var url = escape(window.location.href) document.write('<a href="http://www.washingtonpost.com/ac2/wp-dyn/admin/emaillink?sent=no&link='+url+'&type=Graphic&title=Tom%20Toles%20Cartoons&site=opinion">');

Here you go Liv, the start of Volume 7 of Life in OUR America, The Livyjr Files

Thanks, Snuf ....

I did find it after all ....

And getting back up to speed in here with this newest volume of Life in OUR America, which consists of issues or concerns to us here in America as citizens of the world, we have ...

"One year on, war pollution still stains Lebanon's shores"

by Sylvie Groult

Tue Aug 7, 1:53 AM ET

AMCHIT, Lebanon (AFP) - Thick, black oil still clings to the rocks at the bottom of the seabed, an ugly and forgotten legacy of Israel's war against Lebanon's Shiite militant group Hezbollah last summer.

All along the stony beach of Amchit, some 40 kilometres (25 miles) north of Beirut, every nook and cranny is stained black and effluent washes ashore from a nearby industrial plant, caught up in the sticky flow.

It seems a world away from the glitzy tourist resort, traditional fishing port and UNESCO World Heritage Site of Byblos just five kilometres down the coast.

Here the sand and pebble beaches have been cleaned up in an effort to bring things back to normal, sparking accusations of unfair prioritising by environmentalists.

"Thirty kilometres of coast north of Byblos have not been cleaned."

"Historic and tourist sites have been privileged, but nowhere else," says Fifi Kallab from the environmental group Byblos Ecologia.

But even at Byblos, appearances can be deceptive.

On an artificial sandbank not two paces away from the bathers, dozens of cans of heating oil lie dumped, some of them broken and spilling out a black and shiny discharge under the sun.

All of Lebanon is still grappling with the environmental devastation wrought by last year's month-long bombardment by Israeli forces in their war against Hezbollah.

In the worst single incident, Israel bombed an electricty generating station at Jiye, south of Beirut, last July, sending 15,000 tonnes of oil into the sea -- the most severe oil slick ever seen in the eastern Mediterranean.

One year on, Lebanon's Environment Ministry says that 60 to 70 percent of the oil spread out over 150 kilometres of coastline has been cleaned up, but it admits that 26 rocky sites have not yet been touched.

Many of these sites lie north of Beirut, in a 30 kilometre stretch between Byblos and Enfe.

The clean-up work is being financed to the tune of 4.7 million dollars by the US government's international development agency, which admits the daunting and long-term nature of the work.

"Oil spill cleaning is not something that can be done overnight, it takes years."

" We are aware that the job is not finished," says an official from USAID on condition of anonymity.

He admits that work did stop over winter, but insists this is in line with standard practice to allow natural processes and rhythms to take their course.

"During phase one, from October to December, we set two priorities: sites which have an economic, historical, touristic impact, such as Byblos, then industrial sites with no human contacts."

"Now we are preparing to launch phase two."

"We did an assessment, we have a new list of sites that need pressure washing," the official says.

As for benighted Amchit beach, he insists that it has not been forgotten but concedes that more needs to be done.

"We removed big concentrations of oil there, we know it needs more cleaning and the rocks need pressure cleaning."

This is not enough to satisfy environmentalists who highlight the dangers to both the ecosystem and the population who continue to fish and bathe in polluted waters.

"Large areas of the Lebanese coast are still severely polluted as if there were no cleanup activities there."

"Although about a thousand tons of oil and waste were removed, the waste is still on site, endangering the ecosystem while awaiting treatment," said US scientist Richard Steiner from the University of Alaska, on a recent visit to the country.

"Cleanup should be resumed to the rocky areas using high pressure hot water or steam," he urged.

Lebanon's government has proposed sending the waste to be treated abroad, but ecologists say this will be too expensive, at a cost of between 13,000 and 17,000 dollars per tonne.

"We proposed different solutions which would allow the waste to be treated in Lebanon, but these were rejected by the ministry," says Mohammed Sarji from the Bahr Loubnan (Sea of Lebanon) association, which cleaned the beaches south of Beirut.

And while politicians and ecologists haggle, oil continues to pollute the shoreline -- a lasting reminder of the toxic stains of war.

And in IRAQINAM, the BUSHCO puppet al Maliki can't even cross the street in safety, and here he is talking about opening up a new front in the now way-overlong BUSHCO FIASCO in the QUAQMIRE of IRAQINAM ...

And so ...

"Turkey, Iraq agree to cooperate"

By QASSIM ABDUL-ZAHRA, Associated Press Writer

11 minutes ago

ANKARA, Turkey - Turkey and Iraq agreed Tuesday to try to root out a Kurdish rebel group from northern Iraq, but Iraq's prime minister said his parliament would have the final say on efforts to halt the guerrillas' cross-border attacks into Turkey.

Turkey has threatened to send troops into northern Iraq unless Iraq or the United States cracked down on the separatist Kurdistan Workers Party, or PKK, which seeks greater autonomy for mostly Kurdish regions of southeastern Turkey.

For decades, the group has maintained bases in Iraq's Kurdish mountains.

The proposed counterterrorism agreement is aimed at forcing Iraq to commit itself officially to fighting the rebels.

"We have reached an agreement to spend all efforts to end the presence of the Kurdistan Workers Party or PKK in Iraq," Turkish Prime Minister Recep Tayyip Erdogan told a news conference with his Iraqi counterpart, Nouri al-Maliki.

Erdogan said the leaders signed a memorandum of understanding and agreed to speed up work to finalize a counterterrorism pact.

Iraq's cooperation could possibly avert a Turkish incursion, which is opposed by Washington.

The United States says the PKK is a terrorist group, but U.S. forces are consumed by chaos elsewhere in Iraq and want to preserve the Kurdish-dominated north as a rare spot of relative stability.

Al-Maliki's already shaky government has been hit with a series of Cabinet desertions by both Shiite and Sunni Arabs, although the Kurdish portion of his coalition has held fast so far.

But some members are questioning their participation, and the prime minister may be wary of angering the Kurds.

While reaching agreement on Kurdish rebels, al-Maliki refused to sign the counterterrorism agreement requested by the Turkish authorities.

He said it was not in his power to commit Baghdad to the agreement without first putting it before parliament and his Cabinet, an Iraqi government official said.

The Turkish and Iraqi Interior Ministries had been negotiating such a pact, but the official said al-Maliki was caught off-guard when asked to sign an agreement Tuesday.

The official said al-Maliki refused to sign the anti-terrorism pact because of Kurdish objections to a description of the PKK as a terrorist organization.

The Kurds told al-Maliki that such language would give the Turks a pretext to invade, according to the official.

However, al-Maliki promised to cooperate with Turkey in combatting Kurdish rebels.

"We in Iraq are victims of terrorism."

"We understand what Turkey wants," al-Maliki said.

"We have said that we will establish cooperation against all terrorist organizations, prominently against the PKK."

The PKK, which has had bases in northern Iraq for decades, has killed tens of thousands in attacks since taking up arms for autonomy in southeastern Turkey in 1984.

Turkey's patience has been running thin amid escalated fighting that has left about 80 Turkish soldiers dead so far this year.

Turkey recently reinforced its troops on the Iraqi border, and the military said it was waiting for government orders to move in.

Turkey's parliament must endorse any cross-border military offensive.

On Tuesday, Kurdish rebels killed a lieutenant and wounded two pro-government village guards in a roadside bomb attack in the southeastern province of Hakkari, bordering Iraq and Iran, while Turkish generals attended the funeral of a noncommissioned officer, also killed by rebels, in the capital.
___

Associated Press writers Selcan Hacaoglu and Suzan Fraser in Ankara contributed to this report.

"South Asia flood victims hit by disease"

By BISWAJEET BANERJEE, Associated Press Writer

Tue Aug 7, 11:23 AM ET

LUCKNOW, India - Aid workers scrambled to get food, water and medicine to the millions marooned in flood-hit South Asia following an outbreak of diarrhea and other waterborne diseases in northern India and Bangladesh, officials said Tuesday.

At least 376 people have died as a result of recent monsoons and floods in India and Bangladesh, including at least nine people who drowned when their boat sank Monday in northern India's Bihar state.

Another 29 are missing, said N. Swaran Kumar, the district magistrate.

International aid groups warned of an impending health crisis if help does not reach the millions of stranded people.

"Entire villages are days away from a health crisis if people are not reached in the coming days," Marzio Babille, UNICEF's health chief in India, said in a statement.

The threat of waterborne disease is high because wells have been contaminated by floodwaters, said L.B. Prasad, director-general of health in Uttar Pradesh state.

More than 1,000 people are reported sick, mainly from cholera and gastroenteritis in the Maharajganj, Gorakhpur and Bara Banki districts of India's northern Uttar Pradesh state, officials said.

As the floodwaters receded, special medical camps were distributing chlorine tablets for purifying drinking water.

"Health officials have also been asked to disinfect the wells," Prasad said.

In Bangladesh, there were 1,400 reported cases of diarrhea in the past 24 hours, said Fadela Chaib, a spokeswoman for the World Health Organization.

The World Food Program and UNICEF have been distributing emergency food supplies to thousands of people in Bangladesh and Nepal, said WFP spokesman Simon Pluess in Geneva.

No aid was being distributed in India because no requests for help had been received, he said.

The Indian air force, however, stepped up relief efforts, dropping supplies for 2 million people cut off by some of the worst flooding in eastern Bihar state in 30 years.

Hungry flood victims fought each other for scarce food supplies as helicopters dropped more than 4,300 food packets Monday in Bihar, India's worst-hit state, said Manoj Shrivastav, the state disaster management secretary.

Authorities have been criticized for being too slow to respond to the crisis with too little aid.

At the weekend, a teenager fell from the roof of his home and was drowned in floodwaters after trying to grab an aid packet dropped by a helicopter, officials said.

Hundreds of angry villagers in the Darbhanga district of Bihar briefly kidnapped a senior official and the local police chief, only releasing them after receiving promises that an aid distribution center would be set up there, said Upendera Sharma, a local government official.

Others complained that little was being done to help them as they tried to return to their ruined homes.

"I need money to rebuild my home," said Kedar Nisar, who makes a meager salary ferrying people across a river in his row boat.

Nisar said he and his family had received only 22 pounds of rice from the Uttar Pradesh state government in the past week.

Since the start of the monsoon in June, the government says more than 1,200 people have died in India alone, with scores of others killed in Bangladesh and neighboring Nepal, where floods have hit low-lying southern parts of the country.

So far this year, some 14 million people in India and 5 million in Bangladesh have been displaced by flooding, according to government figures.

Officials have blamed the flooding on an unusual monsoon pattern.

Eight more people died in the latest flooding, bringing Bangladesh's toll to 164 Tuesday, the Information Ministry said.

The Flood Forecasting and Warning Center said flooding had eased in northern and eastern areas, but swollen rivers flowing south to the Bay of Bengal threatened to flood new areas in central Bangladesh, including the region around the capital, Dhaka.

Floods have hit more than 9 million people in 39 of Bangladesh's 64 districts, submerging vast areas of cropland and damaging thousands of miles of roads and mud embankments in the populous, impoverished delta nation of more than 150 million people.

This link is to the video of a recent convenient store robbery in Albany, New York ...

It is interesting to watch, because the PERP apparently doesn't know how to work the shotgun he is using in the robbery, and he lays it down on the counter, while he is pocketing the money, so that the store clerk can then grab it from him ...

One thing you can say about the PERP is that he sure is fast, anyway ...

Another thing you can say about him is that he is pretty dumb ...

A real "rocket scientist" as they say ...

And so ..

http://www.timesunion.com/multimedia/video/robbery.asp

"Gen. Petraeus readies Iraq war report"

By ROBERT BURNS, AP Military Writer

8 August 2007

BAGHDAD - If Gen. David Petraeus is feeling the heat as he readies his momentous Iraq war report to Congress, it is hard to tell by the cool confidence with which he discusses the toughest mission of his career.

Rarely in recent history have the words of one general loomed so large in determining the direction of a war.

Two things in particular give his coming September assessment and testimony to Congress great weight: He is viewed as the master of counterinsurgency strategy, having written just last year the military's manual on how it should be done.

And secondly, President Bush has repeatedly said he would count on the judgment of his top Iraq commander.

"I will rely on General Petraeus to give me his recommendations for the appropriate troop levels in Iraq," Bush said last month when pressed on the timing of when Americans might start coming home — five years into the war and 18 months before he leaves the White House.

"I'm going to wait to see what David has to say."

"I'm not going to pre-judge what he may say."

"I trust David Petraeus' judgment," the president added.

Petraeus is keeping his counsel close, five weeks before he heads to Capitol Hill to pass judgment on the Iraq war strategy — with the direction of the conflict hanging in the balance.

It's not easy to unnerve a guy who was shot in the chest in a training accident at Fort Campbell, Ky., earlier in his career, and who has spent a combined three years in Iraq in three different tours of duty.

He led the 101st Airborne Division, with 17,000 soldiers, in the initial U.S. invasion in March 2003.

In February he became the top U.S. commander in Iraq, replacing Gen. George Casey.

In an Associated Press interview in late July in his office at the U.S. Embassy, Petraeus betrayed no sign of anxiety, except perhaps a hint of worry that he might tip his hand too early, thus opening himself to challenge from critics before he has fully armed himself with credible arguments for why the buildup is working.

Clearly, he believes it is working.

But he is not ready to say that too expansively.

He speaks hopefully, in an understated way, of making more security gains this year with the U.S. troop buildup.

Nor is he willing to go far in discussing the question many in Washington are asking: When can a drawdown of U.S. troops begin?

"We haven't hard-and-fast determined when to do that just yet," he says.

Petraeus, a West Point graduate with 33 years in uniform, is highly regarded by his peers and by many former generals.

Barry McCaffrey, a retired Army four-star, calls him "brilliant."

Gen. Peter Pace, the soon-to-retire chairman of the Joint Chiefs of Staff, told AP during a July trip to Iraq that two key qualities make Petraeus special:

"First, absolute integrity ... and second, (he's) smart as a whip."

Petraeus, 54, is a polished communicator, and it's clear that he sees that as an important asset in wartime.

Some critics have said he overstated the rate of progress by Iraqi security forces during his tenure as leader of that effort in 2004-05.

"But if so, who (among commanders) has not" been overly optimistic, said Stephen Biddle, a military expert at the Council on Foreign Relations who was part of a team that was in Baghdad last spring to advise on developing a new war strategy.

His every word will be scrutinized when he delivers his assessment in mid-September.

He will appear for testimony with Ambassador Ryan Crocker, his diplomatic counterpart in Baghdad.

They are expected to explain the progress and problems with the counterinsurgency strategy that Petraeus began to implement when he arrived in February — both security and political.

And they are expected to present their recommendations on how to proceed beyond September, in the face of efforts by many in the Democratic-controlled Congress to change direction again in Iraq and begin bringing the troops home, starting as soon as this fall.

Petraeus is not predicting, at least publicly, how much longer it will take for his strategy to turn the tide.

Nor is he sharing his view on how much longer the Iraqi government should be given to make moves toward political reconciliation among Iraq's ethno-sectarian rivals that will ultimately decide the outcome.

During the AP interview, his tone was flat, almost a monotone.

He chose his words carefully.

Only when he got to the subject of the sacrifices made in this war by soldiers and their families did he get animated.

His voice rose and he gestured with his hands as he spoke of the obligation he feels to deal frankly with Iraqi leaders when he sees their actions undercutting in important ways the efforts of U.S. forces.

"This is too important to always turn the other cheek, shall we say."

"I think sometimes you have to have straightforward conversations," he says, adding: "I think I owe that to 3,600 families in the United States and the 160,000 coalition forces who are soldiering their hearts out."

"I take that responsibility very, very seriously."

His reference to 3,600 is the approximate number of U.S. war deaths.

"I will not shrink from showing the emotion that I feel about that, on occasion, if I think that will help the effectiveness of the presentation, shall we say," he said.

"Coral reefs dying faster than expected"

By MICHAEL CASEY, AP Environmental Writer

Tue Aug 7, 9:31 PM ET

BANGKOK, Thailand - Coral reefs in much of the Pacific Ocean are dying faster than previously thought, according to a study released Wednesday, with the decline driven by climate change, disease and coastal development.

Researchers from the University of North Carolina in Chapel Hill found that coral coverage in the Indo-Pacific — an area stretching from Indonesia's Sumatra island to French Polynesia — dropped 20 percent in the past two decades.

About 600 square miles of reefs have disappeared since the 1960s, the study found, and the losses were just as bad in Australia's well-protected Great Barrier Reef as they were in poorly managed marine reserves in the Philippines.

"We found the loss of reef building corals was much more widespread and severe than previously thought," said John Bruno, who conducted the study along with Elizabeth Selig.

"Even the best managed reefs in the Indo-Pacific suffered significant coral loss over the past 20 years."

The study, which examined 6,000 surveys of more than 2,600 Indo-Pacific coral reefs done between 1968 and 2004, found the declines began earlier than previously estimated and mirror global trends.

The United Nations has found close to a third of the world's corals have disappeared, and 60 percent are expected to be lost by 2030.

The Indo-Pacific contains 75 percent of the world's coral reefs and provide a home for a wide range of marine plants and animals.

They provide shelter for island communities and are key source of income, mostly from the benefits of fishing and tourism.

"Indo-Pacific reefs have played an important economic and cultural role in the region for hundreds of years and their continued decline could mean the loss of millions of dollars in fisheries and tourism," Selig said in a statement.

"It's like when everything in the forest is gone except for little twigs."

While the study didn't examine the cause of the decline, Bruno said he believed it was driven by a range of factors including warming waters due to climate change.

He also blamed storm damage, runoff from agriculture and industry, predators like fast-spreading crown-of-thorn starfish and diseases like White syndrome.

Bruno said the study demonstrated the need to better manage reefs and prevent threats such as overfishing, but acknowledged local measures would have little impact without a reduction of greenhouse gases.

"It is just one more example of the striking, far reaching effects of climate change and our behavior," Bruno said of the link between climate change and reef destruction.

"It is the folks in North Carolina driving their SUVs."

"It is their behavior that is having an effect way out in the Indo-Pacific."

Ove Hoegh-Guldberg, director of the Center for Marine Studies at The University of Queensland in Australia, said the study should put to rest any suggestion that reefs like the Great Barrier Reef are untouched by "human pressures."

"This is a solid study that produces mounds of evidence that suggests reefs are changing counter to the untested and ungrounded claims that it isn't happening," Hoegh-Guldberg, who was not involved in the study, said in an e-mail interview.
____

On the Net:

Bruno's homepage: http://www.unc.edu/brunoj

And catching up on some "back news" in here, since things are happening out there in the real world faster than I can keep up with them, we have ...

"Stocks dive, then soar on Fed decision"

By JOE BEL BRUNO, Associated Press

Last updated: 6:43 p.m., Tuesday, August 7, 2007

NEW YORK -- Wall Street overcame disappointment in the Federal Reserve's failure to move toward an easing of interest rates Tuesday, and stocks made a late-day surge as the decision was seen as a sign the economy wasn't threatened by turmoil in the credit markets.

Investors were at first deeply disappointed that policymakers, who kept benchmark rates on hold at 5.25 percent, did not provide any hints about a possible cut.

But, after digesting the policy statement, they quickly gained solace the economy is likely to withstand troubles in the mortgage industry.

The Dow Jones industrials rose into positive territory from a 121 point deficit right after the decision was announced.

The Fed's Open Market Committee's economic assessment said the central bank's predominant concern "remains the risk that inflation will fail to moderate as expected."

Wall Street was relieved the Fed didn't consider of bigger concern recent anxiety about how tightening credit standards will affect the economy, which has caused stocks to wobble in the past two weeks.

The statement -- while noting credit problems, continuing weakness in the housing market and the market's turbulence -- stood fast by the Fed's inflation policy.

It gave little new insight into which way policymakers were leaning about a possible interest rate cut, however.

"I think what the Fed is trying to tell us is the economy is still in reasonably good shape, they're still concerned about inflation and they welcome the repricing of risk as long as it does not result in the markets seizing up from a liquidly standpoint," said Robert Auwaerter, head of fixed income portfolio management at Vanguard Group.

The Dow gained 35.52, or 0.26 percent, to 13,504.30.

The blue chip index had risen as much as 102 points after the decision; it is the first time since July 30 that it hasn't closed with a triple-digit gain or loss.

The Standard & Poor's 500 index rose 9.04, or 0.62 percent, to 1,476.71, while the Nasdaq composite index rose 14.27, or 0.56 percent, to 2,561.60.

The Russell 2000 index of smaller companies fell 7.22, or 0.94 percent, to 773.61.

In recent weeks, the major stock market indexes have traded erratically, with the Dow routinely showing triple-digit swings.

The frenetic trading follows the stock market's high seen July 19, when the Dow closed above 14,000 for the first time and the S&P 500 index also saw a record finish.

Treasury bonds fell as investors moved back into stocks, with the yield on the 10-year note climbing to 4.77 percent from late Monday's 4.74 percent.

Investors had been moving into safer investments, like Treasuries, to avoid volatility in major market indexes.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude oil for September delivery rose 36 cents to settle at $72.42 a barrel on the New York Mercantile Exchange.

A week ago, crude closed at a record $78.21 a barrel.

Wall Street also was pleased by a Labor Department report that indicated productivity of U.S. workers increased last quarter as the economy rebounded, and labor costs began to retreat.

Productivity more than doubled from the first quarter.

Labor costs rose during the period at a 2.1 percent pace, and surpassed Wall Street projections.

It was the second-straight quarter in which wage pressures have cooled, which could help assuage some of the Fed's concerns about inflation.

But, for the moment, it appears policymakers remain on track in their thinking about the economy.

The Fed expects moderate economic growth even though credit conditions have tightened for some customers and business.

