will start seeing benefits in two to three months.

Of course, part of that forecast depends on the Fed deciding to stay on the sidelines and not cut rates further, an expectation that is heavily dependent on the course of the overall economy.

There was some good news Wednesday in that the gross domestic product did expand at a tiny 0.6 percent rate in the first quarter rather than contracting.

But analysts say the country is not out of the woods in terms of avoiding a recession and many believe that GDP growth could turn negative in the current quarter.

As long as the downturn is mild, analysts believe the Fed will be content to keep rates unchanged because of their worries that further rate cuts could fuel a rise in inflation that could be very hard to deal with, risking a repeat of the stagflation nightmare of the 1970s.

"The Fed lost control of inflation in the 1970s by pushing interest rates too low and boosting inflation expectations," said David Jones, chief economist at DMJ Advisors.

"The Fed more than anything else wants to avoid a repeat of that episode."

"Japanese shares fall after US rate cut; Nikkei drops 0.6 percent"

Associated Press

Last updated: 5:12 a.m., Thursday, May 1, 2008

TOKYO -- Japanese shares fell Thursday as investors sold banking stocks after the U.S. Federal Reserve cuts its key interest rate.

The benchmark Nikkei 225 Stock Average index shed 83.13 points, or 0.6 percent, to 13,766.86.

"Banks had posted strong gains in the run-up to the FOMC (Federal Open Market Committee) meeting."

"But once the meeting was over, they took a pause," said Masayoshi Okamoto, general manager at Jujiya Securities.

The U.S. central bank, as expected, cut its key federal funds rate by a quarter-point Wednesday, a smaller move than the aggressive easing it undertook earlier this year.

The Fed action pushed the rate down to 2 percent, the lowest level since late 2004.

It was the seventh rate cut by the bank since it began easing credit conditions last September to combat the threat of a recession brought on by the housing slump and credit crisis.

Sentiment was also sluggish after Japan's central bank said in a report Wednesday the world's second largest economy was slowing, with "downside risks" in the U.S. economy a potential threat to Japan.

The Topix index of all the Tokyo Stock Exchange First Section issues declined 12.55 points, or 0.9 percent, to 1,346.10.

Shares in banking giant Mitsubishi UFJ Financial fell 3.8 percent to 1,101 yen.

Mizuho Financial dropped 5 percent to 513,000 yen.

Real estate giant Mitsubishi Estate lost 5.1 percent to 2,865 yen, and Sumitomo Realty & Development fell 3.7 percent to 2,505 yen.

In currencies, the dollar was quoted at 103.72 yen midafternoon in Tokyo trade, down from 104.17 yen late Wednesday in New York.

The euro was quoted at $1.5634, down from $1.5642.

AND FROM THE DEPARTMENT OF "YEAH, RIGHT, WHAT IS IT THAT THESE FINANCIAL WIZARDS ARE SMOKING, ANYWAY?", WE HAVE ...

"Oil future prices rise in Asia as dollar weakens after Fed interest rate cut"

By GILLIAN WONG, Associated Press

Last updated: 4:12 a.m., Thursday, May 1, 2008

SINGAPORE -- Oil prices rose in Asian trading Thursday as the dollar weakened after the U.S. central bank cut its key interest rate.

The U.S. Federal Reserve said Wednesday it would cut the federal funds rate by a quarter percentage point to 2 percent.

Early in Asia, the dollar lost ground against both the euro and yen, although it began to stabilize and strengthen later in the day.

"The U.S. (Federal Open Market Committee) meeting and the softer U.S. dollar helped the oil price recover some ground," said David Moore, commodity strategist with the Commonwealth Bank of Australia in Sydney.

Light, sweet crude for June delivery added 79 cents to $114.25 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon Thursday in Singapore.

The contract fell $2.17 Wednesday to settle at $113.46 a barrel after the U.S. government reported that crude inventories rose more than expected last week.

Interest rate cuts tend to weaken the dollar, and investors buy commodities such as oil as a hedge against inflation when the greenback falls.

A weaker dollar also makes oil cheaper for overseas buyers.

The wording of the statement accompanying the Fed's announcement, though, left traders wondering whether future cuts are likely.

While signaling it is concerned about weak economic growth, the central bank also cited worries about inflation -- a risk propelled in large part by higher energy prices.

Oil prices fell Wednesday after the U.S. government reported a surprisingly large jump in crude oil and distillate fuel inventories last week.

In its weekly inventory report, the Energy Department's Energy Information Administration said crude oil inventories rose 3.8 million barrels, more than double the increase analysts surveyed by energy research firm Platts had expected.

Inventories of distillates, which include heating oil and diesel fuel, rose 1.1 million barrels, more than seven times the expected increase.

Investors shrugged off a 1.5 million barrel decline in gasoline inventories.

In part, that's because despite the drop, supplies of gasoline remain high for this time of year.

Also, demand for gasoline fell slightly over the last four weeks, on average, compared with the same period last year, EIA data show.

In other Nymex trading, June heating oil futures rose 2.45 cents to $3.1825 a gallon while gasoline prices gained 3.12 cents to $2.9375 a gallon.

Natural gas futures added 6.8 cents to $10.911 per 1,000 cubic feet.

In London, Brent crude futures rose 77 cents to $112.13 a barrel on the ICE Futures exchange.

"Police: Car bomb kills at least 9 in Baghdad; US troops kill 17 militants"

By SELCAN HACAOGLU, Associated Press

Last updated: 6:32 a.m., Thursday, May 1, 2008

BAGHDAD -- A car bomb aimed at a U.S. patrol in Baghdad on Thursday killed at least nine Iraqi civilians and wounded 26, police said.

The U.S. military said it killed 17 militants amid escalating fighting in the Shiite slum Sadr City.

The explosion occurred about 9:15 a.m. in a crowded commercial area in eastern Baghdad, police officials said, adding the nine killed included three women and a child.

The U.S. military said no American soldiers were killed, although three were wounded in the attack.

Health officials also said clashes in Baghdad's Shiite militia stronghold of Sadr City killed eight people, including two women and a child, and wounded 18 others, including women and children.

The Iraqi officials spoke on condition of anonymity because they weren't authorized to release the information.

Prime Minister Nouri al-Maliki has accused fighters of the anti-American cleric Muqtada al-Sadr's Mahdi Army of using residents as human shields during close combat in the teeming slum, which has become the epicenter of fighting since a government crackdown triggered clashes in late March.

