"Treasury pays $33.56B to 21 banks - Treasury pays $33.56 billion to 21 banks in second round of disbursements from rescue fund"
By MARTIN CRUTSINGER, Associated Press
Last updated: 6:35 p.m., Monday, November 17, 2008
WASHINGTON -- The government said Monday it has supplied $33.56 billion to 21 banks in a second round of payments from the $700 billion rescue program, and announced a deadline for another 3,800 banks to apply for funds.
The Treasury Department said a category of privately held banks will have until Dec. 8 to apply for the government to purchase shares of their stock as a way to bolster their balance sheets.
The deadline for the larger publicly traded banks was Nov. 14.
The new Dec. 8 deadline will apply to about 3,800 banks that are so-called C-Corps institutions for the part of the tax code that applies to them.
Another 2,500 S-Corps institutions also will be able to apply for money, but Treasury has not set the deadline for their applications.
The new deadline was announced as Treasury confirmed a second round of government stock purchases that follow the initial $125 billion it allocated to nine of the country's largest banks.
The rescue program now has earmarked payments of $158.56 billion to banks.
Treasury Secretary Henry Paulson announced last week the administration was abandoning the initial centerpiece of the rescue program, the purchase of troubled mortgage-backed securities from banks in an effort to bolster their balance sheets.
That was the only program Paulson mentioned as Congress debated the rescue package, which was approved on Oct. 3.
However, Paulson later said the severity of the financial crisis made him realize it would take too long to get the troubled asset program into operation.
In its place, he announced on Oct. 14 that the government would buy shares of bank stock as a way to quickly inject fresh capital into the institutions.
He pressured nine of the largest banks to participate in the program during an Oct. 13 meeting at the Treasury Department, arguing that they should go along with the idea to remove the stigma other banks might feel in getting money from the government.
The rescue program has drawn a significant amount of criticism from lawmakers who have objected to the sudden switch in emphasis and what they see as a lack of restrictions on the funds.
The critics contend that banks can simply hoard the fresh capital or use it to pay dividends to their shareholders or acquire other institutions rather than using it to boost their lending.
Paulson and Federal Reserve Chairman Ben Bernanke are scheduled to testify Tuesday before the House Financial Services Committee to answer questions that have been raised about the bailout program.
The Treasury announcement on Monday said the largest stock purchase in the second round was $6.6 billion paid to U.S. Bancorp of Minneapolis.
The smallest stock purchase was $9 million paid to Broadway Financial Corp. of Los Angeles.
Many of the banks in the second group of 21 already announced that the government was purchasing stock after they had reached preliminary agreements.
Treasury does not make any announcement until after the final legal documents are signed, a process that can take a month from when the preliminary agreements are reached.
The department noted that the $10 billion scheduled to be paid to Merrill Lynch & Co. has been deferred pending the completion of that company's acquisition by Bank of America Corp.
Full Version: WELL, AMERICA, HERE WE ARE
Pages: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29
IN VIET NAM, THE U.S. GOVERNMENT POISONED US WITH "AGENT ORANGE" ...
AND NOW THEY HAVE MOVED ON TO OTHER POISONS TO HARM U.S.SOLDIERS WITH ...
And so ...
"Gulf War Syndrome' is real, report finds"
By Andy Sullivan
17 NOVEMBER 2008
WASHINGTON (Reuters) – A report released Monday concluded that "Gulf War Syndrome" is a legitimate condition suffered by more than 175,000 U.S. war veterans who were exposed to chemical toxins in the 1991 Gulf War.
The congressionally mandated report could help veterans who have battled the government for treatment of a wide range of unexplained neurological illnesses, from brain cancer to multiple sclerosis.
The Research Advisory Committee on Gulf War Veterans' Illnesses concluded that Gulf War Syndrome is a physical condition distinct from the mental "shell shock" suffered by veterans in other wars.
Some earlier studies had concluded it was not a distinct illness.
"Scientific evidence leaves no question that Gulf War illness is a real condition with real causes and serious consequences for affected veterans," said the committee, which has been looking into the problem since 2002.
The committee, composed of independent scientists and veterans, said Congress should boost funding for research on Gulf War veterans' health to at least $60 million per year.
"This is a national obligation, made especially urgent by the many years that Gulf War veterans have waited for answers and assistance," the committee said.
Congress set up the committee in 1998, but the U.S. Veterans Administration did not appoint anyone to serve on it until 2002.
Gulf War Syndrome affects at least one-fourth of the 700,000 U.S. troops who served in the 1991 effort to drive Iraq out of Kuwait, or between 175,000 and 210,000 veterans in all, the report found.
Few have seen their symptoms improve over the past 17 years, the report said.
Symptoms include persistent headaches, widespread pain, cognitive difficulties, unexplained fatigue, skin rashes, chronic diarrhea and digestive and respiratory problems.
Many Gulf War veterans suffering these symptoms say they met with skepticism when seeking treatment.
The panel found two possible causes: a drug given to troops to protect against nerve gas, known as pyridostigmine bromide, and pesticides that were used heavily during the war.
The panel said other possible causes could not be ruled out, including extensive exposure to smoke from oil-well fires and low-level exposure to sarin gas when captured Iraqi stocks were destroyed.
The U.S. government has spent roughly $440 million on Gulf War health research since 1994, but spending has declined in recent years and often is not focused on improving veterans' health, the committee said.
The report further highlighted inadequacies in the medical care veterans have received from their government.
A 2007 investigation by the Washington Post found combat veterans in the current Iraq war faced rodent-infested housing and bureaucratic hurdles as they sought treatment at the Walter Reed Army Medical Center, the flagship military hospital in Washington D.C..
(Editing by David Storey)
AND NOW THEY HAVE MOVED ON TO OTHER POISONS TO HARM U.S.SOLDIERS WITH ...
And so ...
"Gulf War Syndrome' is real, report finds"
By Andy Sullivan
17 NOVEMBER 2008
WASHINGTON (Reuters) – A report released Monday concluded that "Gulf War Syndrome" is a legitimate condition suffered by more than 175,000 U.S. war veterans who were exposed to chemical toxins in the 1991 Gulf War.
The congressionally mandated report could help veterans who have battled the government for treatment of a wide range of unexplained neurological illnesses, from brain cancer to multiple sclerosis.
The Research Advisory Committee on Gulf War Veterans' Illnesses concluded that Gulf War Syndrome is a physical condition distinct from the mental "shell shock" suffered by veterans in other wars.
Some earlier studies had concluded it was not a distinct illness.
"Scientific evidence leaves no question that Gulf War illness is a real condition with real causes and serious consequences for affected veterans," said the committee, which has been looking into the problem since 2002.
The committee, composed of independent scientists and veterans, said Congress should boost funding for research on Gulf War veterans' health to at least $60 million per year.
"This is a national obligation, made especially urgent by the many years that Gulf War veterans have waited for answers and assistance," the committee said.
Congress set up the committee in 1998, but the U.S. Veterans Administration did not appoint anyone to serve on it until 2002.
Gulf War Syndrome affects at least one-fourth of the 700,000 U.S. troops who served in the 1991 effort to drive Iraq out of Kuwait, or between 175,000 and 210,000 veterans in all, the report found.
Few have seen their symptoms improve over the past 17 years, the report said.
Symptoms include persistent headaches, widespread pain, cognitive difficulties, unexplained fatigue, skin rashes, chronic diarrhea and digestive and respiratory problems.
Many Gulf War veterans suffering these symptoms say they met with skepticism when seeking treatment.
The panel found two possible causes: a drug given to troops to protect against nerve gas, known as pyridostigmine bromide, and pesticides that were used heavily during the war.
The panel said other possible causes could not be ruled out, including extensive exposure to smoke from oil-well fires and low-level exposure to sarin gas when captured Iraqi stocks were destroyed.
The U.S. government has spent roughly $440 million on Gulf War health research since 1994, but spending has declined in recent years and often is not focused on improving veterans' health, the committee said.
The report further highlighted inadequacies in the medical care veterans have received from their government.
A 2007 investigation by the Washington Post found combat veterans in the current Iraq war faced rodent-infested housing and bureaucratic hurdles as they sought treatment at the Walter Reed Army Medical Center, the flagship military hospital in Washington D.C..
(Editing by David Storey)
"Median home prices fall around US in Q3"
By ALAN ZIBEL, AP Real Estate Writer
18 NOVEMBER 2008
WASHINGTON – Home prices fell in a record four out of five U.S. cities in the third quarter as low-cost foreclosures flooded the market and the U.S. housing market's decline spread throughout the country.
Among 152 metropolitan areas included in the trade group's survey, 120 posted declines in median home sales prices compared with a year ago, the National Association of Realtors said Tuesday.
Nationally, sales fell by almost 8 percent in the third quarter compared with the same period a year ago.
Sales of foreclosures and other distressed properties made up around 40 percent of transactions in the quarter, bringing down the median price by 9 percent from a year ago to $200,500.
Sales fell in all but four states in the Realtors' group's report.
The exceptions were Nevada, California, Arizona and Virginia, where buyers have been able to snap up foreclosed homes at a bargain.
"A very large proportion of distressed home sales are taking place at discounted prices compared to more normal conditions a year ago," Charles McMillan, the Realtors group's president, said in a statement.
That's especially true in places like Sacramento and Riverside, Calif., where prices were down 37 percent and 39 percent, respectively, from last year.
The two California cities had the largest annual price declines in the report.
A nasty brew of strict lending standards, falling home values and a tough economy is filtering through the housing market.
By the end of the year, foreclosure listing service RealtyTrac Inc. expects more than a million bank-owned properties to have piled up on the market, representing around a third of all properties for sale in the U.S.
Meanwhile many economists believe the economy has fallen into a recession that could be the worst downturn in more than two decades.
As layoffs accelerate, that's likely to put further downward pressure on housing prices.
Freddie Mac said last week that rising unemployment rates, tightening credit and deteriorating economic conditions "contributed to a substantial increase in the number of delinquent loans," including loans made to borrowers with strong credit.
Freddie Mac has 28,000 foreclosed properties on its books, while its sister company, Fannie Mae owns 67,500.
On Tuesday, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said "it is essential" to use some of the funds in the government's $700 billion financial rescue program to stem the tide of foreclosures.
By ALAN ZIBEL, AP Real Estate Writer
18 NOVEMBER 2008
WASHINGTON – Home prices fell in a record four out of five U.S. cities in the third quarter as low-cost foreclosures flooded the market and the U.S. housing market's decline spread throughout the country.
Among 152 metropolitan areas included in the trade group's survey, 120 posted declines in median home sales prices compared with a year ago, the National Association of Realtors said Tuesday.
Nationally, sales fell by almost 8 percent in the third quarter compared with the same period a year ago.
Sales of foreclosures and other distressed properties made up around 40 percent of transactions in the quarter, bringing down the median price by 9 percent from a year ago to $200,500.
Sales fell in all but four states in the Realtors' group's report.
The exceptions were Nevada, California, Arizona and Virginia, where buyers have been able to snap up foreclosed homes at a bargain.
"A very large proportion of distressed home sales are taking place at discounted prices compared to more normal conditions a year ago," Charles McMillan, the Realtors group's president, said in a statement.
That's especially true in places like Sacramento and Riverside, Calif., where prices were down 37 percent and 39 percent, respectively, from last year.
The two California cities had the largest annual price declines in the report.
A nasty brew of strict lending standards, falling home values and a tough economy is filtering through the housing market.
By the end of the year, foreclosure listing service RealtyTrac Inc. expects more than a million bank-owned properties to have piled up on the market, representing around a third of all properties for sale in the U.S.
Meanwhile many economists believe the economy has fallen into a recession that could be the worst downturn in more than two decades.
As layoffs accelerate, that's likely to put further downward pressure on housing prices.
Freddie Mac said last week that rising unemployment rates, tightening credit and deteriorating economic conditions "contributed to a substantial increase in the number of delinquent loans," including loans made to borrowers with strong credit.
Freddie Mac has 28,000 foreclosed properties on its books, while its sister company, Fannie Mae owns 67,500.
On Tuesday, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said "it is essential" to use some of the funds in the government's $700 billion financial rescue program to stem the tide of foreclosures.
HEY!
WE GOT A MESSIAH COMING INTO THE WHITE HOUSE IN JANUARY!
HE'S GOING TO RE-TOOL THE AMERICAN AUTOMOBILE INDUSTRY AND MAKE IT PROFITABLE WITH AN OBAMA MANUFACTURING STRATEGY ...
And so ...
"Big 3 carmakers beg for $25 billion as aid stalls - Big 3 automakers beg Congress for $25 billion, talk of national economic peril as aid stalls"
By JULIE HIRSCHFELD DAVIS, Associated Press
Last updated: 6:55 p.m., Tuesday, November 18, 2008
WASHINGTON -- Detroit's Big Three automakers pleaded with a reluctant Congress Tuesday for a $25 billion lifeline to save the once-proud titans of U.S. industry, pointedly warning of a national economic catastrophe should they collapse.
Millions of layoffs would follow their demise, they said, as damaging effects rippled across an already-faltering economy.
But the new rescue plan appeared stalled on Capitol Hill, opposed by the Bush administration and Republicans in Congress who don't want to dip into the Treasury Department's $700 billion financial bailout program to come up with the $25 billion in loans.
"Our industry ... needs a bridge to span the financial chasm that has opened up before us," General Motors Corp. CEO Rick Wagoner told the Senate Banking Committee.
He blamed the industry's predicament not on management failures but on the deepening global financial crisis.
And Robert Nardelli, CEO of Chrysler LLC, told the panel the bailout would be "the least costly alternative" when compared with damage from bankruptcy.
Sympathy for the industry was sparse, with bailout fatigue dominating Capitol Hill.
Lawmakers bristled with pent-up criticism of the auto industry, and questioned whether a stopgap loan would really cure what ails the companies.
Banking Committee Chairman Christopher Dodd, D-Conn., told the leaders of GM, Chrysler and Ford Motor Co. that the industry was "seeking treatments for wounds that I believe to a large extent were self-inflicted."
Still, he said, "At a time like this, when our economic future is so tenuous, we must do all we can to ensure stability."
Sen. Mike Enzi, R-Wyo., complained that the larger financial crisis "is not the only reason why the domestic auto industry is in trouble."
He cited "inefficient production" and "costly labor agreements" that put the U.S. automakers at a disadvantage to foreign companies.
Ford CEO Alan Mulally told senators the auto industry was "a pillar of our economy."
"We look forward to working with you to be part of the solution" to the financial crisis.
GM's Wagoner said that despite some public perceptions that his company was not keeping pace with the times and technological changes, "we've moved aggressively in recent years to position GM for long-term success."
"And we were well on the road to turning our North American business around."
"What exposes us to failure now is the global financial crisis, which has severely restricted credit availability and reduced industry sales to the lowest per-capita level since World War II."
Failure of the auto industry "would be catastrophic," he said, resulting in three million jobs lost within the first year and "economic devastation (that) would far exceed the government support that our industry needs to weather the current crisis."
Chrysler's Nardelli sought to respond to critics who suggest the automakers seek Chapter 11 bankruptcy protection, as have some airlines that later emerged restructured and leaner.
"We just cannot be confident that we will be able to successfully emerge from bankruptcy," Nardelli said.
Chrysler was bailed out by the federal government once before, in 1979, with $1.2 billion in loan guarantees.
The company repaid the loan, plus interest, ahead of schedule.
The three said a $25 billion government infusion could get them through 2009, with Chrysler and Ford each getting about $7 billion and GM needing $10 billion to $12 billion to pull through.
Joining the Big Three CEOs, Ron Gettelfinger, president of the United Auto Workers union, said the emergency loans were important for the survival of the industry and union jobs.
He said the UAW recognized that "in order for these companies to be competitive, we had to make tough calls" in labor concessions.
Congressional leaders worked behind the scenes trying to hammer out a compromise that could speed some aid to the automakers before year's end.
But the outlook seemed poor.
"My sense is that nothing's going to happen this week," Sen. Bob Corker, R-Tenn., said at the opening of the hearing.
Democratic Sen. Max Baucus of Montana said he also smelled a flameout.
"I sense that nothing is going to be passed," the Finance Committee chairman said.
Earlier, House Majority Leader Steny Hoyer said Congress might have to return in December -- rather than adjourning for the year this week, as expected -- to consider an auto bailout.
"Dealing with the automobile crisis is a pressing need."
"We are talking about a lot of people ... and a great consequence to our economy," said Hoyer, D-Md.
The financial situation for the automakers grows more precarious by the day.
Cash-strapped GM said it will delay reimbursing its dealers for rebates and other sales incentives and could run out of cash by year's end without government aid.
In the Senate, Democrats discussed but rejected the option favored by the White House and GOP lawmakers to let the auto industry use a $25 billion loan program created by Congress in September -- designed to help the companies develop more fuel-efficient vehicles -- to tide them over financially until President-elect Barack Obama takes office.
"There is a way to do this," said Sen. Mitch McConnell, R-Ky., the minority leader.
House Speaker Nancy Pelosi, D-Calif., and other senior Democrats, who count environmental groups among their strongest supporters, have vehemently opposed that approach because it would divert federal money that was supposed to go toward the development of vehicles that use less gasoline.
"I don't think that's going very far in our caucus," said Senate Majority Leader Harry Reid, D-Nev.
Instead, they want to draw the $25 billion directly from the $700 billion Wall Street bailout -- bringing the government's total aid to the car companies to $50 billion.
A Senate vote on that plan, which would also extend jobless benefits, could come as early as Thursday, but it currently lacks the support to advance.
Treasury Secretary Henry Paulson renewed the administration's opposition on Tuesday.
Even the car companies' strongest supporters conceded Tuesday that changing the terms of the fuel-efficiency loan program might be the only way to secure funding for them with Congress set to depart for the year and the firms in tough financial shape.
"While I believe we have to have retooling going into next year, if in the short run the only way we have to be able to get some immediate help is to take a portion of that, I would very reluctantly do that -- but only because I believe President-elect Obama is going to be focused on retooling and on a manufacturing strategy next year," said Sen. Debbie Stabenow, D-Mich.
The White House said the government shouldn't send any more money to the struggling auto industry on top of the already-approved loans.
"We don't think that taxpayers should be asked to throw money at a company that can't prove that it has a long-term path for success," said White House Press Secretary Dana Perino.
------
Associated Press Writers Ken Thomas and Tom Raum contributed to this story.
WE GOT A MESSIAH COMING INTO THE WHITE HOUSE IN JANUARY!
HE'S GOING TO RE-TOOL THE AMERICAN AUTOMOBILE INDUSTRY AND MAKE IT PROFITABLE WITH AN OBAMA MANUFACTURING STRATEGY ...
And so ...