Analysts believe there wasn't too much new in this statement compared to comments issued after their previous meeting -- and that in itself might have led to the market's volatility.

Some investors were looking for a stronger statement about credit markets, where others might have been listening for indications of a rate cut or signs inflation is waning.

"Nobody was surprised, at the Fed's language."

"There wasn't any positive or really negative news," said Brett Hammond, chief investment strategist for TIAA-CREF.

"Beyond seeing a concern about inflation, now they've acknowledged the credit crunch and volatile markets -- it has stuck in people's minds that they are pointing these things out."

In corporate news, Marsh & McLennan Cos. fell $1.54, or 5.6 percent, to $26.11.

The largest U.S. insurance brokerage turned in a 3 percent increase in its second-quarter profits amid growth in its risk and insurance business and consulting operations.

The company also approved a $1.5 billion share-repurchase plan.

Duke Energy Corp. rose 96 cents, or 5.4 percent, to $18.86.

It reported second-quarter profit fell $1.27 percent after it spun off its natural gas business at the beginning of the year.

Tyco International Ltd. shed 56 cents to $47.44 after it fell to a fiscal third-quarter loss due to hefty charges primarily related to a legal settlement.

Adjusted results managed to top Wall Street's expectations, however.

Advancing issues outpaced decliners 3-to-2 on the New York Stock Exchange, where consolidated volume came to 4.71 billion shares, down from a very heavy 5.09 billion Monday.

Overseas, European markets rose higher following Monday's U.S. advance.

London's FTSE 100 closed up 1.93 percent, Germany's DAX index rose 0.93 percent, while France's CAC-40 rose 1.58 percent.

Japan's Nikkei stock average closed up 0.04 percent.

------

On the Net:

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

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

"AP - Consumer Credit Up in June"

Tuesday August 7, 3:24 pm ET

By Martin Crutsinger, AP Economics Writer

WASHINGTON (AP) -- Consumers boosted their borrowing more than expected in June, reflecting another hefty jump in credit card debt.

The Federal Reserve reported Tuesday that consumer credit rose at an annual rate of 6.5 percent in June.

It marked the second straight sizable gain.

Consumer credit rose by an even larger 7.9 percent in May.

The increase was led by an 8.4 percent rate of increase for revolving credit, the category that includes credit card debt.

The category that includes auto loans rose at a 5.3 percent rate, the same as in May.

Total consumer credit rose by $13.2 billion in June to a record $2.459 trillion.

The increase was double what economists had been expecting.

Consumer credit as measured by the Fed does not include mortgage debt.

Analysts said the big rise in consumer credit reflects the slumping housing market and growing troubles in mortgage markets.

When home prices were rising sharply in value, consumers were taking out home equity loans and using other types of mortgage financing instead of relying so much on credit cards.

However, with rising defaults in the subprime mortgage market, lenders have tightened standards for mortgage loans, forcing consumers to move back to credit card borrowing.

"Homeowners are unable to borrow against their homes so they are turning back to their credit cards," said Mark Zandi, chief economist at Moody's Economy.com.

Zandi predicted this trend would continue for the next year or so until the housing market stabilizes and home prices start rising again.

AND AS THE IDIOT-SAVANT PECKERWOOD FROM TEXAS CONTINUES TO SQUANDER OUR RESOURCES BY THE BILLIONS IN HIS VARIOUS FAILING MILITARY ADVENTURES AROUND THE GLOBE, WE HAVE ...

"Bridge disaster could mean gas-tax hike"

By JIM ABRAMS, Associated Press Writer

7 August 2007

WASHINGTON - The Minneapolis bridge disaster that suddenly is the symbol of the nation's crumbling infrastructure could tip the scales in favor of billions of dollars in higher gasoline taxes for repairs coast to coast.

There are 500 bridges around the country similar to the Minneapolis span, and "these are potential deathtraps," says Rep. Don Young, R-Alaska, former chairman of the House Transportation Committee.

"We have to, as a Congress, grasp this problem."

"And yes, I would even suggest, fund this problem with a tax," he says.

"May the sky not fall on me."

One-quarter of the nation's bridges, including the one in Minneapolis, have been classified as structurally deficient or functionally obsolete.

One-third of major roads are judged by federal transportation officials to be in poor or mediocre condition.

Beyond the human tragedy of the Minnesota bridge collapse lie some daunting numbers: The cost of the backlog of needed repairs to roads and bridges is now $461 billion.

Road conditions are a factor in one-third of the 40,000 traffic fatalities every year.

Traffic congestion costs drivers $63 billion a year in wasted time and fuel costs.

There's no evidence to suggest that the Mississippi River disaster was a direct result of federal underspending.

But there is wide agreement that the bridge is symptomatic of a national problem that Congress and the White House are going to have to address.

"It's a tragic wakeup call," said Matt Jeanneret, spokesman for the American Road and Transportation Builders Association.

"This is gut check time for members of Congress for what they are going to do at the federal level."

Past action by Congress and the White House does not give rise to confidence.

The last six-year highway and transit bill finally passed in 2005, two years late and, at $286 billion, almost $90 billion short of the $375 billion that transportation advocates said was needed to keep U.S. infrastructure from further deterioration.

Young and other Transportation Committee leaders wanted to pay for the larger sum by indexing for inflation the fuel tax that keeps the National Highway Trust Fund in money.

That would have raised the tax, at 18.3 cents a gallon since 1993, by about a nickel.

President Bush rejected what he said was a tax hike and insisted that Congress accept a far smaller highway budget.

According to a U.S. Chamber of Commerce study last year, indexing fuel taxes retroactively to 1993 would have boosted the tax to about 25 cents a gallon last year, raising an average of $20 billion annually.

The two-year delay in passing the measure caused havoc with state transportation planners, who had to defer new projects because they didn't know how much would be available.

Federal money accounts for about 45 percent of all infrastructure spending.

"This administration failed to support robust investment in surface transportation and the funding to accompany it," Rep. Jim Oberstar, D-Minn., the Transportation Committee's new chairman this year, said at a news conference after the bridge collapse in his home state.

When the next highway bill comes up in 2009, Congress won't settle for a "bargain basement" measure, Oberstar said.

Rep. John Mica, R-Fla., the top Republican on the committee, called for a national strategic transportation plan to fix a system where "we have congestion, where we have bridges falling into our rivers."

He cited an American Council of Civil Engineering estimate that this would cost $1.7 trillion.

The administration in turn has demanded that Congress show more discipline, citing thousands of special projects, or earmarks, in highway bills that don't reflect the real priorities.

The best known among them was one that Young supported: $223 million for the "Bridge to Nowhere" in Alaska.

That provision eventually faltered, but about $24 billion — a little less than 8 percent of the total — in the last highway bill was still devoted to projects singled out by lawmakers for funding.

State transportation officials also complain about the federal practice of annually denying spending for uncontracted projects, leaving states short of money promised in transportation bills.

This helped build up the highway trust fund, said Jack Basso of the American Association of State Highway and Transportation Officials, but the reality is that "that money is never going to get used."

Since 2002, Congress has been using these unobligated funds for "rescissions," a budget device used to offset spending and make the budget deficit look smaller.

Such highway-related rescissions have grown from $374 million in fiscal 2002 to $4.3 billion this fiscal year.

Within a day of the Minneapolis bridge disaster, the Senate moved to create a national commission to look into what must be done to improve roads, bridges, drinking water systems and other public works.

Advocates said it basically boils down to two issues — finding the money and the political will.

Two years from now, when Congress has to write a new six-year plan, the highway trust fund — which had a balance of almost $23 billion in 2000 — is expected to go into the red.

While revenues from the fuel tax are eroding in value, construction costs are soaring.

In the past three years the costs of basic materials such as asphalt, steel and diesel fuel have risen 47 percent because of construction booms in China and other countries, said Jeff Shoaf, senior executive director of Associated General Contractors of America.

"We're in so deep a hole that we've got to look at every option," he said.

Among those options, all with their detractors, are building more toll roads, encouraging more private-public road projects, sanctioning more state and local construction bonds and taxing drivers according to miles driven rather than fuel purchased.

Congress also may finally be ready to consider a boost in the federal gasoline tax.

Frank Moretti of TRIP, a national transportation research group, said continuing to oppose higher gasoline taxes could become politically untenable.

The bridge collapse "is going to create a fundamental shift," Moretti said.

The public would rather pay more taxes "than have to face the consequences of a crumbling infrastructure."
___

On the Net:

Congress: http://thomas.loc.gov/

<h2 style="display: inline;">Camp Kirsanow</h2>
Submitted by Rick Perlstein on August 7, 2007 - 3:50pm. I haven't seen this getting much attention. It should. On July 19, [ed.: July 19, 2002, I neglected to note originally] a man named Peter Kirsanow said that if Arabs staged another terrorist attack on American soil, the doors might swing open to new American concentration camps.

And who is Peter Kirsanow? A shrieking talk radio maniac? One of those right-wing bloggers who can't host comments on his site because the violent fantasies therein attract too much attention from the FBI?

No, he is a member of the U.S. Civil Rights Commission. A Bush appointee.

"I think we will have a return to Korematsu," was the exact quote. Korematsu v. United States was the 1944 Supreme Court decision that signed off on internment camps for Japanese. For good measure, he said it at a hearing in Detroit, the most Arab-heavy city in the U.S.

He has since walked back his comments. You know the old dodge: out of context. "Under no circumstances did I ever say, nor do I believe in, detention camps or that the government should consider such detention camps,” Kirsanow told the AP three days later. “I am adamantly opposed to the concept. I was trying to emphasize that an effective war on terrorism and preserving civil liberties are not mutually exclusive.”

Well, what was the context? Reports on the meeting are sparse. But one source, citing a Detroit Free Press article no longer available online, said that at the hearing Arab-American leaders were bearing witness to the treatment of their constituents since 9/11 ("It's becoming really ugly," one leader testified), and that "Kirsanow argued that Arab and Muslim Americans should accept the country's new antiterrorism laws and complain less about infringements to their civil rights." Kirsanow is also quoted saying that if there's an attack, "and they come from the same ethnic group that attacked the World Trade Center, you can forget about civil rights... The public would be less concerned about any perceived erosion of civil liberties than they are about protecting their own lives." A lawyer named Roland Hwang apparently piped up and said that never again should Americans be detained for reasons of mere ethnicity. Then came the quote about Korematsu.

So apparently the context was a Bush administration "civil rights" official telling Arabs that if they are worried about civil liberties, well, then, they should just make Arabs stop being terrorists. Lovely. These Bushies are richer ironists than Henry James.

[As I've clarified above, this was from 2002. Kirsanow, an African American, remains on the Civil Rights Commmission; and, after a 2006 recess appointment, he was further rewarded with a berth on the National Labor Relations Board, where I'm certain he continues to serve his nation with distinguished impartiality.]

Well, Snuf ...

Something to think about ...

And I bet George W. Bush does ...

He'd have concentration camps here in Amerrica in the blink of an eye, if he could ...

I can't believe this ignorant Texas peckerwood is actually the president of the same America that I call my home, and which I fought to allegedly defend, although having been in Viet Nam, sadly, I believe that that was a lie ...

But that is a different topic ...

And so ...

And please pardon me here for being sketchy in my posting ...

It's like being in the midst of a wind-driven dust storm right now, news-wise, with things happening so fast on so many levels that I cannot seem to keep up with it ...

So I am "stockpiling" the news, in order to be better able to place it in some kind of rational perspective, which I will do starting with the economy ....

And so ...

"Builder seeing 'different' housing slump"

By DEBORAH YAO, Associated Press

Last updated: 5:32 p.m., Wednesday, August 8, 2007

PHILADELPHIA -- The housing market slump has Toll Brothers' chief executive perplexed.

"This downturn is very different."

"It is the first one in my 41 years in the business that's occurred when you have an up stock market, low unemployment, decent job growth and a very decent economy," said Robert Toll, speaking to analysts Wednesday after his company reported a 21 percent decline in homebuilding revenues.

The luxury homebuilder's usually ebullient and candid chief executive also was cautious in his outlook on the housing market.

Nearly two years into the housing slump, which got worse with defaults by subprime borrowers, most markets remain weak, he said.

Toll said the market is so volatile, that it declined to issue earnings forecasts for the rest of the year.

Despite its hesitation about the market, the company's third-quarter revenue nonetheless beat analysts' expectations and writedowns were smaller than those reported by some homebuilders.

The stock rose $1.38, or 6 percent, to $24.33.

Toll Brothers, which has a mortgage-lending business, said it lines up investors to take over the loan before it is approved for home buyers.

Analysts said Toll isn't as affected by subprime borrower problems.

But it does have greater exposure to buyers with jumbo loans and so-called "alt-A" loans for borrowers who don't have to submit all documentation that otherwise would be required for a traditional loan.

These areas are also coming under pressure.

The company said its buyers have better-than-average credit scores.

Moreover, subprime borrowers only represent 1 percent of its loans.

But 43 percent of its buyers get "alt-A" loans and slightly less than half of the loans are jumbo.

With lenders squeezing credit, "alt-A" borrowers will go away unless they can find other financing, put down a higher deposit, provide full documentation or buy a cheaper home, said Alex Barron, senior research analyst at Agency Trading Group in Wayzata, Minn.

"I expect the volume of sales to drop, cancellations to go up and prices to continue to head lower," Barron said.

"It's going to keep getting worse."

Toll Brothers expects third-quarter homebuilding revenue to fall to $1.21 billion from $1.5 billion in the same quarter a year ago.

The company plans to release results on Aug. 22.

Analysts surveyed by Thomson Financial were on average expecting revenue of $1.08 billion for the nation's largest builder of luxury homes.

"Things could have been worse," said Greg Gieber, an analyst with A.G. Edwards.

"Orders have fallen back to where they were before the boom."

Net signed contracts, a measure of future activity, fell 31 percent to $727.1 million.

Cancellations rose to 23.8 percent in the quarter, compared with 18 percent a year earlier.

The backlog, a sign of past activity, fell by 34 percent to $3.67 billion.

Toll Brothers said it is booking pretax writedowns in the quarter ranging from $125 million to $175 million on homes it can't sell for a profit, as well as land options the company is abandoning.

By comparison, Pulte Homes Inc. logged a $750 million writedown in the second quarter and D.R. Horton Inc. posted $852 million in charges that reflect the lower value of land and other holdings, and $426 million in the value of Horton's intangibles, such as its brand name.

Toll Brothers is also retrenching.

The Horsham, Pa.-based homebuilder is postponing the opening of new developments in weak markets and cutting the amount of land owned or optioned.

In the third quarter, Toll Brothers said revenues in its Western region -- Arizona, California, Colorado and Nevada -- were hit the hardest, down 24 percent to $321.7 million.

The North, comprising Connecticut, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, New York and Rhode Island, was down 22 percent to $293.4 million.

Close behind is the Mid-Atlantic states of Pennsylvania, Delaware, Maryland, Virginia and West Virginia, down 21.6 percent to $350.7 million.

The South -- Florida, the Carolinas and Texas -- fell 14 percent to $242.2 million.

The West could continue to struggle, with signed contracts down 41 percent, followed by the South at 37 percent, the Mid-Atlantic by 28 percent and the North by 19 percent.

In July, homebuilder D.R. Horton posted a third-quarter loss of $823.8 million, or $2.62 a share, compared with a profit of $292.8 million, or 93 cents, a year ago.

Beazer Homes USA Inc. also swung to a loss from a profit in the third quarter as revenue fell 37 percent to $761 million and home closings plummeted by 36 percent.

------

On the Net:

http://www.tollbrothers.com

"Realtors group lowers housing forecast"

By ALAN ZIBEL, Associated Press

Last updated: 3:52 p.m., Wednesday, August 8, 2007

WASHINGTON -- Home sales will hit a five-year low this year, as wary lenders cut back on loans for many borrowers, a trade group for real estate agents said Wednesday.

The National Association of Realtors' revised forecast calls for existing home sales of 6.04 million in 2007, down 6.8 percent from last year.

The forecast was 1 percent lower, or 70,000 fewer homes, than July's prediction of 6.11 million.

This year's sales would be the lowest since 2002, when sales hit 5.63 million.

Last year's sales were 6.48 million.

Next year, the trade group expects sales to climb to 6.38 million, up slightly from the forecast it gave in July of 6.37 million.

The forecast comes as delinquencies among borrowers with weak, or subprime, credit have risen dramatically over the past year, and other loans are showing weakness as well.

"With fewer affordable loans available, that will cut back on some of the homebuyers who wanted to enter the market," Lawrence Yun, the trade group's senior economist, said in an interview.

However, Yun projected that demand would rebound next year.

As of May, more than 16 percent of mortgages issued to subprime borrowers were behind on their payments by 60 days or more -- nearly double last year's levels, according to research firm First American LoanPerformance.

As delinquencies rise, lenders are reducing the availability of credit to those borrowers.

Those worries have also extended to the market for "jumbo" loans, or those above the $417,000 individual limit for home mortgages that mortgage giants Fannie Mae and Freddie Mac are allowed to buy.

Investors worried about rising mortgage defaults have all but stopped buying mortgage-backed securities.

That market could remain "frozen" for up to a month, said Doug Duncan, chief economist for the Mortgage Bankers Association.

However, the Realtors' Yun said investors are overreacting by refusing to buy jumbo loans.

Among borrowers with strong credit and "jumbo" mortgages, delinquencies rose to 0.5 percent in May, from 0.3 percent a year earlier, according to the FirstAmerican LoanPerformance statistics.

While sales fall, some elements of supply are expected to be down as well.

More than 1.4 million housing starts, including multifamily units, are forecast this year and in 2008, but that is down from 1.8 million last year.

Median nationwide existing-home prices are expected to fall by 1.2 percent to a median of $219,300 this year, before climbing back next year to $223,600.

Median new home prices are projected to fall 2.3 percent to $240,800 this year and then rise to $246,300 in 2008.

AND THEN, THE WITLESS TEXAS PECKERWOOD IN THE WHITE HOUSE STEPS UP TO THE PLATE, AS IT WERE, AND RUNS HIS MOUTH ...

"Bush confident of market recovery"

By JEANNINE AVERSA, Associated Press

Last updated: 6:52 p.m., Wednesday, August 8, 2007

WASHINGTON -- President Bush struck a reassuring tone Wednesday about recent turbulence on Wall Street, saying he believes the markets will work their way through the turmoil safely and achieve a "soft landing."

Bush, in his most extensive remarks on a gyrating stock market that has sent investors on a rollercoaster ride, expressed confidence that investors would eventually calm down.

The president said he expects investors to reassess their risk and begin to focus more on the economy's fundamentals, which he said are solid and sound.

"I'm not an economist, but my hope is that the market, if it functions normally, will be able to yield a soft landing," Bush told a small group of reporters at the Treasury Department on Wednesday.

"That's kind of what it looks like so far."

Investors are concerned about a worsening housing slump and possibly a widening credit crunch -- an uneasiness of recent weeks that they fear could permeate the financial system and the national economy.

"The underpinnings of our economy are strong," Bush said, adding that such conditions should help the markets get through the current problems.

"So the conditions for a -- you know -- for the marketplace working through these issues are good, and that's how I look at it," Bush said.

Bush noted that the economy is growing modestly and generating jobs, despite the ill effects of the sour housing market.

After nearly stalling in the first three months of this year, the economy rebounded in the April-to-June quarter, growing at a solid 3.4 percent pace, the best in more than a year.

The nation's unemployment rate edged up to 4.6 percent in July yet remains low by historical standards.

Inflation -- aside from a recent burst in energy and food prices -- has shown signs of improving.

However, stocks have been swinging wildly.

The president indicated he wasn't overly worried.

He said the markets have gone through periods of ups and downs before.

"It's the nature of the markets," he said.

On Wall Street, stocks -- encountering another volatile session -- ended the day up 154 points.

"I'm a glass half-full person," the president said of his optimism.

"I believe that if markets are given a chance they will adjust" in a way that won't endanger the economy, he said.

Although Bush insisted his economic policies have helped the economy grow and his tax cut let workers keep more of their own money, the president has been coping with weak public-approval ratings for his economic stewardship.

Only 37 percent approve of his performance, close to a record low, a recent AP-Ipsos poll indicated.

"I do understand there is disquiet out there," Bush said.

On the one hand he blamed the war.

"I happen to believe the war has clouded a lot of peoples' sense of optimism," Bush said.

On the other hand, he noted that consumer confidence, as measured by the Conference Board, soared to a six-year high.

He said there have been conflicting measures about Americans' moods and their feelings about the economy.

Looking ahead to the Democratic-controlled Congress' return in September, Bush made his case anew for keeping taxes low and restraining spending.

House Majority Leader Steny Hoyer, D-Md., shot back, saying Bush's comment on fiscal responsibility "strains credulity" and accused the president of being determined "to instigate a political fight with the Democratic majorities in Congress."

Bush also urged policymakers to avoid protectionist trade measures.

Lawmakers and some Americans are losing patience with China, which they blame for the loss of millions of factory jobs, unfair trade competition and a flood of harmful food, toys and other products flowing into the United States.

The U.S. trade deficit with China last year swelled to $233 billion, the highest with any single country.

The president acknowledged China "is on a lot of Americans' minds" these days.

He said the administration is working to protect Americans from unsafe goods and deal with trade problems.

Bush said one of his big concerns is the rampant piracy of U.S. movies, computer software and other intellectual property rights.

The administration is also working to curb that and wants to make sure "people don't steal our ideas," he said.

AND RIGHT AFTER THE WITLESS TEXAS PECKERWOOD RUNS HIS MOUTH ABOUT THE STATE OF THE ECONOMY ....