In fighting late Wednesday and early Thursday in Sadr City, U.S. soldiers killed 17 militants in a series of clashes.

Several of the militants had fired on the military or were preparing to.

Other militants were killed while planting a roadside bomb.

The fighting was reported in statements issued Thursday by the military.

A roadside bomb struck an Iraqi patrol car on Thursday, killing two Iraqi soldiers in the northern city of Mosul, police said.

Lt. Col. Steve Stover, a military spokesman for American troops in Baghdad, blamed the militants for putting civilians at risk by staging attacks from populated areas.

"We will exercise all precaution when returning fire; however, we will defend ourselves against violent aggression," Stover said.

Stover blamed what he called Iranian-backed groups of launching attacks on U.S. troops, adding that U.S. troops were working hard to specifically target the enemy and avoid civilian casualties.

Baghdad sent a delegation to Tehran on Wednesday with "evidence, confessions and pictures" indicating that Iran is supplying weapons and training fighters who are locked in a violent standoff with U.S. and Iraqi troops, a government official said Thursday.

The fighting in Sadr City -- a base for the powerful Mahdi Army militia -- intensified after al-Sadr last week threatened to unleash an "open war" against U.S.-led forces who try to exert control, with the help of Iraqi forces, over an area containing nearly half of the Baghdad's population.

The U.S. military reported early Thursday that a soldier had been killed by an explosion Wednesday near a patrol in Ninevah province, bringing the number of U.S. troops killed in April to at least 50 -- the deadliest month since September when 65 U.S. troops died.

Since the U.S.-led invasion in 2003, at least 4,062 U.S. military personnel have died in Iraq, according to an Associated Press count.

Around Iraq, at least 1,080 Iraqi civilians and security forces were killed nationwide last month, or an average of 36 a day, according to an AP tally.

That's down from March's total of 1,269, or an average of 41 per day.

Officials reported at least 479 deaths in Sadr City but they could not break down the number of militants, Iraqi Security forces and civilians.

------

Associated Press writer Qassim Abdul-Zahra and Hamid Ahmed contributed to this report.

AND FROM THE DEPARTMENT OF "YOU HAVE GOT TO BE KIDDING ME" ...

HEY ...

DON'T CUT OFF THAT IRAQINAMI FUNDING ....

NOT YET, ANYWAY ...

GRAFT AND CORRUPTION HAVE A REAL HEALTHY APPETITE OVER THERE, AFTERALL ...

AND THERE ARE STILL SOME PEOPLE WHO HAVEN'T MADE THEMSELVES MILLIONAIRES YET ...

SO KEEP THE CASH COW MILKING ...

WHICH MEANS THAT WE HAVE TO BE THERE FOREVER ...

And so ..

"White House cautions against effort in Congress to restrict US aid to Iraq"

By ANNE FLAHERTY, Associated Press

Last updated: 6:52 a.m., Wednesday, April 30, 2008

WASHINGTON -- White House officials this week privately cautioned lawmakers not to go too far in restricting U.S. aid to Iraq, warning that doing so might only prolong the war, now in its sixth year.

The Bush administration didn't slam the door on proposals in Congress that would insist Iraq do more to pay for its rebuilding efforts.

In the meantime, independent investigators conclude in a report that substantial U.S. support continues despite Baghdad's anticipated $70 billion windfall in oil revenues.

The soaring cost of fuel prices and duration of the war have spurred the latest effort in Congress to get the Iraqis to pay more toward rebuilding efforts.

Democrats and even some Republicans say American taxpayers are footing too much of the bill, including an expensive and painfully slow operation to train and equip Baghdad's security forces.

"There's going to have to be some honest-to-goodness pressure" to get the Iraqis to take charge, said Rep. Ike Skelton, D-Mo., chairman of the House Armed Services Committee.

"We can't be there forever."

Administration officials are concerned that cutting U.S. aid, particularly for rebuilding Iraq's security forces, would only slow the war effort and delay the homecoming of troops.

"We're funding things that are in our interest to fund, that help us meet our goals and that we can do in the most efficient way," said White House spokesman Tony Fratto.

There are certain projects "that in the interest of speed and efficiency to accomplish our mission, it's better for us to spend the money," he said.

Lt. Gen. Douglas Lute, the president's war adviser on Iraq and Afghanistan, met on Capitol Hill behind closed doors Monday with three senators -- Republican Susan Collins of Maine and Democrats Ben Nelson of Nebraska and Evan Bayh of Indiana -- who have proposed a prohibition on spending for major reconstruction projects.

Their proposal also would require the Iraqis to pay for the training and equipping of its security forces and to reimburse the U.S. military for the estimated $153 million a month it spends on fuel in combat operations in Iraq.

"We obviously didn't see eye to eye on everything," Collins said after the meeting.

But the administration seemed "open to some of it," she said.

One issue under discussion, Collins said, is which type of reconstruction projects would qualify as "major" and therefore be prohibited.

On Tuesday, Lute met with Sens. Joseph Lieberman, I-Conn., Lindsey Graham, R-S.C., and Jon Kyl, R-Ariz.

Graham and Lieberman have publicly expressed support for similar legislation.

Fratto declined to comment on the discussions or specific legislative proposals but said there is much common ground between White House and Congress.

"I think we're in the same place in that the Iraqis should be doing more," Fratto said.

"But I think people are neglecting the fact that they (the Iraqis) really are doing more."

In congressional testimony this month, the U.S. ambassador to Iraq, Ryan Crocker, declared that "the era of U.S. major infrastructure projects is over" -- a claim validated by independent investigators.

According to the latest quarterly report by Stuart W. Bowen Jr., special inspector general for Iraq reconstruction, the U.S. is no longer the "prime mover" in major bricks-and-mortar construction efforts, and Iraq is expanding its budget this year to assume more responsibility of such projects.

But the U.S. continues to provide substantial financial aid to smaller, local projects, as well as rebuilding efforts aimed at improving security, the report states.

In fact, the U.S. still has some $10 billion -- out of the $46 billion approved by Congress since 2003 -- to spend on reconstruction and relief projects.

Most of that money is expected to provide Iraqi forces with training, equipment and new facilities, according to the study, which was released on Wednesday.

Meanwhile, the investigators estimate that Iraq's oil revenues will top $70 billion this year -- twice what was initially expected.