"Big 3 carmakers beg for $25 billion as aid stalls - Big 3 automakers beg Congress for $25 billion, talk of national economic peril as aid stalls"
By JULIE HIRSCHFELD DAVIS, Associated Press
Last updated: 6:55 p.m., Tuesday, November 18, 2008
WASHINGTON -- Detroit's Big Three automakers pleaded with a reluctant Congress Tuesday for a $25 billion lifeline to save the once-proud titans of U.S. industry, pointedly warning of a national economic catastrophe should they collapse.
Millions of layoffs would follow their demise, they said, as damaging effects rippled across an already-faltering economy.
But the new rescue plan appeared stalled on Capitol Hill, opposed by the Bush administration and Republicans in Congress who don't want to dip into the Treasury Department's $700 billion financial bailout program to come up with the $25 billion in loans.
"Our industry ... needs a bridge to span the financial chasm that has opened up before us," General Motors Corp. CEO Rick Wagoner told the Senate Banking Committee.
He blamed the industry's predicament not on management failures but on the deepening global financial crisis.
And Robert Nardelli, CEO of Chrysler LLC, told the panel the bailout would be "the least costly alternative" when compared with damage from bankruptcy.
Sympathy for the industry was sparse, with bailout fatigue dominating Capitol Hill.
Lawmakers bristled with pent-up criticism of the auto industry, and questioned whether a stopgap loan would really cure what ails the companies.
Banking Committee Chairman Christopher Dodd, D-Conn., told the leaders of GM, Chrysler and Ford Motor Co. that the industry was "seeking treatments for wounds that I believe to a large extent were self-inflicted."
Still, he said, "At a time like this, when our economic future is so tenuous, we must do all we can to ensure stability."
Sen. Mike Enzi, R-Wyo., complained that the larger financial crisis "is not the only reason why the domestic auto industry is in trouble."
He cited "inefficient production" and "costly labor agreements" that put the U.S. automakers at a disadvantage to foreign companies.
Ford CEO Alan Mulally told senators the auto industry was "a pillar of our economy."
"We look forward to working with you to be part of the solution" to the financial crisis.
GM's Wagoner said that despite some public perceptions that his company was not keeping pace with the times and technological changes, "we've moved aggressively in recent years to position GM for long-term success."
"And we were well on the road to turning our North American business around."
"What exposes us to failure now is the global financial crisis, which has severely restricted credit availability and reduced industry sales to the lowest per-capita level since World War II."
Failure of the auto industry "would be catastrophic," he said, resulting in three million jobs lost within the first year and "economic devastation (that) would far exceed the government support that our industry needs to weather the current crisis."
Chrysler's Nardelli sought to respond to critics who suggest the automakers seek Chapter 11 bankruptcy protection, as have some airlines that later emerged restructured and leaner.
"We just cannot be confident that we will be able to successfully emerge from bankruptcy," Nardelli said.
Chrysler was bailed out by the federal government once before, in 1979, with $1.2 billion in loan guarantees.
The company repaid the loan, plus interest, ahead of schedule.
The three said a $25 billion government infusion could get them through 2009, with Chrysler and Ford each getting about $7 billion and GM needing $10 billion to $12 billion to pull through.
Joining the Big Three CEOs, Ron Gettelfinger, president of the United Auto Workers union, said the emergency loans were important for the survival of the industry and union jobs.
He said the UAW recognized that "in order for these companies to be competitive, we had to make tough calls" in labor concessions.
Congressional leaders worked behind the scenes trying to hammer out a compromise that could speed some aid to the automakers before year's end.
But the outlook seemed poor.
"My sense is that nothing's going to happen this week," Sen. Bob Corker, R-Tenn., said at the opening of the hearing.
Democratic Sen. Max Baucus of Montana said he also smelled a flameout.
"I sense that nothing is going to be passed," the Finance Committee chairman said.
Earlier, House Majority Leader Steny Hoyer said Congress might have to return in December -- rather than adjourning for the year this week, as expected -- to consider an auto bailout.
"Dealing with the automobile crisis is a pressing need."
"We are talking about a lot of people ... and a great consequence to our economy," said Hoyer, D-Md.
The financial situation for the automakers grows more precarious by the day.
Cash-strapped GM said it will delay reimbursing its dealers for rebates and other sales incentives and could run out of cash by year's end without government aid.
In the Senate, Democrats discussed but rejected the option favored by the White House and GOP lawmakers to let the auto industry use a $25 billion loan program created by Congress in September -- designed to help the companies develop more fuel-efficient vehicles -- to tide them over financially until President-elect Barack Obama takes office.
"There is a way to do this," said Sen. Mitch McConnell, R-Ky., the minority leader.
House Speaker Nancy Pelosi, D-Calif., and other senior Democrats, who count environmental groups among their strongest supporters, have vehemently opposed that approach because it would divert federal money that was supposed to go toward the development of vehicles that use less gasoline.
"I don't think that's going very far in our caucus," said Senate Majority Leader Harry Reid, D-Nev.
Instead, they want to draw the $25 billion directly from the $700 billion Wall Street bailout -- bringing the government's total aid to the car companies to $50 billion.
A Senate vote on that plan, which would also extend jobless benefits, could come as early as Thursday, but it currently lacks the support to advance.
Treasury Secretary Henry Paulson renewed the administration's opposition on Tuesday.
Even the car companies' strongest supporters conceded Tuesday that changing the terms of the fuel-efficiency loan program might be the only way to secure funding for them with Congress set to depart for the year and the firms in tough financial shape.
"While I believe we have to have retooling going into next year, if in the short run the only way we have to be able to get some immediate help is to take a portion of that, I would very reluctantly do that -- but only because I believe President-elect Obama is going to be focused on retooling and on a manufacturing strategy next year," said Sen. Debbie Stabenow, D-Mich.
The White House said the government shouldn't send any more money to the struggling auto industry on top of the already-approved loans.
"We don't think that taxpayers should be asked to throw money at a company that can't prove that it has a long-term path for success," said White House Press Secretary Dana Perino.
------
Associated Press Writers Ken Thomas and Tom Raum contributed to this story.
RIGHT NOW THE FEDERAL RESERVE IS ONE OF THE BIGGEST JOKES GOING ...
I WOULDN'T TRUST THE FEDERAL RESERVE TO WALK MY CAT ..
LET ALONE MANAGE MY FINANCES ...
And so ..
"Wholesale prices plunge, easing inflation concerns - Wholesale prices fall by record amount in October, easing inflation concerns"
By MARTIN CRUTSINGER, Associated Press
Last updated: 4:05 p.m., Tuesday, November 18, 2008
WASHINGTON -- Wholesale prices in October experienced the biggest one-month drop on records that go back more than 60 years, illustrating the impact falling energy prices and fears of a prolonged recession can have on inflation.
Wholesale prices dropped by a record 2.8 percent last month, reflecting the fact that energy prices decreased by the largest amount in 22 years.
After spending most of the year worrying about surging costs for energy, food and other commodities, analysts found it remarkable that prices could reverse so quickly.
"Inflation is yesterday's problem," said Nigel Gault, chief U.S. economist at IHS Global Insight.
He called the change "a testament to how suddenly the global economy's expansion has turned into recession."
Economists said they did not believe the country would experience outright deflation, which was last faced in the U.S. in the 1930s when the nation suffered through the Great Depression and a long, debilitating bout of falling prices.
"I think deflation concerns will rise over the next three to six months while the economy is at its worst and businesses are scrambling to hold on to sales by cutting prices," said Mark Zandi, chief economist at Moody's Economy.com.
"But I don't think we will get an actual period of deflation because the Federal Reserve will be working very hard to make sure that doesn't happen."
Many economists believe the economy has fallen into a recession that could be the worst downturn in more than two decades.
But they believe that retreating inflation pressures will give the Fed the room to cut interest rates further to combat the economic weakness.
The Fed cut interest rates by a half-point in a coordinated move with other central banks on Oct. 8 when the financial market turmoil was growing in intensity and followed with another half-point reduction on Oct. 29.
The federal funds rate, the target rate for overnight loans between banks, is now at 1 percent, matching a low seen only once before in the last half-century.
Many economists are predicting the Fed will cut the funds rate to 0.5 percent at their next meeting on Dec. 16.
"We are facing a recession and it is going to be a pretty bad one," said David Wyss, chief economist at Standard & Poor's in New York.
"The Fed is going to keep doing all it can to support the economy."
The 2.8 percent drop in wholesale prices in October followed smaller declines of 0.9 percent in August and 0.4 percent in September.
It was bigger than the 1.8 percent decline economists had been expecting, and surpassed the old record fall for a single month, a decline of 1.6 percent in October 2001, the month after the terrorist attacks.
The report showed that energy prices dropped by 12.8 percent in October, the biggest one-month fall since a 14 percent decline in July 1986.
That drop reflected the fact that crude oil prices have fallen by more than 60 percent since peaking at an all-time high of $147 per barrel in mid-July.
Core inflation, which excludes energy and food, showed a 0.4 percent increase in October, bigger than the 0.1 percent rise that had been expected.
However, analysts blamed much of that gain on a big jump in prices for light trucks, a category that includes sport utility vehicles.
It was not expected to be sustained given that significant declines in auto sales are occurring as demand falters in the face of rising unemployment and falling consumer confidence.
All types of energy showed big declines with gasoline falling by a record 24.9 percent, surpassing the old mark of a 22.1 percent drop in March 1986.
Home heating oil prices were down 9.6 percent, natural gas intended for home uses fell by 5.9 percent, and liquefied petroleum gas dropped by 27.6 percent, the biggest decline in more than three decades.
Food costs edged down 0.2 percent last month, as declines in the price of milk and meats offset a big jump in vegetable prices.
Excluding food and energy, the 0.4 percent increase in core prices reflected not only higher costs for light trucks but also increases for tires, malt beverages such as beer, and civilian aircraft.
The report on the Producer Price Index will be followed Wednesday by a report on consumer prices.
Analysts surveyed by Thomson Reuters are looking for retail prices to decline by 0.5 percent in October, reflecting a big drop in gasoline and other energy costs.
I WOULDN'T TRUST THE FEDERAL RESERVE TO WALK MY CAT ..
LET ALONE MANAGE MY FINANCES ...
And so ..
"Wholesale prices plunge, easing inflation concerns - Wholesale prices fall by record amount in October, easing inflation concerns"
By MARTIN CRUTSINGER, Associated Press
Last updated: 4:05 p.m., Tuesday, November 18, 2008
WASHINGTON -- Wholesale prices in October experienced the biggest one-month drop on records that go back more than 60 years, illustrating the impact falling energy prices and fears of a prolonged recession can have on inflation.
Wholesale prices dropped by a record 2.8 percent last month, reflecting the fact that energy prices decreased by the largest amount in 22 years.
After spending most of the year worrying about surging costs for energy, food and other commodities, analysts found it remarkable that prices could reverse so quickly.
"Inflation is yesterday's problem," said Nigel Gault, chief U.S. economist at IHS Global Insight.
He called the change "a testament to how suddenly the global economy's expansion has turned into recession."
Economists said they did not believe the country would experience outright deflation, which was last faced in the U.S. in the 1930s when the nation suffered through the Great Depression and a long, debilitating bout of falling prices.
"I think deflation concerns will rise over the next three to six months while the economy is at its worst and businesses are scrambling to hold on to sales by cutting prices," said Mark Zandi, chief economist at Moody's Economy.com.
"But I don't think we will get an actual period of deflation because the Federal Reserve will be working very hard to make sure that doesn't happen."
Many economists believe the economy has fallen into a recession that could be the worst downturn in more than two decades.
But they believe that retreating inflation pressures will give the Fed the room to cut interest rates further to combat the economic weakness.
The Fed cut interest rates by a half-point in a coordinated move with other central banks on Oct. 8 when the financial market turmoil was growing in intensity and followed with another half-point reduction on Oct. 29.
The federal funds rate, the target rate for overnight loans between banks, is now at 1 percent, matching a low seen only once before in the last half-century.
Many economists are predicting the Fed will cut the funds rate to 0.5 percent at their next meeting on Dec. 16.
"We are facing a recession and it is going to be a pretty bad one," said David Wyss, chief economist at Standard & Poor's in New York.
"The Fed is going to keep doing all it can to support the economy."
The 2.8 percent drop in wholesale prices in October followed smaller declines of 0.9 percent in August and 0.4 percent in September.
It was bigger than the 1.8 percent decline economists had been expecting, and surpassed the old record fall for a single month, a decline of 1.6 percent in October 2001, the month after the terrorist attacks.
The report showed that energy prices dropped by 12.8 percent in October, the biggest one-month fall since a 14 percent decline in July 1986.
That drop reflected the fact that crude oil prices have fallen by more than 60 percent since peaking at an all-time high of $147 per barrel in mid-July.
Core inflation, which excludes energy and food, showed a 0.4 percent increase in October, bigger than the 0.1 percent rise that had been expected.
However, analysts blamed much of that gain on a big jump in prices for light trucks, a category that includes sport utility vehicles.
It was not expected to be sustained given that significant declines in auto sales are occurring as demand falters in the face of rising unemployment and falling consumer confidence.
All types of energy showed big declines with gasoline falling by a record 24.9 percent, surpassing the old mark of a 22.1 percent drop in March 1986.
Home heating oil prices were down 9.6 percent, natural gas intended for home uses fell by 5.9 percent, and liquefied petroleum gas dropped by 27.6 percent, the biggest decline in more than three decades.
Food costs edged down 0.2 percent last month, as declines in the price of milk and meats offset a big jump in vegetable prices.
Excluding food and energy, the 0.4 percent increase in core prices reflected not only higher costs for light trucks but also increases for tires, malt beverages such as beer, and civilian aircraft.
The report on the Producer Price Index will be followed Wednesday by a report on consumer prices.
Analysts surveyed by Thomson Reuters are looking for retail prices to decline by 0.5 percent in October, reflecting a big drop in gasoline and other energy costs.
"Homebuilder sentiment index plunges to record low - Homebuilder sentiment index slides 5 points to new record low in November"
By ALEX VEIGA, Associated Press
Last updated: 2:06 p.m., Tuesday, November 18, 2008
LOS ANGELES -- Homebuilders' confidence in a near-term housing recovery sank to a new all-time low this month, reflecting growing worries over the U.S. financial crisis, rising unemployment and weakening consumer confidence, an industry trade association said Tuesday.
The National Association of Home Builders/Wells Fargo housing market index, started in January 1985, tumbled five points to nine in November.
The index stood at 14 in October after slipping three points from September.
Index readings higher than 50 indicate positive sentiment about the market.
But the index has drifted below 50 since May 2006 and below 20 since April.
"Today's report shows that we are in a crisis situation," NAHB Chairman Sandy Dunn said in a statement.
"Tremendous economic uncertainties have driven consumers from the housing market, and it's going to take some major incentives to bring them back."
In recent weeks, homebuilders have ratcheted up pressure on Congress to take steps that go beyond trying to reduce foreclosures.
The industry wants lawmakers to enact new incentives aimed at getting reluctant homebuyers back into the market.
Specifically, they're asking for a 10 percent tax credit of up to $22,000 for homebuyers that purchase a home over the next year and a temporary interest-rate reduction on 30-year mortgages.
"The housing downturn has already cost America three million jobs in construction and related industries, and this downward momentum cannot be stemmed without substantive government intervention," said David Crowe, the association's chief economist.
The builders' proposed housing aid measures would cost the government an estimated $270 billion, and would amount to a short-term fix at best, Deutsche Bank North America analyst Nishu Sood concluded in a research note earlier this month.
Builders have grown increasingly convinced that only government intervention will help stem the downward spiral in home prices and rising foreclosures that have led to a dearth in demand for new and preowned homes.
Major public builders such as D.R. Horton Inc., KB Home, and Centex Corp., have seen their stocks hammered as housing woes have worsened.
The latest builder index reflects a survey of 422 residential developers nationwide, tracking builders' perceptions of market conditions.
Builders' gauge of current sales conditions tumbled six points to eight, while the index of foot traffic by prospective buyers fell four points to seven.
Builders' expectations for sales over the next six months remained at 19, the NAHB said.
Declines in builder confidence were seen across the U.S., with the biggest drop in the Midwest, where confidence declined by six points.
The other regions -- Northeast, South and West -- saw builder confidence slide by five points.
By ALEX VEIGA, Associated Press
Last updated: 2:06 p.m., Tuesday, November 18, 2008
LOS ANGELES -- Homebuilders' confidence in a near-term housing recovery sank to a new all-time low this month, reflecting growing worries over the U.S. financial crisis, rising unemployment and weakening consumer confidence, an industry trade association said Tuesday.
The National Association of Home Builders/Wells Fargo housing market index, started in January 1985, tumbled five points to nine in November.
The index stood at 14 in October after slipping three points from September.
Index readings higher than 50 indicate positive sentiment about the market.
But the index has drifted below 50 since May 2006 and below 20 since April.
"Today's report shows that we are in a crisis situation," NAHB Chairman Sandy Dunn said in a statement.
"Tremendous economic uncertainties have driven consumers from the housing market, and it's going to take some major incentives to bring them back."
In recent weeks, homebuilders have ratcheted up pressure on Congress to take steps that go beyond trying to reduce foreclosures.
The industry wants lawmakers to enact new incentives aimed at getting reluctant homebuyers back into the market.
Specifically, they're asking for a 10 percent tax credit of up to $22,000 for homebuyers that purchase a home over the next year and a temporary interest-rate reduction on 30-year mortgages.
"The housing downturn has already cost America three million jobs in construction and related industries, and this downward momentum cannot be stemmed without substantive government intervention," said David Crowe, the association's chief economist.
The builders' proposed housing aid measures would cost the government an estimated $270 billion, and would amount to a short-term fix at best, Deutsche Bank North America analyst Nishu Sood concluded in a research note earlier this month.
Builders have grown increasingly convinced that only government intervention will help stem the downward spiral in home prices and rising foreclosures that have led to a dearth in demand for new and preowned homes.
Major public builders such as D.R. Horton Inc., KB Home, and Centex Corp., have seen their stocks hammered as housing woes have worsened.
The latest builder index reflects a survey of 422 residential developers nationwide, tracking builders' perceptions of market conditions.
Builders' gauge of current sales conditions tumbled six points to eight, while the index of foot traffic by prospective buyers fell four points to seven.
Builders' expectations for sales over the next six months remained at 19, the NAHB said.
Declines in builder confidence were seen across the U.S., with the biggest drop in the Midwest, where confidence declined by six points.
The other regions -- Northeast, South and West -- saw builder confidence slide by five points.
"Zigzagging on bailout rattles markets, critics say - Treasury actions heighten uncertainty in markets, possibly delaying economic recovery"
By DANIEL WAGNER, Associated Press
Last updated: 6:15 p.m., Tuesday, November 18, 2008
WASHINGTON -- Financial markets hate uncertainty, but that's what they're getting from Washington.