"AP - Dow Plunges 387 on Subprime Concerns"

Thursday August 9, 4:46 pm ET

By Tim Paradis, AP Business Writer

NEW YORK (AP) -- Wall Street plunged again Thursday after a French bank said it was freezing three funds that invested in U.S. subprime mortgages because it was unable to properly value their assets.

The Dow Jones industrials extended its series of triple-digit swings, this time falling more than 380 points.

The announcement by BNP Paribas raised the specter of a widening impact of U.S. credit market problems.

The idea that anyone -- institutions, investors, companies, individuals -- can't get money when they need it unnerved a stock market that has suffered through weeks of volatility triggered by concerns about tight credit and bad subprime mortgages.

A move by the European Central Bank to provide more cash to money markets intensified Wall Street's angst.

Although the bank's loan of more than $130 billion in overnight funds to banks at a low rate of 4 percent was intended to calm investors, Wall Street saw it as confirmation of the credit markets' problems.

It was the ECB's biggest injection ever.

The Federal Reserve added a larger-than-normal $24 billion in temporary reserves to the U.S. banking system.

The concerns that arose in Europe and spilled onto Wall Street underscored the potential worldwide ramifications of an implosion of some subprime loans and perhaps also weakened arguments that strength in the global economy could help keep profit growth going in the U.S. among large companies that do business overseas.

The ECB's injection of money into the system is an unprecedented move, said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co., adding that it shows that problems in subprime lending are, in fact, spilling into the general economy.

"This is a mini-panic," he said.

"All the things that had been denied up until this point are unraveling."

"On top of this, retail sales were mediocre, which shows that indeed, the housing collapse is affecting the consumer."

Retailers released July sales figures Thursday that were overall disappointing.

The Fed didn't soften its stance on inflation after leaving short-term interest rates unchanged Tuesday.

However, the renewed credit market concerns spurred bond traders who bet on its next move to predict early in the session that the Fed will cut rates at its meeting next month.

Before Thursday, traders had bet on a 1 in 4 chance of such a cut.

According to preliminary calculations, the Dow fell 387.18, or 2.83 percent, to 13,270.68.

Thursday's pullback continued an erratic pattern of triple-digit moves in the Dow since the index closed at a record 14,001.41 on July 19.

Eleven of the 15 ensuing sessions have ended in a triple-digit gain or loss.

Gains have been evaporating at the first mention of trouble in housing, subprime lending or the credit markets.

With Thursday's decline, the Dow is about 730 points, or 5.2 percent, below its record close.

Some experts have been calling for a textbook correction -- a pullback of at least 10 percent.

At its lowest close since the market's high, Friday's finish of 13,181.91, the Dow was 5.85 percent below the record.

Bonds rose sharply as investors again sought the relative safety of Treasurys, pushing down the yield on the benchmark 10-year note to 4.79 percent from 4.89 percent late Wednesday.

The broader Standard & Poor's 500 index fell 44.40, or 2.96 percent, to 1,453.09.

Before Thursday, the S&P had its best three-day winning streak in nearly five years.

But the latest pullback was the biggest point drop and percentage loss for both the Dow and the S&P since a market pullback on Feb. 27., that owed in part to concerns about subprime loans.

The Nasdaq composite index fell 56.49, or 2.16 percent, to 2,556.49.

On Wednesday, it posted its biggest point gain in more than year.

And while Thursday's loss was sharp, last Friday's was more severe.

The pullback came after BNP Paribas Investment Partners said it was suspending three funds together worth about $3.79 billion and wouldn't make investor redemptions until it could determine net asset values.

The funds invest in part in subprime mortgages through a process known as securitization.

Investment banks bundle together mortgages -- including those from subprime borrowers -- and sell them off to investors such as hedge funds, mutual funds and other institutional investors.

Buyers of such securities are seeking the steady flow of income from homeowners making their mortgage payments.

Shares of financial companies, which investors have fled recently amid lending concerns, took another beating Thursday.

Citigroup Inc. fell 5 percent, as did fellow Dow component JPMorgan Chase & Co.

In another sign of credit market trouble, Home Depot Inc. warned that the sale of its wholesale business might bring in less than expected.

The world's largest home improvement retailer, which also cut how much it intends to pay to repurchase stock, said volatility in the stock, debt and housing markets has led to the possible repricing.

Home Depot fell $2.01, or 5.3 percent, to $35.79, and was the worst performer of the 30 Dow components.

But American International Group Inc., one of the world's largest insurers, on Thursday reassured investors that it remains comfortable with its exposure to the subprime lending market as an investor, lender and mortgage insurer.

AIG, which reported a 34 percent jump in second-quarter profit late Wednesday, said it has enough cash and liquidity and "does not need to liquidate any investment securities in a chaotic market."

AIG fell $2.18, or 3.3 percent, to $64.30.

The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell 56 cents to $71.59 per barrel on the New York Mercantile Exchange.

Declining issues outnumbered advancers by about 4 to 1 on the New York Stock Exchange, where volume came to 2.8 billion shares compared with 2.6 billion shares traded Wednesday.

The Russell 2000 index of smaller companies fell 10.79, or 1.36 percent, to 784.87.

The Chicago Board Options Exchange's volatility index, often called the "fear index," rose early Thursday to its highest level since April 2003.

European stocks plunged.

Britain's FTSE 100 lost 1.92 percent, Germany's DAX index fell 2.00 percent, and France's CAC-40 fell 2.17 percent after being down more than 3 percent.

Japan's Nikkei stock average rose 0.83 percent.

Hong Kong's Hang Seng index fell 0.43 percent.

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

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

AND IS ANOTHER GIGANTIC GOVERNMENT BAIL-OUT ON THE WAY, HERE IN OUR AMERICA?

"Reserve acts to stem credit turmoil"

By JEANNINE AVERSA, Associated Press

Last updated: 6:23 p.m., Friday, August 10, 2007

WASHINGTON -- The Federal Reserve, trying to calm turmoil on Wall Street, announced Friday that it will pump as much money as needed into the U.S. financial system to help overcome the ill effects of a spreading credit crunch.

The Fed, in a short statement, said it will provide "reserves as necessary" to help the markets safely make their way.

The central bank did not provide details but said it would do all it can to "facilitate the orderly functioning of financial markets."

The Fed pushed $38 billion in temporary reserves into the system Friday, on top of a similar move the day before.

Financial markets in the United States and around the globe have been shaken by fears about spreading credit problems that started with home mortgages for those with tarnished credit histories.

Investors are worried that these problems will infect the larger financial system and possibly hurt the U.S. economy.

The Fed's action may have eased some investors' anxieties.

The Dow Jones industrials were down around 90 points in afternoon trading Friday following much sharper losses near the start of the session.

Presidential spokeswoman Dana Perino said the Fed is an independent body, and the White House will not comment on its decisions.

"But I can assure you that there are many of the president's advisers who are keeping a very close eye on all the market activity and making sure that policies are put in place to keep our economy strong and growing," she told reporters in Kennebunkport, Maine, where President Bush is spending the weekend.

The current financial turmoil provides the biggest test yet to Federal Reserve Chairman Ben Bernanke, who took the helm last year.

The Fed's action comes one day after a financial panic about a credit crunch swept through Europe.

That prompted the Europeans to pump $130 billion into their financial system.

The Fed moved Thursday to add an extra $24 billion in temporary reserves to the U.S. banking system.

But that wasn't enough to comfort Wall Street, which suffered its second-worst decline of the year that day.

The Fed on Friday chose not to cut a key interest rate, called the federal funds rate, to address the problem.

That interest rate still stands at 5.25 percent.

The funds rate is interest banks charge each other on overnight loans and is the Fed's main lever to influence economic activity.

Instead, the Fed is seeking to provide reassurance to investors that the central bank will plow extra money into the U.S. financial system to make sure the credit crunch doesn't worsen.

The Federal Reserve Bank of New York, which carries out the central bank's market operation, moved to add $19 billion in temporary reserves Friday morning.

It pumped in another $16 billion in reserves a couple of hours later, then $3 billion more in the afternoon.

"In current circumstances, depository institutions may experience unusual funding needs because of dislocations in money and credit markets," the Federal Reserve in Washington said in its statement.

It told banks that the Fed's discount window -- where banks can turn in an emergency for short-term loans -- is available as a source of funding.

After the Sept. 11, 2001, terror attacks, the Fed used the discount window to extend billions of dollars worth of emergency loans to banks to keep the financial system functioning.

The current meltdown in the housing and mortgage markets has caused new home foreclosures to climb to record highs and has forced some lenders out of business.

Problems first sprouted in the market for higher-risk or "subprime" mortgages, which are held by people with poor credit or low incomes.

But some problems have spilled over to more creditworthy borrowers.

That has led to tighter lending standards, making credit harder to get for people and businesses.

The free flow of credit is important to the smooth functioning of the national economy.

Increasingly restrictive lending conditions can put a damper on people's ability to buy big-ticket items such as homes, cars and appliances.

And it can crimp businesses' capital investment and hiring.

That reduced appetite by businesses and consumers would slow overall economic activity.

Against this backdrop, Wall Street has careened wildly in recent weeks.

Bernanke and his central bank colleagues, in a meeting on Tuesday, acknowledged that these problems are posing increasing risks to the economy.

But they refrained from cutting interest rates and stuck to their forecast that the economy will weather the financial storm and grow gradually in the coming months.

One day later, Bush struck a reassuring tone about the turbulence on Wall Street, saying he believes the markets will achieve a "soft landing."

The market ended Wednesday up by 154 points, but then went into its nosedive on Thursday.

And getting back to my stockpile of back news, we have ...

"Study finds twist in human evolution"

By SETH BORENSTEIN, AP Science Writer

8 August 2007

WASHINGTON - Surprising fossils dug up in Africa are creating messy kinks in the iconic straight line of human evolution with its knuckle-dragging ape and briefcase-carrying man.

The new research by famed paleontologist Meave Leakey in Kenya shows our family tree is more like a wayward bush with stubby branches, calling into question the evolution of our ancestors.

The old theory was that the first and oldest species in our family tree, Homo habilis, evolved into Homo erectus, which then became us, Homo sapiens.

But those two earlier species lived side-by-side about 1.5 million years ago in parts of Kenya for at least half a million years, Leakey and colleagues report in a paper published in Thursday's journal Nature.

In 2000 Leakey found an old Homo erectus complete skull within walking distance of an upper jaw of the Homo habilis, and both dated from the same general time period.

That makes it unlikely that one evolved from the other, researchers said.

It's the equivalent of finding that your grandmother and great-grandmother were sisters rather than mother-daughter, said study co-author Fred Spoor, a professor of evolutionary anatomy at the University College in London.

The two species lived near each other, but probably didn't interact with each other, each having their own "ecological niche," Spoor said.

Homo habilis was likely more vegetarian and Homo erectus ate some meat, he said.

Like chimps and apes, "they'd just avoid each other, they don't feel comfortable in each other's company," he said.

They have some still-undiscovered common ancestor that probably lived 2 million to 3 million years ago, a time that has not left much fossil record, Spoor said.

Overall what it paints for human evolution is a "chaotic kind of looking evolutionary tree rather than this heroic march that you see with the cartoons of an early ancestor evolving into some intermediate and eventually unto us," Spoor said in a phone interview from a field office of the Koobi Fora Research Project in northern Kenya.

That old evolutionary cartoon, while popular with the general public, keeps getting proven wrong and too simple, said Bill Kimbel, who praised the latest findings.

He is science director of the Institute of Human Origins at Arizona State University and wasn't involved in the research team.

"The more we know, the more complex the story gets," he said.

Scientists used to think Homo sapiens evolved from Neanderthals, he said, but now know that both species lived during the same time period and that we did not come from Neanderthals.

Now a similar discovery applies further back in time.

Leakey's team spent seven years analyzing the fossils before announcing their findings that it was time to redraw the family tree — and rethink other ideas about human evolutionary history, especially about our most immediate ancestor, Homo erectus.

Because the Homo erectus skull Leakey recovered was much smaller than others, scientists had to first prove that it was erectus and not another species nor a genetic freak.

The jaw, probably from an 18- or 19-year-old female, was adult and showed no signs of any type of malformations or genetic mutations, Spoor said.

The scientists also know it isn't Homo habilis from several distinct features on the jaw.

That caused researchers to re-examine the 30 other erectus skulls they have and the dozens of partial fossils.

They realized that the females of that species are much smaller than the males — something different from modern man, but similar to other animals, said study co-author Susan Anton, a New York University anthropologist.

Scientists hadn't looked carefully enough before to see that there was a distinct difference in males and females.

Difference in size between males and females seem to be related to monogamy, the researchers said.

Primate species that have same-sized males and females, such as gibbons, tend to be more monogamous.

Species that are not monogamous, such as gorillas and baboons, have much bigger males.

This suggests that our ancestor Homo erectus reproduced with multiple partners.

The Homo habilis jaw was dated at 1.44 million years ago.

That is the youngest ever found from a species that scientists originally figured died off somewhere between 1.7 and 2 million years ago, Spoor said.

It enabled scientists to say that the two species lived at the same time.

All the changes to human evolutionary thought should not be considered a weakness in the theory of evolution, Kimbel said.

Rather, those are the predictable results of getting more evidence, asking smarter questions and forming better theories, he said.
___

On the Net:

Nature: http://www.nature.com

"Powerful earthquake hits Indonesia"

By ROBIN McDOWELL, Associated Press Writer

8 August 2007

JAKARTA, Indonesia - A powerful earthquake under the Java Sea rattled Indonesia's capital early Thursday, violently shaking tall buildings and sending panicked residents into the streets.

There were no immediate reports of damage, and geophysicists said there was little risk of a tsunami.

The quake, which struck at 12:04 a.m. (1:04 p.m. EDT Wednesday) had a preliminary magnitude of 7.5 and was centered about 65 miles east of Jakarta at a depth in the Earth of 180 miles, the U.S. Geological Survey said.

Residents said tall buildings and single story homes shook violently in the city of 9 million people, and water sloshed from swimming pools.

Many people were awakened by the quake and some people screamed "Allah akbar!" or "God is great!" as they ran outside.

El-Shinta radio reported that the quake could be felt from Sumatra island in the west to Bali to the east, but that there were no immediate reports of damage.

The quake also was felt in parts of Malaysia, said Don Blakeman, a geophysicist at the USGS National Earthquake Information Center in Golden, Colo.

None of the instruments closest to the earthquake indicated that a tsunami was triggered, said Robert Cessaro, a geophysicist at the Pacific Tsunami Warning Center in Hawaii.

He added that there were no instruments "very close" to the quake's epicenter.

"Because this earthquake was so far below the ocean bottom, it didn't trigger a tsunami or cause a lot of damage," said John Bellini, another USGS geophysicist.

The Dec. 26, 2004, earthquake that triggered the tsunami off the coast of Sumatra and killed more than 131,000 in Indonesia's Ache province was only 18 miles deep, according to the USGS.

"The earthquake center in 2004 was close enough that it actually ruptured the surface of the sea floor, which caused a tsunami," Bellini said.

"This one was felt by people on the ground, and it shook buildings, but it was too deep to cause the ocean bottom to move."

Indonesia, the world's largest archipelago, is prone to seismic upheaval due to its location on the so-called Pacific "Ring of Fire," an arc of volcanos and fault lines encircling the Pacific Basin.
___

Associated Press writers Chris Hawke in Bangkok, Thailand, and Sarah DiLorenzo and Lily Hindy contributed to this story from New York.

"N.Y. company indicted in Big Dig death"

By STEVE LeBLANC, Associated Press Writer

8 August 2007

BOSTON - The company that provided the epoxy blamed in the fatal Big Dig tunnel collapse was indicted Wednesday in the death of a motorist crushed by ceiling panels.

Powers Fasteners Inc., was charged with one count of involuntary manslaughter, Attorney General Martha Coakley said.

The Brewster, N.Y.-based firm was the only company involved in the construction and design of the tunnel to be indicted by the Suffolk County grand jury, Coakley said.

A report from the National Transportation Safety Board released last month found the July 10, 2006, collapse could have been avoided if designers and construction crews had considered that the epoxy holding support anchors for the panels could slowly pull away over time.

Milena Del Valle, 39, was killed when 26 tons of concrete panels and hardware came crashing down from a tunnel ceiling onto her car as she and her husband drove through the westbound I-90 connector tunnel.

Her husband crawled out of the rubble with minor injuries.

Prosecutors said Powers Fasteners knew the type of epoxy it marketed and sold for the nearly $15 billion project was unsuitable for the weight it would have to hold, but never told project managers.

"They failed to make that distinction clear," said Paul Ware, hired as a special investigator by Coakley.

The company did not immediately return a call seeking comment.

The maximum penalty for a company charged with manslaughter in Massachusetts is $1,000.

Coakley said there may need to be changes in the law, saying the criminal statute may be "wholly inadequate."

The indictment comes after more than a year of investigations by state and federal agencies, which Coakley stressed are continuing.

The charge does not directly affect a separate wrongful death lawsuit that Del Valle's husband and daughter filed against Powers, the Massachusetts Turnpike Authority and eight other companies.

Jeffrey Denner, an attorney for Angel Del Valle, said he believes the grand jury would continue to consider criminal charges against others involved but that it was appropriate to charge Powers.

"They are certainly as culpable as it gets."

"They are the people who supplied the epoxy," he said.

In the report released last month, federal investigators spread blame for the collapse among the many corporations, consultants and engineers involved in the Big Dig project, the most expensive highway project in U.S. history.

The agency also faulted the Massachusetts Turnpike Authority for failing to conduct a timely tunnel inspection program.

The NTSB singled out Powers for providing "inadequate and misleading" information about its Power-Fast epoxy.

Tests had shown the epoxy's "Fast Set" formulation to be "subject to creep under sustained tension loading," the report said.

Officials from Powers Fasteners said after the report was issued that it would be "an absurd conclusion if the federal investigators were to consider Powers Fasteners in any way responsible, since the overwhelming evidence is that the fault lies elsewhere."

Del Valle's death prompted tunnel and road closures and sparked a public furor over the Big Dig.

The project, which had an initial price tag of $2.6 billion, has been plagued by problems and cost overruns throughout the two decades it took to design and build.

The construction buried the old elevated Central Artery that ran through the heart of Boston with a series of tunnels, ramps and bridges.

And speaking of wayward bushes, the other morning, on the morning FOX ALLEGEDLY FAIR AND BALANCED NEWS BUT NOT REALLY FAIR NOR BALANCED on CLEAR CHANNELS radio up this way, I heard PRESIDENT OF THE WORLD FOR LIFE George W. Bush saying in his peckerwood gibberish that he was going to warn the world about Iran trying to destabilize the countries of the world, and all I could think was that this is yet further evidence that not only is George W. Bush in deep denial about what he himself is doing to destabilize the world, but that he is bereft of his senses as well, assuming he ever had any in the first place, which is greatly in doubt in my own mind, anyway ....

And so ...

"Iran promises security help for Iraq"

By ALI AKBAR DAREINI, Associated Press Writer

Thu Aug 9, 11:01 AM ET

TEHRAN, Iran - Iranian officials told Iraqi Prime Minister Nouri al-Maliki on Thursday that they were doing everything they could to help stabilize his nation, but only a U.S. pullout would bring true peace.

Al-Maliki's three-day trip is aimed at enlisting Iranian help in calming Iraq's turmoil.

The Bush administration wants the U.S.-backed Shiite leader to use his close ties with predominantly Shiite Iran to help end what they call Tehran's support for militia that attack American soldiers and Sunni civilians in Iraq.

But the first two days appeared to bring no concessions from America's greatest rival in the region.

Instead, Iranian officials used the spotlight to decry American involvement in Iraq, and promote their increasingly close ties to al-Maliki's government.

"Establishment of peace and tranquility in Iraq depends on withdrawal of occupiers and their avoidance of interfering in Iraq," Vice President Parviz Davoodi told reporters after talks with al-Maliki, who was expected to meet later in the day with Iran's supreme leader Ayatollah Ali Khamenei.

Iraqi officials have not said whether al-Maliki is pressing Iran on the claims, which his government has only partially backed, saying it doesn't rule out an Iranian role in the attacks.

Iran has denied the charges, most recently on Thursday at a gathering in Damascus, Syria, of officials from Iraq and its neighbors, as well as the United States and other countries.

"There is no evidence on this subject."

"We have held talks with the Americans in Baghdad aimed at helping the Iraqi government and people."

"... We are serious about this issue," said Mohammad Firouznia, the head of the Iranian delegation to the gathering.

In their meetings with al-Maliki, Iranian officials also promised their support for Iraq's security.

"We hope we can achieve stability in Iraq, because we believe security in Iraq will ensure the same for Iran and the region," Davoodi said.

"Iran is sparing no efforts to achieve political and security stability in Iraq."

But they made clear in the talks that U.S. forces should go, Iranian Foreign Minister Manouchehr Mottaki said.

"The United States won't get out of the complex situation it has created for itself in Iraq unless it corrects its policies," Mottaki said, according to the official Iranian news agency IRNA.

He said that when Iraqi forces run security instead of the Americans, "one can be hopeful that effective steps will be taken and that one can be hopeful of talks in the future."

On Wednesday evening, al-Maliki had a warm meeting with Iranian President Mahmoud Ahmadinejad, walking hand-in-hand with him into an ornate meeting room.

Ahmadinejad described the current situation as "very sensitive," IRNA said.

"Iran and Iraq have a heavy responsibility for establishing peace and security in the region," he said.

Iraqi Foreign Minister Hoshyar Zebari, said Ahmadinejad had expressed support for continuing talks between Iranian and American officials in Baghdad about stabilizing Iraq.

"We understood from the (Iranian) president that there is a real desire to continue this dialogue and especially on the borders issue," Zebari said, referring to cross-border movement of militants.

Iraqi and Iranian officials also sought to increase economic ties between the two country, which already have been growing.

Under some of the deals being worked on, Iran would build a power station in the Shiite Sadr City enclave and supply Iraq directly with electricity.