If oil prices stay high and the revenues produce a surplus, Iraq has promised to revise its annual budget and spend more.

Bowen said in an interview Tuesday that the Iraqis are taking on more responsibility on rebuilding efforts, but that lawmakers' concerns are still well founded.

Last year, Baghdad spend half of its capital budget, he estimated.

"That's not enough."

"There is much that needs to be done in Iraq, (and) the Iraqi government needs to do it," Bowen said.

In a letter to Congress released Tuesday, Defense Secretary Robert Gates defended the Pentagon's latest plans to spend more than $400 million on certain infrastructure improvements for Iraqi security forces.

Sen. Carl Levin, D-Mich., chairman of the Armed Services Committee, had complained that such spending shouldn't be a U.S. responsibility, particularly in light of Iraq's expected oil surplus this year.

Gates responded by agreeing to block $171 million for police station construction.

But the remaining $419 million for other infrastructure improvements and $20 million for training was warranted, he told Levin.

"I heard the committee loud and clear on the need for Iraq to pay for economic reconstruction and civilian infrastructure," Gates wrote.

But helping the Iraqi security forces "to transition our troops to a different mission continues to be paramount."

------

On the Web:

April quarterly report by the special inspector general for Iraq reconstruction:

http://www.sigir.mil/reports/quarterlyreports/default.aspx

THE DEMOCRATS LOVE THIS ON-GOING IRAQINAM WAR JUST AS MUCH AS THE REPUBLICANS DO ....

IT GIVES THEM A CONTINUAL OPPORTUNITY TO LOAD UP THESE WAR SPENDING BILLS WITH SOME ADDITIONAL GRAFT AND CORRUPTION FOR THEIR CROWD, AFTERALL ...

AND THAT IS REALLY WHAT IT IS ALL ABOUT ...

GET YOUR SNOUT INTO THE TROUGH BEFORE ALL THE OTHER HOGS HAVE EATEN ALL THE SWILL ...

And so ...

"Bush holds firm on war funding bill - Bush, Democrats at odds over add-ons to war funding bill as veto looms"

By ANDREW TAYLOR, Associated Press

Last updated: 5:42 p.m., Tuesday, April 29, 2008

WASHINGTON -- President Bush and Democrats controlling Congress continued on course toward a veto confrontation Tuesday as Bush said he would veto any attempt to add a popular veteran benefits bill to his $108 billion war funding request.

Bush's hard line in a Rose Garden news conference could virtually assure a veto of the hotly contested war funding bill.

Democrats are likely to add extended unemployment benefits and new education funding for post-Sept. 11 veterans to the war funding bill, along with a few other add-ons.

When asked about the popular plan to increase education benefits for troops returning from Iraq, however, Bush held firm.

"I made my position very clear to Congress and I will not accept a supplemental over $108 billion or a supplemental that micromanages the war, ties the hands of our commanders," Bush said.

"We will work with Congress on these veterans' benefits ...."

"But the $108 billion is $108 billion."

The hard line came as House Speaker Nancy Pelosi, D-Calif., and other top congressional leaders held a rally for the Iraq war veterans measure on the West Front of the Capitol.

Several conservative Republicans joined the rally on behalf of the legislation, which would greatly increase college education benefits for veterans to cover tuition and fees at most public universities.

That would, on average, double college aid for veterans to about $12,000 per year.

"We are very close to pulling it off," said Sen. Jim Webb, D-Va., the chief sponsor on the legislation, alluding to a plan by Democratic leaders to add the veterans measure to the war funding bill.

"I hope it's in there, but we haven't decided for sure yet," said Senate Majority Leader Harry Reid, D-Nev.

Democratic leaders still appear to be struggling over how to handle the war funding measure, which exposes fault lines within the party and is a management nightmare for Pelosi and Reid.

The measure -- which could grow to $178 billion or more if Democrats add on Bush's 2009 war funding request -- is coming together in a remarkably secret process dominated by Pelosi and House Appropriations Committee Chairman David Obey, D-Wis.

Despite the huge cost to taxpayers and prior promises to make the House more open and fair in its operations, Obey and Pelosi have said virtually nothing about their plans for the bill.

Rep. Jerry Lewis, R-Calif., says it appears that under current plans, Republicans and rank and file lawmakers would be shut out of any opportunity to offer changes to the bill, which Democratic leaders hope to pass next week.

Democrats have devised a complicated procedure for considering the measure in which lawmakers would be forced to vote on three components: the war funding, Democratic policy language restricting war operations, and a package of domestic add-ons like unemployment insurance and the increase in education benefits for veterans.

Another likely Democratic add-on is a $12.7 billion plan to give 13 more weeks of unemployment checks to people whose benefits have run out and 13 weeks beyond that in states with especially high unemployment rates.

Democrats are also considering adding $6 billion worth of tax incentives for renewable energy sources such as wind and biofuels.

Those add-ons, and a few other items such as money to combat wildfires, would guarantee a Bush veto.

"In the end, I suspect this first exercise is going to get vetoed and we're going to come back," said Sen. Judd Gregg, R-N.H.

That could mean the war money probably won't pass until June.

Still, Democrats appear to have dumped plans to add billions of dollars for roads, bridges and other ideas such as heating subsidies for the poor and increases in food stamp benefits.

At the same time, various administration agencies are signaling they need Congress' help in easing shortfalls in a few accounts, such as international food aid, the decennial Census and the Bureau of Prisons.

YES ...

I REMEMBER WHEN TARIQ AZIZ AND BUSHITE DONALD RUMSFELD WERE QUITE THE ITEM OVER THERE IN BAGHDAD ...

BACK IN THE GOOD OLD DAYS WHEN SADDAM WAS USING POISON GAS ON THE IRANIANS ...

AND RONALD RAYGUN HAD SENT DONALD RUMSFELD OVER THERE AS HIS SPECIAL ENVOY TO KISS SADDAM'S *** AND TO TELL SADDAM HOW MUCH RONALD RAYGUN AND AMERICA LOVED HIM ...

And so ...

"Trial begins for Iraq ex-deputy prime minister Tariq Aziz - Former Iraqi deputy PM Tariq Aziz goes on trial over execution of traders in 1992"

By SAMEER N. YACOUB, Associated Press

Last updated: 11:52 a.m., Tuesday, April 29, 2008

BAGHDAD -- An Iraqi court on Tuesday began hearing the case against Tariq Aziz, one of Saddam Hussein's best-known lieutenants, who is accused of ordering the execution of dozens of merchants for profiteering.