The Treasury Department's frequent, scattershot revisions to the $700 billion financial bailout have badly shaken investor confidence, and experts say the confusion could delay the lending revival necessary for an economic recovery.
Treasury Secretary Henry Paulson has repeatedly surprised lawmakers and financiers with reversals of earlier statements in the six weeks since Congress passed the package.
Last week, Paulson officially abandoned the initial centerpiece of his pitch to Congress: a plan to buy troubled assets that have clogged bank balance sheets.
Stocks plunged on the news, with investors saying they had based business decisions on Treasury's insistence that the program was on track.
And Monday, Paulson said he would not ask Congress for the second half of the $700 billion.
That dashed hopes he would follow through on a plan he had announced five days earlier to use the money to ease access to home, school and auto loans.
It was the latest in a series of gyrations that have heightened confusion in markets already rocked by a global financial crisis and grim economic news.
"Markets react very badly to uncertainty, and Treasury and Paulson are not making decisions in such a way that uncertainty goes down," said Mauro Guillen, director of the Wharton School's Lauder Institute.
"This is only going to exacerbate the problem."
The recent decision not to seek the second $350 billion is "very counterproductive" because it intensifies the inevitable market uncertainty surrounding the coming political transition, he said.
Paulson has defended his leadership, saying flexibility is necessary to deal with changing conditions.
"If we have learned anything throughout this year, we have learned that this financial crisis is unpredictable and difficult to counteract," the secretary told a House hearing Tuesday.
"There is no playbook for responding to turmoil we have never faced."
"We adjusted our strategy to reflect the facts of a severe market crisis."
Treasury's fits and starts have stirred already-shaken markets and made it harder for financial institutions to take calculated risks, said Wayne Abernathy, a former assistant treasury secretary now serving as executive vice president of the American Bankers Association.
In a series of interviews, former Federal Reserve and Treasury officials, economists and policymakers criticized Treasury's erratic approach to the bailout program.
They said it's spreading confusion even before the bailout program has had time to produce economic benefits for most consumers and businesses.
A Treasury spokeswoman did not return calls seeking comment.
Robert Eisenbeis, a former Atlanta Fed economist now with the hedge fund Cumberland Advisors, likened Treasury's piecemeal approach to water torture and said it hasn't helped business or consumer attitudes.
Because "scare tactics were used to stampede a vote" on the bailout legislation, Eisenbeis said, Treasury's turnabouts suggested "a lack of understanding of what the problems were to start with."
"If the program has morphed so rapidly, it really implies something about credibility," he said.
Paulson, on Capitol Hill on Tuesday for a hearing of the House Financial Services Committee, was lambasted by lawmakers for his stewardship of the program.
"You seem to be flying a $700 billion plane by the seat of your pants," Rep. Gary Ackerman, D-N.Y., told him.
"It seems to be the second-largest bait-and-switch scheme that history has ever seen, second only to the reasons given to us to vote for the invasion of Iraq."
Critics who say the government response to the crisis has been haphazard point to policy changes including the decision to prop up insurance giant American International Group Inc. a day after Lehman Brothers was allowed to file for bankruptcy -- the biggest ever.
They also cite last week's announcement that Treasury would abandon its asset purchase plan after an official testified Oct. 23 to "rapid progress."
By displaying "a repetitive underestimation of the systemic risk in the financial system," Treasury has made it harder for market participants to trust even good news coming from the department, agreed Brian Bethune, economist with IHS Global Insight.
Treasury's insistence on a closed-door process, and its frequent surprise announcements, have contributed to instability in the banking industry, Abernathy said.
He said earlier consultations with industry leaders might have helped avoid some of the stumbles.
He described frantic meetings following Treasury's Sept. 18 announcement that it would insure money market mutual funds, which compete with banks for deposits.
Concerned about a massive shift of capital out of banks and into money funds, Abernathy and colleagues persuaded Treasury officials to guarantee only money that had been invested before the announcement.
"That's a good example of something a little conversation with us (before the announcement) would have solved," Abernathy said.
"It does feed uncertainty, and it does feed lack of confidence."
Both Abernathy and Sen. Charles Schumer, D-N.Y., criticized Treasury's decision to pressure nine large banks to take direct injections of capital.
The move was intended to prevent banks that took the money from being stigmatized.
But critics say it pressured banks that didn't need help to take the money to maintain their competitive positions.
Schumer also questioned Paulson's promotion of the asset purchase plan at a time when many legislators and economists had concluded that direct injections of money would work faster and better than buying up bad bank assets.
"Even on those nights when we negotiated it, it was clear to many of us that the auction or the asset purchase hadn't been fully thought out," Schumer told reporters last week.
Treasury's objections to cash infusions seemed to fall away after Oct. 11 meetings with world economic powers, Bethune said.
And he said credit markets have started thawing thanks largely to coordinated actions that followed that summit, including the infusions and higher deposit insurance.
But those actions helped interbank lending by addressing an immediate problem -- fears about other banks' solvency -- and have had only an indirect effect on the flow of credit to consumers and small businesses.
Access remains limited to loans for homes and cars, which drive consumer spending.
Bert Ely, a banking industry consultant, said investors are already shaken by the drumbeat of news about rising unemployment and cratering retail sales.
"I wonder to what extent all the zigzagging feeds into negative sentiments and negative perceptions about how things are going," he said.
But with credit markets beginning to thaw while the broader economy flounders, even the most effective government actions will have few immediate benefits, warned John Dearie, a former officer of the New York Fed now serving as executive vice president of the Financial Services Forum, an industry group.
"There is a lag between when you start to see improvement in financial conditions and when that improvement affects the broader economy," he said.
By DANIEL WAGNER, Associated Press
Last updated: 6:15 p.m., Tuesday, November 18, 2008
WASHINGTON -- Financial markets hate uncertainty, but that's what they're getting from Washington.
The Treasury Department's frequent, scattershot revisions to the $700 billion financial bailout have badly shaken investor confidence, and experts say the confusion could delay the lending revival necessary for an economic recovery.
Treasury Secretary Henry Paulson has repeatedly surprised lawmakers and financiers with reversals of earlier statements in the six weeks since Congress passed the package.
Last week, Paulson officially abandoned the initial centerpiece of his pitch to Congress: a plan to buy troubled assets that have clogged bank balance sheets.
Stocks plunged on the news, with investors saying they had based business decisions on Treasury's insistence that the program was on track.
And Monday, Paulson said he would not ask Congress for the second half of the $700 billion.
That dashed hopes he would follow through on a plan he had announced five days earlier to use the money to ease access to home, school and auto loans.
It was the latest in a series of gyrations that have heightened confusion in markets already rocked by a global financial crisis and grim economic news.
"Markets react very badly to uncertainty, and Treasury and Paulson are not making decisions in such a way that uncertainty goes down," said Mauro Guillen, director of the Wharton School's Lauder Institute.
"This is only going to exacerbate the problem."
The recent decision not to seek the second $350 billion is "very counterproductive" because it intensifies the inevitable market uncertainty surrounding the coming political transition, he said.
Paulson has defended his leadership, saying flexibility is necessary to deal with changing conditions.
"If we have learned anything throughout this year, we have learned that this financial crisis is unpredictable and difficult to counteract," the secretary told a House hearing Tuesday.
"There is no playbook for responding to turmoil we have never faced."
"We adjusted our strategy to reflect the facts of a severe market crisis."
Treasury's fits and starts have stirred already-shaken markets and made it harder for financial institutions to take calculated risks, said Wayne Abernathy, a former assistant treasury secretary now serving as executive vice president of the American Bankers Association.
In a series of interviews, former Federal Reserve and Treasury officials, economists and policymakers criticized Treasury's erratic approach to the bailout program.
They said it's spreading confusion even before the bailout program has had time to produce economic benefits for most consumers and businesses.
A Treasury spokeswoman did not return calls seeking comment.
Robert Eisenbeis, a former Atlanta Fed economist now with the hedge fund Cumberland Advisors, likened Treasury's piecemeal approach to water torture and said it hasn't helped business or consumer attitudes.
Because "scare tactics were used to stampede a vote" on the bailout legislation, Eisenbeis said, Treasury's turnabouts suggested "a lack of understanding of what the problems were to start with."
"If the program has morphed so rapidly, it really implies something about credibility," he said.
Paulson, on Capitol Hill on Tuesday for a hearing of the House Financial Services Committee, was lambasted by lawmakers for his stewardship of the program.
"You seem to be flying a $700 billion plane by the seat of your pants," Rep. Gary Ackerman, D-N.Y., told him.
"It seems to be the second-largest bait-and-switch scheme that history has ever seen, second only to the reasons given to us to vote for the invasion of Iraq."
Critics who say the government response to the crisis has been haphazard point to policy changes including the decision to prop up insurance giant American International Group Inc. a day after Lehman Brothers was allowed to file for bankruptcy -- the biggest ever.
They also cite last week's announcement that Treasury would abandon its asset purchase plan after an official testified Oct. 23 to "rapid progress."
By displaying "a repetitive underestimation of the systemic risk in the financial system," Treasury has made it harder for market participants to trust even good news coming from the department, agreed Brian Bethune, economist with IHS Global Insight.
Treasury's insistence on a closed-door process, and its frequent surprise announcements, have contributed to instability in the banking industry, Abernathy said.
He said earlier consultations with industry leaders might have helped avoid some of the stumbles.
He described frantic meetings following Treasury's Sept. 18 announcement that it would insure money market mutual funds, which compete with banks for deposits.
Concerned about a massive shift of capital out of banks and into money funds, Abernathy and colleagues persuaded Treasury officials to guarantee only money that had been invested before the announcement.
"That's a good example of something a little conversation with us (before the announcement) would have solved," Abernathy said.
"It does feed uncertainty, and it does feed lack of confidence."
Both Abernathy and Sen. Charles Schumer, D-N.Y., criticized Treasury's decision to pressure nine large banks to take direct injections of capital.
The move was intended to prevent banks that took the money from being stigmatized.
But critics say it pressured banks that didn't need help to take the money to maintain their competitive positions.
Schumer also questioned Paulson's promotion of the asset purchase plan at a time when many legislators and economists had concluded that direct injections of money would work faster and better than buying up bad bank assets.
"Even on those nights when we negotiated it, it was clear to many of us that the auction or the asset purchase hadn't been fully thought out," Schumer told reporters last week.
Treasury's objections to cash infusions seemed to fall away after Oct. 11 meetings with world economic powers, Bethune said.
And he said credit markets have started thawing thanks largely to coordinated actions that followed that summit, including the infusions and higher deposit insurance.
But those actions helped interbank lending by addressing an immediate problem -- fears about other banks' solvency -- and have had only an indirect effect on the flow of credit to consumers and small businesses.
Access remains limited to loans for homes and cars, which drive consumer spending.
Bert Ely, a banking industry consultant, said investors are already shaken by the drumbeat of news about rising unemployment and cratering retail sales.
"I wonder to what extent all the zigzagging feeds into negative sentiments and negative perceptions about how things are going," he said.
But with credit markets beginning to thaw while the broader economy flounders, even the most effective government actions will have few immediate benefits, warned John Dearie, a former officer of the New York Fed now serving as executive vice president of the Financial Services Forum, an industry group.
"There is a lag between when you start to see improvement in financial conditions and when that improvement affects the broader economy," he said.
"Consumer prices drop record 1 percent in October - Consumer prices drop by largest amount in past 61 years as energy prices see record plunge"
By MARTIN CRUTSINGER, Associated Press
Last updated: 6:35 p.m., Wednesday, November 19, 2008
WASHINGTON -- Consumer prices plunged by the largest amount in the past 61 years in October as gasoline pump prices dropped by a record amount.
The Labor Department said Wednesday that consumer prices fell by 1 percent last month, the biggest one-month decline on records that go back to February 1947.
The drop was twice as large as the 0.5 percent decrease that analysts had been expecting and marked the third straight month that prices had either fallen or been unchanged.
The worry is that the recession, which many analysts believe will worsen in coming months, will further depress prices, hurting such industries as housing, autos and retailing, and contribute to a downward spiral that will feed on itself.
A separate report Wednesday showed that the woes in housing, where the economic troubles began two years ago, have yet to ease.
Builders slashed construction of new homes and apartments to a seasonally adjusted annual rate of 791,000 units in October, the slowest building pace on records that go back nearly 50 years.
With the economy sliding into a recession and mortgage foreclosures continuing to rise to record levels, there was little prospect of a rebound any time soon.
Analysts noted that the National Association of Home Builders reported this week that builder confidence plunged to a record low in November, reflecting the gloom that pervades the housing sector.
The big drop in inflation reflected not only a huge fall in gasoline and other energy costs, but widespread declines in other areas.
Core consumer prices, which exclude food and energy, fell by 0.1 percent last month, the first drop in core prices in more than a quarter-century.
There were price declines for clothing, new and used cars, and airline fares.
Analysts predicted further declines in the months ahead as retailers struggle to attract consumers who are being battered by rising unemployment and the weak economy.
The big retreat in consumer prices represented a remarkable turnaround from just a few months ago when a relentless surge in energy prices raised concerns that inflation could get out of control.
Since that time, the economy has been jolted by the most serious financial crisis in seven decades.
The U.S. troubles have quickly spread overseas, depressing growth around the world and cutting into demand for oil and other products, a development that has resulted in sharp declines in the price of crude oil and other commodities.
"Consumer price inflation has suddenly screeched into reverse as the recent abrupt slowdown in world economic growth has led to sharp declines in energy costs while very weak domestic demand is putting downward pressure on retail prices," said Brian Bethune, chief U.S. financial economist at IHS Global Insight.
Separately, the Federal Reserve revealed Wednesday that it has sharply lowered its projections for economic activity this year and next.
Minutes released of its Oct. 28-29 meetings showed that the Fed approved a new economic forecast projecting that the economy, as measured by the gross domestic product, will be flat or show growth of just 0.3 percent for this year.
GDP will either decline by a slight 0.2 percent or expand by 1.1 percent next year.
Those forecasts were both lower than the Fed's forecasts delivered to Congress in July.
While falling prices especially for such key products as gasoline can provide a break for consumers, analysts said the worry is if price declines become so entrenched that consumers stop buying things, awaiting further price drops.
That is one of the problems facing housing as buyers in some markets stay on the fence, expecting home prices to drop further.
The U.S. has not suffered through a prolonged bout of deflation since the Great Depression of the 1930s.
But Japan was gripped with a period of deflation during the 1990s and it took a decade for that country to overcome those problems.
"I am worried that the situation in the United States could turn into a deflationary period in this country if trends continue," said Sung Won Sohn, chief economist at the Martin Smith School of Business at California State University.
"With economic conditions getting worse and not better, the risk of deflation is there."
Other analysts, however, said they still saw deflation as a remote threat, in large part because they believed the Federal Reserve would use every means at its disposal to combat an actual period of deflation.
The Fed cut interest rates twice in half-point moves in October, driving the federal funds rate to 1 percent, a low seen only once before in the last half-century.
Economists expect the Fed will cut rates again at its last meeting this year on Dec. 16.
The Bush administration has also been working to combat the current financial crisis, pushing out nearly $160 billion to banks from the $700 billion bailout fund Congress passed on Oct. 3.
Neel Kashkari, the Treasury official who is running the rescue effort, said Wednesday that he believed all the government efforts were having a significant impact.
"We believe the combined actions ... have stabilized the financial system and prevented a financial collapse," he said in remarks to a Washington business group.
Kashkari told the group that Treasury was processing "hundreds and hundreds" of applications from banks for money from the rescue fund and that "potentially thousands" of banks may apply for a portion of the money.
For October, energy prices fell by a record 8.6 percent, led by a 14.2 percent drop in gasoline prices, also a record.
Since prices at the pump have continued to fall this month, analysts are looking for a big decline in energy costs in November as well.
The nationwide average for regular gasoline now stands at $2.07, down 33 cents since the start of the month, according to the Energy Information Agency, and well below record-highs above $4 per gallon this summer.
Food costs rose 0.3 percent in October, just half the increase of September, as dairy products and fruit showed declines.
Food prices are still 6.1 percent above where they were a year ago, reflecting big increases in past months as grocery stores hiked prices to reflect higher transportation costs.
Excluding food and energy, consumer prices fell by 0.1 percent, the first decline in core prices since a similar drop in December 1982 as the country was battling the effects of a severe recession.
Many analysts believe the current downturn will be the worst recession since the 1981-82 slump.
The big drop in inflation meant workers got a bit of a break in their discretionary incomes.
Average weekly earnings, after adjusting for inflation, were down by 0.9 percent from a year ago, but that was a smaller decline than the 2.5 percent drop for the 12-month period ending in September.
By MARTIN CRUTSINGER, Associated Press
Last updated: 6:35 p.m., Wednesday, November 19, 2008
WASHINGTON -- Consumer prices plunged by the largest amount in the past 61 years in October as gasoline pump prices dropped by a record amount.
The Labor Department said Wednesday that consumer prices fell by 1 percent last month, the biggest one-month decline on records that go back to February 1947.
The drop was twice as large as the 0.5 percent decrease that analysts had been expecting and marked the third straight month that prices had either fallen or been unchanged.
The worry is that the recession, which many analysts believe will worsen in coming months, will further depress prices, hurting such industries as housing, autos and retailing, and contribute to a downward spiral that will feed on itself.
A separate report Wednesday showed that the woes in housing, where the economic troubles began two years ago, have yet to ease.
Builders slashed construction of new homes and apartments to a seasonally adjusted annual rate of 791,000 units in October, the slowest building pace on records that go back nearly 50 years.
With the economy sliding into a recession and mortgage foreclosures continuing to rise to record levels, there was little prospect of a rebound any time soon.
Analysts noted that the National Association of Home Builders reported this week that builder confidence plunged to a record low in November, reflecting the gloom that pervades the housing sector.
The big drop in inflation reflected not only a huge fall in gasoline and other energy costs, but widespread declines in other areas.
Core consumer prices, which exclude food and energy, fell by 0.1 percent last month, the first drop in core prices in more than a quarter-century.
There were price declines for clothing, new and used cars, and airline fares.
Analysts predicted further declines in the months ahead as retailers struggle to attract consumers who are being battered by rising unemployment and the weak economy.
The big retreat in consumer prices represented a remarkable turnaround from just a few months ago when a relentless surge in energy prices raised concerns that inflation could get out of control.
Since that time, the economy has been jolted by the most serious financial crisis in seven decades.
The U.S. troubles have quickly spread overseas, depressing growth around the world and cutting into demand for oil and other products, a development that has resulted in sharp declines in the price of crude oil and other commodities.
"Consumer price inflation has suddenly screeched into reverse as the recent abrupt slowdown in world economic growth has led to sharp declines in energy costs while very weak domestic demand is putting downward pressure on retail prices," said Brian Bethune, chief U.S. financial economist at IHS Global Insight.