Iran would also provide 400,000 tons of kerosene and liquid gas this year.

Sadr City has been the scene of fierce fighting between the U.S. and Shiite militants, most recently on Wednesday, when U.S. aircraft and soldiers attacked Shiite militia bomb makers accused of links to Iran.

The U.S. military said 32 suspected militants were killed and 12 were captured.

The strike in Sadr City sought to target a ring believed to be smuggling armor-piercing roadside bombs from Iran.

The precision-crafted explosives have become a growing threat to American troops.
___

Associated Press Writer Qassim Abdul-Zahra in Tehran contributed to this report.

end quotes

This talk about knuckle-dragging Neanderthals always reminds me of George W. Bush and Richard Bruce "AMERICA'S DICK" Cheney for some reason ...

All the pair of them seem to know how to do, besides being totally incompetent to run a democratic nation like the United States of America, is to kill and destroy ...

KILL AND DESTROY ...

The Bush/Cheney mantra ...

Especially women and children ...

George W. Bush invades these people's country, and then he starts killing and destroying people and their proerty right and left, indiscriminately ...

And when these people have the gall to fight back to protect their families and meager possessions ....

George W. Bush has the unmitigated gall to call them TAY-RISTS ...

When the biggest TAY-RIST of them all is George W. Bush, THE DESTROYER OF LIVES ...

And so ...

And as the Texas peckerwood in the American White House in Washington, D.C. continues on with his quest to bring death and destruction to all the known world in his guise as the modern ALEXANDER THE GREAT, in his peckerwood mind, anyway, we have signs of yet more instability in the world ...

This time from Pakistan, where the BUSHIAN PUPPET Musharaff is becoming the ADOLPH HITLER of the 21st Century ...

And so ...

"Pakistan may declare state of emergency"

By MATTHEW PENNINGTON, Associated Press Writer

9 August 2007

ISLAMABAD, Pakistan - Legal experts and security officials met with Pakistani President Gen. Pervez Musharraf Thursday, as the government weighed whether to invoke a state of emergency for what it said were mounting "external and internal" threats, officials said.

Tariq Azim, minister of state for information, said talk from the United States about the possibility of U.S. military action against al-Qaida in Pakistan "has started alarm bells ringing and has upset the Pakistani public."

He mentioned Democratic presidential hopeful Barak Obama by name as an example of someone who made such comments, saying his recent remarks were one reason the government was debating a state of emergency.

But it appeared the motivation for an emergency declaration was domestic political woes of Musharraf, a key ally in the U.S. war on terrorism.

His popularity has dwindled and his standing has been badly shaken by a failed bid to oust the country's chief justice, Iftikhar Mohammed Chaudhry — an independent-minded judge likely to rule on expected legal challenges to Musharraf's bid to seek a new five-year presidential term.

It was not immediately clear how Musharraf might gain politically from a state of emergency, but it would give him sweeping powers, including the ability to restrict people's freedom to move, rally, and engage in political activities.

He would also gain powers to restrict the parliament's right to make laws, and to suspend the courts' ability to hear cases on fundamental rights such as freedom of movement.

Former Prime Minister Nawaz Sharif has lodged a freedom of movement case with the Supreme Court that could allow him to return from exile to run in parliamentary elections due soon.

"These are only unconfirmed reports although the possibility of imposition of emergency cannot be ruled out and has recently been talked about and discussed, keeping in mind some external and internal threats and the law and order situation," Tariq Azim, minister of state for information, told The Associated Press.

"We hope that it does not happen."

"But we are going through difficult circumstances so the possibility of an emergency cannot be ruled out," he said.

Azim referred to recent Pakistani military action against militants in northwestern border areas that he said had resulted in the deaths of many soldiers.

More than 360 people have died during a wave of suicide attacks and clashes between militants and security forces that began with a bloody army assault on a pro-Taliban mosque in Islamabad in early July.

Legal experts and security officials began arriving at Musharraf's office in the capital, Islamabad, at midmorning for meetings on the issue, a presidential aide said.

Attorney General Malik Abdul Qayyum said he had been summoned to meet Musharraf later Thursday, but he had not been told the reason.

The aide said Prime Minister Shaukat Aziz held talks with Musharraf before leaving Thursday morning to attend a U.S.-backed tribal peace council aimed at curtailing cross-border militancy by the Taliban and al-Qaida.

Musharraf on Wednesday abruptly pulled out of the meeting in Kabul with more than 600 Pakistani and Afghan tribal leaders, phoning Afghan President Hamid Karzai to say he couldn't attend because of "engagements" in Islamabad.

Secretary of State Condoleezza Rice spoke with Musharraf by phone for more than 15 minutes in the early hours of Thursday, said an official in Washington on condition of anonymity due to the sensitivity of the situation.

The official refused to discuss the content of the conversation.

Earlier, State Department spokesman Sean McCormack said the U.S. understands Musharraf's decision to pull out of the meeting in Afghanistan.

"President Musharraf certainly wouldn't stay back in Islamabad if he didn't believe he had good and compelling reasons to stay back," McCormack said.

Musharraf is under growing American pressure to crack down on militants at the Afghan border because of fears that al-Qaida is regrouping there.

The Bush administration has also not ruled out unilateral military action inside Pakistan, but like Obama, has stressed the need to work with Musharraf.

On Wednesday, Obama was asked again about his views on Pakistan.

"We can't send millions and millions of dollars to Pakistan for military aid and be a constant ally to them and yet not see more aggressive action in dealing with al-Qaida," he told reporters in Oakland, Calif.

However, he did not repeat the most incendiary line from his foreign policy speech last week when he promised: "If we have actionable intelligence about high-value terrorist targets and President Musharraf won't act, we will."

On Tuesday night, Obama appeared to soften his position during a debate with other Democratic presidential hopefuls.

"I did not say that we would immediately go in unilaterally."

"What I said was that we have to work with Musharraf, because the biggest threats to American security right now are in the northwest provinces of Pakistan."

Obama and his spokesman could not immediately be reached for comment Wednesday on Pakistan's possible declaration of a state of emergency.

On Thursday, Chaudhry considered a petition lodged by Sharif — whom Musharraf ousted in a coup eight years ago — seeking the court's help in coming home.

Chaudhry adjourned the hearing until Aug. 16, when the government will have to explain its position, said Akram Sheikh, one of Sharif's lawyers.

Musharraf says Sharif struck a deal with his government that he would not return home for 10 years.

Sharif denied any deal.

Shahbaz Sharif, the former prime minister's brother, said a state of emergency would be aimed at preventing Sharif from returning to Pakistan.

"There is no justification, no basis for emergency," he told Pakistan's Geo TV from London.

Another exiled former prime minister, Benazir Bhutto, widely reported to have met with Musharraf recently in the United Arab Emirates to discuss a power-sharing deal, told Geo it would be a "a negative step for the restoration of democracy."

Also Thursday, opposition party lawmakers vowed to oppose any imposition of emergency.

"We will not accept it," said Naveed Qamar, a lawmaker from Bhutto's party.

Under Pakistan's Constitution, the president may declare a state of emergency if it is deemed the country's security is "threatened by war or external aggression, or by internal disturbance beyond" the authority of provincial governments to control.

The Supreme Court — which has emerged as the most potent check on the military leader's dominance of Pakistani politics — could still challenge the legality of a state of emergency.
___

Associated Press writers Munir Ahmad and Sadaqat Jan in Islamabad and Matthew Lee in Washington contributed to this report.

"Asian stocks plummet on credit fears"

By CARL FREIRE, Associated Press Writer

10 August 2007

TOKYO - Asian stocks plunged Friday as fallout spread from global market turmoil set off by concerns about credit weakness in the U.S.

The Bank of Japan joined its U.S. and European counterparts in pouring cash into money markets to calm growing jitters.

The Nikkei 225 index dropped 406.51 points, or 2.37 percent, to close at 16,764.09 points on the Tokyo Stock Exchange.

The broader Topix index of all shares on the exchange's first section sank 49.88 points, or 2.96 percent, to 1,633.93 points.

The Korea Composite Stock Price Index fell 80.19 points, or 4.2 percent, to 1,828.49, with issues falling across the board, especially financial stocks.

The Kospi fell as much as 5 percent in intraday trade.

Asian markets across the region followed the general slump.

Hong Kong's blue chip Hang Seng Index was down 3 percent midday at 21,771.94.

Singapore's Straits Times Index was down 2.89 percent by midday at 3,314.37.

The Phillipine benchmark index was also off 3 percent, and the standard market measure in Australia finished down 3.7 percent.

The plunge came after the Dow Jones industrial average fell 387.18, or 2.83 percent, to 13,270.68 in New York on Thursday after a French bank announced it was freezing funds that invested in U.S. subprime mortgages, deepening fears of a credit crunch.

Amid Friday's decline, the Bank of Japan said it injected 1 trillion yen ($8.39 billion) into money markets to curb rises in a key overnight interest rate.

The injection followed similar moves by its European and U.S. counterparts overnight.

The European Central Bank provided more than $130 billion to money markets, the bank's biggest infusion ever.

The U.S. Federal Reserve also added a larger-than-normal $24 billion in temporary reserves to the U.S. banking system.

In South Korea early Friday, blue chip stocks Samsung Electronics Co., the country's largest corporation, and Posco, the world's fourth-largest steelmaker, were down 2.6 percent and 3.6 percent, respectively.

Moves in international markets affect the Korean index, said Kang Moon-sung, a strategist at Korea Investment and Securities Co.

"So no one is confident this level is (the) bottom," Kang said.

The index has been on a tear for most of this year, rising as much as 40 percent.

Last month, the benchmark closed past 2,000 for the first time.

Japan's government spokesman Yasuhisa Shiozaki tried to play down the fears about the fallout on the world's second largest economy.

"Our economy is recovering smoothly, spurred by private sector demand," Shiozaki told reporters Friday.

"The government will continue to closely watch share prices and overall economic indicators," he said.

___

Associated Press writers Yuri Kageyama and Hiroko Tabuchi in Tokyo, and Kelly Olsen in Seoul, South Korea, contributed to this report.

"U.S. helicopter forced down near Baghdad"

By LAUREN FRAYER, Associated Press Writer

10 August 2007

BAGHDAD - A U.S. helicopter was forced down south of Baghdad on Friday, and two soldiers were injured, the military said.

The incident occurred in the predominantly Sunni town of Youssifiyah, 10 miles south of the capital.

The helicopter was en route to support a planned mission when it made the forced landing, the military said, adding the cause was not immediately clear from initial ground reports but was being investigated.

The two soldiers sustained non-life threatening injuries, according to the statement.

"Security forces and close-air support immediately responded to the site, providing security for the forces and the downed aircraft," it said.

Youssifiyah is in the area south of Baghdad known as the triangle of death for the insurgent activity there.

It was the second helicopter to go down in just over a week.

On July 31, an AH-64 Apache helicopter went down after coming under fire in eastern Baghdad.

The two crew members were safely evacuated, the military said.

Insurgents also shot down a U.S. military helicopter south of Baghdad on July 3, and the two pilots were rescued with minor injuries, the military said.

On Thursday hundreds of thousands of Shiites marched to a gold-domed mosque in harsh heat and sun in a pilgrimage of devotion to an 8th century saint that also starkly demonstrated their political power.

Only scattered strikes by Sunni insurgents marred the event, held amid tight security to avoid the attacks that have occurred during past gatherings.

"Long live Muqtada!" some pilgrims shouted as they paraded toward the Imam al-Kadhim shrine, referring to radical Shiite leader Muqtada al Sadr, whose Mahdi army is accused of death squad attacks.

"May God kill his enemies!"

A few shook their fists at U.S. soldiers standing alongside the procession route, but the march was mostly peaceful.

Many said they intended their presence to show they could not be intimidated by Sunni insurgents who have devastated past gatherings, and who regularly target Shiites at markets and on buses.

"I have come here to get the blessing of the martyr imam and to challenge the terrorism of the Wahhabists," said Hussein Mizaal, a 21-year-old college student from southeastern Baghdad.

He was referring to the austere Wahhabi strain of Sunni Islam, practiced mostly in Saudi Arabia but also identified with Sunni insurgents.

"We are not afraid of anyone except God," Mizaal said.

The march comes as Iraq's government remains sharply divided, unable to meet key U.S.-sought benchmarks like a new oil law.

Iraqi Prime Minister Nouri al-Maliki, a Shiite who heads the unity government but is accused of bias by Sunnis, was in Iran to talk about security and electricity deals.

Separately, the U.S. military said Friday that an American helicopter was forced down south of Baghdad and two soldiers were injured.

On Thursday, the military announced the deaths of two Marines in Anbar province west of Baghdad — one in fighting and the other in a non-combat incident.

Both died Tuesday.

In addition, two British soldiers were killed early Thursday by a roadside bombing in southern Iraq, north of the Rumaylah oil fields, the Ministry of Defense said.

At the meetings in Tehran, Iranian officials told al-Maliki they were doing all they could to help stabilize his nation, but insisted that only a U.S. pullout would bring true peace.

Al-Maliki told reporters later that he did not discuss the issue of U.S. forces with the Iranians.

In Baghdad, the heat soared to 115 degrees as the religious spectacle unfolded.

Residents used garden hoses to spray cool water over pilgrims, many of whom began their journey — on foot — days ago from Shiite cities in southern Iraq.

Men draped wet towels over their heads and necks.

Guards checked pilgrims as they reached the green iron gates of the mosque, but in some spots the crush of the crowd was so thick that chaos reigned.

A citywide driving ban also was in effect until early Saturday to prevent suicide car bombings.

It also improved Baghdad air quality.

Nevertheless, there were scattered attacks: Seven pilgrims were killed when gunmen in a speeding car opened fire and threw hand grenades at them in the Dabouniya area, southeast of Baghdad, as they headed to the pilgrimage, Kut police said.

Gunmen also opened fire on Iraqi soldiers guarding pilgrims in the Yarmouk neighborhood in western Baghdad.

The soldiers returned fire, killing one attacker.

The same festival was struck by tragedy two years ago, when an estimated 1,000 pilgrims were killed in a stampede over a bridge after panic that a suicide attacker was among them.

And last year, snipers killed at least 20 people as the pilgrims walked through Sunni areas.

This year, some marchers beat their heads and chests with their hands, while others flogged themselves with iron chains in self-flagellation rituals, as loudspeakers played religious music across the city of some 6 million people.

Iraqi officials estimated the crowd at 3 million, but it was impossible to verify the numbers.

More than 1,800 Iraqi security forces were guarding the mosque complex, including 625 agents inside the shrine, officials said.

Shiite militiamen also milled throughout the area.

U.S. troops took a lower-key security role, staying away from the area immediately around the mosque to show respect.

Along the Tigris River, residents used dinghies and small motor boats to shuttle pilgrims over the brown, churning waters.

"We have so many problems with security, with water and with power in this country — it's overwhelming," said Imad Muhi, 35, who was helping some over the river.

"This is the one day when we take time out from our own suffering to mourn and celebrate this religious festival."

And again, going back to my stockpiled news, and getting caught up in here, we have ...

"Stocks end mixed after raucous week"

By TIM PARADIS, Associated Press

Last updated: 7:23 p.m., Friday, August 10, 2007

NEW YORK -- Wall Street closed out a difficult week with a mixed finish Friday after the Federal Reserve injected billions of dollars into the banking system to calm markets torn by worries about evaporating credit.

The Dow Jones industrials, down more than 200 points during the session, ended with just a 31-point deficit and managed to post a gain for the week.

The stock market, which has been gyrating for weeks over fears that credit is drying up, pared its losses after the Fed's injections of cash and following morning comments from the central bank that it would do all it can to "facilitate the orderly functioning of financial markets."

The steep declines seen at times during the session and persistent volatility, however, showed the depths of fear that had some investors yanking money out of stocks.

The Fed added $19 billion in liquidity to the market Friday morning, then another $16 billion and, finally, $3 billion.

Federal Reserve policy makers "are trying to do everything they can short of cutting the federal funds rate" to try to calm the markets, said Ed Yardeni, president of Yardeni Research in Great Neck, N.Y.

But, he said, "I think they probably have to cut rates, and probably before their scheduled September meeting."

He noted that it was Fed rate cuts that calmed the market after the 1998 Russian debt crisis and the implosion of the hedge fund Long-Term Capital Management.

The Dow closed down 31.14, or 0.23 percent, at 13,239.54.

On Thursday, the Dow fell 387 points and extended a series of triple-digit moves that began in late July.

Friday's moves were typical of the zigzag trading in the Dow since the index closed at a record 14,000.41 on July 19.

The Dow is down about 761 points, or 5.4 percent, from its record close.

Broader stock indicators finished mixed Friday.

The Standard & Poor's 500 index edged up 0.55, or 0.04 percent, to 1,453.64, and the Nasdaq composite index fell 11.60, or 0.45 percent, to 2,544.89.

All three indexes still finished higher for the week: The Dow rose 0.44 percent, the S&P advanced 1.44 percent and the Nasdaq added 1.34 percent.

Sharp gains such as the Dow's 287-point climb Monday, left stocks better able to weather Thursday's plunge.

The Russell 2000 index of smaller companies rose 3.91, or 0.50 percent, to 788.78 Friday, and ended the week with a 4.41 percent gain.

The New York Fed, which carries out the central bank's market operation, announced a three-day repurchase agreement of mortgage backed securities and then two more of the so-called "repo" moves to inject liquidity into the market.

The Fed's maneuvers came after the fed funds rate, the amount banks charge each other for overnight loans, ticked above 6 percent again Friday -- well above the Fed's target of 5.25 percent and a sign that credit was becoming harder to obtain.

The Fed stepped in after the same occurrence Thursday, injecting $24 billion in temporary reserves to the U.S. banking system.

In a repo, the Fed arranges to buy securities from dealers, who then deposit the money the Fed has paid them into commercial banks.

"It's encouraging because it's a proactive step and they're not just focused on the inflation numbers and not ignoring turmoil in the credit market," said John Miller, head of the fixed income funds at Nuveen Asset Management.

The Fed's moves Thursday and Friday follow its August meeting Tuesday at which it left short-term interest rates unchanged, as it has done for more than a year.

In its statement following the meeting, the bank said its primary concern remains inflation.

But the tumultuousness of the final two sessions of the week, which followed a sharp run-up in the week's first three sessions, has some market observers wondering whether the Fed will need to take added steps to douse some of the credit fears that have gripped the markets.

So while some are now calling for a rate cut at the Fed's September meeting or even sooner, others contend investors will in any case first need to gather some confidence that the subprime woes and the credit market tightening aren't lethal for the economy and the markets.

"The confidence will be restored over time if the economy and the financial markets are resilient enough to overcome these kinds of announcements and view them in isolation," Miller said, in reference to disclosures such as the one Thursday from French bank BNP Paribas that it was freezing three funds that invested in U.S. subprime mortgages because it was unable to properly value their assets.

"I think it's premature to forecast a recession, particularly if the Fed is responsive."

"There is no reason why we couldn't work our way out of this fairly quickly," said Miller.

However, he contends subprime unease is likely to continue, particularly this fall as a big batch of subprime mortgages written in 2005 and 2006 begin to reset their rates.

Part of the unease over subprime loans -- those made to borrowers with weak credit -- relates to a process known as securitization.

Investors bundle together mortgages, including some subprime loans, and sell them off to institutional investors such as hedge funds and mutual funds.

These buyers are hoping for the steady flow of income from homeowners making their mortgage payments.

The result is that many big investors are finding it difficult to sift through their holdings and take stock of all potential subprime loans that could go bad.

Such loans sour when borrowers with poor credit find themselves unable to make their mortgage payments now that home values aren't rising as fast, or even falling, in much of the country.

Investor confidence worldwide has been shaken by the credit market problems.

In Asia, stocks fell Friday after regulators including the Bank of Japan added liquidity.

The European Central Bank for the second day added cash to its money markets.

These banks and others around the world haven't worked together to inject liquidity into the markets since the aftermath of the Sept. 11, 2001, attacks.

But the measures, intended to keep financial markets well-oiled, also seemed to confirm investor fears of a larger problem in the credit markets that will stall corporate growth -- including the burst of takeover activity that powered stocks higher this year.

Overseas, Japan's Nikkei stock average fell 2.4 percent.

Hong Kong's Hang Seng Index fell 2.9 percent.

Britain's FTSE 100 fell 3.71 percent, Germany's DAX index finished down 1.48 percent, and France's CAC-40 fell 3.13 percent.

Bonds slipped as investors traded the relative safety of Treasurys for stocks late in Friday's session.

The yield on the benchmark 10-year Treasury note rose to 4.80 percent from 4.79 percent late Thursday.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell 12 cents to $71.47 per barrel on the New York Mercantile Exchange.

Declining issues outnumbered advancers by more than 5 to 3 on the New York Stock Exchange, where consolidated volume came to 5.11 billion shares compared with a heavy 5.76 billion shares traded Thursday.

------

The Dow Jones industrial average ended the week up 57.63, or 0.44 percent, at 13,239.54.

The Standard & Poor's 500 index finished up 20.58, or 1.44 percent, at 1,453.64.

The Nasdaq composite index ended up 33.64, or 1.34, at 2,544.89.

The Russell 2000 index finished the week up 33.36, or 4.41 percent, at 788.78.

The Dow Jones Wilshire 5000 Composite Index -- a free-float weighted index that measures 5,000 U.S. based companies -- ended Friday at 14,641.03, up 205.69 for the week.

A year ago, the index was at 12,702.92.

------

On the Net:

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

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

"SEC probes books of Wall Street firms"

By ALAN ZIBEL, Associated Press

Last updated: 6:44 p.m., Friday, August 10, 2007

WASHINGTON -- The Securities and Exchange Commission is examining major Wall Street banks to determine their vulnerability to home-loan defaults.