Aziz, 72, a former deputy prime minister under Hussein, is one of eight defendants in the case.

If convicted, they could be sentenced to death.

Other defendants include Saddam's half brother Watban Ibrahim al-Hassan and the dictator's cousin known as "Chemical Ali," who faces a pending death sentence in another case.

Aziz walked into the court room on Tuesday leaning on a walking stick.

But Ali, whose full name is Ali Hassan al-Majid, did not attend the opening proceedings due to health reasons, Judge Raouf Abdul-Rahman said.

The judge then adjourned the trial until May 20, citing al-Majid's absence.

He said doctors had signed a medical report saying that al-Majid was sick and needed some three weeks to recover.

The U.S. military said Monday that al-Majid is under medical care at an American detention facility after suffering a heart attack earlier this month.

The trial had been scheduled to open at 10:15 a.m., but was pushed back to 5 p.m.

The judge, Abdul-Rahman, said this was due to "organizational and procedural measures," because the defendants had not been brought to the courthouse on time.

A judge with the Iraqi High Tribunal, which is prosecuting offenses of the former regime, said charges against the defendants include war crimes, crimes against humanity and genocide.

The charges stem from the execution of 42 merchants accused by Saddam's government of being behind a sharp increase in food prices when the country was under strict U.N. sanctions.

The merchants were rounded up over two days in July 1992 from Baghdad's wholesale markets and charged with manipulating food supplies to drive up prices at a time when many Iraqis were suffering economically.

All 42 were executed hours later following a quick trial.

The tribunal judge -- who declined to be identified because he was not authorized to discuss the information -- said Aziz was being prosecuted because he signed the execution orders against the merchants as a member of Saddam's Revolutionary Command Council, a rubber stamp group that approved the dictator's decisions.

Aziz has denied the accusations through his Italian lawyer.

"Mr. Aziz is not guilty of any offense whatsoever," Giovanni Di Stefano, the lawyer, said in a statement.

Another defense attorney, Badee Izzat Aref, has said Aziz is ailing and still suffers from the effects of a stroke he had prior to the U.S.-led invasion in 2003.

Aziz was the only Christian among Saddam's mostly Sunni Muslim inner coterie.

He was No. 25 on the U.S. most-wanted list after the invasion.

He surrendered to American forces on April 25, 2003, and has been in custody ever since.

Saddam was sentenced to death for the killing of 148 Shiites and hanged in 2006.

THIS SATTLER SOUNDS LIKE TOMMY FRANKS ALL OVER AGAIN ...

"GEE, I DON'T KNOW NOTHING ABOUT NOTHING, ESPECIALLY ABOUT GETTING READY TO GO TO WAR AGAINST IRAN ..."

And so ...

"Officials: Iraq sends delegation to Iran to discuss concerns about Shiite militias"

By QASSIM ABDUL-ZAHRA, Associated Press

Last updated: 4:52 a.m., Thursday, May 1, 2008

BAGHDAD -- Iraqi officials say the government has dispatched a delegation to Iran to discuss concerns about the arming and training of Shiite militias in Iraq.

A government official says five Shiite politicians left Wednesday with "evidence, confessions and pictures" indicating that Iran is supplying weapons and training fighters who are locked in a violent standoff with U.S. and Iraqi troops.

The official says the delegation "will seek to clarify ... the interference of Iranian leaders."

The official spoke Thursday on condition of anonymity because he wasn't authorized to release the information.

Senior Shiite lawmaker Reda Jawad Taqi confirms the delegation was sent but did not provide more details.

AND WHILE WE ARE ON THE SUBJECT OF WHETHER OR NOT THE PENTAGON WOULD STILL BE LYING TO US ....

LIKE IT WAS LYING TO US BACK IN THE VIET NAM TIMES ...

LET'S DROP BACK IN TIME JUST A BIT ....

TO 2002 ...

AND THE VERY PUBLIC ANNOUNCEMENTS FROM BUSHITE DONALD RUMSFELD AND THE PENTAGON THAT THEY INTENDED TO LIE TO US ....

And so ...

ASIA TIMES

February 26, 2002

atimes.com

WAR ON TERROR

"Pentagon ponders disinformation campaign"

By Jim Lobe

WASHINGTON - When the Pentagon insists that one of its missiles hit senior al-Qaeda leaders meeting near Khost, Afghanistan, but local residents swear that the victims were peasants salvaging scrap metal, who is more credible?

When US Secretary of Defense Donald Rumsfeld declares that Iran is actively helping al-Qaeda leaders to escape from Afghanistan but the Iranian government insists it is not, who is more credible?

The burden of proof will almost surely shift against the Pentagon if it goes through with plans for a new propaganda campaign that, according to Tuesday's New York Times, might include "disinformation" to persuade public opinion overseas to back Washington's war against terrorism.

The plans, which have provoked objections from the uniformed military as well as within the administration, appear to mark a new phase in a broader campaign to influence opinion particularly in the Islamic world and Europe, where opposition to any expansion of the war beyond Afghanistan is especially strong.

Top civilian officials in the Pentagon, together with Vice President Dick Cheney and his senior advisers, are eager to take the war to Iraq in hopes of ousting President Saddam Hussein but are opposed by the State Department and the Central Intelligence Agency (CIA), which historically have run US propaganda campaigns.

"The fact that the Pentagon is doing it has got to be an issue," said former State Department spokesman Alan Romberg.

"If it's a covert action, using disinformation, it's the CIA which has the mandate."

Assembling the plans is the Office of Strategic Influence (OSI), created several weeks after last September's terrorist attacks in the United States.

Headed by Brigadier-General Simon Worden, it consists of some 15 people and reports to the assistant secretary of defense for special operations and low-intensity conflict.

The head of that office in turn reports to Under Secretary of Defense for Policy Douglas Feith, one of the administration's best-known and fiercest anti-Saddam hawks.

The OSI also coordinates closely with the White House's new counterterrorism office, run by retired General Wayne Downing, who in the late 1990s helped devise and sell a war plan against Saddam Hussein on behalf of the Iraqi National Congress (INC), a coalition of Iraqi exile and Kurdish groups whose cause right-wing Republicans long have championed.