Separately, the Federal Reserve revealed Wednesday that it has sharply lowered its projections for economic activity this year and next.
Minutes released of its Oct. 28-29 meetings showed that the Fed approved a new economic forecast projecting that the economy, as measured by the gross domestic product, will be flat or show growth of just 0.3 percent for this year.
GDP will either decline by a slight 0.2 percent or expand by 1.1 percent next year.
Those forecasts were both lower than the Fed's forecasts delivered to Congress in July.
While falling prices especially for such key products as gasoline can provide a break for consumers, analysts said the worry is if price declines become so entrenched that consumers stop buying things, awaiting further price drops.
That is one of the problems facing housing as buyers in some markets stay on the fence, expecting home prices to drop further.
The U.S. has not suffered through a prolonged bout of deflation since the Great Depression of the 1930s.
But Japan was gripped with a period of deflation during the 1990s and it took a decade for that country to overcome those problems.
"I am worried that the situation in the United States could turn into a deflationary period in this country if trends continue," said Sung Won Sohn, chief economist at the Martin Smith School of Business at California State University.
"With economic conditions getting worse and not better, the risk of deflation is there."
Other analysts, however, said they still saw deflation as a remote threat, in large part because they believed the Federal Reserve would use every means at its disposal to combat an actual period of deflation.
The Fed cut interest rates twice in half-point moves in October, driving the federal funds rate to 1 percent, a low seen only once before in the last half-century.
Economists expect the Fed will cut rates again at its last meeting this year on Dec. 16.
The Bush administration has also been working to combat the current financial crisis, pushing out nearly $160 billion to banks from the $700 billion bailout fund Congress passed on Oct. 3.
Neel Kashkari, the Treasury official who is running the rescue effort, said Wednesday that he believed all the government efforts were having a significant impact.
"We believe the combined actions ... have stabilized the financial system and prevented a financial collapse," he said in remarks to a Washington business group.
Kashkari told the group that Treasury was processing "hundreds and hundreds" of applications from banks for money from the rescue fund and that "potentially thousands" of banks may apply for a portion of the money.
For October, energy prices fell by a record 8.6 percent, led by a 14.2 percent drop in gasoline prices, also a record.
Since prices at the pump have continued to fall this month, analysts are looking for a big decline in energy costs in November as well.
The nationwide average for regular gasoline now stands at $2.07, down 33 cents since the start of the month, according to the Energy Information Agency, and well below record-highs above $4 per gallon this summer.
Food costs rose 0.3 percent in October, just half the increase of September, as dairy products and fruit showed declines.
Food prices are still 6.1 percent above where they were a year ago, reflecting big increases in past months as grocery stores hiked prices to reflect higher transportation costs.
Excluding food and energy, consumer prices fell by 0.1 percent, the first decline in core prices since a similar drop in December 1982 as the country was battling the effects of a severe recession.
Many analysts believe the current downturn will be the worst recession since the 1981-82 slump.
The big drop in inflation meant workers got a bit of a break in their discretionary incomes.
Average weekly earnings, after adjusting for inflation, were down by 0.9 percent from a year ago, but that was a smaller decline than the 2.5 percent drop for the 12-month period ending in September.
"US home construction sinks to new record low - Construction of homes falls to lowest on records dating to 1959 as builders cut back"
By ALAN ZIBEL, Associated Press
Last updated: 1:35 p.m., Wednesday, November 19, 2008
WASHINGTON -- Construction of new homes plunged last month to the lowest level on records going back nearly 50 years as U.S. builders slashed production while Wall Street nosedived.
Embattled homebuilders, who enjoyed a five-year boom, are now building new homes and apartments at a record-low pace, according to government data released Wednesday.
New building permits, a barometer of future activity, also plummeted to the lowest pace on record.
With construction dropping, the number of unsold homes should fall quickly in the coming months, wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.
"But right now housing is a disaster area," he said.
The Commerce Department reported that construction of new homes and apartments fell 4.5 percent in October, the fourth straight monthly decline.
Construction sank to an annual rate of 791,000 units from an upwardly revised September rate of 828,000 units.
The results were the lowest on government records dating back to January 1959.
Previously, the slowest pace had been in January 1991, when the country was in recession and going through a similar housing correction.
Analysts surveyed by Thomson Reuters had expected construction to fall even further to a rate of 780,000 units Wachovia Corp. economist Adam York forecasts that construction will fall to around 650,000 units by next summer.
While that's going to be painful for the nation's homebuilders, it will help stabilize the overall U.S. housing market, he said.
"The broader housing market needs fewer homes," York said in an interview.
"We built too many homes in the United States and building less is one way to work off the excess inventory."
The declines in construction last month were led by a 31 percent drop in the Northeast, where construction of single family homes fell to a new record low.
They also dropped 13.7 percent in the Midwest.
Construction rose 7.5 percent in the West and 1.5 percent in the South.
Applications for building permits, considered a good sign of future activity, fell by 12 percent in October to an annual rate of 708,000 units, the weakest on records dating to early 1960.
New permits for single-family houses fell 14.5 percent to 460,000, the lowest level since February 1982.
That decline was surprisingly large, wrote Global Insight economist Patrick Newport, adding that builders "will take a big hit from the financial problems that erupted in September," when the government seized control of mortgage finance companies Fannie Mae and Freddie Mac, and extended a financial lifeline to insurance company American International Group Inc.
The U.S. housing recession has triggered severe economic problems and calls for further action in Washington.
Builders' sentiment about market conditions dropped to a record low in November, according to the latest survey from the National Association of Home Builders.
The trade group's housing market index, which started in January 1985, tumbled five points to nine in November, reflecting growing worries over the U.S. financial crisis, rising unemployment and weakening consumer confidence.
Index readings higher than 50 indicate positive sentiment about the market.
But the index has drifted below 50 since May 2006 and below 20 since April.
Tighter lending standards, rising defaults and fear about the housing market's future have sidelined homebuyers, an absence felt acutely by homebuilders such as D.R. Horton Inc., Pulte Homes Inc. and Centex Corp.
In recent weeks, homebuilders have ratcheted up pressure on Congress to take steps that go beyond trying to reduce foreclosures.
The industry wants lawmakers to enact new incentives aimed at getting reluctant homebuyers back into the market.
Specifically, the group is asking for a 10 percent tax credit of up to $22,000 for homebuyers that purchase a home over the next year, and a temporary interest-rate reduction on 30-year mortgages.
And on Wall Street on Wednesday, shares in homebuilders took another beating as investors reacted to the government data.
Shares of Lennar, D.R. Horton, Centex, KB Home and Beazer all tumbled 10 percent or more.
By ALAN ZIBEL, Associated Press
Last updated: 1:35 p.m., Wednesday, November 19, 2008
WASHINGTON -- Construction of new homes plunged last month to the lowest level on records going back nearly 50 years as U.S. builders slashed production while Wall Street nosedived.
Embattled homebuilders, who enjoyed a five-year boom, are now building new homes and apartments at a record-low pace, according to government data released Wednesday.
New building permits, a barometer of future activity, also plummeted to the lowest pace on record.
With construction dropping, the number of unsold homes should fall quickly in the coming months, wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.
"But right now housing is a disaster area," he said.
The Commerce Department reported that construction of new homes and apartments fell 4.5 percent in October, the fourth straight monthly decline.
Construction sank to an annual rate of 791,000 units from an upwardly revised September rate of 828,000 units.
The results were the lowest on government records dating back to January 1959.
Previously, the slowest pace had been in January 1991, when the country was in recession and going through a similar housing correction.
Analysts surveyed by Thomson Reuters had expected construction to fall even further to a rate of 780,000 units Wachovia Corp. economist Adam York forecasts that construction will fall to around 650,000 units by next summer.
While that's going to be painful for the nation's homebuilders, it will help stabilize the overall U.S. housing market, he said.
"The broader housing market needs fewer homes," York said in an interview.
"We built too many homes in the United States and building less is one way to work off the excess inventory."
The declines in construction last month were led by a 31 percent drop in the Northeast, where construction of single family homes fell to a new record low.
They also dropped 13.7 percent in the Midwest.
Construction rose 7.5 percent in the West and 1.5 percent in the South.
Applications for building permits, considered a good sign of future activity, fell by 12 percent in October to an annual rate of 708,000 units, the weakest on records dating to early 1960.
New permits for single-family houses fell 14.5 percent to 460,000, the lowest level since February 1982.
That decline was surprisingly large, wrote Global Insight economist Patrick Newport, adding that builders "will take a big hit from the financial problems that erupted in September," when the government seized control of mortgage finance companies Fannie Mae and Freddie Mac, and extended a financial lifeline to insurance company American International Group Inc.
The U.S. housing recession has triggered severe economic problems and calls for further action in Washington.
Builders' sentiment about market conditions dropped to a record low in November, according to the latest survey from the National Association of Home Builders.
The trade group's housing market index, which started in January 1985, tumbled five points to nine in November, reflecting growing worries over the U.S. financial crisis, rising unemployment and weakening consumer confidence.
Index readings higher than 50 indicate positive sentiment about the market.
But the index has drifted below 50 since May 2006 and below 20 since April.
Tighter lending standards, rising defaults and fear about the housing market's future have sidelined homebuyers, an absence felt acutely by homebuilders such as D.R. Horton Inc., Pulte Homes Inc. and Centex Corp.
In recent weeks, homebuilders have ratcheted up pressure on Congress to take steps that go beyond trying to reduce foreclosures.
The industry wants lawmakers to enact new incentives aimed at getting reluctant homebuyers back into the market.
Specifically, the group is asking for a 10 percent tax credit of up to $22,000 for homebuyers that purchase a home over the next year, and a temporary interest-rate reduction on 30-year mortgages.
And on Wall Street on Wednesday, shares in homebuilders took another beating as investors reacted to the government data.
Shares of Lennar, D.R. Horton, Centex, KB Home and Beazer all tumbled 10 percent or more.
"Al-Qaida No. 2 insults Obama with racial epithet - Al-Qaida No. 2 insults Obama, using racial epithet to describe president-elect"
By MAAMOUN YOUSSEF and LEE KEATH, Associated Press
Last updated: 6:25 p.m., Wednesday, November 19, 2008
CAIRO, Egypt -- Al-Qaida's No. 2 leader used a racial epithet to insult Barack Obama in a message posted Wednesday, describing the president-elect in demeaning terms that imply he does the bidding of whites.
The message appeared chiefly aimed at persuading Muslims and Arabs that Obama does not represent a change in U.S. policies.
Ayman al-Zawahri said in the message, which appeared on militant Web sites, that Obama is "the direct opposite of honorable black Americans" like Malcolm X, the 1960s African-American rights leader.
In al-Qaida's first response to Obama's victory, al-Zawahri also called the president-elect -- along with secretaries of state Colin Powell and Condoleezza Rice -- "house Negroes."
Speaking in Arabic, al-Zawahri uses the term "abeed al-beit," which literally translates as "house slaves."
But al-Qaida supplied English subtitles of his speech that included the translation as "house Negroes."
The message also includes old footage of speeches by Malcolm X in which he explains the term, saying black slaves who worked in their white masters' house were more servile than those who worked in the fields.
Malcolm X used the term to criticize black leaders he accused of not standing up to whites.
In Washington, State Department spokesman Sean McCormack said the latest message was just "more despicable comments from a terrorist."
The 11-minute 23-second video features the audio message by al-Zawahri, who appears only in a still image, along with other images, including one of Obama wearing a Jewish skullcap as he meets with Jewish leaders.
In his speech, al-Zawahri refers to a Nov. 5 U.S. airstrike attack in Afghanistan, meaning the video was made after that date.
Al-Zawahri said Obama's election has not changed American policies he said are aimed at oppressing Muslims and others.
"America has put on a new face, but its heart full of hate, mind drowning in greed, and spirit which spreads evil, murder, repression and despotism continue to be the same as always," the deputy of al-Qaida chief Osama bin Laden said.
He said Obama's plan to shift troops to Afghanistan is doomed to failure, because Afghans will resist.
"Be aware that the dogs of Afghanistan have found the flesh of your soldiers to be delicious, so send thousands after thousands to them," he said.
Al-Zawahri did not threaten specific attacks, but warned Obama that he was "facing a Jihadi (holy war) awakening and renaissance which is shaking the pillars of the entire Islamic world; and this is the fact which you and your government and country refuse to recognize and pretend not to see."
He said Obama's victory showed Americans acknowledged that President George W. Bush's policies were a failure and that the result was an "admission of defeat in Iraq."
But Obama's professions of support for Israel during the election campaign "confirmed to the Ummah (Islamic world) that you have chosen a stance of hostility to Islam and Muslims," al-Zawahri said.
By MAAMOUN YOUSSEF and LEE KEATH, Associated Press
Last updated: 6:25 p.m., Wednesday, November 19, 2008
CAIRO, Egypt -- Al-Qaida's No. 2 leader used a racial epithet to insult Barack Obama in a message posted Wednesday, describing the president-elect in demeaning terms that imply he does the bidding of whites.
The message appeared chiefly aimed at persuading Muslims and Arabs that Obama does not represent a change in U.S. policies.
Ayman al-Zawahri said in the message, which appeared on militant Web sites, that Obama is "the direct opposite of honorable black Americans" like Malcolm X, the 1960s African-American rights leader.
In al-Qaida's first response to Obama's victory, al-Zawahri also called the president-elect -- along with secretaries of state Colin Powell and Condoleezza Rice -- "house Negroes."
Speaking in Arabic, al-Zawahri uses the term "abeed al-beit," which literally translates as "house slaves."
But al-Qaida supplied English subtitles of his speech that included the translation as "house Negroes."
The message also includes old footage of speeches by Malcolm X in which he explains the term, saying black slaves who worked in their white masters' house were more servile than those who worked in the fields.
Malcolm X used the term to criticize black leaders he accused of not standing up to whites.
In Washington, State Department spokesman Sean McCormack said the latest message was just "more despicable comments from a terrorist."
The 11-minute 23-second video features the audio message by al-Zawahri, who appears only in a still image, along with other images, including one of Obama wearing a Jewish skullcap as he meets with Jewish leaders.
In his speech, al-Zawahri refers to a Nov. 5 U.S. airstrike attack in Afghanistan, meaning the video was made after that date.
Al-Zawahri said Obama's election has not changed American policies he said are aimed at oppressing Muslims and others.
"America has put on a new face, but its heart full of hate, mind drowning in greed, and spirit which spreads evil, murder, repression and despotism continue to be the same as always," the deputy of al-Qaida chief Osama bin Laden said.
He said Obama's plan to shift troops to Afghanistan is doomed to failure, because Afghans will resist.
"Be aware that the dogs of Afghanistan have found the flesh of your soldiers to be delicious, so send thousands after thousands to them," he said.
Al-Zawahri did not threaten specific attacks, but warned Obama that he was "facing a Jihadi (holy war) awakening and renaissance which is shaking the pillars of the entire Islamic world; and this is the fact which you and your government and country refuse to recognize and pretend not to see."
He said Obama's victory showed Americans acknowledged that President George W. Bush's policies were a failure and that the result was an "admission of defeat in Iraq."
But Obama's professions of support for Israel during the election campaign "confirmed to the Ummah (Islamic world) that you have chosen a stance of hostility to Islam and Muslims," al-Zawahri said.
"Shouting and pounding, Iraqis fight over US pact"
By QASSIM ABDUL-ZAHRA, Associated Press Writer
20 NOVEMBER 2008
BAGHDAD – Opposition lawmakers shouted and pounded their desks in protest Thursday in a second day of emotional debate in parliament over a proposed agreement with the U.S. that would allow American forces to stay in Iraq for three more years.
At least three parliamentary factions, including lawmakers loyal to Shiite leader Muqtada al-Sadr, are fighting the agreement.
But their opposition is not expected to prevent it from passing.
"The agreement ushers in a new occupation of Iraq, the duration of which we cannot tell," said Ajeel Abdul-Hussein, the senior Sadrist lawmaker.
If approved, the security pact would for the first time establish a clear timetable for the withdrawal of American forces from Iraq, and it would give Iraqi authorities far more oversight over the U.S. military presence than they currently have.
It took nine months to negotiate the deal.
Prime Minister Nouri al-Maliki went on national television Tuesday to tell Iraqis the agreement is a step toward full sovereignty and to reassure neighboring Syria and Iran that he will not allow Iraq to be a base for attacks against them.
Sadrist lawmakers disrupted a reading of the proposed agreement for the second straight day.
On Wednesday, they scuffled with security guards after one of them aggressively approached the bench while a lawmaker from the ruling Shiite coalition was reading the text.
On Thursday, they attempted to drown out the lawmaker reading it.
Shouting matches broke out and Speaker Mahmoud al-Mashhadani was barely able to control the chaos that lasted about 20 minutes.
Parliament managed to complete the second reading, the last step prior to opening debate on the pact ahead of a vote scheduled for Monday.
However, the disruptions on Wednesday could delay the vote by a day or two.
Ali al-Adeeb, a Shiite lawmaker close to al-Maliki, said it was necessary for American forces to remain in Iraq because of the insurgency even if the government, like opposition lawmakers, saw the U.S. presence as "unwanted."
Al-Maliki warned the alternative to the security pact — a renewal or an extension of the U.N. mandate providing legal cover for U.S. forces in Iraq — is worse.
"The danger of an extension is the removal of Iraq's sovereignty and facing the same problem again, which will drive us back to searching for another agreement" with the Americans, al-Maliki told a news conference.
He assured Iraqis the timeline for the withdrawal of U.S. forces under the agreement — out of cities by June 30, 2009, and the entire country by the end of 2011 — is not negotiable and could even be moved up.
The Cabinet approved the agreement last weekend, meaning the pact stands a good chance of passage in 275-seat parliament where the government's parties dominate.
But the vocal opposition in parliament could mean a narrow victory for the government in the vote, which would cast a shadow on the legitimacy of the deal that al-Maliki has said should be approved with a broad consensus.
Iraq's most influential Shiite cleric, Grand Ayatollah Ali al-Sistani, said the deal would be acceptable only if approved by a wide margin in parliament.
Al-Sistani enjoys enormous influence among Iraq's Shiite majority.
He could bury the deal if he speaks publicly against it.
How the deal fares in parliament will also have implications for the fortunes of Iraq's major parties in provincial elections on Jan. 31 and a general election late in 2009.
The Sadrists hope their anti-American stance will win them votes of Iraqis who see the Americans as occupiers who plan to stay indefinitely.
But al-Maliki's Dawa party and the Supreme Islamic Iraqi Council, its senior government partner, hope passage by a wide margin could win them votes as the parties that engineered a timetable for the Americans' departure.
If the agreement passes the legislature, it will go to the president and his two deputies for ratification.