Two people familiar with the accounting inquiry described the examination as a routine part of the SEC's oversight authority and said it involved Goldman Sachs Group Inc., Merrill Lynch & Co. and several rival investment banks.

The people declined to be identified by name because the inquiry has not been publicly disclosed.

The Wall Street Journal reported the SEC's probe on Friday.

Trouble in the U.S. mortgage market, and a related credit crunch, has rippled across the globe.

French bank BNP Paribas on Thursday suspended three securities funds valued at $2.75 billion, saying it could not value them accurately because of problems in the U.S. mortgage market.

Credit is drying up in the mortgage and corporate buyout markets after several years in which lending standards were loosened -- too far, in retrospect, many experts say.

With big mortgage-related losses affecting companies as diverse as German banks and Australian hedge funds, investors are uncertain about how far the problems will spread.

On Friday, stocks fell as the Federal Reserve tried to calm Wall Street by saying it will pump as much money as needed into the U.S. financial system.

The European Central Bank has provided some $210 billion in funds to banks over the past two days, while Japan and Canada have also added liquidity.

SEC Chairman Christopher Cox disclosed in late June that the SEC had started about a dozen investigations related to complex aggregations of mortgage debt known as collateralized debt obligations, which investors around the world purchased in recent years.

For example, SEC officials have been examining the collapse of two Bear Stearns Cos. hedge funds that folded after making bad bets on the market for borrowers with weak, or subprime, credit.

John Nester, an SEC spokesman, declined to confirm or deny the SEC's latest activity, other than to say that placing a value on mortgage securities "is always a concern."

The investments trade infrequently and are difficult to price and difficult for many investors to understand, experts say, leading to uncertainty that has sent financial markets into tumult this week.

"Valuations are something that our inspection teams are absolutely focusing on when they do inspections," Nester said.

Josh Rosner, managing director of research firm Graham Fisher & Co., said SEC officials likely are looking at the assumptions that banks use in valuing mortgage securities to see if they are reasonable.

"Many of those models have quite a bit of subjectivity in them," he said.

"However, if the market is saying it's worthless, it's worthless."

Shares of Goldman Sachs fell $1.75 to close at $180.50 Friday, while shares of Merrill Lynch fell 56 cents to close at $74.12.

"Gov't won't ease limits on loan giants"

By MARCY GORDON, Associated Press

Last updated: 7:43 p.m., Friday, August 10, 2007

WASHINGTON -- Mortgage finance giants Fannie Mae and Freddie Mac will not be allowed to take on more debt, the government said Friday, denying requests to relax the companies' investment caps as a way to pump cash into the struggling mortgage market.

The decision by the Office of Federal Housing Enterprise Oversight capped a week of speculation that buoyed the stock prices of the government-sponsored companies.

Investors drove Fannie's share price 17 percent above last Friday's close, and pushed up Freddie's stock by 11 percent.

Meanwhile, with the U.S. home-loan markets in turmoil and credit drying up as a result, a mild panic has spread across the globe, knocking down key stock market indexes.

Democratic lawmakers and others made the case for federal regulators to ease the investment limits on Fannie and Freddie in order to provide much-needed liquidity in the market for mortgage-backed securities.

The Bush administration, though, opposed the idea: President Bush insisted that a higher priority should be placed on tightening the oversight of Fannie and Freddie, which only a few years ago suffered multibillion-dollar accounting scandals.

OFHEO Director James B. Lockhart, the independent regulator charged with the decision, said Friday the risk of allowing the two companies to take on more debt at the moment was too great.

Combined, Fannie and Freddie hold or guarantee two-thirds of all U.S. home mortgages.

"Their safety and soundness is of paramount importance," said Lockhart, adding that he could reconsider the decision later on.

It was Lockhart's agency that installed caps last year on the companies' mortgage investment holdings.

Fannie's cap is set at $727 billion, Freddie's at $724 billion.

"The marketplace should have confidence that (the companies') securities are trading efficiently," Lockhart said in a statement.

Lockhart said Fannie and Freddie "will remain active market participants" in buying blocs of home mortgages from lenders and bundling them for sale to investors worldwide.

Fannie Mae's CEO Daniel Mudd said Friday that raising his company's investment portfolio cap by 10 percent "would help to alleviate the ongoing credit crunch in the markets and bring an additional measure of stability."

Earlier, the Federal Reserve announced that it will pump as much money as needed into the country's financial system, including $38 billion in temporary reserves injected Friday morning.

Shares of Fannie gained 53 cents to $66.46 on Friday, ending the week near the upper end of its 52-week trading range of $47.17-$69.94.

Shares of Freddie rose 28 cents to $61.95, trading in the middle of its 52-week range of $54.97-$71.92.

Arvind Sachdeva, senior portfolio manager at Victory Capital Management, said he was skeptical all week about investors' apparent belief that regulators would ease the investment limits on Fannie and Freddie.

Sachdeva called it "almost incomprehensibly ironic" that Fannie and Freddie, criticized for years by many officials and lawmakers as posing risk to the financial system, were being viewed as the "solution" for the mortgage markets.

The mortgage markets in which Fannie and Freddie operate, marked by less risk, have not been as severely hit by the credit squeeze racking much of Wall Street.

Bush administration officials lauded OFHEO's decision.

"Currently, that market is active and functioning," Robert Steel, the Treasury undersecretary for domestic finance, said in a statement.

"The correct approach is to continue to watch this market closely and determine what further role (they) may play."

"High-risk mortgages become toxic mess"

By MICHAEL LIEDTKE, Associated Press

Last updated: 6:44 p.m., Friday, August 10, 2007

SAN FRANCISCO -- When Linda Martin refinanced the mortgages on three different houses nearly three years ago, she thought the lower monthly payments would help her save more money for retirement.

Instead, the Lakewood, Colo. skin-care specialist is sinking in financial quicksand amid a widening mortgage morass that's pulling down home prices and threatening to drag the U.S. economy into a recession.

"I'm hanging on by a thread, not knowing whether I am going to be living in a car in six months," said Martin, who declined to reveal her age.

Martin is among the hundreds of thousands of borrowers saddled with "option" adjustable rate mortgages, risky loans that dangled bargain-basement introductory payments and also let borrowers defer a portion of interest payments until later years.

Millions of other borrowers are wrestling with another type of adjustable rate mortgage, or ARM, called "interest-only."

These loans allowed borrowers to pay just enough each month to cover the interest owed on the loan, leaving the balance of the outstanding debt unchanged.

While most of the mortgage market worries so far have focused on the huge losses flowing from the subprime home loans made to people with bad credit, the option and interest-only ARMs held by more creditworthy borrowers loom as another calamity in the making.

If the worst fears about these loans materialize, the economic damage would likely extend well beyond the United States because much of the debt has been packaged into securities sold to pension funds, banks and other investors around the world who were hungry for high yields.

The fallout could also further depress housing prices, leaving U.S. consumers feeling poorer and less likely to buy the merchandise imported from overseas.

So far, less than 4 percent of the option and interest-only ARMs are delinquent, well below the 14 percent rate for the subprime market, where about $1.5 trillion in home loans are still outstanding, according to the most recent data from the research firm First American LoanPerformance.

But there is still reason to be alarmed because the trouble with option and interest-only ARMs still appears to be in its early stages.

Many industry observers suspect the biggest problems will emerge during the next 16 months as shoddily underwritten ARMs made near the real estate market's peak in 2005 and 2006 climb to higher interest rates.

"Those loans are begging to blow up."

"This is a true financial crisis," said Christopher Thornberg, a principal with Beacon Economics, a consulting firm that has followed real estate market's ups and downs.

Lenders made an estimated $581 billion in option ARM loans during 2005 and 2006 while doling out nearly $1.4 trillion in interest-only ARMs, according to LoanPerformance.

A recent study estimated about $325 billion of these loans will default, leading to more than 1 million homeowners relinquishing their property to lenders.

By comparison, about $212 billion in subprime loans were delinquent through May.

The initially low monthly payments on these exotic ARMs enabled more people to buy homes and enticed other borrowers to refinance their existing mortgages to free up cash for other purposes.

Now, the exotic ARMs are tormenting overextended homeowners, reckless lenders and shortsighted investors as the teaser rates rise, dramatically driving up monthly loan payments against a backdrop of declining property values.

The conditions have deteriorated so much that Angelo Mozilo, chief executive of mortgage lender Countrywide Financial Corp., recently described the current real estate slump as the worst since the Depression ended nearly 70 years ago.

Countrywide sent out another distress signal late Thursday in a regulatory filing that warned it's being forced to hold on to more loans than it wants to keep.

"We believe the current environment of rapidly changing and evolving credit markets may provide increasing challenges for the financial services sector, including Countrywide," the Calabasas-based company said.

Washington Mutual Inc., another major lender of option and interest-only ARMs, echoed those concerns in a similarly bleak Securities and Exchange Commission filing that warned the subprime problems are cropping up in higher-quality mortgages, too.

Option ARMs like Martin's are especially toxic when home prices start to shrivel.

Here's why:

When borrowers pay the minimum monthly amount on an option-ARM, they aren't covering the amount of interest accruing on the loan.

To compensate, lenders add the amount of unpaid interest to the mortgage's outstanding debt.

Option-ARMs also allow for a higher monthly payment to reduce the loan's principal, but most borrowers only make the minimum installment.

At some lenders, 80 to 90 percent of the option-ARM borrowers are paying the minimum amount.

So, a homeowner who originally borrowed $250,000 under an option-ARM could end up owing an additional $5,000 to $10,000 after making the minimum monthly payment for a year, depending on the terms.

The negative amortization isn't as troubling when home prices are rising because the borrower could still be building more equity than debt.

But now that real estate prices are sliding, the additional debt created by option-ARMs raises the chances that the property will be worth less than the remaining amount owed on the loan -- a perilous position known as being "upside down."

The situation only becomes more worrisome as the teaser rates on the loans adjust upward.

It's a scary scenario because many borrowers obtained their loans with little or no down payment, meaning they only had a small amount of equity to start.

Nearly 18 percent of the first mortgages originated last year went to borrowers with no equity in the property, up from 5 percent in 2002, according to an analysis by First American CoreLogic, a research firm affiliated with LoanPerformance.

Other borrowers eroded their equity with second loans known as "piggyback" mortgages or lines of credit secured by their properties.

That means many ARM borrowers unable to afford their higher loan payments after their loans reset probably won't be able to extricate themselves by selling their homes.

And refinancing into a more manageable mortgage is becoming increasingly difficult as suddenly leery lenders stop accepting application in an effort to avoid further headaches.

"It's a perfect storm that is going to lead to more foreclosures with severe downward pressure on home values," said George McCarthy, a housing economist with the Ford Foundation.

Martin doesn't think she is upside down on her loans yet, but knows she is getting uncomfortably close as home prices around her neighborhood continue to sag.

When Martin refinanced the mortgages on her home and two rental properties in October 2004, she said she owed a total of $735,000.

The combined debt now stands at $777,000 and is growing by more than $2,000 each month.

Martin says she would have never refinanced if a mortgage broker hadn't misled her about how the new loans worked -- a frequent complaint among borrowers with option-ARMs.

As she contacts lawmakers and attorneys in search of help, Martin isn't focused on retirement any more.

She is more worried about making sure she won't lose her home.

"I very well may be looking at a foreclosure case," she said.

"I may just have to walk away from these loans."

Martin's situation isn't unique.

Although they have been around since 1981, option-ARMs weren't common until the past few years.

They previously had been aimed at high-paid workers who depended on large commissions and bonuses.

But option-ARMs began making their way into the mainstream in 2004 as commission-hungry brokers and profit-driven lenders tried to capitalize on intense home-buying demand driven by soaring real estate prices.

Last year, negative amortization loans accounted for 9.9 percent, or $350 billion, of all mortgages nationwide, up from just 0.4 percent as recently as 2003, according to LoanPerformance.

The mortgages were particularly popular in high-priced real estate markets like California or areas like Nevada, Arizona and Florida, where speculators were buying homes as investments instead of places to live.

Option-ARMs accounted for nearly 22 percent of the mortgages made in California during 2006, according to LoanPerformance.

Other hot spots included: Nevada (15 percent), Hawaii (13.3 percent), Florida (12.2 percent), Washington (10.9 percent) and Arizona (10.6 percent).

If many of those loans go bad, major option-ARM lenders will likely be forced to erase some of the profits that they have already booked from the exotic mortgages.

Under an accrual accounting method allowed by regulators, option-ARM lenders routinely record the uncollected interest as income even though the money may never be paid.

This phantom income has swelled along with the use of option-ARMs.

For instance, Washington Mutual recognized $706 million in uncollected interest from negative amortization loans during the first half of this year, a 61 percent increase from the same time last year.

Investors already appear to be seeking shelter from the possible financial storm ahead.

Washington Mutual's stock price has dropped by 21 percent so far this year while Countrywide's shares have shed 34 percent.

Another major option-ARM lender, IndyMac Bancorp Inc., has been even harder hit, with its stock plunging by 55 percent since the end of last year.

The sharp downturn in those three stocks alone have wiped out a combined $24 billion in shareholder wealth.

Thornberg is among the economists who believes the mortgage market turmoil could lead to a recession during the next year.

"This snowball is just 20 percent down the hill."

"It's nowhere near the bottom," he said.

The biggest risks appear concentrated among ARMs that began with an initial interest rate of 4 percent or less.

CoreLogic estimates 1.4 million ARMs totaling $521 billion fell into this danger zone from 2004 through 2006.

That represented nearly 10 percent of the $5.38 trillion in home loans originated during that period.

Christopher Cagan, CoreLogic's director of research and analytics, predicts about 1.1 million ARMs totaling $325 billion will sink into foreclosure as rising monthly payments squeeze borrowers.

After accounting for the money recovered through property sales, he expects the losses from the fallout to total $112 billion, with the damage spread out over six years.

Although significant, the losses won't be large enough to topple the United States' $12 trillion economy, Cagan said.

"This is the turning of a business cycle," he said.

"There will be some pain, but most people will be fine and most lenders will be fine."

That's little consolation to homeowners like Andrew Villaruz, a 43-year-old hospital administrator who said he refinanced into an option-ARM late last year without understanding what he was getting into.

His loan balance quickly grew from $364,000 to $370,000, a shift that become even more disturbing to him as he watched more foreclosure signs go up around his Sacramento neighborhood.

Coupled with other costs lumped into the loan, Villaruz figures he lost about $25,000 by the time he found another lender willing to refinance him into a more conventional mortgage.

He sheepishly acknowledged he had never heard of a negative amortization loan until he had one.

He knows enough now to stay away from them.

"They might be good for people who make a lot of money, but they don't pan out for the average person," he said.

"They just don't make sense."

------

AP Business Writer Sandy Shore in Denver contributed to this story.

"Countrywide shares slip on bleak outlook"

By ALEX VEIGA, Associated Press

Last updated: 5:23 p.m., Friday, August 10, 2007

LOS ANGELES -- Shares of Countrywide Financial Corp. slipped more than 2 percent Friday after the nation's largest mortgage lender said in a regulatory filing that "unprecedented disruptions" in debt markets could continue or worsen.

The stock fell 80 cents, or 2.79 percent, to close at $27.86.

Shares opened the day by plunging more than 17 percent in premarket trading.

Shares of Washington Mutual Inc. also dropped more than 2 percent after the bank said in a filing with the Securities and Exchange Commission late Thursday that disruptions in the mortgage market could affect its liquidity.

Its shares dropped 81 cents, or 2.20 percent, to close at $35.95 on a day when stocks were mostly lower.

In an SEC filing late Thursday, Countrywide said it has adequate funding liquidity but added "the situation is rapidly evolving and the impact on the company is unknown."

The filings by both companies came as liquidity -- loans available to borrowers including banks, companies and home buyers -- dries up around the world.

Central banks in Europe, Japan and the U.S. have been infusing their markets with cash as stocks plummet internationally.

Countrywide packages many of its home loans into bonds and sells them to investors.

But the market for those bonds has shriveled because of deteriorating credit quality and a stagnant housing market.

Rather than sell the bonds inexpensively, Countrywide said it was keeping more home loans in its own portfolio.

The lender is also becoming pickier about which borrowers to lend to.

In addition, Countrywide said credit quality among its prime borrowers -- clients with solid credit ratings -- has drastically worsened.

At the end of June, 3.7 percent of Countrywide's prime home equity borrowers were not up to date with their payments, compared with 1.5 percent at the end of the second quarter last year.

The percentage of prime home equity loans pending foreclosure was also up 0.12 percent from 0.08 percent in the year-ago period.

In all, 4.9 percent of the company's loans were delinquent at the end of June, up from 3.9 percent a year ago.

During a conference call last month, Countrywide Financial, based in Calabasas, Calif., assured investors it has access to more than $46 billion in cash and was not in financial distress.

But in a sign of its difficulty selling loans, Countrywide said in the filing it had transferred $1.9 billion in mortgages from the "loans held for sale" category to the "held for investment" classification.

The company marked down $1 billion in nonprime loans held for sale by $200 million, to $800 million, according to the filing.

"The problem is you can't find a home for loans with investors right now, so as a result they're having to hold more loans," said Frederick Cannon, an analyst with Keefe, Bruyette & Woods Inc.

"In my view, Countrywide has a strong balance sheet and can get through this."

J.P.Morgan Securities analyst George A. Sacco Jr. said Thursday's filing was not a new view from Countrywide's management team.

The outlook reiterates the company's assessments during the recent conference call, he said.

Washington Mutual, based in Seattle, said in its filing that deposits decreased by $12.57 billion for the six months ending June 30, compared to an increase of $11.39 billion for the comparable period last year.

The company is now expending billions in financing costs, a business that previously generated cash for the bank, according to the filing.

Net cash the company uses in financing activities zoomed to $34.24 billion for the six-month period.

In the comparable period, financing generated $5.13 billion.

At the same time, its lenders are apparently demanding repayments.

For the six months ended in June, it made $42.9 billion in repayments on advances from Federal Home Loan Banks, up from $28.37 billion for the comparable period.

Lehman Brothers analyst Bruce Harting said in a research note Friday that he expects Washington Mutual's losses from its pool of riskier loans to be offset by the traditional loans in its portfolio.

While all mortgage lenders are facing stress because of the credit crunch, the worst off are those that have been dependent on financing from Wall Street.

"That business model appears to be coming unwound pretty quickly," Cannon said.

"In our view, we believe that the institutions with depository funding are going to get through this."

Harting echoed that, concluding savings and loans may have the edge if the mortgage debt woes continue.

He noted that in the 1980s, such institutions were able to survive, even as their loan portfolios suffered losses, because they were primarily funded by federally insured deposits.

"Look for (savings and loans) to actually have opportunities to cherry pick higher quality lending opportunities in the event the liquidity crisis wears on," Harting wrote.

"U.S. commander says Iraqi cleric Sadr in Iran"

Fri Aug 10, 12:26 PM ET

BAGHDAD (Reuters) - Powerful Iraqi Shi'ite cleric Moqtada al-Sadr is in Iran and not in complete control of the militia that owe allegiance to him, the U.S. commander in Sadr's main stronghold in Baghdad said on Friday.

"I think he is now in Iran so just based on his location that implies that some of his control is not direct," Colonel John Castles said in a video conference from Baghdad with journalists in Washington.

Castles is in command of U.S. forces responsible for Sadr City, the vast Shi'ite slum named for Sadr's father who was killed under Saddam Hussein and now the young cleric's main power base in the capital.

A spokesman for Sadr's office in the Shi'ite holy city of Najaf denied that the cleric had left the country.

"Moqtada al-Sadr is in Najaf and has never left," the spokesman said.

Sadr was last seen in public in Iraq attending a religious ceremony in the holy city of Kufa on May 25, when he denounced the United States as part of an "evil trio" with Britain and Israel.

U.S. officials said at the time that they believed Sadr had been out of the country for the previous four months, and they said in July they believed he had left Iraq again.

Castles said civilian branches of Sadr's office in Sadr City still have influence over the 2 million Shi'ites living there, but it was no longer clear how much control the cleric had over the armed wing of his followers, the feared Mehdi Army militia.

"I think he certainly exudes some influence just by the fact that the office of Moqtada al-Sadr is very strong in Sadr City and he has a direct influence over that," he said.

"In relation to the Mehdi Army though, it's hard to tell."

"I personally think it's fractured somewhat, that they don't get a whole lot of direct guidelines from him and that some of these divisions of it are operating on their own," Castles said.

U.S. commanders said this week that nearly three quarters of attacks against their troops were now coming from Shi'ite militants, many believed to have links to Iran.

On Wednesday, U.S. forces said they killed 30 Shi'ite militants in an air strike during a raid in Sadr City.

Hospital sources put the death toll at 13, including at least one woman.

(Reporting by Khaled Farhan in Najaf and Kristin Roberts in Washington)

"Perseid Meteor shower peaks this weekend"

By ALICIA CHANG, AP Science Writer

Sat Aug 11, 2:09 AM ET

LOS ANGELES - Summer's annual meteor shower promises to put on a dazzling show when it peaks this weekend — provided you're far from city lights.

With no moon in sight to interfere with the Perseid meteor shower, skygazers can expect to spot streaking fireballs late Sunday into dawn Monday regardless of time zone.

Astronomers estimate as many as 60 meteors per hour could flit across the sky at the shower's peak.

This year's sky show comes with an added bonus: Mars will be visible as a bright red dot in the northeastern sky.

"We have front-row seats this year," said Kelly Beatty, executive editor of Sky & Telescope magazine.

Last year's Perseid shower was somewhat of a dud because the moon's glare washed out many of the faint meteors.

This weekend's meteor shower coincides with a new moon, which means the skies will be dark and perfect for viewing meteors.