It was no surprise, therefore, when the OSI contracted with the Rendon Group, a Washington-based lobbying and consulting firm retained by the Kuwaiti royal family to represent it during the 1990-91 Gulf crisis and later by the INC for its efforts to lobby the White House and Congress for millions of dollars in political and other support.

"I think it's safe to say that this is an initiative of the Iraq hawks, who have had Saddam in their sights virtually from September 12," said one official, who asked not to be identified.

The OSI "rolls up all the instruments within DOD [Department of Defence] to influence foreign audiences", its assistant for operations, Thomas Timmes, a former colonel in the army's psychological operations unit, told a recent conference.

"DOD has not traditionally done these things," the Times quoted him as saying.

According to Pentagon officials who spoke with the Times on condition of anonymity, the plans call for planting news items with foreign media organizations through sources that may not have obvious ties to the Pentagon and sending journalists and foreign leaders e-mail messages that promote US views or US targets without identifying the source as the military.

Under US law, neither the CIA nor the Pentagon may engage in propaganda activities in the United States or direct them at a domestic audience.

The law was tightened in the mid-1970s after investigations revealed that the CIA planted stories abroad that were, in some cases, reprinted in the United States - a process referred to as "blowback".

According to the Times account, which was clearly leaked by Pentagon officials who oppose the plan, Worden has very much the same kind of legally questionable operations in mind.

"Information is much more global now and moves much more swiftly than it did 25 years ago," said Thomas Rosenstiel, director of the Project for Excellence in Journalism here, who cited the Internet as one reason separating foreign from domestic media audiences no longer makes sense.

"It would mean blowback, and that makes [these plans] much more complicated and either somewhat naive or disingenuous on the Pentagon's part," said Rosenstiel.

More than that, added Romberg, the Pentagon, if it goes through with the plans to use disinformation, risks losing its credibility.

"People anticipate that the intelligence agencies do that; that's part of the game."

"But it would be a very dangerous mistake for the Pentagon to do it."

From virtually the outset of the counterterrorism campaign, the administration has been concerned with influencing foreign opinion.

Secretary of State Colin Powell recruited Charlotte Beers, a retired top advertising executive, to become his undersecretary for public diplomacy and public affairs.

Best known for developing the images of major products and US corporations, her primary focus has been to refurbish Washington's image, particularly in the Arab world.

During the 1980s, the State Department housed a public diplomacy office on Central America that reported to the National Security Council and was later found by a Congressional investigative body to have engaged in "prohibited, covert propaganda" operations when it, among other things, authored articles purportedly written by leaders of the Nicaraguan contras for publication in US newspapers.

Several high-ranking members of the Bush administration contributed to that effort, including Otto Reich, who headed the office and is now assistant secretary of state for Western Hemisphere affairs, and Elliott Abrams, who was assistant secretary then and is now a top National Security Council aide to Bush.

A third, Duane "Dewey" Clarridge, was to be named as Downey's deputy at the White House anti-terrorist office but apparently fell victim to strenuous protests from Congressional Democrats who recalled that he and Abrams had pleaded guilty to lying to Congress in the Iran-contra affair, only to be pardoned by then-president George Bush Sr.

The Rendon Group had a CIA contract to do media work on behalf of the INC in the mid-1990s, for which it was reportedly paid US$23 million, an amount that prompted a brief but inconclusive congressional investigation.

It worked for the government in Panama during and after the 1989 US invasion "Operation Just Cause", and performed similar services when US troops intervened in Haiti to restore exiled President Jean-Bertrand Aristide.

Its most recent Pentagon contract, for just under $400,000, was to last four months, subject to renewal.

A spokesperson at Rendon told IPS on Tuesday she could confirm only that the group had a contract with the Pentagon and could provide no other information.

Public affairs officials at the Pentagon held a closed-door meeting about the Times article on Tuesday but did not return phone calls seeking comment.

(Inter Press Service)

http://www.atimes.com/terror/DB22Dk02.html

THE PENTAGON HAS NO CREDIBILITY ...

THE TRUTH IS A LIE ...

AND LIES ARE THE ONLY TRUTH WE SHALL EVER KNOW ...

And so ...

THE NEW YORK TIMES

"HEARTS AND MINDS - Pentagon Weighs Use of Deception in a Broad Arena"

By THOM SHANKER and ERIC SCHMITT

Published: December 13, 2004

WASHINGTON, Dec. 12 - The Pentagon is engaged in bitter, high-level debate over how far it can and should go in managing or manipulating information to influence opinion abroad, senior Defense Department civilians and military officers say.

Such missions, if approved, could take the deceptive techniques endorsed for use on the battlefield to confuse an adversary and adopt them for covert propaganda campaigns aimed at neutral and even allied nations.

Critics of the proposals say such deceptive missions could shatter the Pentagon's credibility, leaving the American public and a world audience skeptical of anything the Defense Department and military say - a repeat of the credibility gap that roiled America during the Vietnam War.

The efforts under consideration risk blurring the traditional lines between public affairs programs in the Pentagon and military branches - whose charters call for giving truthful information to the media and the public - and the world of combat information campaigns or psychological operations.

The question is whether the Pentagon and military should undertake an official program that uses disinformation to shape perceptions abroad.

But in a modern world wired by satellite television and the Internet, any misleading information and falsehoods could easily be repeated by American news outlets.

The military has faced these tough issues before.

Nearly three years ago, Defense Secretary Donald H. Rumsfeld, under intense criticism, closed the Pentagon's Office of Strategic Influence, a short-lived operation to provide news items, possibly including false ones, to foreign journalists in an effort to influence overseas opinion.

Now, critics say, some of the proposals of that discredited office are quietly being resurrected elsewhere in the military and in the Pentagon.

Pentagon and military officials directly involved in the debate say that such a secret propaganda program, for example, could include planting news stories in the foreign press or creating false documents and Web sites translated into Arabic as an effort to discredit and undermine the influence of mosques and religious schools that preach anti-American principles.

Some of those are in the Middle Eastern and South Asian countries like Pakistan, still considered a haven for operatives of Al Qaeda.

But such a campaign could reach even to allied countries like Germany, for example, where some mosques have become crucibles for Islamic militancy and anti-Americanism.

Before the invasion of Iraq, the military's vast electronic-warfare arsenal was used to single out certain members of Saddam Hussein's inner circle with e-mail messages and cellphone calls in an effort to sway them to the American cause.