Each one has veto power.
Shiite coalition parties, which have 85 seats, and the Kurdish bloc, with 54, firmly support the pact, and their votes alone amount to a thin majority.
They might also pick up support from smaller parties.
The position of their Sunni Arab allies, the three-party Iraqi Accordance Front, is less certain and many of those 44 lawmakers might not back the deal.
Beside the Sadrists, who have about 30 lawmakers, the small Shiite Fadhila party, which has 15 seats, and a small Sunni Arab bloc with 11 seats are firmly opposed to the deal.
Also Thursday, the U.S. military said a leader of al-Qaida in Iraq, blamed in the 2004 abduction and murder of Army reservist Staff Sgt. Matt Maupin of Batavia, Ohio, had been killed.
The military said Hajji Hammadi also was the mastermind of a June 26 attack that killed three U.S. Marines, two interpreters and more than 20 Iraqis in western Anbar province.
It said U.S. forces killed Hammadi and another armed insurgent on Nov. 11 in Baghdad.
By QASSIM ABDUL-ZAHRA, Associated Press Writer
20 NOVEMBER 2008
BAGHDAD – Opposition lawmakers shouted and pounded their desks in protest Thursday in a second day of emotional debate in parliament over a proposed agreement with the U.S. that would allow American forces to stay in Iraq for three more years.
At least three parliamentary factions, including lawmakers loyal to Shiite leader Muqtada al-Sadr, are fighting the agreement.
But their opposition is not expected to prevent it from passing.
"The agreement ushers in a new occupation of Iraq, the duration of which we cannot tell," said Ajeel Abdul-Hussein, the senior Sadrist lawmaker.
If approved, the security pact would for the first time establish a clear timetable for the withdrawal of American forces from Iraq, and it would give Iraqi authorities far more oversight over the U.S. military presence than they currently have.
It took nine months to negotiate the deal.
Prime Minister Nouri al-Maliki went on national television Tuesday to tell Iraqis the agreement is a step toward full sovereignty and to reassure neighboring Syria and Iran that he will not allow Iraq to be a base for attacks against them.
Sadrist lawmakers disrupted a reading of the proposed agreement for the second straight day.
On Wednesday, they scuffled with security guards after one of them aggressively approached the bench while a lawmaker from the ruling Shiite coalition was reading the text.
On Thursday, they attempted to drown out the lawmaker reading it.
Shouting matches broke out and Speaker Mahmoud al-Mashhadani was barely able to control the chaos that lasted about 20 minutes.
Parliament managed to complete the second reading, the last step prior to opening debate on the pact ahead of a vote scheduled for Monday.
However, the disruptions on Wednesday could delay the vote by a day or two.
Ali al-Adeeb, a Shiite lawmaker close to al-Maliki, said it was necessary for American forces to remain in Iraq because of the insurgency even if the government, like opposition lawmakers, saw the U.S. presence as "unwanted."
Al-Maliki warned the alternative to the security pact — a renewal or an extension of the U.N. mandate providing legal cover for U.S. forces in Iraq — is worse.
"The danger of an extension is the removal of Iraq's sovereignty and facing the same problem again, which will drive us back to searching for another agreement" with the Americans, al-Maliki told a news conference.
He assured Iraqis the timeline for the withdrawal of U.S. forces under the agreement — out of cities by June 30, 2009, and the entire country by the end of 2011 — is not negotiable and could even be moved up.
The Cabinet approved the agreement last weekend, meaning the pact stands a good chance of passage in 275-seat parliament where the government's parties dominate.
But the vocal opposition in parliament could mean a narrow victory for the government in the vote, which would cast a shadow on the legitimacy of the deal that al-Maliki has said should be approved with a broad consensus.
Iraq's most influential Shiite cleric, Grand Ayatollah Ali al-Sistani, said the deal would be acceptable only if approved by a wide margin in parliament.
Al-Sistani enjoys enormous influence among Iraq's Shiite majority.
He could bury the deal if he speaks publicly against it.
How the deal fares in parliament will also have implications for the fortunes of Iraq's major parties in provincial elections on Jan. 31 and a general election late in 2009.
The Sadrists hope their anti-American stance will win them votes of Iraqis who see the Americans as occupiers who plan to stay indefinitely.
But al-Maliki's Dawa party and the Supreme Islamic Iraqi Council, its senior government partner, hope passage by a wide margin could win them votes as the parties that engineered a timetable for the Americans' departure.
If the agreement passes the legislature, it will go to the president and his two deputies for ratification.
Each one has veto power.
Shiite coalition parties, which have 85 seats, and the Kurdish bloc, with 54, firmly support the pact, and their votes alone amount to a thin majority.
They might also pick up support from smaller parties.
The position of their Sunni Arab allies, the three-party Iraqi Accordance Front, is less certain and many of those 44 lawmakers might not back the deal.
Beside the Sadrists, who have about 30 lawmakers, the small Shiite Fadhila party, which has 15 seats, and a small Sunni Arab bloc with 11 seats are firmly opposed to the deal.
Also Thursday, the U.S. military said a leader of al-Qaida in Iraq, blamed in the 2004 abduction and murder of Army reservist Staff Sgt. Matt Maupin of Batavia, Ohio, had been killed.
The military said Hajji Hammadi also was the mastermind of a June 26 attack that killed three U.S. Marines, two interpreters and more than 20 Iraqis in western Anbar province.
It said U.S. forces killed Hammadi and another armed insurgent on Nov. 11 in Baghdad.
"Citi shares sink despite Saudi prince's investment - Saudi Prince Alwaleed raises stake in Citigroup, but his support fails to muster confidence"
By MADLEN READ and STEPHEN BERNARD, Associated Press
Last updated: 5:35 p.m., Thursday, November 20, 2008
NEW YORK -- Citigroup Inc. shares tumbled below $5 a share Thursday to their lowest level in more than 15 years, a sign that a Saudi prince's decision to boost his stake in the bank has failed to galvanize confidence among increasingly anxious investors.
Prince Alwaleed bin Talal, a longtime investor in Citigroup, said he plans to increase his stake in the bank to 5 percent from less than 4 percent.
He also expressed "his full and complete support" of the bank's management -- including Vikram Pandit, who has been CEO for less than a year.
It wasn't clear whether his roughly $350 million investment -- calculated based on Citigroup's current market capitalization -- would be used to buy new shares issued directly by Citigroup, or to buy stock from other shareholders in open market transactions.
In either case, it was seen as paltry compared with the more than $20 billion in losses Citigroup has racked up over the past four quarters, and the expectation that it will post another large loss in the fourth quarter.
"It's not a significant strategic investment statement," said Peter Kenny, managing director in institutional sales at Knight Equity Markets.
"And the question Wall Street is asking is, is this good money after bad?"
The stock plunge also raised the question of whether Citi will have to go begging for more cash from outside investors to calm its shareholders.
"I think they'll have to raise a lot more money," said Christopher Whalen, managing director of Institutional Risk Analytics.
A pledge of support for Citigroup management from Prince Alwaleed may not resonate so much with shareholders these days.
Back in October 2007, he made a similar pledge of "full support" for Charles Prince -- Citigroup's CEO at the time, who was shuffled out a month later and replaced by Pandit in December.
On Thursday, shares of Citigroup plummeted to as low as $4.39 in afternoon trading before closing down $1.69, or 26 percent, at $4.71 -- the lowest close since February 1993.
Citigroup stock is down about 84 percent since the beginning of the year, and down about 92 percent from its trading record of $57 a share in December 2006.
Citigroup is considered the most vulnerable among the major U.S. banks, failing to turn a profit in the past four quarters when rivals such as JPMorgan Chase & Co. and Bank of America Corp. managed to do so.
Concerns are growing that the deteriorating economy and still-turbulent markets will slam Citigroup with more write-downs in the coming quarters.
What began as a subprime residential mortgage crisis last year has ballooned into a full-blown debt crisis, escalating defaults in everything from leveraged loans to credit card debt to commercial real estate loans.
As worries grow, investors sell -- and in the current Wall Street environment, selling has been leading to more selling.
It's a pattern that felled the Wall Street investment bank Lehman Brothers Holdings Inc., and led to the shotgun buyouts of Bear Stearns Cos. and Merrill Lynch.
"It's almost like a self-fulfilling prophecy," said Kenny.
The worry now is, "how many future losses can Citi withstand, as a direct proportion of market cap?"
Citigroup spokesman Michael Hanretta declined to comment on the company's falling stock, and issued the following statement:
"Citi has a very strong capital and liquidity position and a unique global franchise."
"We are focused on executing our strategy, including our targeted expense and legacy asset reductions, and we believe the benefits will be seen over time."
The bank has been rushing to get leaner and wind down its assets backed by risky debt.
On Monday, Citigroup said it will be eliminating 53,000 jobs, on top of 22,000 cuts previously announced, to reduce costs.
Then on Wednesday, the bank said it is acquiring the remaining $17.4 billion in assets held by complex debt products known as structured investment vehicles that it previously ran off its balance sheet.
But as Citigroup made these announcements amid increasing nervousness in the broader market about the fate of U.S. automakers, the cost to insure against a default by Citigroup surged.
That cost on Thursday was at $395,000 per year to protect $10 million of debt -- up from $357,000 on Wednesday, and up from $215,000 on Friday before Citi announced its massive job cuts, according to Phoenix Partners Group.
Citigroup's sell-off appeared to be aggravated by short-selling, analysts said.
A short sale is a bet that a stock will fall; investors borrow shares and sell them with the expectation that they'll go down in value, so they can pay for the shares later at a lower price and make a profit.
Hanretta declined to comment on media reports that the bank is trying to get the Securities and Exchange Commission to reinstate a ban on short selling.
The SEC also declined to comment on the reports.
The SEC temporarily banned short selling on certain financial institutions' stock for three weeks in September.
Scott Talbott of the Financial Services Roundtable, a trade group representing Citigroup and other companies in the financial services industry, said the group has been in ongoing discussions with the SEC about temporarily halting short sales again.
Prince Alwaleed's connection with Citigroup goes back to the early 1990s, when he took a stake in Citigroup's predecessor, Citicorp, coming to its rescue after the bank made some losing bets on U.S. real estate and Latin America.
The stake owned by Prince Alwaleed through his investment company Kingdom Holding Co. has fluctuated over time.
It fell below 4 percent over the past year as Citigroup raised more than $50 billion in private capital -- including a small portion from Prince Alwaleed himself.
Citigroup is also getting $25 billion from the U.S. government's bank investment program.
This year, Prince Alwaleed ranked No. 19 on Forbes' list of the world's billionaires, with net worth of $21 billion.
By MADLEN READ and STEPHEN BERNARD, Associated Press
Last updated: 5:35 p.m., Thursday, November 20, 2008
NEW YORK -- Citigroup Inc. shares tumbled below $5 a share Thursday to their lowest level in more than 15 years, a sign that a Saudi prince's decision to boost his stake in the bank has failed to galvanize confidence among increasingly anxious investors.
Prince Alwaleed bin Talal, a longtime investor in Citigroup, said he plans to increase his stake in the bank to 5 percent from less than 4 percent.
He also expressed "his full and complete support" of the bank's management -- including Vikram Pandit, who has been CEO for less than a year.
It wasn't clear whether his roughly $350 million investment -- calculated based on Citigroup's current market capitalization -- would be used to buy new shares issued directly by Citigroup, or to buy stock from other shareholders in open market transactions.
In either case, it was seen as paltry compared with the more than $20 billion in losses Citigroup has racked up over the past four quarters, and the expectation that it will post another large loss in the fourth quarter.
"It's not a significant strategic investment statement," said Peter Kenny, managing director in institutional sales at Knight Equity Markets.
"And the question Wall Street is asking is, is this good money after bad?"
The stock plunge also raised the question of whether Citi will have to go begging for more cash from outside investors to calm its shareholders.
"I think they'll have to raise a lot more money," said Christopher Whalen, managing director of Institutional Risk Analytics.
A pledge of support for Citigroup management from Prince Alwaleed may not resonate so much with shareholders these days.
Back in October 2007, he made a similar pledge of "full support" for Charles Prince -- Citigroup's CEO at the time, who was shuffled out a month later and replaced by Pandit in December.
On Thursday, shares of Citigroup plummeted to as low as $4.39 in afternoon trading before closing down $1.69, or 26 percent, at $4.71 -- the lowest close since February 1993.
Citigroup stock is down about 84 percent since the beginning of the year, and down about 92 percent from its trading record of $57 a share in December 2006.
Citigroup is considered the most vulnerable among the major U.S. banks, failing to turn a profit in the past four quarters when rivals such as JPMorgan Chase & Co. and Bank of America Corp. managed to do so.
Concerns are growing that the deteriorating economy and still-turbulent markets will slam Citigroup with more write-downs in the coming quarters.
What began as a subprime residential mortgage crisis last year has ballooned into a full-blown debt crisis, escalating defaults in everything from leveraged loans to credit card debt to commercial real estate loans.
As worries grow, investors sell -- and in the current Wall Street environment, selling has been leading to more selling.
It's a pattern that felled the Wall Street investment bank Lehman Brothers Holdings Inc., and led to the shotgun buyouts of Bear Stearns Cos. and Merrill Lynch.
"It's almost like a self-fulfilling prophecy," said Kenny.
The worry now is, "how many future losses can Citi withstand, as a direct proportion of market cap?"
Citigroup spokesman Michael Hanretta declined to comment on the company's falling stock, and issued the following statement:
"Citi has a very strong capital and liquidity position and a unique global franchise."
"We are focused on executing our strategy, including our targeted expense and legacy asset reductions, and we believe the benefits will be seen over time."
The bank has been rushing to get leaner and wind down its assets backed by risky debt.
On Monday, Citigroup said it will be eliminating 53,000 jobs, on top of 22,000 cuts previously announced, to reduce costs.
Then on Wednesday, the bank said it is acquiring the remaining $17.4 billion in assets held by complex debt products known as structured investment vehicles that it previously ran off its balance sheet.
But as Citigroup made these announcements amid increasing nervousness in the broader market about the fate of U.S. automakers, the cost to insure against a default by Citigroup surged.
That cost on Thursday was at $395,000 per year to protect $10 million of debt -- up from $357,000 on Wednesday, and up from $215,000 on Friday before Citi announced its massive job cuts, according to Phoenix Partners Group.
Citigroup's sell-off appeared to be aggravated by short-selling, analysts said.
A short sale is a bet that a stock will fall; investors borrow shares and sell them with the expectation that they'll go down in value, so they can pay for the shares later at a lower price and make a profit.
Hanretta declined to comment on media reports that the bank is trying to get the Securities and Exchange Commission to reinstate a ban on short selling.
The SEC also declined to comment on the reports.
The SEC temporarily banned short selling on certain financial institutions' stock for three weeks in September.
Scott Talbott of the Financial Services Roundtable, a trade group representing Citigroup and other companies in the financial services industry, said the group has been in ongoing discussions with the SEC about temporarily halting short sales again.
Prince Alwaleed's connection with Citigroup goes back to the early 1990s, when he took a stake in Citigroup's predecessor, Citicorp, coming to its rescue after the bank made some losing bets on U.S. real estate and Latin America.
The stake owned by Prince Alwaleed through his investment company Kingdom Holding Co. has fluctuated over time.
It fell below 4 percent over the past year as Citigroup raised more than $50 billion in private capital -- including a small portion from Prince Alwaleed himself.
Citigroup is also getting $25 billion from the U.S. government's bank investment program.
This year, Prince Alwaleed ranked No. 19 on Forbes' list of the world's billionaires, with net worth of $21 billion.
"Judge orders release of 5 terror suspects at Gitmo"
By LARA JAKES JORDAN, Associated Press Writer
20 NOVEMBER 2008
WASHINGTON – A federal judge on Thursday ordered the release of five Algerians held at Guantanamo Bay, Cuba, and the continued detention of a sixth in a major blow to the Bush administration's strategy to keep terror suspects locked up without charges.
In the first case of its kind, U.S. District Judge Richard J. Leon said the government's evidence linking the five Algerians to al-Qaida was not credible as it came from a single, unidentified source.
Therefore, he said, the five could not be held indefinitely as enemy combatants, and should be released immediately.
"To allow enemy combatancy to rest on so thin a reed would be inconsistent with this court's obligation," Leon told the crowded courtroom.
As a result, he said, "the court must and will grant their petitions and order their release."
As for the sixth Algerian, Belkacem Bensayah, Leon said there was enough reason to believe he was close to an al-Qaida operative and had sought to help others travel to Afghanistan to join the terrorists' fight against the United States and its allies.
One of the men to be released is Lakhdar Boumediene, whose landmark Supreme Court case last summer gave the Guantanamo detainees the right to challenge their imprisonment.
The Algerians' attorneys said they would appeal Bensayah's detention but hugged each other and colleagues in congratulations after Leon's ruling.
"It's a relief," said attorney Robert C. Kirsch.
The Bosnian government already has agreed to take back the detainees, all of whom immigrated there from Algeria before they were captured in 2001.
Justice spokesman Peter Carr said it is pleased that Bensayah will remain at Guantanamo but "we are of course disappointed by, and disagree with, the court's decision that we did not carry our burden of proof with respect to the other detainees."
Leon also urged senior Justice Department leaders and high-level officials at other government agencies involved in the case not to appeal his ruling.
Later Thursday, the Justice Department said it had not decided whether it would.
Leon said the five Algerians already have been improperly held for seven years, and deserve to go home.
An appeal could delay their release for up to another two years, Leon said.
"This is a unique case," Leon said, trying to assuage any Justice Department fears that hundreds of other detainees also could be released based on Thursday's ruling.
"Few if any others will be factually like it."
"Nobody should be lulled into a false sense that all of the ... cases will look like this one."
Leon was appointed by President George W. Bush and has been sympathetic to the argument that the president has broad authority during wartime.
In 2005, Leon ruled that this same group of detainees had no right to challenge their detention in civilian courts.
Thursday's ruling is the first since the Supreme Court cleared the way last June for civilian courts to hear challenges by detainees being held indefinitely without charges.
It largely hinged on Leon's definition of an enemy combatant, which he said included al-Qaida or Taliban supporters who directly assisted in hostile acts against the U.S. or its allies.
Much of the evidence against the Algerians is classified and could not be discussed during the two open court hearings in the seven-day trial — or even with the detainees themselves.
The detainees listened to Thursday's ruling through a translated telephone conference call, but could not be heard during the nearly one-hour hearing.
The government initially detained Boumediene and the other Algerians on suspicion of plotting to bomb the U.S. Embassy in Sarajevo in October 2001.
They were transferred to Guantanamo in January 2002.
The Justice Department last month backed off the embassy bombing accusations, but said the six men were caught and detained before they could join terrorists' global jihad.