Experts offer some tips to get the most out of nature's fireworks: Since Perseid meteors can be seen from any direction in the sky, viewers should pick out a dark patch of sky free of light pollution and wait for the meteors to appear.

Dim meteors appear as a momentary flash of light while the brighter ones leave a glowing streak.

The number of Perseids zipping across the sky should increase steadily through the night, peaking just before sunrise.

Although the peak occurs this weekend, the Perseids are visible for several nights after that.

Unlike other celestial sightings that require a telescope or binoculars, the best way to watch a meteor shower is with the naked eye.

The Perseids are perhaps the most beloved of all meteor showers because of their predictability.

The August shower gets its name from the constellation Perseus because the meteors appear to originate there.

The annual Perseid shower occurs when the Earth's orbit crosses the path of debris thrown off by Comet Swift-Tuttle.

As the cosmic junk — many the size of a grain of sand — enters the atmosphere, it burns up in a flash, appearing as "shooting stars" across the sky.

In the past, the Perseid showers have produced such spectacular displays that people swamped radio stations with reports of a mysterious light in the sky.
___

On the Net:

Sky & Telescope magazine: http://www.skyandtelescope.com

"Italy probe unearths huge Iraq arms deal"

By CHARLES J. HANLEY and ARIEL DAVID, Associated Press Writers

45 minutes ago

PERUGIA, Italy - In a hidden corner of Rome's busy Fiumicino Airport, police dug quietly through a traveler's checked baggage, looking for smuggled drugs.

What they found instead was a catalog of weapons, a clue to something bigger.

Their discovery led anti-Mafia investigators down a monthslong trail of telephone and e-mail intercepts, into the midst of a huge black-market transaction, as Iraqi and Italian partners haggled over shipping more than 100,000 Russian-made automatic weapons into the bloodbath of Iraq.

As the secretive, $40 million deal neared completion, Italian authorities moved in, making arrests and breaking it up.

But key questions remain unanswered.

For one thing, The Associated Press has learned that Iraqi government officials were involved in the deal, apparently without the knowledge of the U.S. Baghdad command — a departure from the usual pattern of U.S.-overseen arms purchases.

Why these officials resorted to "black" channels and where the weapons were headed is unclear.

The purchase would merely have been the most spectacular example of how Iraq has become a magnet for arms traffickers and a place of vanishing weapons stockpiles and uncontrolled gun markets since the 2003 U.S. invasion and the onset of civil war.

Some guns the U.S. bought for Iraq's police and army are unaccounted for, possibly fallen into the hands of insurgents or sectarian militias.

Meanwhile, the planned replacement of the army's AK-47s with U.S.-made M-16s may throw more assault rifles onto the black market.

And the weapons free-for-all apparently is spilling over borders: Turkey and Iran complain U.S.-supplied guns are flowing from Iraq to anti-government militants on their soil.

Iraqi middlemen in the Italian deal, in intercepted e-mails, claimed the arrangement had official American approval.

A U.S. spokesman in Baghdad denied that.

"Iraqi officials did not make MNSTC-I aware that they were making purchases," Lt. Col. Daniel Williams of the Multi-National Security Transition Command-Iraq (MNSTC-I), which oversees arming and training of the Iraqi police and army, told the AP.

Operation Parabellum, the investigation led by Dario Razzi, anti-Mafia prosecutor in this central Italian city, began in 2005 as a routine investigation into drug trafficking by organized-crime figures, branched out into an inquiry into arms dealing with Libya, and then widened to Iraq.

Court documents obtained by the AP show that Razzi's break came early last year when police monitoring one of the drug suspects covertly opened his luggage as he left on a flight to Libya.

Instead of the expected drugs, they found helmets, bulletproof vests and the weapons catalog.

Tapping telephones, monitoring e-mails, Razzi's investigators followed the trail to a group of Italian businessmen, otherwise unrelated to the drug probe, who were working to sell arms to Libya and, by late 2006, to Iraq as well, through offshore companies they set up in Malta and Cyprus.

Four Italians have been arrested and are awaiting court indictment for allegedly creating a criminal association and alleged arms trafficking — trading in weapons without a government license.

A fifth Italian is being sought in Africa.

In addition, 13 other Italians were arrested on drug charges.

In the documents, Razzi describes it as "strange" that the U.S.-supported Iraqi government would seek such weapons via the black market.

Investigators say the prospect of an Iraq deal was raised last November, when an Iraqi-owned trading firm e-mailed Massimo Bettinotti, 39, owner of the Malta-based MIR Ltd., about whether MIR could supply 100,000 AK-47 assault rifles and 10,000 machine guns "to the Iraqi Interior Ministry," adding that "this deal is approved by America and Iraq."

The go-between — the Al-Handal General Trading Co. in Dubai — apparently had communicated with Bettinotti earlier about buying night visors and had been told MIR could also procure weapons.

Al-Handal has figured in questionable dealings before, having been identified by U.S. investigators three years ago as a "front company" in Iraq's Oil-for-Food scandal.

The Interior Ministry's need at that point for such a massive weapons shipment is unclear.

The U.S. training command had already reported it would arm all Interior Ministry police by the end of 2006 through its own three-year-old program, which as of July 26 has bought 701,000 weapons for the Iraqi army and police with $237 million in U.S. government funds.

Negotiations on the deal progressed quickly in e-mail exchanges between the Italians and Iraqi middlemen of the al-Handal company and its parent al-Thuraya Group.

But at times the discussion turned murky and nervous.

The Iraqis alternately indicated the Interior Ministry or "security ministries" would be the end users.

At one point, a worried Bettinotti e-mailed, "We prefer to speak about this deal face to face and not by e-mail."

The Italians sent several offers of various types and quantities of rifles, with photos included.

The negotiating focused on the source of the weapons: The Iraqi middlemen said their buyer insisted they be Russian-made, but the Italians wanted to sell AK-47s made in China, where they had better contacts.

"We are in a hurry with this deal," an impatient Waleed Noori al-Handal, Jordan-based general manager of the Iraqi firm, wrote the Italians on Nov. 13 in one of the e-mails seen by AP.

He added, in apparent allusion to the shipment's clandestine nature, "You mustn't worry if it's a problem to import these goods directly into Iraq."

"We can bring the product to another country and then transfer it to Iraq."

By December, the Italians, having found a Bulgarian broker, were offering Russian-made goods: 50,000 AKM rifles, an improved version of the AK-47; 50,000 AKMS rifles, the same gun with folding stock; and 5,000 PKM machine guns.

The Iraqis quibbled over the asking price, $39.7 million, but seemed satisfied.

The Italians were set for a $6.6 million profit, the court documents show, and were already discussing air transport for the weapons.

At this point prosecutor Razzi acted, seeking an arrest warrant from a Perugia court.

"The negotiation with Iraq is developing very quickly," he wrote the judge.

On Feb. 12, in seven locations across Italy, police arrested the 17 men, including the four alleged arms traffickers: Bettinotti; Gianluca Squarzolo, 39, the man whose luggage had yielded the original clue; Ermete Moretti, 55, and Serafino Rossi, 64.

If convicted, they could be sentenced to up to 12 years in prison.

The at-large fifth man, Vittorio Dordi, 42, was believed to be in the Democratic Republic of Congo, where he apparently is involved in the diamond trade.

Italian authorities were seeking information on him from the African country.

In the parallel Libya case, the Italians allegedly paid two Libyan Defense Ministry officials about $500,000 in kickbacks to speed that transaction for Chinese-made assault rifles.

It isn't known whether such bribes were a factor in the Iraq deal.

No Libyans or Iraqis are known to have been detained in connection with the cases.

Al-Handal's operations have caught investigators' notice before.

In 1996-2003, the company was involved as a broker in the kickback scandal known as Oil for Food, the CIA says.

In that program, Iraq under U.N. economic sanctions bought food and other necessities with U.N.-supervised oil revenues.

Foreign companies, often through intermediaries, surreptitiously kicked back payments to officials of Saddam Hussein's Iraqi government in exchange for such supply contracts.

Those Iraqi middlemen also engaged in "misrepresenting the origin or final destination of goods," said the 2004 report of the CIA's Iraq Survey Group, which investigated both Iraq's defunct advanced weapons programs and Oil for Food.

That report also alleged that during this period Al-Handal General Trading, from its bases in Dubai and Jordan, secretly moved unspecified "equipment" into Iraq that was forbidden by the U.N. sanctions.

Reached at his office in Amman, Jordan, Waleed Noori al-Handal denied the family firm had done anything wrong in the Italian arms case.

"We don't have anything to hide," he told the AP.

Citing the names of "friends" in top U.S. military ranks in Iraq, al-Handal said his company has fulfilled scores of supply and service contracts for the U.S. occupation.

Asked why he claimed U.S. approval for the abortive Italian weapons purchase, he said he had a document from the U.S. Army "that says, 'We allow al-Thuraya Group to do all kinds of business.'"

In Baghdad, the Interior Ministry wouldn't discuss the AK-47 transaction on the record.

But a senior ministry official, speaking on condition of anonymity because of the matter's sensitivity, acknowledged it had sought the weapons through al-Handal.

Asked about the irregular channels used, he said the ministry "doesn't ask the supplier how these weapons are obtained."

Although this official refused to discuss details, he said "most" of the 105,000 weapons were meant for police in Iraq's western province of Anbar.

That statement raised questions, however, since Pentagon reports list only 161,000 trained police across all 18 of Iraq's provinces, and say the ministry has been issued 169,280 AK-47s, 167,789 pistols and 16,398 machine guns for them and 28,000 border police.

A July 26 Pentagon report said 20,847 other AK-47s purchased for the Interior Ministry have not yet been delivered.

Iraqi officials complain that the U.S. supply of equipment, from bullets to uniforms, has been slow.

A Pentagon report in June may have touched on another possible destination for weapons obtained via secretive channels, noting that "militia infiltration of local police remains a significant problem."

Shiite Muslim militias in Iraq's civil war have long been known to find cover and weapons within the Interior Ministry.

In fact, in a further sign of poor controls on the flow of arms into Iraq, a July 31 audit report by the U.S. Government Accountability Office said the U.S. command's books don't contain records on 190,000 AK-47s and other weapons, more than half those issued in 2004-2005 to Iraqi forces.

This makes it difficult to trace weapons that may be passed on to militias or insurgents.

The Pentagon, meanwhile, has described the Interior Ministry's accounting of police equipment as unreliable.

Here in Italy, Razzi expressed puzzlement at the Iraqi officials' circumvention of U.S. supply routes.

"It seems strange that a pro-Western government, supported by the U.S. Army and other NATO countries on its own territory, would seek Russian or Chinese weapons through questionable channels," the anti-Mafia prosecutor wrote in seeking the arrest warrant that short-circuited the complex deal.

"U.S. homeowner woes felt around world"

By MATT MOORE, Associated Press

Last updated: 4:53 p.m., Sunday, August 12, 2007

FRANKFURT, Germany -- The latest crisis in financial markets has once again served as a reminder of how vital and interconnected the health of the U.S. economy is to that of the rest of the world.

From New York to Frankfurt to Tokyo, markets were jolted in the past week by fears that Americans are failing to keep up with their mortgage payments and the ripple effects that could have on the global banking and financial system.

The fallout could further depress U.S. housing prices by making it harder to find buyers for a glut of foreclosed homes.

That, coupled with a drop in the value of investments, could leave U.S. consumers feeling poorer and less likely to spend on domestic and imported goods.

"The sharp falls in global stock markets obviously affect consumer wealth, which again could dampen spending," said Howard Archer, chief British and European economist at Global Insight.

The most immediate effect for the half of all American households who own mutual funds and other individual investors worldwide is a decline in the value of their investments, which may or may not be short-lived.

Around the globe, small-time investors are taking a beating.

Stock prices have slid in recent days as fears of the market crisis infected markets worldwide.

Worried investors sold stocks but finding buyers was hard, which caused share prices to dip even lower.

"We all feel threatened, problems on the stock exchange have consequences for the economy of America and of the world" said Gabriella Savarini, a 69-year-old shopkeeper in Rome.

"America influences all, for good or for bad."

The distress in the markets makes it harder and more expensive for businesses and consumers to get loans and cash, Archer said.

If companies cannot get loans, they cannot expand and may have to cut expenses, typically through layoffs.

America faced a crisis similar to the current mortgage fiasco when hundreds of savings and loan companies went belly-up in the 1980s.

Back then, the fallout did not spread dramatically to foreign shores because the U.S. government stepped in to bail out the banks and repay depositors.

But the past two decades have seen a quantum leap in globalization and outsourcing, crumbling trade barriers, and a revolution in financial markets have knit the world tightly together.

A steep sell-off in global markets on Thursday and Friday was triggered by distress signals from France's biggest bank, BNP Paribas, which had to freeze billions of dollars in assets in three mutual funds because of the falling value of securities linked to high-risk mortgages taken out by U.S. borrowers.

"I'm sitting here in Brazil and Brazilian markets have gotten crushed by this."

"... It's hit all the emerging markets," said Kenneth Rogoff, a former director of research at the International Monetary Fund and now a professor at Harvard University.

"If this were to snowball next week, it would affect markets in Turkey, Indonesia."

Global interdependency isn't a recent phenomenon: The Wall Street stock market crash of 1929 and the Great Depression affected the entire world, and helped create the conditions for the rise of fascism in Europe.

But with faster communications and real-time trading, market jitters in New York race around the world almost instantly today.

At the center of the concerns are high-risk loans to individuals or businesses made by banks globally.

More Americans are failing to keep up with their home mortgage payments, and there are concerns that this could ripple around the globe because much of the debt from mortgages has been packaged into securities sold to pension funds, banks and other investors who were hungry for high returns on investments.

The same mortgage securities in the U.S. that are crumbling in value are a part of bigger holdings that banks from Japan to Germany bought into because of low U.S. interest rates and a good returns.

That is, until the mortgage holders started defaulting.

Meanwhile, the ability of banks to convert assets to cash quickly was in doubt because some were unable to track how much money they poured into now worthless securities backed by sub-prime U.S. mortgages, or loans made to high credit-risk individuals.

Those bad loans raised fears of broader credit troubles that could affect the entire banking and financial system -- concerns that caused stock markets to plummet and threatened pensions.

The slide started innocuously in April after New Century Financial, a U.S. mortgage lender whose principle borrowers were Americans with less-than-stellar credit, filed for bankruptcy protection.

Its customers were people who may have been late on credit card payments, maybe even filed bankruptcy in previous years, but still wanted a shot at buying their own home.

Lenders were only too happy to oblige -- flush with cash and eager to exploit new markets so they could, in turn, lend more money and increase their profits.

Hedge funds and banks worldwide saw a market with opportunity and bought up mortgage-backed securities.

A month later, USB AG, the giant financial company, said its hedge fund business had lost $125 million in the first quarter largely on the back of investments in the U.S. sub-prime mortgage field.

Then in July, Wall Street's Bear Stearns closed a pair of hedge funds after it lost more than $20 billion on mortgage-backed investments.

In early August, concerns mounted that those mortgage securities may not have been as solid as people thought.

Those fears were capped by the Aug. 6 bankruptcy by Melville, N.Y.-based American Home Mortgage Investment Corp.

American Home, once a major U.S. mortgage lender, said it fell victim to "extraordinary disruptions" that effectively cut off the funding it needed to make new loans.

On Thursday, France's biggest bank, BNP Paribas, froze $2.2 billion held in three funds because their exposure to sub-prime mortgages in the U.S.

That intensified fears that risk was spreading worldwide.

With cash reserves running low, the interest rates that banks charge each other for overnight loans rose so steeply that central banks in the U.S., Europe and Asia poured tens of billions of dollars into the market to make sure enough cash was available to meet demand.

Such large-scale central bank interventions are rare -- that last major injection came immediately after the Sept. 11 attacks in 2001.

--------

Associated Press writers John Leicester in Paris, Hiroko Tabuchi in Tokyo, Romina Spina in London, Teodora Teani in Rome, and Alan Zibel in Washington contributed to this report.

"Wall Street begins week anxious again"

By MADLEN READ, Associated Press

Last updated: 2:23 p.m., Sunday, August 12, 2007

NEW YORK -- There will be no fresh start on Wall Street Monday when traders and investors get back to work.

The market's anxiety over shrinking credit remains, and even if stocks manage gains after weeks of volatility, no one will trust that they'll stick.

The immediate question is whether moves by the Federal Reserve to calm financial markets will succeed, and, if not, what the Fed will do next.

Wall Street is beside itself because of concerns over whether subprime mortgage-related losses are causing banks and other lenders to tighten up credit and whether the market for mortgage-backed securities has dried up.

The uncertainty comes in part from the fact that no one really knows yet just how widespread mortgage problems are, and therefore how long it will take for credit market conditions to ease.

In the meantime, investors are uneasy because the unavailability of credit can stunt corporate growth, and, perhaps more important to Wall Street, curtail the mergers and acquisitions that helped feed a first-half stock rally.

There already have been instances of deals being rethought because debt financing is harder to come by.

Those concerns have taken stocks on a turbulent ride: Since the Dow Jones industrial average hit a record above 14,000 in July, it has swung up and down violently as investors try to gauge how tough the lending climate is getting.

Triple-digit moves in the Dow are becoming a daily occurrence.

The blue chip index is now 5.4 percent below its record, and stock market volatility, as measured by the Chicago Board Options Exchange's volatility index, is at its highest level since April 2003.

Another problem for Wall Street is that it doesn't seem to know what it wants from the Federal Reserve: After the central bank released its Tuesday statement that it was keeping rates on hold and still regarded inflation as its main concern, the market zigzagged.

Wall Street also plunged and wobbled after the Fed, along with Europe's and Japan's central banks, made unusually large injections of cash into the banking system -- moves that are intended to soothe the markets by creating more liquidity and in turn, giving lending a boost.

"Only time will tell if they've done enough."

"It is a step in the right direction," said Gary Thayer, chief economist at A.G. Edwards & Sons Inc.

"They have the ability to calm the markets, but you know, they can't control traders' emotions directly."

"It ultimately rests on seeing events sort of stabilize, too."

What's especially disconcerting to investors, he added, is that it appears that mortgage market problems aren't just national, but global.

"The U.S. has been adjusting to the housing problems for years, and the Europeans are just waking up to the idea," Thayer said.

The ability for individuals and companies to invest in and draw revenues from economies around the world had been a major source of optimism in recent months, offsetting the disappointment over the U.S. economy's tepid pace.

Yet another dilemma for the stock market is that investors don't know how robust they want the overall U.S. economy to be right now.

Stronger-than-expected economic data supports the argument that the United States shouldn't get a rate cut, which would free up more cash; weaker-than-expected data suggests that the sluggish housing market is tripping up the economy, which raises the possibility of a recession.

Essentially, the delicate balance between stable interest rates and moderate growth that drove the Dow Jones industrial average to record after record over the past year is in jeopardy.

Now, the Fed may be caught between spurring the economy so much that it rekindles inflation, or not stepping in with enough conviction, allowing the credit markets to tighten up.

A credit crunch could put the brakes on business deals around the world.

Most investors are confident that the Federal Reserve's diligence will eventually do its job, as it has in the past.

The question, though, is where the stock market will be after it's done shaking out its worries.

"I don't think the central banks are going to try to support a particular stock market level," said Alan Gayle, senior investment strategist for Trusco Capital Management.

"I think they want to make sure the credit markets and financial markets in general continue to operate and function."

"China seeks to dampen US dollar rumors"

Associated Press

Last updated: 3:14 a.m., Sunday, August 12, 2007

BEIJING -- China sought Sunday to dampen speculation it will conduct a massive sell-off of U.S. dollar holdings, with a central bank official saying the dollar remains a mainstay of its foreign exchange reserves.

In an interview carried by the government's Xinhua News Agency, an unnamed official with the People's Bank of China said U.S. dollars and government bonds are "an important part of China's foreign reserve investments."

China's $1.3 trillion in foreign exchange reserves are the largest in the world and are believed to be comprised largely of dollar assets, potentially giving Beijing enormous sway over the dollar's value and currency markets worldwide.

A report in the British newspaper The Daily Telegraph this past week that quoted Chinese government economists as saying China would dump its dollar holdings in the event of a trade war with Washington added to jitters in stock markets already unnerved by volatility in U.S. share markets.

Xinhua said the central banker's remarks were intended to counter unspecified reports in Western media that China "is threatening to carry out a sell-off of U.S. dollars."

The Xinhua report was prominently posted on the central government's main Web site, in a further sign Beijing hoped the statement would underscore its commitment to hold U.S. dollar assets and calm investors.

"China is a responsible investor in international financial markets, and our country's foreign exchange reserves are managed with the operational goals of safety, liquidity and profit," Xinhua quoted the central bank official as saying.

The People's Bank does not disclose the composition of the foreign exchange reserves, which have swelled in recent years as China's exports surged and investors poured money into the country to profit from an economy now in its fourth straight year of double-digit growth.

But the reserves have become a political issue both within China and between Beijing and Washington.

As the dollar has fallen in value, the People's Bank has come under pressure to diversify its holdings to maintain the value of the reserves and improve returns.

Washington has pointed to China's growing reserves as proof that the Chinese currency is undervalued, making Chinese exports cheap, putting American manufacturers at a disadvantage and compounding a hefty U.S. trade deficit.

Several U.S. senators have renewed calls in recent weeks to punish Beijing if it does not let the currency, the yuan, rise in value.

And here is some GOOD NEWS for OUR America on this Monday morning ...

"Karl Rove to resign at the end of August"

By TERENCE HUNT, AP White House Correspondent

12 minutes ago

WASHINGTON - Karl Rove, President Bush's close friend and chief political strategist, plans to leave the White House at the end of August, joining a lengthening line of senior officials heading for the exits in the final 1 1/2 years of the administration.