Arguments have been made for similar efforts to be mounted at leadership circles in other nations where the United States is not at war.

During the cold war, American intelligence agencies had journalists on their payrolls or operatives posing as journalists, particularly in Western Europe, with the aim of producing pro-American articles to influence the populations of those countries.

But officials say that no one is considering using such tactics now.

Suspicions about disinformation programs also arose in the 1980's when the White House was accused of using such a campaign to destabilize Col. Muammar el-Qaddafi of Libya.

In the current debate, it is unclear how far along the other programs are or to what extent they are being carried out because of their largely classified nature.

Within the Pentagon, some of the military's most powerful figures have expressed concerns at some of the steps taken that risk blurring the traditional lines between public affairs and the world of combat information operations.

These tensions were cast into stark relief this summer in Iraq when Gen. George W. Casey Jr., the top commander in Iraq, approved the combining of the command's day-to-day public affairs operations with combat psychological and information operations into a single "strategic communications office."

In a rare expression of senior-level questions about such decisions, Gen. Richard B. Myers, chairman of the Joint Chiefs of Staff, issued a memorandum warning the military's regional combat commanders about the risks of mingling the military public affairs too closely with information operations.

"While organizations may be inclined to create physically integrated P.A./I.O. offices, such organizational constructs have the potential to compromise the commander's credibility with the media and the public," it said.

But General Myers's memorandum is not being followed, according to officers in Iraq, largely because commanders there believe they are safely separating the two operations and say they need all the flexibility possible to combat the insurgency.

Indeed, senior military officials in Washington say public affairs officers in war zones might, by choice or under pressure, issue statements to world news media that, while having elements of truth, are clearly devised primarily to provoke a response from the enemy.

Administration officials say they are increasingly troubled that a nation that can so successfully market its cars and colas around the world, even to foreigners hostile to American policies, is failing to sell its democratic ideals, even as the insurgents they are battling are spreading falsehoods over mass media outlets like the Arab news satellite channel Al Jazeera.

"In the battle of perception management, where the enemy is clearly using the media to help manage perceptions of the general public, our job is not perception management but to counter the enemy's perception management," said the chief Pentagon spokesman, Lawrence Di Rita.

The battle lines in this debate have been drawn in a flurry of classified studies, secret operational guidance statements and internal requests from Mr. Rumsfeld.

Some go to the concepts of information warfare, and some complain about how the government's communications are organized.

The fervent debate today is focused most directly on a secret order signed by Mr. Rumsfeld late last year and called "Information Operations Roadmap."

The 74-page directive, which remains classified but was described by officials who had read it, accelerated "a plan to advance the goal of information operations as a core military competency."

Noting the complexities and risks, Mr. Rumsfeld ordered studies to clarify the appropriate relationship between Pentagon and military public affairs - whose job is to educate and inform the public with accurate and timely information - and the practitioners of secret psychological operations and information campaigns to influence, deter or confuse adversaries.

In response, one far-reaching study conducted at the request of the strategic plans and policy branch of the military's Joint Staff recently produced a proposal to create a "director of central information."

The director would have responsibility for budgeting and "authoritative control of messages" - whether public or covert - across all the government operations that deal with national security and foreign policy.

The study, conducted by the National Defense University, was presented Oct. 20 to a panel of senior Pentagon officials and military officers, including Douglas J. Feith, the under secretary of defense for policy, whose organization set up the original Office of Strategic Influence.

No senior officer today better represents the debate over a changing world of military information than Brig. Gen. Mark Kimmitt, an operational commander chosen to be the military's senior spokesman in Iraq after major combat operations shifted to counterinsurgency operations in the spring of 2003.

His role rankled many in the military's public affairs community who contend that the job should have gone to someone trained in the doctrine of Army communications and public affairs, rather than to an officer who had spent his career in combat arms.

"This is tough business," said General Kimmitt, who now serves as deputy director of plans for the American military command in the Middle East.

"Are we trying to inform?"

"Yes."

"Do we offer perspective?"

"Yes."

"Do we offer military judgment?"

"Yes."

"Must we tell the truth to stay credible?"

"Yes."

"Is there a battlefield value in deceiving the enemy?"

"Yes."

"Do we intentionally deceive the American people?"

"No."

The rub, General Kimmitt said, is operating among those sometimes conflicting principles.

"There is a gray area," he said.

"Tactical and operational deception are proper and legal on the battlefield."

But "in a worldwide media environment," he asked, "how do you prevent that deception from spilling out from the battlefield and inadvertently deceiving the American people?"

Mr. Di Rita said the scope of the issue had changed in recent years.

"We have a unique challenge in this department," he said, "because four-star military officers are the face of the United States abroad in ways that are almost unprecedented since the end of World War II."

He added, "Communication is becoming a capability that combatant commanders have to factor in to the kinds of operations they are doing."

Much of the Pentagon's work in this new area falls under a relatively unknown field called Defense Support for Public Diplomacy.

This new phrase is used to describe the Pentagon's work in governmentwide efforts to communicate with foreign audiences but that is separate from support for generals in the field.

At the Pentagon, that effort is managed by Ryan Henry, Mr. Feith's principal deputy for policy.

"With the pace of technology and such, and with the nature of the global war on terrorism, information has become much more a part of strategic victory, and to a certain extent tactical victory, than it ever was in the past," Mr. Henry said.

However, a senior military officer said that without clear guidance from the Pentagon, the military's psychological operations, information operations and public affairs programs are "coming together on the battlefield like never before, and as such, the lines are blurred."

This has led to a situation where "proponents of these elements jockey for position to lead the overall communication effort," the officer said.

Debate also continues over proposed amendments to a classified Defense Department directive, titled "3600.1: Information Operations," which would lay down Pentagon policy in coming years.

Previous versions of the directive allow aggressive information campaigns to affect enemy leaders, but not those of allies or even neutral states.

The current debate is over proposed revisions that would widen the target audience for such missions.

Mr. Di Rita, the Pentagon spokesman, says that even though the government is wrestling with these issues, the standard is still to tell to the truth.

"Our job is to put out information to the public that is accurate," he said, "and to put it out as quickly as we can."

http://www.nytimes.com/2004/12/13/politics...ner=rssuserland

I HEARD ON THE RADIO THIS MORNING THAT ONE OF THE TOP THREE BANNED BOOKS IN AMERICAN LIBRARIES IS THE ADVENTURES OF HUCKLEBERRY FINN BY MARK TWAIN ...