The Justice Department said it needed to be proactive against threats, especially in the months after the Sept. 11, 2001 attacks on New York and Washington.
The detainee's lawyers denied the men ever planned to join the battlefield.
Even if they had, the lawyers argued, they did not fit Leon's definition of an enemy combatant because they never joined the terrorist fighters.
The cases of more than 200 additional Guantanamo detainees are still pending, many in front of other judges in Washington's federal courthouse.
By LARA JAKES JORDAN, Associated Press Writer
20 NOVEMBER 2008
WASHINGTON – A federal judge on Thursday ordered the release of five Algerians held at Guantanamo Bay, Cuba, and the continued detention of a sixth in a major blow to the Bush administration's strategy to keep terror suspects locked up without charges.
In the first case of its kind, U.S. District Judge Richard J. Leon said the government's evidence linking the five Algerians to al-Qaida was not credible as it came from a single, unidentified source.
Therefore, he said, the five could not be held indefinitely as enemy combatants, and should be released immediately.
"To allow enemy combatancy to rest on so thin a reed would be inconsistent with this court's obligation," Leon told the crowded courtroom.
As a result, he said, "the court must and will grant their petitions and order their release."
As for the sixth Algerian, Belkacem Bensayah, Leon said there was enough reason to believe he was close to an al-Qaida operative and had sought to help others travel to Afghanistan to join the terrorists' fight against the United States and its allies.
One of the men to be released is Lakhdar Boumediene, whose landmark Supreme Court case last summer gave the Guantanamo detainees the right to challenge their imprisonment.
The Algerians' attorneys said they would appeal Bensayah's detention but hugged each other and colleagues in congratulations after Leon's ruling.
"It's a relief," said attorney Robert C. Kirsch.
The Bosnian government already has agreed to take back the detainees, all of whom immigrated there from Algeria before they were captured in 2001.
Justice spokesman Peter Carr said it is pleased that Bensayah will remain at Guantanamo but "we are of course disappointed by, and disagree with, the court's decision that we did not carry our burden of proof with respect to the other detainees."
Leon also urged senior Justice Department leaders and high-level officials at other government agencies involved in the case not to appeal his ruling.
Later Thursday, the Justice Department said it had not decided whether it would.
Leon said the five Algerians already have been improperly held for seven years, and deserve to go home.
An appeal could delay their release for up to another two years, Leon said.
"This is a unique case," Leon said, trying to assuage any Justice Department fears that hundreds of other detainees also could be released based on Thursday's ruling.
"Few if any others will be factually like it."
"Nobody should be lulled into a false sense that all of the ... cases will look like this one."
Leon was appointed by President George W. Bush and has been sympathetic to the argument that the president has broad authority during wartime.
In 2005, Leon ruled that this same group of detainees had no right to challenge their detention in civilian courts.
Thursday's ruling is the first since the Supreme Court cleared the way last June for civilian courts to hear challenges by detainees being held indefinitely without charges.
It largely hinged on Leon's definition of an enemy combatant, which he said included al-Qaida or Taliban supporters who directly assisted in hostile acts against the U.S. or its allies.
Much of the evidence against the Algerians is classified and could not be discussed during the two open court hearings in the seven-day trial — or even with the detainees themselves.
The detainees listened to Thursday's ruling through a translated telephone conference call, but could not be heard during the nearly one-hour hearing.
The government initially detained Boumediene and the other Algerians on suspicion of plotting to bomb the U.S. Embassy in Sarajevo in October 2001.
They were transferred to Guantanamo in January 2002.
The Justice Department last month backed off the embassy bombing accusations, but said the six men were caught and detained before they could join terrorists' global jihad.
The Justice Department said it needed to be proactive against threats, especially in the months after the Sept. 11, 2001 attacks on New York and Washington.
The detainee's lawyers denied the men ever planned to join the battlefield.
Even if they had, the lawyers argued, they did not fit Leon's definition of an enemy combatant because they never joined the terrorist fighters.
The cases of more than 200 additional Guantanamo detainees are still pending, many in front of other judges in Washington's federal courthouse.
"Iraqi Shiites burn Bush effigy to protest US pact"
By HAMZA HENDAWI, Associated Press Writer
21 NOVEMBER 2008
BAGHDAD – Thousands of followers of a radical Shiite cleric protested a proposed U.S.-Iraqi security deal Friday, burning an effigy of President George W. Bush in the same square where Iraqis beat a toppled Saddam Hussein statue five years ago.
Chanting and waving flags, Muqtada al-Sadr's followers filled Firdous Square to protest the pact that would allow American troops to stay for three more years.
The demonstration followed two days of protests in parliament by al-Sadr loyalists who disrupted readings of the proposed agreement ahead of a debate and vote.
Despite the opposition at least three small parliamentary factions, the pact is expected to pass in the Shiite-led parliament when it comes up for a vote next week.
Al-Sadr, who controls a group of 30 lawmakers in the 275-seat parliament, views the deal as a surrender to U.S. interests.
But supporters say the pact will eventually lead to full sovereignty.
If al-Sadr's group and other legislators opposed to the pact lose by a thin margin, they might attempt to turn their anti-American message into a defining issue in provincial elections on Jan. 31 and general elections late in 2009.
Al-Sadr's influence in Iraq however has dipped from the days when militiamen loyal to him battled U.S. forces and were seen as protectors of Shiites against Sunni militants, and his anti-American message earned him and his followers strong nationalist credentials.
Al-Sadr, believed to be in Iran, was not at the protest, though his representative read a sermon he wrote that called the U.S. "the enemy of Islam."
"The government must know that it is the people who help it in the good and the bad times."
"If it throws the occupier out, all the Iraqi people will stand by it," the sermon read, using common rhetoric for the United States.
Al-Sadr reiterated that his followers in both his movement's armed and peaceful factions will continue to work for the removal of U.S. forces.
The protesters placed the Bush effigy on the same pedestal where U.S. Marines toppled the ousted dictator's statue in one of the iconic images of the 2003 U.S.-led invasion.
The effigy held a sign that described the pact as "shame and humiliation."
After a mass prayer, demonstrators pelted the Bush effigy with plastic water bottles and sandals.
One man hit it in the face with his sandal.
The effigy fell head first into the crowd and protesters jumped on it before setting it ablaze.
The uproar this week suggests that the security pact could remain divisive as the country struggles for reconciliation after years of war.
For Prime Minister Nouri al-Maliki's Dawa party and the Supreme Islamic Iraqi Council, its senior government partner, the margin of support is almost as important as the victory itself.
A narrow passage will cast doubt on the legitimacy of the new terms governing the U.S. troop presence.
Iraq's most influential Shiite cleric, Grand Ayatollah Ali al-Sistani, said the deal would be acceptable only if approved by a wide margin in parliament.
Al-Sistani enjoys enormous influence among Iraq's Shiite majority.
Al-Sadr's movement's popularity suffered with the involvement of some militiamen in protection and black market rackets as well as the general fatigue from the on-and-off fighting.
But the movement has retained a loyal base of support in Baghdad and across much of the Shiite south of Iraq, largely because of its nationalist credentials and the perceived failure of rival Shiite parties to improve services in provinces under their control.
The Sadrists' opposition to the agreement however was likely to win it support in a country where the U.S. presence is seen as an occupation.
Security was tight for Friday's protest, with the area closed to traffic and heavily guarded by Iraqi soldiers in Humvees.
Army snipers took positions on rooftops overlooking the square.
The Sadrists also provided their own security, searching worshippers as they approached the square.
The protesters included two Sunni clerics.
Many arrived at the square on foot or by bus and carried prayer rugs, pieces of cardboard or newspapers for the mass prayer.
They waved Iraqi flags and green Shiite banners, chanting, "No, no to the agreement of humiliation!"
If the agreement passes the legislature, it will go to the president and his two deputies for ratification.
Each one has veto power.
By HAMZA HENDAWI, Associated Press Writer
21 NOVEMBER 2008
BAGHDAD – Thousands of followers of a radical Shiite cleric protested a proposed U.S.-Iraqi security deal Friday, burning an effigy of President George W. Bush in the same square where Iraqis beat a toppled Saddam Hussein statue five years ago.
Chanting and waving flags, Muqtada al-Sadr's followers filled Firdous Square to protest the pact that would allow American troops to stay for three more years.
The demonstration followed two days of protests in parliament by al-Sadr loyalists who disrupted readings of the proposed agreement ahead of a debate and vote.
Despite the opposition at least three small parliamentary factions, the pact is expected to pass in the Shiite-led parliament when it comes up for a vote next week.
Al-Sadr, who controls a group of 30 lawmakers in the 275-seat parliament, views the deal as a surrender to U.S. interests.
But supporters say the pact will eventually lead to full sovereignty.
If al-Sadr's group and other legislators opposed to the pact lose by a thin margin, they might attempt to turn their anti-American message into a defining issue in provincial elections on Jan. 31 and general elections late in 2009.
Al-Sadr's influence in Iraq however has dipped from the days when militiamen loyal to him battled U.S. forces and were seen as protectors of Shiites against Sunni militants, and his anti-American message earned him and his followers strong nationalist credentials.
Al-Sadr, believed to be in Iran, was not at the protest, though his representative read a sermon he wrote that called the U.S. "the enemy of Islam."
"The government must know that it is the people who help it in the good and the bad times."
"If it throws the occupier out, all the Iraqi people will stand by it," the sermon read, using common rhetoric for the United States.
Al-Sadr reiterated that his followers in both his movement's armed and peaceful factions will continue to work for the removal of U.S. forces.
The protesters placed the Bush effigy on the same pedestal where U.S. Marines toppled the ousted dictator's statue in one of the iconic images of the 2003 U.S.-led invasion.
The effigy held a sign that described the pact as "shame and humiliation."
After a mass prayer, demonstrators pelted the Bush effigy with plastic water bottles and sandals.
One man hit it in the face with his sandal.
The effigy fell head first into the crowd and protesters jumped on it before setting it ablaze.
The uproar this week suggests that the security pact could remain divisive as the country struggles for reconciliation after years of war.
For Prime Minister Nouri al-Maliki's Dawa party and the Supreme Islamic Iraqi Council, its senior government partner, the margin of support is almost as important as the victory itself.
A narrow passage will cast doubt on the legitimacy of the new terms governing the U.S. troop presence.
Iraq's most influential Shiite cleric, Grand Ayatollah Ali al-Sistani, said the deal would be acceptable only if approved by a wide margin in parliament.
Al-Sistani enjoys enormous influence among Iraq's Shiite majority.
Al-Sadr's movement's popularity suffered with the involvement of some militiamen in protection and black market rackets as well as the general fatigue from the on-and-off fighting.
But the movement has retained a loyal base of support in Baghdad and across much of the Shiite south of Iraq, largely because of its nationalist credentials and the perceived failure of rival Shiite parties to improve services in provinces under their control.
The Sadrists' opposition to the agreement however was likely to win it support in a country where the U.S. presence is seen as an occupation.
Security was tight for Friday's protest, with the area closed to traffic and heavily guarded by Iraqi soldiers in Humvees.
Army snipers took positions on rooftops overlooking the square.
The Sadrists also provided their own security, searching worshippers as they approached the square.
The protesters included two Sunni clerics.
Many arrived at the square on foot or by bus and carried prayer rugs, pieces of cardboard or newspapers for the mass prayer.
They waved Iraqi flags and green Shiite banners, chanting, "No, no to the agreement of humiliation!"
If the agreement passes the legislature, it will go to the president and his two deputies for ratification.
Each one has veto power.
"Analysis: Obama Treasury choice could calm markets - Analysis: US bailouts haven't stopped spiral; investors hope Obama econ picks will bring calm"
By TOM RAUM, Associated Press
Last updated: 6:35 p.m., Friday, November 21, 2008
WASHINGTON -- Why aren't the government bailouts working?
The presidential transition may be adding to the uncertainty roiling the financial markets.
In fact, knowing the names on President-elect Barack Obama's economic team may prove more helpful in calming those stormy markets in the short term than bailout packages that so far haven't had much payoff.
After two days of steep declines, stocks rallied strongly on Friday -- with the Dow Jones industrials surging nearly 500 points -- on news that Obama planned to name New York Federal Reserve chief Timothy Geithner to be treasury secretary.
But that came at the end of another very tough week for the economy.
While Obama likes to say there can be but one president at a time, Americans need to know one is fully on the job.
While many different things have contributed to the economic panic spreading worldwide, it doesn't help that the crisis is being played out in the muddled political wilderness of a lame-duck Congress, a departing president and an incoming administration that hasn't yet been formed.
William Galston, who was a White House domestic policy assistant in President Bill Clinton's first term, said Obama is likely to "name the economic team together as a package, so people can see how the pieces fit together and how people are likely to work together."
That could come early next week.
It could help bring some clarity to the economic strategy picture, and alleviate what markets hate most: uncertainty.
Geithner has been a top player in the current economic crisis -- helping Treasury Secretary Henry Paulson and his team manage the Wall Street bailout.
"Having a new administration come in with new faces and new ideas and with a Congress which is firmly behind it could restore confidence as quickly as it has evaporated," said Mark Zandi, chief economist at Moody's Economy.com
"The Bush administration is winding things down and the Obama administration is trying to gear things up."
"And in the middle of all this, we've got this complete collapse of confidence."
"And there is a vacuum," said Zandi.
Even with the late-day rally, stock market gains of the past decade have been essentially erased.
Credit markets that had thawed briefly have frozen again amid widespread fears of a deep and long recession.
Congress, the administration and the Federal Reserve have hurled well over a trillion dollars at the problem.
But while Paulson told Congress this week the U.S. had "turned the corner" in averting a financial collapse, there is little evidence that the economy's downward spiral has been broken.
Obama told CBS' "60 Minutes" in an interview aired last Sunday that, while the government's big financial bailout program may not have worked as hoped, "things could be worse."
But, unless Geithner's selection can work wonders, there's little evidence things will be getting much better soon.
Among the mistakes and other reasons cited by economists and financial analysts for why bold steps haven't had much apparent impact so far:
-- Initial market satisfaction with the $700 billion financial bailout passed in October soured after Paulson abandoned his original plan to buy troubled assets from financial institutions and moved to use most of the money instead to invest directly in banks and firms that issue auto, student and credit-card loans.
His statement this week that he would leave the final $350 billion of the bailout money for the Obama administration in January raised further uncertainties about the Bush administration's commitment.
-- The steps taken so far have provided little in the way of direct aid to homeowners facing foreclosure or who have lost their homes.
-- Even though the Fed on Oct. 29 slashed its key interest rate to 1 percent -- a level seen only once before in the past half-century -- and is believed to be pondering a further cut next month, there is always a lag time between rate cuts and economic improvements.
-- The collapse of a a $25 billion congressional effort to rescue automakers further rattled markets and raised the specter of Big Three bankruptcies that could ripple through the economy and claim millions of jobs.
-- Many economists fault the administration for allowing Wall Street bank Lehman Brothers to fail, after helping to rescue Bear Stearns and taking over mortgage giants Fannie Mae and Freddie Mac.
The failure spooked investors.
-- Rising unemployment and a sharp pullback in consumer spending have overwhelmed multibillion-dollar government efforts.
Consumer spending usually accounts for two-thirds of the overall economy, and when it starts to topple, it's hard to keep the dominoes from falling.
-- Tumbling financial stocks have been further driven down by a Wall Street strategy known as short-selling in which investors wager that stocks will fall.
Also, investors who borrowed money to buy stocks are being hit with "margin calls" forcing them to sell involuntarily.
"The financial system is still precarious and the real economy is going to get worse before it gets better."
"That's enough explanation for the markets being extremely nervous," said economist Alice Rivlin, budget director in the Clinton White House and vice chair of the Federal Reserve from 1996 to 1999.
While Obama aides have stayed in close touch with congressional leaders, his camp doesn't seem to have taken a direct role in either the auto-rescue talks or details of a new stimulus package.
That could change with the announcement of his economic team.
"I have friends at the New York Fed who are lyrical about Tim Geithner," said Lyle Gramley, a former Fed governor and now senior economic adviser at the Stanford Group.
"He's very, very highly regarded."
But Geithner also has his detractors, based on his role in the rescue efforts by the Fed and Treasury, some of the actions quite controversial.
"I would expect his confirmation hearings to be animated, with some strong opposition asking questions about his involvement in the AIG, Lehman, Goldman, Morgan and Bear decisions by the New York Fed," said Joshua Rosner, managing director at research firm Graham Fisher & Co. in New York.
------
EDITOR'S NOTE -- Tom Raum has covered national and international affairs for The Associated Press since 1973., including five presidencies.
By TOM RAUM, Associated Press
Last updated: 6:35 p.m., Friday, November 21, 2008
WASHINGTON -- Why aren't the government bailouts working?
The presidential transition may be adding to the uncertainty roiling the financial markets.
In fact, knowing the names on President-elect Barack Obama's economic team may prove more helpful in calming those stormy markets in the short term than bailout packages that so far haven't had much payoff.
After two days of steep declines, stocks rallied strongly on Friday -- with the Dow Jones industrials surging nearly 500 points -- on news that Obama planned to name New York Federal Reserve chief Timothy Geithner to be treasury secretary.
But that came at the end of another very tough week for the economy.
While Obama likes to say there can be but one president at a time, Americans need to know one is fully on the job.
While many different things have contributed to the economic panic spreading worldwide, it doesn't help that the crisis is being played out in the muddled political wilderness of a lame-duck Congress, a departing president and an incoming administration that hasn't yet been formed.
William Galston, who was a White House domestic policy assistant in President Bill Clinton's first term, said Obama is likely to "name the economic team together as a package, so people can see how the pieces fit together and how people are likely to work together."
That could come early next week.
It could help bring some clarity to the economic strategy picture, and alleviate what markets hate most: uncertainty.
Geithner has been a top player in the current economic crisis -- helping Treasury Secretary Henry Paulson and his team manage the Wall Street bailout.
"Having a new administration come in with new faces and new ideas and with a Congress which is firmly behind it could restore confidence as quickly as it has evaporated," said Mark Zandi, chief economist at Moody's Economy.com
"The Bush administration is winding things down and the Obama administration is trying to gear things up."
"And in the middle of all this, we've got this complete collapse of confidence."
"And there is a vacuum," said Zandi.
Even with the late-day rally, stock market gains of the past decade have been essentially erased.
Credit markets that had thawed briefly have frozen again amid widespread fears of a deep and long recession.
Congress, the administration and the Federal Reserve have hurled well over a trillion dollars at the problem.
But while Paulson told Congress this week the U.S. had "turned the corner" in averting a financial collapse, there is little evidence that the economy's downward spiral has been broken.
Obama told CBS' "60 Minutes" in an interview aired last Sunday that, while the government's big financial bailout program may not have worked as hoped, "things could be worse."