A longtime member of Bush's inner circle, Rove was nicknamed "the architect" by the president for designing the strategy that twice won him the White House.

A criminal investigation put Rove under scrutiny for months during the investigation into the leak of a CIA operative's name but he was never charged with any crime.

Bush was expected to make a statement Monday with Rove.

"Obviously it's a big loss to us," White House deputy press secretary Dana Perino said.

"He's a great colleague, a good friend, and a brilliant mind."

"He will be greatly missed, but we know he wouldn't be going if he wasn't sure this was the right time to be giving more to his family, his wife Darby and their son."

"He will continue to be one of the president's greatest friends."

Since Democrats won control of Congress in November, some top administration officials have announced their resignations.

Among those who have left are White House counselor Dan Bartlett, budget director Rob Portman, chief White House attorney Harriet Miers, political director Sara Taylor, deputy national security adviser J.D. Crouch and Meghan O'Sullivan, another deputy national security adviser who worked on Iraq.

Defense Secretary Donald Rumsfeld was forced out immediately after the election as the unpopular war in Iraq dragged on.

Rove is expected to write a book after he leaves.

He disclosed his departure in an interview with The Wall Street Journal.

"I just think it's time," Rove said in an interview at this home on Saturday.

He first floated the idea of leaving to Bush a year ago, the newspaper said, and friends confirmed he'd been talking about it even earlier.

However, he said he didn't want to depart right after the Democrats regained control of Congress and then got drawn into policy battles over the Iraq war and immigration.

"There's always something that can keep you here, and as much as I'd like to be here, I've got to do this for the sake of my family," said Rove, who has been in the White House since Bush took office in 2001.

Rove's son attends college in San Antonio and he said he and his wife plan to spend much of their time at their nearby home in Ingram.

Rove, currently the deputy White House chief of staff, has been the president's political guru for years and worked with Bush since he first ran for governor of Texas in 1993.

In the interview, Rove predicted Bush will regain his popularity, which has sunk to record lows because of the war in Iraq.

Rove also predicted conditions in Iraq would improve and that the Democrats would nominate Hillary Rodham Clinton for president, calling her "a tough, tenacious, fatally flawed candidate."

Rove testified before a federal grand jury in the investigation into the leak of the name of Valerie Plame, a CIA officer whose husband was a critic of the war in Iraq.

That investigation led to the conviction of I. Lewis "Scooter" Libby on charges of lying and obstructing justice.

Plame contends the White House was trying to discredit her husband.

Attorneys for Libby told jurors at the onset of his trial that Libby was the victim of a conspiracy to protect Rove.

Details of any save-Rove conspiracy were promised but never materialized.

The most explicit testimony on Rove came from columnist Robert Novak, who outed Plame in a July 2003 column.

He testified that Rove, a frequent source, was one of two officials who told him about Plame.

Libby, with whom he seldom spoke, was not a source.

The jury did not hear testimony that Rove was not indicted after testifying five times before the grand jury, occasionally correcting misstatements he made in his earlier testimony.

Nor did the jury hear testimony about how Rove is credited as an architect of Republican political victories and has been accused by opponents of playing dirty tricks.

All that jurors heard is that Rove leaked Plame's identity and, from the outset, got political cover from the White House.

He was never charged with a crime.

"Some Asian markets recover from plunge"

By MARI YAMAGUCHI, Associated Press Writer

46 minutes ago

TOKYO - Some Asian markets rebounded Monday, recovering warily from a worldwide plunge set off by fears that Americans are failing to keep up with their mortgage payments and the ripple effects that could have on the global banking and financial system.

The Nikkei 225 — the benchmark for the Tokyo Stock Exchange — edged up 0.2 percent to 16,800.05, recouping Friday's drop as investors bought back into stocks with strong earnings.

Yutaka Miura, manager at Shinko Securities, said Monday's gains weren't expected to be very big, and most investors were waiting to see the U.S. markets later in the day.

"This was mainly a technical rebound from Friday," he said.

South Korea's benchmark stock index stabilized Monday following a 4.2 percent, or 80.19 point, decline Friday, its third-worst point drop ever.

The Korea Composite Stock Price Index rose 20.77 points, or 1.1 percent, to close at 1,849.26.

South Korea said Monday that the impact from the U.S. subprime loan crisis on the country is limited, and vowed to deal with any credit squeeze by adding cash to the financial system if needed.

Last week, the U.S., European, Australian and Japanese central banks poured funds into money markets as stocks dropped on concerns over U.S. mortgages.

On Monday, the Bank of Japan injected $5 billion into money markets to try to bring more stability to the markets.

Later in the day, the European Central Bank said that it was injecting cash again into the banking system in a bid to soothe rattled credit markets, but said that market conditions are "normalizing."

The ECB on Thursday provided $130 billion in funds to banks and injected a further $83.6 billion on Friday.

Also Friday, the Bank of Japan had injected $8.39 billion.

Taiwan's main stock index ended up 0.09 percent at 8,938.96 Monday, while Hong Kong's benchmark Hang Seng index was down 0.03 percent midday at 21785.59.

In Sydney, the benchmark S&P/ASX 200 index was up 1.27 percent at 6011.6 after hitting an intraday high of 6040.4.

In Manila, shares fell 0.45 percent lower to close at 3,267.03 after rising early on bargain-hunting.

Stocks in Jakarta and Singapore also were lower.

New Zealand shares closed lower Monday, despite more stable Asian markets and a positive rebound in Australia.

"There was perhaps a suspicion we never really suffered as much as the other markets did last week, so we might just be seeing an element of catch-up in terms of a percentage sell-off," said First NZ Capital research director Barry Lindsay.

Looking into the rest of the week, brokers expect the local market to take direction from Wall Street.

The Dow Jones industrials closed out a tough week Friday on Wall Street, ending with just a 31-point loss for the day and managing to post a gain for the week.

On Thursday, the Dow fell 387 points and extended a series of triple-digit moves that began in late July.

Stock markets in Europe declined Thursday and Friday as well, unappeased by the European Central Bank's decision to inject another 61 billion euros ($83.9 billion) into the banking system Friday, a day after it provided nearly 95 billion euros ($130.8 billion), the bank's biggest infusion ever.

At the center of the concerns are high-risk loans to individuals or businesses made by banks globally.

More Americans are failing to keep up with their home mortgage payments, and there are concerns that this could ripple around the globe because much of the debt from mortgages has been packaged into securities sold to pension funds, banks and other investors who were hungry for high returns on investments.

The same mortgage securities in the U.S. that are crumbling in value are a part of bigger holdings that banks from Japan to Germany bought into because of low U.S. interest rates and a good returns.

That is, until the mortgage holders started defaulting.

"Iraqi Sunni claims 'genocide campaign'"

By STEVEN R. HURST, Associated Press Writer

1 hour, 19 minutes ago

BAGHDAD - Iraq's most senior Sunni politician issued a desperate appeal Sunday for Arab nations to help stop what he called an "unprecedented genocide campaign" by Shiite militias armed, trained and controlled by Iran.

The U.S. military reported five American soldiers were killed, apparently lured into an al-Qaida trap.

Adnan al-Dulaimi said "Persians" and "Safawis," Sunni terms for Iranian Shiites, were on the brink of total control in Baghdad and soon would threaten Sunni Arab regimes which predominate in the Mideast.

"It is a war that has started in Baghdad and they will not stop there but will expand it to all Arab lands," al-Dulaimi wrote in an impassioned e-mail to The Associated Press.

Sunni Arab regimes throughout the Middle East fear the growing influence of Iran's Shiite theocracy with radical groups like Hezbollah and Hamas as well as the Syrian regime.

Raising the specter of Iranian power reaching the Arab doorstep, unlikely in the near-term, betrayed al-Dulaimi's desperation.

But his fears of a Shiite takeover of Baghdad were not as farfetched.

Mahdi Army militiamen have cleansed entire neighborhoods of Sunni residents and seized Sunni mosques.

Day by day, hundreds have been killed and thousands have fled their homes, seeking safety in the shrinking number of majority Sunni districts.

The fighters, nominally loyal to radical Shiite cleric Muqtada al-Sadr, are believed to operate as death squads blamed for much of the country's sectarian slaughter.

Sunni extremists, many with al-Qaida links, are responsible too, mainly through massive bombings, often carried out by suicide attackers.

Like al-Dulaimi, the United States accuses Iran of providing the Shiite militia with sophisticated armor-piercing roadside bombs, other weapons and training.

Iran denies the allegations.

Al-Dulaimi resorted to the extremely harsh language a day after Prime Minister Nouri al-Maliki, a Shiite, returned from his second visit to Tehran since taking power 14 months ago.

The outburst reflected growing anger in the Sunni establishment over perceptions of al-Maliki as a deeply biased sectarian leader with links to Iran.

"Arabs, your brothers in the land of the two rivers and in Baghdad in particular are exposed to an unprecedented genocide campaign by the militias and death squads that are directed, armed and supported by Iran," al-Dulaimi said.

And he castigated fellow Sunnis in the Middle East, saying they "did not make any move and did not even bother to denounce what is taking place against your brothers at the hands of Iranian militias and death squads."

The 75-year-old al-Dulaimi heads the Iraqi Accordance Front, the largest Sunni political bloc in parliament.

The coalition of parties pulled its six Cabinet ministers from al-Maliki's Shiite-dominated government Aug. 1.

Five days later, government ministers loyal to former Prime Minister Ayad Allawi, a secular Shiite, launched a boycott of Cabinet meetings.

That left the government without any Sunni Arab members, except the politically unaffiliated defense minister.

Major political figures were expected to hold a rare summit with al-Maliki this week in Baghdad to address the government crisis.

The five American soldiers were killed Saturday in Arab Jabour, a district just south of Baghdad where Shiite militiamen and al-Qaida linked fighters have battled for control and are now under attack by soldiers of the 3rd Infantry Division.

Maj. Gen. Rick Lynch, the task force commander, said a sniper killed one soldier, then lured his comrades to a booby-trapped house where four died in an explosion when one of them stepped on a hidden bomb.

Four others were wounded in the blast, Lynch told the AP.

At least 37 people were killed or found dead in sectarian violence nationwide.

Nearly half of that number, 17, were tortured bodies discovered in Baghdad, officials said.

At a news conference Sunday, al-Maliki defended his Iranian sojourn and said he would continue traveling to neighboring countries and asking for help to curb violence.

He was expected to be in Syria next week, but the trip has not been announced.

"Iraq has turned into the center of terrorism."

"Iraq will only succeed through reconciliation," he said.

Al-Dulaimi's remarks focused not on reconciliation but on Arab nationalism and perceived Iranian threats.

"I call on all Arabs — Muslims, presidents and kings and people — to intervene and urge the Iraqi government to end this crisis."

"I call on them to stand beside Iraqis against violence and the oppression that come to us from Iran and its agents."

"Religion, culture behind Texas execution tally"

By Ed Stoddard Sun Aug 12, 7:57 PM ET

DALLAS (Reuters) - Texas will almost certainly hit the grim total of 400 executions this month, far ahead of any other state, testament to the influence of the state's conservative evangelical Christians and its cultural mix of Old South and Wild West.

"In Texas you have all the elements lined up."

"Public support, a governor that supports it and supportive courts," said Richard Dieter, executive director of the Death Penalty Information Center.

"If any of those things are hesitant then the process slows down," said Dieter.

"With all cylinders working as in Texas it produces a lot of executions."

Texas has executed 398 convicts since it resumed the practice in 1982, six years after the U.S. Supreme Court lifted a ban on capital punishment, far exceeding second-place Virginia with 98 executions since the ban was lifted.

It has five executions scheduled for August.

The average time spent on death row before execution is about 10 years, not much less than the national average of closer to 11 years, according to the Death Penalty Information Center.

But the average would be considerably longer if Texas were excluded.

A Texas governor can commute a death sentence or grant a reprieve based on a recommendation from the Board of Pardons and Paroles, whose members are appointed by the governor.

But governors past and present, including President George W. Bush and the state's current chief executive Rick Perry, have taken a hands-off approach.

"The courts are not much of a check in Texas and the executive defers to the courts," said Jordan Steiker, a professor at the University of Texas at Austin's School of Law and co-director of the school's Capital Punishment Center.

BIBLE BELT INFLUENCE

Like his predecessor, Governor Perry is a devout Christian, highlighting one key factor in Texas' enthusiasm for the death penalty that many outsiders find puzzling -- the support it gets from conservative evangelical churches.

This is in line with their emphasis on individuals taking responsibility for their own salvation, and they also find justification in scripture.

"A lot of evangelical Protestants not only believe that capital punishment is permissible but that it is demanded by God."

"And they see sanction for that in the Old Testament especially," said Matthew Wilson, a political scientist at Southern Methodist University in Dallas.

Texas also stands at an unusual geographical and cultural crossroads: part Old South, with its legacy of racism, and part Old West, with a cowboy sense of rough justice.

Some critics say the South can be seen in the racial bias of death sentences with blacks more likely than whites to be condemned -- though Texas is not alone on this score.

Over 41 percent of the inmates currently on death row in Texas are black, but they account for only about 12 percent of the state's population.

Meanwhile, for some in Texas the death penalty is about the victim.

"It's the criminal justice system, not the victim justice system."

"I need to get justice for my victim."

"I need to see that justice here on earth," said Cathy Hill, whose husband Barry was shot dead while working as a deputy sheriff almost seven years ago. H

His killer is now on Texas' death row.

Support for capital punishment in Texas has also been attributed to the state's high rates of violent crime, though it is not strikingly above the national average.

According to FBI statistics for 2005, the national rate of violent crime was 469.2 per 100,000 inhabitants while the same rate for murder and non-negligent manslaughter was 5.6.

For Texas, the same figures were 529.7 and 6.2.

While the prolific death chamber in the city of Huntsville, where 19 inmates have already been executed by lethal injection in 2007, makes Texas stand out, the state is also starting to follow national trends toward fewer death sentences.

Data provided by the state's Office of Court Administration for 1996 to 2006 -- when the number of murders fell somewhat but overall remained fairly constant -- show a sharp drop in the number of death sentences being imposed.

The highs over that period were in 1997 and 1999, years in which 37 death sentences were handed down.

But in 2005 only 14 convicts were condemned to die in Texas.

The longer trend is a decline of homicides over the past 30 years with a peak of 2,652 in 1991 in Texas and 1,407 in 2005.

And fewer murders should translate into fewer death sentences.

Demographics could help tilt the balance a bit further, as the state's booming economy attracts outsiders -- and potential jury members -- from more liberal regions and as its Latino population grows rapidly.

"Demographics could change things as minority groups like Latinos are generally less enthusiastic about the death penalty," said Dieter of the Death Penalty Information Center.

"Indian PM defends nuclear deal with U.S."

By MATTHEW ROSENBERG, Associated Press Writer

Mon Aug 13, 12:32 PM ET

NEW DELHI - India is free to keep developing and testing nuclear weapons under its much-touted atomic cooperation pact with the United States, the country's prime minister said Monday, defending the deal in front of lawmakers who noisily demanded it be scrapped.

Indian and U.S. leaders say the deal will cement a strategic partnership between the world's two largest democracies after decades spent on opposite sides of the Cold War divide.

But India's' right to push ahead with its cherished weapons program and, if needed, test atomic bombs has been seized on by critics of the deal in both countries, although for different reasons.

American critics say the deal, which only covers civilian cooperation, could also aid India's weapons program by freeing up domestic supplies of nuclear fuel, such as uranium.

The pact reverses three decades of American policy by allowing the U.S. to send atomic fuel and technology to India, which has never signed international nonproliferation accords and has tested atomic weapons in the past.

Indian critics argue the pact could result in too much U.S. influence over their country's foreign policy and undermine its weapons program.

Prime Minister Manmohan Singh insisted that was not the case in a speech to lawmakers Monday.

The deal, he said, is "another step in our journey to regain our due place in global councils."

He also touted the benefits of the deal for India's booming, but energy starved economy.

As for fears it could stymie the weapons program Singh said, "This agreement does not in any way inhibit, restrict or curtail our strategic autonomy or capabilities."

While India retained the right "to undertake future nuclear tests if it is necessary in India's national interest," the country nonetheless remained committed to its unilateral moratorium on tests, put in place after New Delhi detonated a weapon in 1998, he added.

As he spoke, lawmakers from the Hindu nationalist opposition and from communist parties that support Singh but oppose the deal sought to drown out the prime minister, shouting, "We don't want to be American stooges," and "Cancel the nuclear deal!"

Similar protests by lawmakers earlier in the day forced the house to adjourn until Singh spoke in the afternoon.

The Hindu nationalists have no chance of the defeating the deal, which does not need to be approved by Parliament.

Singh's speech follows the sealing of a technical pact, known as the 1-2-3 agreement, which details how nuclear cooperation between New Delhi and Washington is to work.

India got nearly everything it wanted, including the right to stockpile and reprocess nuclear fuel, a key step in making weapons.

The deal itself does not contain a test ban, and some clauses strongly suggest an Indian test would not automatically scuttle the agreement if the move followed tests by either Pakistan or China, India's major rivals.

However, Congress last year included a test ban when it created an exception for India to American laws that prohibit civilian nuclear cooperation with countries that have not signed the Nuclear Nonproliferation Treaty.

That law, which was needed before the technical agreement could be worked out, has been seized on by Indian opponents as evidence that the U.S. is seeking to constrain the South Asian country's weapons program.

The opponents also object to a nonbinding clause in the legislation directing the U.S. president to determine whether India is cooperating with American efforts to confront Iran about its nuclear program.

The critics say the clause shows American is intent on dictating foreign policy to India.

American critics worry about the lack of a test ban and say the deal will stymie U.S. anti-proliferation efforts, especially in Iran, by rewarding India for refusing to sign the Nuclear Nonproliferation Treaty.

Iran has signed the accord.

Despite those concerns, Sen. Joe Lieberman, I-Conn., said Sunday that he was confident the pact would get congressional approval.

On a three-day visit to India, Lieberman said he hoped the agreement would transform the U.S.-India relationship "into the most important bilateral relationship we have in the next century of our history."

Aside from being approved by U.S. lawmakers, India needs to make separate agreements with the U.N. nuclear watchdog, the International Atomic Energy Agency, and the Nuclear Suppliers Group, an assembly of nations that export nuclear material.

"US military launches operation in Diyala"

By KIM GAMEL, Associated Press Writer

17 minutes ago

BAGHDAD - About 16,000 U.S. and Iraqi troops began a new operation north of Baghdad targeting insurgents who have fled a crackdown in the restive city of Baqouba, the military said Tuesday.

Political leaders prepared for a crisis council as Prime Minister Nouri al-Maliki seeks to save his crumbling government.

Local officials, meanwhile, said four civilians, including a 3-year-old girl, were killed Tuesday during a raid by joint U.S.-Iraqi forces in Baghdad's Shiite district of Sadr City.

The U.S. military said four militants were killed after a fierce gunfight, but it had no reports of civilian deaths.

Operation Lightning Hammer, which began late Monday with an air assault, was part of a broader U.S. push announced Monday to build on successes in Baghdad and surrounding areas by targeting al-Qaida in Iraq and Iranian-allied Shiite militia fighters nationwide.

Maj. Gen. Benjamin Mixon, the commander of U.S. forces in northern Iraq, said the troops were pursuing al-Qaida cells that had been disrupted and forced into hiding by previous operations.

"Our main goal with Lightning Hammer is to eliminate the terrorist organizations ... and show them that they truly have no safehaven — especially in Diyala," he said in a statement.

The military did not immediately provide results from the operation because it was in the beginning stages.

Spokesman Lt. Col. Michael Donnelly said the effort would not interrupt operations in Baqouba, where U.S. forces have flushed out al-Qaida and Shiite militiamen who had fomented a virtual civil war there.

"We are not drawing down in Baqouba at all, in fact, we are in the build and hold portion of the operation there," he said.

The military has claimed success in quelling the violence in the city, 35 miles northeast of Baghdad, as well as in the capital, but it also acknowledges that Shiite and Sunni extremists fled to outlying areas where attacks have been increasing.

On Monday, three U.S. soldiers were killed in an explosion near their vehicle in the northwestern province of Ninevah, while another American soldier died during fighting in Baghdad, the military said in separate statements.

The sinking fortunes of al-Maliki and his Shiite-led administration have become something of a second front for Washington.

Al-Maliki appeared to have cleared the way, with a last-minute push from U.S. Ambassador Ryan Crocker, for a crisis council that seeks to save his crumbling government, but the timing of the meeting was uncertain.

Al-Maliki's government — a shaky coalition of Shiites, Sunnis and Kurds — has been gutted by boycotts and defections.

A full-scale disintegration could touch off power grabs on all sides and seriously complicate U.S.-led efforts to stabilize Iraq.

Al-Maliki has struggled over the past days to pull together a summit of Iraq's main religious and ethnic groups.

The meeting finally appeared likely after Crocker called on Vice President Tariq al-Hashemi, the lone Sunni Arab invited to the talks.

Al-Hashemi's attendance had been in question.

A senior American official, who spoke in Baghdad, said Monday that the stage was set for major changes in the "structure, nature and direction of the Iraqi state."

The official spoke on condition of anonymity because of the delicate nature of the planned gathering.

But ending the political impasse would likely require concessions from al-Maliki's embattled government toward Sunnis, who account for up to 20 percent of Iraq's population but complain they have been sidelined in trying to rebuild Iraq after Saddam Hussein.

The importance of the Sunni role has taken on greater dimensions this year.

Sunni tribal leaders, clerics and others have increasingly turned against the violence of al-Qaida in Iraq and helped bring significant U.S. military gains.

If al-Maliki were able to bring al-Hashemi on board — which remained uncertain — he then could try to welcome back Sunni Cabinet ministers who quit earlier this month.

Should they refuse, al-Maliki has said he was ready to name rival Sunnis to the vacant Cabinet positions.