PEOPLE DON'T WANT THEIR CHILDREN READING IT, I GUESS ....

READING ABOUT VIOLENCE AND HEARING ABOUT THE ON-GOING VIOLENCE IN THE WORLD IS ALRIGHT ...

BUT GOD FORBID THAT A CHILD IN AMERICA BE EXPOSED TO MARK TWAIN AND HUCKLEBERRY FINN ....

And so ...

"Blasts in Afghanistan kill 1 NATO soldier, 8 civilians"

Associated Press

Last updated: 4:32 a.m., Thursday, May 1, 2008

KABUL, Afghanistan -- Roadside bombs struck a NATO patrol and two civilian vehicles in Afghanistan, killing nine people and wounding 10, officials said Thursday.

A blast targeting a NATO patrol south of Kabul killed an alliance soldier and wounded four others Wednesday, the military alliance said in a statement.

NATO did not identify the nationalities of the troops attacked in Logar province.

Militants often target Afghan and foreign troops with roadside bombs.

In the southern Kandahar province, roadside bombs hit two civilian cars Wednesday on a road frequently used by foreign and Afghan troops, killing eight civilians and wounding six others, provincial police Chief Sayeed Agha Saqib said.

Saqib blamed Taliban militants for the attack, which occurred between Spin Boldak and Maruf, close to the border with Pakistan.

Over 1,200 people -- mostly militants -- have died in insurgency-related violence so far this year, according to a count by The Associated Press.

AND MOVING RIGHT ALONG HERE ...

KEEPING IN MIND THAT I AM BEHIND IN HERE ....

WE HAVE, FROM THE ENVIRONMENT, AS FOLLOWS ....

"Maine river crests after surging to a record high, triggering evacuations as flood waters rose"

By DAVID SHARP, Associated Press

Last updated: 7:42 a.m., Thursday, May 1, 2008

FORT KENT, Maine -- The rain-swollen St. John River crested early Thursday after hitting a new record high, forcing residents to flee to higher ground as more than 100 homes flooded.

Rain and melting snow raised the St. John to more than 30 feet -- about 5 feet above flood stage -- causing widespread flooding.

But the community dodged a bullet because the water never topped a levee that protects downtown, said Bruce Fitzgerald, spokesman for the Maine Emergency Management Agency.

The previous record crest of 27.3 feet was set in 1979.

"The water level appears to have crested and is actually moving a bit down, so we don't anticipate any more rises in the river at this point," Dwayne Hubert, operations chief at the Emergency Operations Center in Augusta, said early Thursday.

About 600 people were evacuated in the Fort Kent area.

There were no reports of injuries.

Officials continued to keep an eye on other rivers under flood warning in northern Maine, but Hubert said there was no indication of any significant rises elsewhere.

Michael Fitzsimmons, a meteorologist at the National Weather Service in Caribou, Maine, said the water level at the St. John's River was 29.6 feet at 4 a.m. Thursday, down from a peak of 30.14 feet at 7:30 p.m. Wednesday.

Scientists described the flooding for the community of 4,200 people in Fort Kent as "greater than a 100-year event," said Lynette Miller, a spokeswoman for the Maine Emergency Management Agency.

Across the river in Canada, officials issued warnings to residents in low-lying areas around Fredericton, New Brunswick, about 200 miles from Fort Kent.

Up to 1,300 homes there were threatened by rising water.

St. John River, the longest free-flowing river east of the Mississippi, totals about 410 miles in length, with 210 of those miles in Maine.

It starts in Maine, forms the border with Canada in one section and continues through New Brunswick to the ocean.

Gov. John Baldacci, who flew from Augusta to get a firsthand look at the floodwaters Wednesday, requested disaster aid from the Federal Emergency Management Agency.

The International Bridge over the St. John between Fort Kent and Clair, New Brunswick, was closed amid fears that the raging waters could drag it down.

"There are people who are losing their property, their homes and their livelihoods in a lot of cases," Baldacci said.

"I looked at the International Bridge that connects Maine and Canada and it's ready to wash away."

Much of downtown Fort Kent was blocked off.

Blue lights flashed at most intersections as police, sheriff's deputies and the Border Patrol monitored water-covered streets.

Evacuations also took place along the St. John River in Van Buren, downstream from Fort Kent, and in the Penobscot County town of Mattawamkeag, where the Mattawamkeag and Penobscot rivers spilled over their banks, according to the National Weather Service.

Officials have been watching the St. John since last week, when rising waters caused concern on the Canadian side.

Those waters had been receding until a deluge of at least 3 inches of rain began Tuesday, said Joseph Hewitt of the National Weather Service in Caribou.

There was still a half-foot of snow on the ground following a winter that dumped around 200 inches of snow in the region, and the melting snow exacerbated the situation.

Classes were canceled and students were moved from the University of Maine at Fort Kent to create a shelter, where a handful of people took up residence Wednesday night.

The Maine Warden Service and the Washburn fire and police departments directed more evacuations downstream from two dams in danger of breaching.

----

Associated Press writer Bob Salsberg in Boston contributed to this report.

------

On the Net:

Maine Emergency Management Agency: http://www.state.me.us/mema

AND FROM THE DEPARTMENT OF "IT IS BETTER TO CREATE APPEARANCES THAN TO FACE REALITY", WE HAVE ...

"Pentagon moves to reduce stigma of mental counseling - Pentagon to allow troops to get security clearances without disclosing psychiatric counseling"

By PAULINE JELINEK, Associated Press

Last updated: 5:12 a.m., Thursday, May 1, 2008

WASHINGTON -- Advocates of better mental health care for troops say a new Pentagon policy aimed at reducing the stigma of getting psychiatric counseling could be a small but important step.

Under the new policy, troops won't have to reveal past job-related therapy when they apply for security clearances.

The change was prompted partly by the finding that many don't get treatment because they fear acknowledging a mental problem could cost them their security clearance, harm their careers and embarrass them before commanders and comrades.

Defense Secretary Robert Gates planned to announce the policy Thursday at Fort Bliss, Texas, where he was visiting a center for troops recovering from post-traumatic stress disorder, several officials said.

They spoke on condition of anonymity ahead of the announcement.

"I think it will help," said Paul Riechoff, executive director of Iraq and Afghanistan Veterans of America.

"This needs to be followed by a mental health campaign -- not just for service members but for their families as well."