But, unless Geithner's selection can work wonders, there's little evidence things will be getting much better soon.
Among the mistakes and other reasons cited by economists and financial analysts for why bold steps haven't had much apparent impact so far:
-- Initial market satisfaction with the $700 billion financial bailout passed in October soured after Paulson abandoned his original plan to buy troubled assets from financial institutions and moved to use most of the money instead to invest directly in banks and firms that issue auto, student and credit-card loans.
His statement this week that he would leave the final $350 billion of the bailout money for the Obama administration in January raised further uncertainties about the Bush administration's commitment.
-- The steps taken so far have provided little in the way of direct aid to homeowners facing foreclosure or who have lost their homes.
-- Even though the Fed on Oct. 29 slashed its key interest rate to 1 percent -- a level seen only once before in the past half-century -- and is believed to be pondering a further cut next month, there is always a lag time between rate cuts and economic improvements.
-- The collapse of a a $25 billion congressional effort to rescue automakers further rattled markets and raised the specter of Big Three bankruptcies that could ripple through the economy and claim millions of jobs.
-- Many economists fault the administration for allowing Wall Street bank Lehman Brothers to fail, after helping to rescue Bear Stearns and taking over mortgage giants Fannie Mae and Freddie Mac.
The failure spooked investors.
-- Rising unemployment and a sharp pullback in consumer spending have overwhelmed multibillion-dollar government efforts.
Consumer spending usually accounts for two-thirds of the overall economy, and when it starts to topple, it's hard to keep the dominoes from falling.
-- Tumbling financial stocks have been further driven down by a Wall Street strategy known as short-selling in which investors wager that stocks will fall.
Also, investors who borrowed money to buy stocks are being hit with "margin calls" forcing them to sell involuntarily.
"The financial system is still precarious and the real economy is going to get worse before it gets better."
"That's enough explanation for the markets being extremely nervous," said economist Alice Rivlin, budget director in the Clinton White House and vice chair of the Federal Reserve from 1996 to 1999.
While Obama aides have stayed in close touch with congressional leaders, his camp doesn't seem to have taken a direct role in either the auto-rescue talks or details of a new stimulus package.
That could change with the announcement of his economic team.
"I have friends at the New York Fed who are lyrical about Tim Geithner," said Lyle Gramley, a former Fed governor and now senior economic adviser at the Stanford Group.
"He's very, very highly regarded."
But Geithner also has his detractors, based on his role in the rescue efforts by the Fed and Treasury, some of the actions quite controversial.
"I would expect his confirmation hearings to be animated, with some strong opposition asking questions about his involvement in the AIG, Lehman, Goldman, Morgan and Bear decisions by the New York Fed," said Joshua Rosner, managing director at research firm Graham Fisher & Co. in New York.
------
EDITOR'S NOTE -- Tom Raum has covered national and international affairs for The Associated Press since 1973., including five presidencies.
WHEN TIM GEITHNER IS PERCEIVED AS BEING A DIRECT PART OF THE PROBLEM, HOW IS THE MESSIAH OBAMA OFFERING US "FRESH THINKING" BY MAKING GEITHNER HIS TREASURY SECRETARY?
"Obama wants economic rescue approved 'right away'"
By BETH FOUHY, Associated Press Writer
24 NOVEMBER 2008
CHICAGO – With the economy in crisis, President-elect Barack Obama pledged Monday to honor the commitments the outgoing Bush administration has made to rescue financial markets and urged the new, incoming Congress to pass a major stimulus package "right away" to restore growth and create jobs.
"Most experts now believe that we could lose millions of jobs next year," Obama said at a somber news conference 57 days before he takes the oath of office.
He declined to say how big a spending package he wants to revive the economy, but he said, "It's going to be costly."
Some Democratic lawmakers are speculating about a two-year measure as large as $700 billion.
The president-elect introduced the top economic advisers for his new administration, beginning with New York Federal Reserve President Tim Geithner to be his treasury secretary.
Geithner, 47, is a veteran of financial crises at home and overseas and has worked closely with the Bush administration in recent months.
Obama chose Lawrence Summers as director of his National Economic Council.
Summers was treasury secretary under former President Bill Clinton.
Obama said his newly minted economic team offered "sound judgment and fresh thinking" at a time of economic peril.
"The economy is likely to get worse before it gets better," he said in a downbeat forecast, delivered as Americans head into the year-end holiday season.
At the same time, he expressed confidence the nation would weather the crisis "because we've done it before."
The president-elect was mildly critical of the Big Three automakers, saying he was surprised they did not have a better-thought-out plan for their future before asking Congress to approve $25 billion in emergency loans.
He said once he sees a plan, he expects "we're going to be able to shape a rescue."
Obama also announced two other members of his economic team in the making.
He named Christina Romer as chair of his Council of Economic Advisers, and Melody Barnes as director of his White House Domestic Policy Council.
"Obama wants economic rescue approved 'right away'"
By BETH FOUHY, Associated Press Writer
24 NOVEMBER 2008
CHICAGO – With the economy in crisis, President-elect Barack Obama pledged Monday to honor the commitments the outgoing Bush administration has made to rescue financial markets and urged the new, incoming Congress to pass a major stimulus package "right away" to restore growth and create jobs.
"Most experts now believe that we could lose millions of jobs next year," Obama said at a somber news conference 57 days before he takes the oath of office.
He declined to say how big a spending package he wants to revive the economy, but he said, "It's going to be costly."
Some Democratic lawmakers are speculating about a two-year measure as large as $700 billion.
The president-elect introduced the top economic advisers for his new administration, beginning with New York Federal Reserve President Tim Geithner to be his treasury secretary.
Geithner, 47, is a veteran of financial crises at home and overseas and has worked closely with the Bush administration in recent months.
Obama chose Lawrence Summers as director of his National Economic Council.
Summers was treasury secretary under former President Bill Clinton.
Obama said his newly minted economic team offered "sound judgment and fresh thinking" at a time of economic peril.
"The economy is likely to get worse before it gets better," he said in a downbeat forecast, delivered as Americans head into the year-end holiday season.
At the same time, he expressed confidence the nation would weather the crisis "because we've done it before."
The president-elect was mildly critical of the Big Three automakers, saying he was surprised they did not have a better-thought-out plan for their future before asking Congress to approve $25 billion in emergency loans.
He said once he sees a plan, he expects "we're going to be able to shape a rescue."
Obama also announced two other members of his economic team in the making.
He named Christina Romer as chair of his Council of Economic Advisers, and Melody Barnes as director of his White House Domestic Policy Council.
"Obama tries to balance fiscal restraint"
Carol E. Lee, Lisa Lerer
25 NOVEMBER 2008
CHICAGO — President-elect Barack Obama highlighted his commitment to fiscal restraint Tuesday, even as his transition team readied plans for hundreds of billions in new spending.
“If we’re going to make the investments we need, we must also be willing to shed the spending we don’t,” Obama said at news conference.
“We cannot sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness, or exist solely because of the power of a politician, lobbyist, or interest group.”
Obama has said that his economic team is working out the details of a massive recovery plan to create, or save, 2.5 million jobs.
The economic stimulus package is expected to cost several hundred billion dollars and include few of the tax increases he campaigned on.
The new spending comes on top of billions of dollars already committed to helping the nation’s struggling financial institutions.
On Tuesday, the Bush administration unveiled plans to pump $800 billion into the economy to spur new lending for mortgages and consumer loans.
Last month, Congress approved $700 billion for the Treasury Department to use to help stabilize the economy.
During the campaign, Obama largely dodged questions detailing which programs his administration would be forced to sacrifice given his budget constraints.
He promised that becoming energy-independent, reforming health care and improving education would remain priorities for his administration, no matter the spending constraints.
“There is no doubt that we've been living beyond our means, and we're going to have to make some adjustments,” Obama during one of his debates with Republican John McCain., promising to go through the federal budget “line by line” to eliminate failed programs.
“What is absolutely true is that, once we get through this economic crisis and some of the specific proposals to get us out of this slump, that we're not going to be able to go back to our profligate ways,” Obama also warned.
One campaign promise that seems likely to be shelved is Obama’s vow to raise taxes on families making more than $250,000 a year by repealing the Bush tax cuts, which are set to expire by 2011.
“Whether that’s done through repeal or whether that’s done because the Bush tax cuts are not renewed is something that my economic team will be providing me a recommendation on,” Obama told reporters Monday.
“But the basic principle is that we’re going to provide tax cuts to the vast majority of Americans.”
On Tuesday, the president-elect also formally announced Peter Orszag as his new director of the White House Office of Management and Budget and Rob Nabors as his deputy.
Orszag is now director of the Congressional Budget Office. And Nabors is staff director and clerk of the House Appropriations Committee, a job that makes him responsible for recommending legislative strategies to handle discretionary spending to House Democratic leaders.
On Monday, Obama had introduced his choices for Treasury secretary and other key economic posts.
"Given the circumstances, I think it is very important for the American people to understand that we are putting together a first class team," Obama said on Tuesday.
"We don't intend to stumble into the next administration."
Orszag will be charged with the momentous task of managing the administration’s spending requests as the nation hurtles toward a record deficit of $1 trillion.
Obama said Orszag’s experience would help the administration start slashing excess programs immediately, but warned of some tough choices ahead.
“There are just going to be some programs that don’t work, and we’re going to have to eliminate them,” Obama said.
“As soon as the recovery is well under way, then we’ve got to set up a long-term plan to reduce the structural deficit and make sure we are not leaving a mountain of debt for the next generation.”
Before he took the CBO reins, Orszag had worked on economic issues in the Clinton White House.
He is a protégé of Clinton Treasury Secretary Robert Rubin, who’s known for his belief in balanced budgets, deregulation and free trade.
Orszag and Rubin co-founded the Hamilton Project, which researches economic policy.
New York Fed chief Timothy Geithner, who Obama named Treasury secretary, and his top White House economic adviser, Lawrence Summers also worked closely with Rubin in the Clinton administration.
Orszag’s selection also signals Obama’s commitment to major health care reform, since the budget director is seen as an expert on entitlement spending for Medicare, Medicaid and Social Security.
He has also emerged as a critic of how funds for those programs are allocated.
“He believes, as I do, that even as we take steps to restore discipline to our budget, we also have to take the steps that are necessary to solve our immediate crisis,” Obama said.
“Peter doesn’t need a map to tell him where the bodies are buried in the federal budget.”
The Republican National Committee, though, was quick to criticize Orszag’s openness to raising capital gains taxes and his support of raising the tax rate levied on “carried interest,” a portion of private equity manager’s income that currently gets special tax treatment.
“Today’s nomination of Peter Orszag as director of OMB is just another indication that President-elect Obama is most interested in surrounding himself with people who share his belief in raising taxes,” said RNC spokeswoman Amber Wilkerson.
Carol E. Lee, Lisa Lerer
25 NOVEMBER 2008
CHICAGO — President-elect Barack Obama highlighted his commitment to fiscal restraint Tuesday, even as his transition team readied plans for hundreds of billions in new spending.
“If we’re going to make the investments we need, we must also be willing to shed the spending we don’t,” Obama said at news conference.
“We cannot sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness, or exist solely because of the power of a politician, lobbyist, or interest group.”
Obama has said that his economic team is working out the details of a massive recovery plan to create, or save, 2.5 million jobs.
The economic stimulus package is expected to cost several hundred billion dollars and include few of the tax increases he campaigned on.
The new spending comes on top of billions of dollars already committed to helping the nation’s struggling financial institutions.
On Tuesday, the Bush administration unveiled plans to pump $800 billion into the economy to spur new lending for mortgages and consumer loans.
Last month, Congress approved $700 billion for the Treasury Department to use to help stabilize the economy.
During the campaign, Obama largely dodged questions detailing which programs his administration would be forced to sacrifice given his budget constraints.
He promised that becoming energy-independent, reforming health care and improving education would remain priorities for his administration, no matter the spending constraints.
“There is no doubt that we've been living beyond our means, and we're going to have to make some adjustments,” Obama during one of his debates with Republican John McCain., promising to go through the federal budget “line by line” to eliminate failed programs.
“What is absolutely true is that, once we get through this economic crisis and some of the specific proposals to get us out of this slump, that we're not going to be able to go back to our profligate ways,” Obama also warned.
One campaign promise that seems likely to be shelved is Obama’s vow to raise taxes on families making more than $250,000 a year by repealing the Bush tax cuts, which are set to expire by 2011.
“Whether that’s done through repeal or whether that’s done because the Bush tax cuts are not renewed is something that my economic team will be providing me a recommendation on,” Obama told reporters Monday.
“But the basic principle is that we’re going to provide tax cuts to the vast majority of Americans.”
On Tuesday, the president-elect also formally announced Peter Orszag as his new director of the White House Office of Management and Budget and Rob Nabors as his deputy.
Orszag is now director of the Congressional Budget Office. And Nabors is staff director and clerk of the House Appropriations Committee, a job that makes him responsible for recommending legislative strategies to handle discretionary spending to House Democratic leaders.
On Monday, Obama had introduced his choices for Treasury secretary and other key economic posts.
"Given the circumstances, I think it is very important for the American people to understand that we are putting together a first class team," Obama said on Tuesday.
"We don't intend to stumble into the next administration."
Orszag will be charged with the momentous task of managing the administration’s spending requests as the nation hurtles toward a record deficit of $1 trillion.
Obama said Orszag’s experience would help the administration start slashing excess programs immediately, but warned of some tough choices ahead.
“There are just going to be some programs that don’t work, and we’re going to have to eliminate them,” Obama said.
“As soon as the recovery is well under way, then we’ve got to set up a long-term plan to reduce the structural deficit and make sure we are not leaving a mountain of debt for the next generation.”
Before he took the CBO reins, Orszag had worked on economic issues in the Clinton White House.
He is a protégé of Clinton Treasury Secretary Robert Rubin, who’s known for his belief in balanced budgets, deregulation and free trade.
Orszag and Rubin co-founded the Hamilton Project, which researches economic policy.
New York Fed chief Timothy Geithner, who Obama named Treasury secretary, and his top White House economic adviser, Lawrence Summers also worked closely with Rubin in the Clinton administration.
Orszag’s selection also signals Obama’s commitment to major health care reform, since the budget director is seen as an expert on entitlement spending for Medicare, Medicaid and Social Security.
He has also emerged as a critic of how funds for those programs are allocated.
“He believes, as I do, that even as we take steps to restore discipline to our budget, we also have to take the steps that are necessary to solve our immediate crisis,” Obama said.
“Peter doesn’t need a map to tell him where the bodies are buried in the federal budget.”
The Republican National Committee, though, was quick to criticize Orszag’s openness to raising capital gains taxes and his support of raising the tax rate levied on “carried interest,” a portion of private equity manager’s income that currently gets special tax treatment.
“Today’s nomination of Peter Orszag as director of OMB is just another indication that President-elect Obama is most interested in surrounding himself with people who share his belief in raising taxes,” said RNC spokeswoman Amber Wilkerson.
"Massive new programs aimed at loosening credit - Emergency rescue efforts totaling $800 billion aim to loosen credit for consumers, businesses"
By MARTIN CRUTSINGER, Associated Press
Last updated: 6:35 p.m., Tuesday, November 25, 2008
WASHINGTON -- Rolling out powerful new weapons against the financial meltdown, the Bush administration and the Federal Reserve pledged $800 billion Tuesday to blast through blockades on credit cards, auto loans, mortgages and other borrowing.
Total bailout commitments neared a staggering $7 trillion.
Treasury Secretary Henry Paulson, who has been criticized for constantly revising the original $700 billion rescue program, said the administration was considering even more changes in its final two months in office.
Reports on the nation's economic health weren't getting any better.
The Commerce Department said the overall economy, as measured by the gross domestic product, declined at an annual rate of 0.5 percent in the July-September quarter, even worse than the initial 0.3 percent estimated a month ago as consumer spending fell by the largest amount in 28 years.
In Chicago, meanwhile, President-elect Barack Obama named his budget director and said they both will focus on the nation's soaring budget deficit -- but only after economic revival is under way.
Paulson stressed that Obama's transition team was being kept informed of the government's moves.
Investors digested it all and sent the Dow Jones industrials 36 points higher, a modest gain but still the first time the average had risen three straight days in more than two months.
Millions of Americans rely on the kinds of loans that were targeted in one of the new programs announced Tuesday.
The Federal Reserve will purchase $200 billion in securities backed by different types of debt including credit card loans, auto loans, student loans and loans to small businesses.
That market essentially froze in October.
These types of loans as a result have become harder to obtain and have carried higher interest rates.
The Fed also announced that it would spend $500 billion to purchase mortgage-backed securities guaranteed by mortgage giants Fannie Mae and Freddie Mac and another $100 billion to directly purchase mortgages held by Fannie, Freddie and the Federal Home Loan Banks.
This would greatly expand an initial modest effort announced back in September in which Treasury spent $26 billion to purchase mortgage-backed securities.
The current credit crisis was triggered by soaring losses on securities backed by subprime loans.
The announcement of the new programs had an immediate positive impact on credit markets Tuesday, sending demand up and rates lower.
Analysts predicted the program could send mortgage rates down by as much as one-half to a full percentage point in coming months, helping to spur demand in the beleaguered housing market, which is suffering its worst downturn in decades.
The programs to buy mortgage-related assets and securities backed by consumer debt have the same aim: to boost demand for those assets.
In doing so, the government hopes to lower the costs being charged for consumer loans.
That would make loans on everything from mortgages to cars more available.
"This is one of the key actions we've been advocating," said Charles McMillan, president of the National Association of Realtors, referring to the purchase program for mortgage-backed assets.
The mortgage-backed securities the Fed will buy will be investment-grade assets -- not the toxic mortgage-related assets that the administration initially had said the $700 billion financial rescue program would buy.
By focusing on investment-grade securities, the Fed will be able to help provide a functioning secondary market.
It will pay the prices for these securities that are being set by the market.
Had the Fed needed to buy bad assets, it would have had to develop a mechanism to properly price assets that weren't being traded.
The use of Fed resources also gets around another problem Treasury faced: a limited amount of money in the program.
The $800 billion being committed to buy mortgage-related assets and other assets backed by consumer loans will come from the Federal Reserve's vast resources.
It will not count against the $700 billion rescue program.
A boost to housing and the overall economy is considered vital at a time when nearly every day has brought further evidence that the country is sliding into a severe downturn.
Nariman Behravesh, chief economist at IHS Global Insight, said he thought the economy would shrink by an even more drastic 4 percent annual rate in the current quarter and keep falling through the middle of 2009.
"We are in the early stages of one of the worst recessions in the post-war period, even factoring in a massive stimulus program," said Behravesh.
Obama is putting together a stimulus program with the goal of creating 2.5 million jobs over the next two years.
It's an effort that many economists think will need to total between $500 billion and $700 billion to bring the benefits needed to help shore up the economy.