He even mentioned reaching out to Sunni tribal sheiks in the western Anbar province, where the Sunni insurgency was born.

A police officer in Sadr City, speaking on condition of anonymity because he wasn't authorized to release the information, said the four civilians were killed and five others were wounded as American and Iraqi troops backed by helicopters, conducted house-to-house searches in the sprawling area in eastern Baghdad.

Associated Press photos showed the body of 3-year-old Zahraa Hussein lying in a wooden coffin, her white nightdress stained with blood.

Police said she and her father had been struck by shrapnel while they slept on the roof of their house seeking comfort from the heat.

Spokesman Lt. Col. Christopher Garver said he had no reports of civilians killed in the operation.

"I can't confirm that our operation did that," he said, referring to Hussein's death.

"We work very hard to avoid any injury to civilians."

The troops raided three buildings in search of a rogue Shiite militia leader suspected of coordinating and conducting attacks against U.S.-led forces and moderate Iraqis, the military said in a statement.

As the armored vehicles were leaving the area, they were attacked by two roadside bombs and small-arms fire from multiple locations, prompting helicopters to fire warning shots to allow the convoy to escape the attack, it said, adding that U.S.-led ground forces also returned fire, killing four gunmen.
___

Associated Press writers Sinan Salaheddin and Qassim Abdul-Zahra contributed to this report.

And as the out-of-control Texas peckerwood in the Washington White House continues on with his efforts to destroy OUR world, we have ....

"Australian cities face water shortage"

Tue Aug 14, 12:58 AM ET

CANBERRA, Australia - Nearly every Australian city will have to find new water supplies over the next decade as climate change and population growth stretch the nation's already limited water resources, according to a study released Tuesday.

The annual report by the Water Services Association of Australia found that after a decade of punishing drought, authorities in all of Australia's mainland capital cities will need to find new ways to provide water, such as desalination and recycling, in the next five to 10 years.

In its report to urban water utilities, the association said water prices will rise steadily in cities to pay for new infrastructure in the driest continent in the world after Antarctica.

New infrastructure could cost up to $25 billion over the next decade and likely would be paid for by higher charges to consumers, said Ross Young, the association's chief executive.

"The 10 years of below average rainfall and drought have been a wake-up call for urban Australia," Young told The Associated Press.

"This will send a stronger price signal to consumers about conserving what is a very scarce resource."

The report found that in the fiscal year ending June 2007, rainfall in catchments serving towns and cities fell by as much as 80 percent below average.

"Experience over the last several summers indicates that ongoing harsh water restrictions will not be accepted by the community and the challenge is to develop reliable supplies of water for our growing cities in a sustainable manner," the report said.

The west coast city of Perth has become the first in Australia to build a large-scale desalination plant while recycled water will be piped into homes in the east coast city of Brisbane next year.

"2 more heat wave deaths in Memphis"

By BETH RUCKER, Associated Press Writer

1 hour, 28 minutes ago

NASHVILLE, Tenn. - Two more deaths in the Memphis area have been linked to high temperatures, bringing the heat wave death toll there to five, officials said Tuesday.

The temperature in Memphis rose to at least 100 degrees again Tuesday, the fifth consecutive day of triple-digit highs, as hot air blanketed the south-central portion of the nation.

Monday's top reading in the city was 105.

"This is unusual."

"Last summer we had two (heat-related deaths) all summer."

"This is five deaths over a six-day period," Shelby County Medical Examiner Karen E. Chancellor said.

The latest two deaths were a 75-year-old man found in a home with no air conditioning and a 77-year-old woman found in her back yard where she apparently had been gardening, Chancellor said.

Both were found Monday.

The National Weather Service predicts Memphis temperatures will rise beyond the century mark through Friday.

Temperatures were in the 90s at midday Tuesday from the western Plains to the East Coast, with scattering readings of 100.

On Monday, thermometers registered above 100 in parts of Alabama, Arkansas, Texas, Nebraska and Kansas, the weather service said.

South Carolina and Missouri have each reported one heat-related death, and Illinois blamed three deaths on the heat since Thursday.

Kentucky officials said the heat may have been to blame for one death, but that had not yet been confirmed.

"In the debate over Iraq, it's vet vs vet"

By ANNE FLAHERTY, Associated Press Writer

1 hour, 55 minutes ago

WASHINGTON - Despite their opposing views on the war, soldiers Pete Hegseth and Jon Soltz have much in common, not the least of which is time spent in Iraq.

Both profess their love of the Army.

They are young, athletic and clean-shaven, and they speak eloquently about honor and a sense of duty, as though plucked from central casting to play the role of the patriotic soldier.

Above all, they draw heavily on their experiences in combat to justify their views on Iraq, hoping their message will resonate with voters because they — unlike most of America — have witnessed combat.

They also represent dueling activist groups that are fast becoming a powerful lobbying force on Capitol Hill.

And to politicians trying to make their case in anticipation of a critical assessment on the war this September, such groups have become valuable public relations tools in the deeply partisan, pull-no-punches Iraq debate.

"The Democrats, unfortunately, are trying to undermine the efforts of our troops and restrict the ability of our generals to carry out their mission," Senate Republican leader Mitch McConnell, R-Ky., said at a July news conference with Hegseth and other members of the group Vets for Freedom, which supports a continued U.S. presence in Iraq.

Later that week, Hegseth — a National Guard soldier who worked as a civil affairs officer in Samarra last year — stood behind President Bush in a news conference chastising Democrats for not passing a spending bill for the troops.

"These patriotic Americans who are behind us deserve an opportunity to be heard," McConnell said.

Democrats agree they should rely on the counsel of troops.

They just opt to listen to Soltz, a captain in the Army Reserves who deployed logistics convoys in Iraq with the 1st Armored Division in 2003.

His group, VoteVets.org, says Bush should bring troops home.

Politicians play on the expectation among voters that because the military is supposed to be apolitical and service members experience combat first-hand, troops will offer an unvarnished assessment of the war.

"Their status as combat veterans gives them an authenticity that politicians don't have," said Darrell West, political science professor at Brown University.

"Voters will always see them as combat veterans first, not advocates."

Still, advocates they are, with extensive political ties and budgets for televised political ads.

Both Vets for Freedom and VoteVets.org are tax-exempt nonprofits, but they are not charities.

Such groups deliberately do not accept tax-deductible donations — making it tougher to raise money but giving them free reign to lobby on Capitol Hill.

Soltz' VoteVets.org also operates a separate political action committee and has officially endorsed six candidates for the 2008 elections.

The group has spent about $850,000 this year on political ads, including local spots during the Super Bowl aimed mostly at pressuring Republican senators into breaking with Bush on the war.

Its board of advisers includes retired Gen. Wesley Clark, a Vietnam veteran who sought the 2004 Democratic presidential nomination, and former Democratic Sen. Bob Kerrey, also a veteran of the Vietnam War.

It's affiliated with the Americans Against Escalation in Iraq, a coalition of anti-war groups that includes the partisan MoveOn.org, which backed Democratic challengers in the last election.

Soltz suggests his group's ties to the Democratic Party reflect a bigger movement under way within the military.

"I think you're seeing a paradigm shift in the military, from those who served being fairly passive Republicans to being more active and opposed to what the current leadership is doing," Soltz said.

Hegseth's Vets for Freedom is firmly rooted in politics as well, but with Republican ties instead.

The group has worked with former White House spokesman Taylor Gross, and Campaign Solutions — headed by Republican consultant R. Rebecca Donatelli — helps manage its online media.

Adriel Domenech, the press contact for the group, is a former intern with the Republican National Committee and worked on Bush's 2004 campaign in Colorado.

Most recently, Domenech worked for 13 months in Iraq for the State Department public affairs office under Bush.

This month, Vets for Freedom launched political ads in five states — Minnesota, Kentucky, Connecticut, Nebraska and Virginia — in a bid to shore up support for Bush's Iraq policies among key senators.

The ads feature young combat veterans urging members to fight al-Qaida and thanking them for their support of continued military involvement in Iraq.

Hegseth said the group is still nonpartisan.

In July, the group tried to meet with members of both parties and are pushing to sit down with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev.

"We stand with those who stand with the mission," he said in a recent interview.

"I don't care if you're Republican or Democrat."

"... If you believe it's important to finish the mission in Iraq, we will stand with you."

Soltz and Hegseth readily acknowledge they don't speak on behalf of the military and are careful not to lobby in uniform, as prohibited under Pentagon rules.

Both say they are proud of the advocacy roles their groups play on Capitol Hill and think troops should share their experiences on the ground.

"Those who served have a duty to speak out for those who are on active duty and cannot," said Soltz.

"As long as they follow the rules about doing so, all Iraq and Afghanistan veterans need to get involved."

Hegseth said personal experience enhances the debate but that it should be done without a political agenda.

"It can become dangerous when troops use their status as a veteran to talk about their own political beliefs," he said.

"But when troops are talking about their mission and the importance of their mission and why the strategy being used is successful, or why it's different or why it could be altered, I think that's important."

And looking in on the Texas peckerwood's IRAQINAM WAR, we have ....

"U.S. helicopter crash in Iraq kills 5"

By KIM GAMEL, Associated Press Writer

47 minutes ago

BAGHDAD - Three suicide truck bombers targeted members of an ancient religious sect in northwestern Iraq on Tuesday, killing at least 20 people, while the crash of an American transport helicopter near an air base in Anbar killed five U.S. servicemembers.

Four more U.S. soldiers were reported killed in separate attacks — three in an explosion near their vehicle Monday in the northwestern Ninevah province and another who was died of wounds from combat in western Baghdad.

In a separate attack, a fourth suicide truck bomber struck a strategic bridge on the main highway linking Baghdad with the northern city of Mosul, killing at least 10, police said.

The span was bombed three months ago and only one lane had reopened, according to the police officials, who spoke on condition of anonymity because they were not authorized to release the information.

In Baghdad, dozens of uniformed gunmen in 17 official vehicles stormed an Oil Ministry compound and abducted a deputy oil minister and three other officials, a ministry spokesman and police said.

The violence came as 16,000 U.S. and Iraqi troops began a new operation north of the Iraqi capital targeting insurgents who have fled a crackdown in the restive city of Baqouba, the military said Tuesday.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

BAGHDAD (AP) — Three suicide truck bombers targeted members of an ancient religious sect in northwestern Iraq, killing at least 20 people. In Baghdad, dozens of uniformed gunmen in 17 official vehicles stormed an Oil Ministry compound and abducted a deputy oil minister and three other officials, a ministry spokesman and police said.

Nobody claimed responsibility for the bombings targeting the Yazidis — a primarily Kurdish sect that worships an angel figure considered to be the devil by some Muslims and Christians.

But the attacks bore the hallmark of al-Qaida in Iraq, which has been regrouping in the north of the country after being driven from safe havens in Anbar and Diyala provinces.

In a separate attack, a fourth suicide truck bomber struck a strategic bridge on the main highway linking Baghdad with the northern city of Mosul, killing at least 10, police said.

The span was bombed three months ago and only one lane had reopened, according to the police officials, who spoke on condition of anonymity because they were not authorized to release the information.

The attacks came as 16,000 U.S. and Iraqi troops began a new operation north of the Iraqi capital targeting insurgents who have fled a crackdown in the restive city of Baqouba, the military said Tuesday.

In Baghdad, Abdel-Jabar al-Wagaa, the senior assistant to Oil Minister Hussain al-Shahristani, was spirited away by more than 50 gunmen wearing security forces uniforms and driving what were believed to be military vehicles, said Assem Jihad, the oil ministry spokesman.

An Interior Minister official, speaking anonymously because he was not authorized to release the information, said a top official in the State Oil Marketing Organization and three directors general in the operation also were kidnapped.

The official said five bodyguards were wounded in the raid on the State Oil Marketing Organization complex in eastern Baghdad.

Five Britons were seized May 29 in a similar raid on Iraq's Finance Ministry, not far from the oil marketing office.

They were taken by gunmen wearing police uniforms and have not been found.

Both government organizations are near the lawless Sadr City Shiite enclave, a stronghold of the Mahdi Army militia.

The raid also was reminiscent of an attack by Mahdi Army fighters, dressed as Interior Ministry commandos, who stormed a Higher Education Ministry office Nov. 14 and snatched away as many as 200 people.

Dozens of those kidnap victims were never been found.

Jihad said the kidnappers Tuesday were an "armed gang" and took the deputy minister from his home in the compound.

He said the gunmen stole a number of cars from the compound, most of them belonging to the marketing organization.

And as the Texas peckerwood is out there destroying the world to make it unsafe for everyone, we have ...

"Dow off 208 on on credit, consumer woes"

By JOE BEL BRUNO, Associated Press

Last updated: 6:13 p.m., Tuesday, August 14, 2007

NEW YORK -- Wall Street pulled back sharply Tuesday as investors worried about fundamental economic problems as well as the ongoing fallout from credit market problems and stocks' own volatility.

The Dow Jones industrials skidded more than 200 points.

The downturn in stocks was first triggered by a report from Wal-Mart Stores Inc. that profit will fall below expectations this year as consumers rein in spending.

Home Depot Inc., the world's biggest home improvement chain, added to the slide when it said weakness in the housing market caused quarterly profit to slide.

Confirmation that Sentinel Management Group Inc., which oversees $1.6 billion in assets, is seeking to halt investor redemptions exacerbated the selling.

Other funds are said to have similar problems as they face withdrawal demands at a time it has become difficult to value low-quality debt.

Hedge funds and other big institutional investors have taken a beating in recent weeks due to the market turbulence.

On Monday, Goldman Sachs Group Inc. said three funds it manages have had significant losses -- and infused $3 billion in capital into one of them.

Wall Street has been pummeled as a deepening credit crunch spooked the market, and led to unease about potential losses at financial firms and funds.

The Federal Reserve, which has injected some $64 billion of liquidity into the U.S. banking system since Thursday, said it stood ready to act again should market conditions warrant.

While the market seemed to be looking past most economic news in recent weeks, on Tuesday the earnings reports and their implications for consumer spending compounded an already high state of anxiety on Wall Street.

"The market is very, very sensitive at this point, and any news about a potential financial problems is going to affect the way that the market trades," said Scott Fullman, director of investment strategy for I.A. Englander & Co.

"We've been seeing extreme sensitivity in the financials, but also in the consumer stocks and industrials during the session."

The Dow fell 207.61, or 1.57 percent, to 13,028.92.

The benchmark index is now on the verge of falling back below the psychologically-important 13,000 mark, which it first crossed in late April.

Broader stock indicators were lower.

The Standard & Poor's 500 index shed 26.38, or 1.82 percent, to 1,426.54, and the Nasdaq composite index fell 43.12, or 1.70 percent, to 2,499.12.

The retreat ended a one-day reprieve from triple-digit moves in the Dow, but no one really had expected that the market had moved past its protracted period of volatility.

The Dow, which went from 13,000 to 14,000 in just 57 trading days ended in mid-July, is now up only 4.54 percent for the year.

Meanwhile, the S&P 500 is close to wiping out all its gains and is ahead just 0.58 percent.

The Nasdaq is up 3.47 percent.

Bonds rose, with the yield on the benchmark 10-year Treasury note falling to 4.73 percent from 4.78 percent late Monday.

The fixed-income market has rallied as stock investors move into securities deemed less volatile.

Stocks originally were lifted in early trading on government data that indicated inflation remains in check.

But, that gave way to further concerns about consumer spending and widening credit worries.

The Labor Department said wholesale prices rose in July for the fifth time in six months.

Its Producer Price Index advanced 0.6 percent amid higher energy costs.

Excluding often volatile food and energy costs, however, what's known as core PPI rose a modest 0.1 percent.

Mike Malone, a trading analyst at Cowen & Co., said efforts by central banks to stabilize the markets had been somewhat successful.

On Tuesday, the European Central Bank injected another $10.5 billion into money markets and said conditions were normalizing after several days of volatility.

There was no action Tuesday by the Fed.

He said "there is still a tremendous amount of risk out there."

Among the hardest hit sectors on Tuesday were financial services stocks, which have been sliding as worries mounted that subprime loan trouble could spread to other parts of the economy.

Major investment banks have reported losses linked to mortgage-backed securities.

Goldman Sachs fell $7.75, or 4.4 percent, to $169.75 -- extending losses from Monday.

Bear Stearns Cos., which earlier this summer disclosed that two of its funds were all but wiped out, fell $3.60, or 3.3 percent, to $106.

Sentinel Management said in a letter to clients it cannot meet investors' requests to withdraw their money without selling investments at a steep discount.

Sentinel did not respond to calls for comment.

The firm sent a request to the Commodity Futures Trading Commission for permission to stop investors from cashing out, but it was rejected.

Retail stocks were also hit after Wal-Mart, one of the 30 stocks included in the Dow, lowered its profit forecast amid weak economic conditions that it blames for hurting consumer spending globally.

The retailer said some of its customers were straining under economic pressures such as higher oil prices.

Wal-Mart shares tumbled $2.35, or 5.1 percent, to $43.82.

Home Depot warned that it expects profit to decline for fiscal 2007 because of a sluggish housing sector.

Shares fell $1.72, or 4.9 percent, to $33.52.

Mattel Inc. shares fell 57 cents, or 2.4 percent, to $23 after it announced the recall of 8.8 million toys.

It was Mattel's second big recall of Chinese-made toys in two weeks.

Declining issues outpaced advancers by a 3 to 1 on the New York Stock Exchange, where consolidated volume came to 3.72 billion shares, up from 3.54 billion on Monday.

Light, sweet crude rose 76 cents to $72.38 on the New York Mercantile Exchange.

The dollar was lower against other major currencies, while gold prices fell.

The Russell 2000 index of smaller companies fell 16.94, or 2.17 percent, to 762.87.

Overseas, Japan's Nikkei stock average rose 0.27 percent.

Britain's FTSE 100 fell 0.10 percent, Germany's DAX index slipped 0.52 percent, and France's CAC-40 fell 0.82 percent.

------

On the Net:

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

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

"Home Depot reports 2Q profit drop"

By HARRY R. WEBER, Associated Press

Last updated: 6:44 p.m., Tuesday, August 14, 2007

ATLANTA -- The Home Depot Inc. reported Tuesday a 14.8 percent drop in second-quarter profit.

The results beat Wall Street expectations, but its shares fell after executives made comments that suggested to investors that the sale of the company's wholesale distribution business may not be a lock.

Chief Financial Officer Carol Tome said during an investor conference call that the world's largest home improvement store chain would have to cut by nearly half the size of its plan to repurchase up to $22.5 billion in company stock if the sale of its HD Supply unit falls through.

"If we have no proceeds from HD Supply ... our recap would be reduced to $12 billion," Tome said.

Later, she told The Associated Press she was "just trying to do the math" for an analyst who asked her about the issue.

Tome said any reduction in the stock repurchase plan would be subject to board approval.

At the same time, Tome told AP that when the company sized its stock repurchase plan, it did so based on the expected proceeds from HD Supply.

Neither she nor Chief Executive Frank Blake said the agreement to sell HD Supply to a group of private equity firms for $10.3 billion was in danger, but they did talk openly about the implications if the deal announced in June falls through.

Home Depot disclosed last week that it might not get as much money as originally thought for the supply unit.

Speaking publicly about ramifications of a failure to sell appeared to be enough to spook investors.

"We now believe Home Depot's tone on the sale of The Home Depot Supply is more concerning that previously," Citigroup analysts said in a research note Tuesday.

Home Depot has said it hopes to close the sale of HD Supply later this year.

The company said last week that it was lowering how much it will pay shareholders who agree to sell their shares back to the company as part of a tender offer related to the stock repurchase plan.

Proceeds from the sale of HD Supply are expected to be used to partly fund the stock repurchase plan.

For the three months ended July 29, Home Depot said it earned $1.59 billion, or 81 cents a share, compared to a profit of $1.86 billion, or 90 cents a share, for the same period a year earlier.

The Atlanta-based company said earnings from continuing operations totaled $1.52 billion, or 77 cents a share, in the second quarter.

On that basis, analysts surveyed by Thomson Financial were expecting earnings of 72 cents a share.

The results from continuing operations excludes Home Depot's wholesale distribution unit, HD Supply, which the company has agreed to sell to a group of private equity firms for $10.3 billion.

Revenue in the second quarter fell 1.8 percent to $22.18 billion, compared to $22.59 billion recorded in the same period a year earlier.

Sales at stores open at least a year fell 5.2 percent in the quarter.

The company said it has been hurt by weakness in the housing market, which it expects to continue into next year.

"This is a difficult time and our performance reflects that," Blake said during the conference call with analysts.

Overall, Home Depot isn't losing market share as fast as in the past, Blake said.

Home Depot said Tuesday that it "will continue to assess financial market conditions and the impact of any restructured HD Supply transaction, or failure to complete that transaction, on its overall recapitalization plan and on the terms of the tender offer part of that plan."

Blake declined to speculate on what the outcome of the HD Supply talks will be.

For the first half of its fiscal year, Home Depot said it earned $2.63 billion, or $1.34 a share, compared to a profit of $3.35 billion, or $1.60 a share, for the same period a year ago.

Six-month revenue fell 3 percent to $40.73 billion, compared to $41.97 billion recorded a year earlier.

Home Depot reiterated that it expects its earnings per share from continuing operations to decline by 12 percent to 15 percent for fiscal 2007.

Consolidated earnings per share are expected to decline by 15 percent to 18 percent for fiscal 2007, Home Depot said.

The Home Depot operates 2,200 stores in the United States, Canada, Mexico and China.

Home Depot shares fell $1.72, or 4.9 percent, to $33.52 Tuesday.

------

On the Net:

The Home Depot Inc.: http://www.homedepot.com

US General Says 15-Month Army Rotations in Iraq, Afghanistan to Continue Into Next Summer