"But I really do think it's a significant evolution.

A survey released Wednesday by the American Psychiatric Association found that about three in five service members think seeking help for mental health concerns would have at least some impact on their careers.

"The military has made strides in raising awareness of mental health, but it's going to take a tremendous commitment to overcome attitudes that are ingrained in the military culture," association president Dr. Carolyn B. Robinowitz said.

The new policy relates to a question on the application required by the Office of Personnel Management, the agency that does the majority of investigations for security clearances for military and civilian federal workers.

Currently, Question 21 asks applicants whether they have consulted a mental health professional in the past seven years.

If so, they are asked to list the names, addresses and dates they saw the doctor or therapist, unless it was for marriage or grief counseling and not related to violent behavior.

The amended question Gates has approved is less stringent.

It essentially means troops would not have to worry about therapy they got for difficulties caused by their wartime tours of duty or other missions, said four officials familiar with the revision.

"No service member should fail to seek professional care because he doesn't want to answer a security clearance question," said Rep. Ike Skelton, D-Mo., chairman of the House Armed Services Committee.

"This small step may pay big dividends by encouraging our forces to get the help they need."

The Pentagon says the perception of stigma for security applicants is far worse than the reality.

The most recently released data show less than 1 percent of some 800,000 people investigated for clearances in 2006 were rejected on the sole issue of their mental health profiles.

Up to 20 percent of the more than 1.6 million troops who have served in Iraq and Afghanistan are estimated to have mental health problems, the Defense Department says.

Successive government and private studies have found roughly half of those who need help are seeking it.

Revising the security clearance procedure is the latest in a string of efforts aimed at changing military attitudes on mental health:

-- The Army last year held special sessions to teach 800,000 troops how to recognize concussions and mental problems in themselves and their buddies.

-- The Army and Navy have put mental health professionals into primary care centers -- rather than setting them off in separate locations -- so troops can go for appointments discreetly.

------

On the Net:

National Security Questionnaire: http://www.opm.gov/forms/pdf--fill/sf86.pdf

Army battlefront survey: http://tinyurl.com/38zfmq

EVERY SINGLE LIVING IRAQI IS A THREAT TO AMERICA, ESPECIALLY THE WOMEN AND CHILDREN ...

HOW DO I KNOW THIS?

WHY, I HEARD IT FROM A LAWYER RIGHT ABOVE HERE ...

EVERYBODY KNOWS THAT LAWYERS KNOW WHAT THE TRUTH IS ...

AND BESIDES, THAT IS DIRECTLY FROM THE "RULES OF ENGAGEMENT" AS SET DOWN BY THE ADMINISTRATION OF GEORGE W. BUSH, WHICH "RULES" CAME DIRECTLY TO GEORGE W. BUSH FROM GOD ...

GOD WANTS ALL THE IRAQIS DEAD BECAUSE HE HATES IRAQIS AND LOVES AMERICA ...

IT REALLY IS THAT SIMPLE ...

And so ...

"Army sergeant says he's innocent in Iraqi murder case - Army sergeant says he shot Iraqi insurgent because he was a threat, didn't commit murder"

By ANGELA K. BROWN, Associated Press

Last updated: 4:02 a.m., Thursday, May 1, 2008

FORT HOOD, Texas -- A military jury must soon decide whether an Army sergeant committed murder or followed the rules of engagement when he shot an unarmed insurgent in an Iraqi village overrun by al-Qaida forces.

The seven-member jury at Sgt. Leonardo Trevino's court-martial was to start deliberating Thursday after closing arguments by military prosecutors and defense attorneys.

In testimony that lasted more than three hours, Trevino said Wednesday that he was innocent of premeditated murder and other charges stemming from the June killing after a firefight in Muqdadiyah, Iraq.

Trevino testified that after following a trail of blood into a house, he thought the severely wounded insurgent was a threat because the flailing man might have been trying to trigger an explosive.

After being shot about two dozen times, the man had fled to one house, jumped off its roof and then scaled a wall to get to the other house, Trevino said, leading him to wonder if the Iraqi was leading the soldiers there to sabotage them.

He said that during the chaotic scene, someone yelled that the Iraqi had or was reaching for a gun, so Trevino shot him.

He then asked where the Iraqi's gun was, and one soldier pulled out a weapon and placed it on the floor, he said.

But Trevino testified that he was disappointed in the implication that they had to cover up something, so he returned the pistol.

He testified that after a medic arrived and said the insurgent was about to die, the sergeant scoffed at the medic's suggestion of suffocating the man.

He then left the house to give a report to his superior.

When Trevino returned, he said, he saw the insurgent's arm jerk, then fired his gun a second time as a reaction without aiming or looking at the man.

Trevino, a 1st Cavalry Division soldier from San Antonio, could face life in prison if convicted of premeditated murder, attempted murder, obstruction of justice and solicitation to commit murder.

Asked by his attorney whether he committed those crimes, Trevino said, "No, I did not."

Trevino acknowledged that the insurgent did not have a pistol, but he said he wasn't worried when questioned by Army investigators "because all those shots were legit."

Under cross-examination, Trevino said he saw that the insurgent's arm was broken, that he had gunshot wounds and that he did not feel the man was a threat after the medic arrived.

He also said several U.S. and Iraqi soldiers were walking around the room, and he pointed out that explosives did not have to be in the room to be detonated.

Trevino acknowledged that he told two soldiers in the room that "I don't want this to come back on you," but said he meant he did not want them to have the responsibility of guarding a dangerous insurgent and the possibility of having to shoot him.

A key prosecution witness, Pvt. Tristan Miller, testified earlier that Trevino said those words before shooting the insurgent in the abdomen, then directed another soldier to drop a gun by the man and invented the story that the Iraqi was armed.

Miller also testified that he had kicked a pillow off the insurgent's arm and saw that he was unarmed and not a threat.

An Army investigator testified Wednesday that in three long interviews with Miller, the soldier never told him or wrote in his statements that he checked to see if the insurgent had a weapon.

"We needed to know what kind of threat level they were under by the insurgent in that room," Mikey Nogle, a special agent for the Army's Criminal Investigative Division, told the military jury.

The medic, Spc. John Torres, was acquitted in March of attempted premeditated murder and dereliction of duty for failing to provide aid.

It is no measure of health to be well adjusted to a profoundly sick society.

- Krishnamurti