Obama pledged Tuesday to make deficit reduction a goal of his administration -- but only after recovery from the financial crisis is well under way.
"We are going to have to jump start the economy," he said.
At a news conference, Obama claimed a "mandate to move the country in a new direction," and promised to consult with Republicans as he goes about it.
The effort to restart the frozen market for securities that back consumer debt will get an assist from the government's $700 billion financial rescue fund, which Congress passed on Oct. 3.
Paulson told reporters that the fund will supply $20 billion as protection for the Fed against losses in its purchases of securities for the program.
He also signaled that the program could be expanded to include asset-backed paper that covers commercial mortgage loans.
Those loans are used to finance shopping malls and office buildings.
Paulson defended the administration against charges that it has made haphazard changes in the financial rescue program, sending confusing signals to markets.
Initially, the effort was sold to Congress as a way to buy toxic mortgage-related assets off the books of financial institutions.
The idea was to give them the capital needed to resume more normal lending.
When the financial crisis worsened and Paulson decided it would take too long to get the toxic purchase program operating, he switched to making direct purchases of bank stock with the rescue funds.
Paulson announced that the first $350 billion installment of the rescue fund probably would not be used to buy any toxic assets.
"It is naive for any of us to think that when you are dealing with a situation of this magnitude that a bill could be passed or a single action taken to make all the issues go away," Paulson told reporters at a briefing.
Paulson declined to say whether the Bush administration would seek authority from Congress to tap a portion of the second half of the $700 billion fund before leaving office.
That decision had not yet been made, he said.
By MARTIN CRUTSINGER, Associated Press
Last updated: 6:35 p.m., Tuesday, November 25, 2008
WASHINGTON -- Rolling out powerful new weapons against the financial meltdown, the Bush administration and the Federal Reserve pledged $800 billion Tuesday to blast through blockades on credit cards, auto loans, mortgages and other borrowing.
Total bailout commitments neared a staggering $7 trillion.
Treasury Secretary Henry Paulson, who has been criticized for constantly revising the original $700 billion rescue program, said the administration was considering even more changes in its final two months in office.
Reports on the nation's economic health weren't getting any better.
The Commerce Department said the overall economy, as measured by the gross domestic product, declined at an annual rate of 0.5 percent in the July-September quarter, even worse than the initial 0.3 percent estimated a month ago as consumer spending fell by the largest amount in 28 years.
In Chicago, meanwhile, President-elect Barack Obama named his budget director and said they both will focus on the nation's soaring budget deficit -- but only after economic revival is under way.
Paulson stressed that Obama's transition team was being kept informed of the government's moves.
Investors digested it all and sent the Dow Jones industrials 36 points higher, a modest gain but still the first time the average had risen three straight days in more than two months.
Millions of Americans rely on the kinds of loans that were targeted in one of the new programs announced Tuesday.
The Federal Reserve will purchase $200 billion in securities backed by different types of debt including credit card loans, auto loans, student loans and loans to small businesses.
That market essentially froze in October.
These types of loans as a result have become harder to obtain and have carried higher interest rates.
The Fed also announced that it would spend $500 billion to purchase mortgage-backed securities guaranteed by mortgage giants Fannie Mae and Freddie Mac and another $100 billion to directly purchase mortgages held by Fannie, Freddie and the Federal Home Loan Banks.
This would greatly expand an initial modest effort announced back in September in which Treasury spent $26 billion to purchase mortgage-backed securities.
The current credit crisis was triggered by soaring losses on securities backed by subprime loans.
The announcement of the new programs had an immediate positive impact on credit markets Tuesday, sending demand up and rates lower.
Analysts predicted the program could send mortgage rates down by as much as one-half to a full percentage point in coming months, helping to spur demand in the beleaguered housing market, which is suffering its worst downturn in decades.
The programs to buy mortgage-related assets and securities backed by consumer debt have the same aim: to boost demand for those assets.
In doing so, the government hopes to lower the costs being charged for consumer loans.
That would make loans on everything from mortgages to cars more available.
"This is one of the key actions we've been advocating," said Charles McMillan, president of the National Association of Realtors, referring to the purchase program for mortgage-backed assets.
The mortgage-backed securities the Fed will buy will be investment-grade assets -- not the toxic mortgage-related assets that the administration initially had said the $700 billion financial rescue program would buy.
By focusing on investment-grade securities, the Fed will be able to help provide a functioning secondary market.
It will pay the prices for these securities that are being set by the market.
Had the Fed needed to buy bad assets, it would have had to develop a mechanism to properly price assets that weren't being traded.
The use of Fed resources also gets around another problem Treasury faced: a limited amount of money in the program.
The $800 billion being committed to buy mortgage-related assets and other assets backed by consumer loans will come from the Federal Reserve's vast resources.
It will not count against the $700 billion rescue program.
A boost to housing and the overall economy is considered vital at a time when nearly every day has brought further evidence that the country is sliding into a severe downturn.
Nariman Behravesh, chief economist at IHS Global Insight, said he thought the economy would shrink by an even more drastic 4 percent annual rate in the current quarter and keep falling through the middle of 2009.
"We are in the early stages of one of the worst recessions in the post-war period, even factoring in a massive stimulus program," said Behravesh.
Obama is putting together a stimulus program with the goal of creating 2.5 million jobs over the next two years.
It's an effort that many economists think will need to total between $500 billion and $700 billion to bring the benefits needed to help shore up the economy.
Obama pledged Tuesday to make deficit reduction a goal of his administration -- but only after recovery from the financial crisis is well under way.
"We are going to have to jump start the economy," he said.
At a news conference, Obama claimed a "mandate to move the country in a new direction," and promised to consult with Republicans as he goes about it.
The effort to restart the frozen market for securities that back consumer debt will get an assist from the government's $700 billion financial rescue fund, which Congress passed on Oct. 3.
Paulson told reporters that the fund will supply $20 billion as protection for the Fed against losses in its purchases of securities for the program.
He also signaled that the program could be expanded to include asset-backed paper that covers commercial mortgage loans.
Those loans are used to finance shopping malls and office buildings.
Paulson defended the administration against charges that it has made haphazard changes in the financial rescue program, sending confusing signals to markets.
Initially, the effort was sold to Congress as a way to buy toxic mortgage-related assets off the books of financial institutions.
The idea was to give them the capital needed to resume more normal lending.
When the financial crisis worsened and Paulson decided it would take too long to get the toxic purchase program operating, he switched to making direct purchases of bank stock with the rescue funds.
Paulson announced that the first $350 billion installment of the rescue fund probably would not be used to buy any toxic assets.
"It is naive for any of us to think that when you are dealing with a situation of this magnitude that a bill could be passed or a single action taken to make all the issues go away," Paulson told reporters at a briefing.
Paulson declined to say whether the Bush administration would seek authority from Congress to tap a portion of the second half of the $700 billion fund before leaving office.
That decision had not yet been made, he said.
QUOTE(Livyjr @ Nov 24 2008, 04:15 PM) 
WHEN TIM GEITHNER IS PERCEIVED AS BEING A DIRECT PART OF THE PROBLEM, HOW IS THE MESSIAH OBAMA OFFERING US "FRESH THINKING" BY MAKING GEITHNER HIS TREASURY SECRETARY?
"Obama wants economic rescue approved 'right away'"
By BETH FOUHY, Associated Press Writer
24 NOVEMBER 2008
CHICAGO – With the economy in crisis, President-elect Barack Obama pledged Monday to honor the commitments the outgoing Bush administration has made to rescue financial markets and urged the new, incoming Congress to pass a major stimulus package "right away" to restore growth and create jobs.
"Most experts now believe that we could lose millions of jobs next year," Obama said at a somber news conference 57 days before he takes the oath of office.
He declined to say how big a spending package he wants to revive the economy, but he said, "It's going to be costly."
Some Democratic lawmakers are speculating about a two-year measure as large as $700 billion.
The president-elect introduced the top economic advisers for his new administration, beginning with New York Federal Reserve President Tim Geithner to be his treasury secretary.
Geithner, 47, is a veteran of financial crises at home and overseas and has worked closely with the Bush administration in recent months.
Obama chose Lawrence Summers as director of his National Economic Council.
Summers was treasury secretary under former President Bill Clinton.
Obama said his newly minted economic team offered "sound judgment and fresh thinking" at a time of economic peril.
"The economy is likely to get worse before it gets better," he said in a downbeat forecast, delivered as Americans head into the year-end holiday season.
At the same time, he expressed confidence the nation would weather the crisis "because we've done it before."
The president-elect was mildly critical of the Big Three automakers, saying he was surprised they did not have a better-thought-out plan for their future before asking Congress to approve $25 billion in emergency loans.
He said once he sees a plan, he expects "we're going to be able to shape a rescue."
Obama also announced two other members of his economic team in the making.
He named Christina Romer as chair of his Council of Economic Advisers, and Melody Barnes as director of his White House Domestic Policy Council.
"Obama wants economic rescue approved 'right away'"
By BETH FOUHY, Associated Press Writer
24 NOVEMBER 2008
CHICAGO – With the economy in crisis, President-elect Barack Obama pledged Monday to honor the commitments the outgoing Bush administration has made to rescue financial markets and urged the new, incoming Congress to pass a major stimulus package "right away" to restore growth and create jobs.
"Most experts now believe that we could lose millions of jobs next year," Obama said at a somber news conference 57 days before he takes the oath of office.
He declined to say how big a spending package he wants to revive the economy, but he said, "It's going to be costly."
Some Democratic lawmakers are speculating about a two-year measure as large as $700 billion.
The president-elect introduced the top economic advisers for his new administration, beginning with New York Federal Reserve President Tim Geithner to be his treasury secretary.
Geithner, 47, is a veteran of financial crises at home and overseas and has worked closely with the Bush administration in recent months.
Obama chose Lawrence Summers as director of his National Economic Council.
Summers was treasury secretary under former President Bill Clinton.
Obama said his newly minted economic team offered "sound judgment and fresh thinking" at a time of economic peril.
"The economy is likely to get worse before it gets better," he said in a downbeat forecast, delivered as Americans head into the year-end holiday season.
At the same time, he expressed confidence the nation would weather the crisis "because we've done it before."
The president-elect was mildly critical of the Big Three automakers, saying he was surprised they did not have a better-thought-out plan for their future before asking Congress to approve $25 billion in emergency loans.
He said once he sees a plan, he expects "we're going to be able to shape a rescue."
Obama also announced two other members of his economic team in the making.
He named Christina Romer as chair of his Council of Economic Advisers, and Melody Barnes as director of his White House Domestic Policy Council.
I haven't made a decision about Geithner yet. The fact that he was already in the system doesn't automatically rule him out. "The relationship between and among the entities are more important than the essence of the entities...
QUOTE(rla @ Nov 27 2008, 07:38 PM)
I haven't made a decision about Geithner yet.
The fact that he was already in the system doesn't automatically rule him out.
"The relationship between and among the entities are more important than the essence of the entities" ...
The fact that he was already in the system doesn't automatically rule him out.
"The relationship between and among the entities are more important than the essence of the entities" ...
Well, rla ....
The last thing I will try and do in here is TELL SOMEBODY WHAT they must think ...
I certainly do say WHAT I think, but that is merely me ....
And I will at times challenge the thoughts somebody puts forth in here ....
I have done that with you, in fact ....
But generally, it is sufficient to get people to think or consider by putting forth facts or alleged facts on the table for them to think about ...
I can't and won't argue your perspective here, although I don't agree about Geithner ....
As to your statement that "the relationship between and among the entities are more important than the essence of the entities", I would see that applying to Butch Cassidy and the Sundance Kid and the other members of the "Hole In The Wall" gang ....
It would also apply to Fagin and his band of pickpockets and cut-purses ....
It would also apply to the gang of kids in Joseph Conrad's Heart of Darkness ....
And it applies to the relationship between Timothy Geithner and the WALL STREET LOOTERS ....
And it applies to these statements in this above article here, to wit:
Total bailout commitments neared a staggering $7 trillion.
Reports on the nation's economic health weren't getting any better.
end quotes
Quite a juxtaposition, isn't it, rla?
STAGGERING $7 TRILLION ....
ECONOMIC HEALTH ISN'T GETTING BETTER ....
Say it over and over like a mantra, rla, as you think about Timothy Geithner and Obama's specious statement that "his newly minted economic team offered 'sound judgment and fresh thinking' at a time of economic peril."
SOUND JUDGMENT ....
FRESH THINKING ....
TIMOTHY GEITHNER ...
STAGGERING $7 TRILLION ....
ECONOMIC HEALTH ISN'T GETTING BETTER ....
SOUND JUDGMENT ....
FRESH THINKING ....
TIMOTHY GEITHNER ...
STAGGERING $7 TRILLION ....
ECONOMIC HEALTH ISN'T GETTING BETTER ....
SOUND JUDGMENT ....
FRESH THINKING ....
TIMOTHY GEITHNER ...
STAGGERING $7 TRILLION ....
ECONOMIC HEALTH ISN'T GETTING BETTER ....
You see what I am saying here, rla ....
HUCKSTERISM ....
That is what we unlettered countryfolks call it anyway ....
Like a carnival sideshow barker calling in the hicks to watch LITTLE EGYPT do the Mystic Dance of the Nile ....
Or a medicine show huckster selling the hicks the latest snake oil remedy for their rheumatiz ....
And so ...
good afterThanksgiving morning livyjr...I must say I dozed off after dinner and now it is morning...what happened to the evening?
Does having been in the Bush and Clinton administration automatically make that person bad?
Could instead it be said that BOTH Bush and Clinton were rancid people who were corrupt to the nth degree and they were the leaders of their
administation(or name plates)
Does that though correspond to mean all the people working for them were also corrupt and rancid?
Could the same things happening DURING A GOOD PRESIDENCY with other people as president, and the same underlinks, have resulted in the
different action
(not to say I am sure the evil Jeb will eventaully come out of hiding and use this logic specifically to advance himself)...
Just because Bill Clinton and George W. Bush/Bush41 were bad, does it mean x/x/x/x/x/x/x/x/x/x/x/x/ people were too?
(maybe this should be a different thread).
Does having been in the Bush and Clinton administration automatically make that person bad?
Could instead it be said that BOTH Bush and Clinton were rancid people who were corrupt to the nth degree and they were the leaders of their
administation(or name plates)
Does that though correspond to mean all the people working for them were also corrupt and rancid?
Could the same things happening DURING A GOOD PRESIDENCY with other people as president, and the same underlinks, have resulted in the
different action
(not to say I am sure the evil Jeb will eventaully come out of hiding and use this logic specifically to advance himself)...
Just because Bill Clinton and George W. Bush/Bush41 were bad, does it mean x/x/x/x/x/x/x/x/x/x/x/x/ people were too?
(maybe this should be a different thread).
$7 TRILLION, rla ....
Do you think that is a STAGGERING AMOUNT of money?
I don't .....
I think that to a very rich people like the American people are, $7 TRILLION is just CHUMP CHANGE ....
And how is Obama getting FRESH THINKING out of Timothy Geithner?
Did he get him a brain transplant?
Or what?
And so ...
Do you think that is a STAGGERING AMOUNT of money?
I don't .....
I think that to a very rich people like the American people are, $7 TRILLION is just CHUMP CHANGE ....
And how is Obama getting FRESH THINKING out of Timothy Geithner?
Did he get him a brain transplant?
Or what?
And so ...
QUOTE(graham4anything @ Nov 28 2008, 06:07 AM)
Does having been in the Bush and Clinton administration automatically make that person bad?
Well, graham ...
As you say ....
It is morning ...
And while you certainly could start another thread wrapped around your question, it certainly is not inappropriate in here, where the subject is WHERE ARE WE, REALLY ...
Does simply having been there make a person "bad"?
Evidence of badness is what makes a person "bad" in my book, graham ....
And I will leave that hang as a pregnant phrase ....
I will say that based on my own personal and documented experiences as a "government" employee that if you work in a corrupt environment, then you are expected to be and are required to be corrupt, yourself, or at least inured to corruption to the point of where you will assist it and not try and blow the whistle on it ....
And your use of the word "bad" is outdated or outmoded, somehow, graham ....
The connotation doesn't seem somehow right or correct here ...
I truthfully am no longer sure of what the word really means any more ....
"BAD TO THE BONE" ....
That means that you are "hip", doesn't it?
Is Timothy Geithner "BAD TO THE BONE", graham?
And so ...
If you had asked me, graham, if I thought the republican and democrat parties foster and promote corruption in government, I would have said, OF COURSE ...
Whether or not that is "bad" is a cultural context kind of question to me ....
Judging by what I see and read, I would say the American people are a people who do not mind corruption at all, and they don't want to see it go ....
And so ...
DO THE AMERICAN PEOPLE LOVE CORRUPTION, graham?
Or merely like it?
And so ...
Whether or not that is "bad" is a cultural context kind of question to me ....
Judging by what I see and read, I would say the American people are a people who do not mind corruption at all, and they don't want to see it go ....
And so ...
DO THE AMERICAN PEOPLE LOVE CORRUPTION, graham?
Or merely like it?
And so ...
Do you like being lied to, graham?
Do you mind it?
Do you tolerate it?
Do you encourage people to lie to you?
Are lies easier to take than the truth?
And so ...
Do you mind it?
Do you tolerate it?
Do you encourage people to lie to you?
Are lies easier to take than the truth?
And so ...
QUOTE(Livyjr @ Nov 28 2008, 06:30 AM)
Do you like being lied to, graham?
Do you mind it?
Do you tolerate it?
Do you encourage people to lie to you?
Are lies easier to take than the truth?
And so ...
Do you mind it?
Do you tolerate it?
Do you encourage people to lie to you?
Are lies easier to take than the truth?
And so ...
no
no
no
no
no
I was one who constantly over the years said PLEASE, NO CLINTONITES in the Obama administation
However, one thing I can't quite now that Obama won figure out is, where would the people come from if not those already here?
So I look for people who slapped the Clinton's down (at least in public), like Bill Richardson and Tom Daschle, and about 1/2 the people he has named.
I look for the posts created for the people who slapped the Clinton's down
Bill Richardson if you take it as a good thing, in Commerce is genius.
As for the treasury choices...Geithner is not in my book a good choice. But who would one pick?
You gotta take some baby steps to stand up
I could say I am not corrupt, or you livyjr are not corrupt, however, nobody is calling our name to be the one, nor would at least I, have any idea
how the actual system runs, so I would not be a good choice.
Makes it oh so complicated, and THEY plant people in all fields, so of course, it is THEM who get called.
I was one of the people who said 9-11 was a robbery, that WE all looked up, THEY stole down. And THEY continnue to steal down.
Answers? I have none.
But specifics? I can't specifically name someone who would be any less "bad" than this Geithner person.
I sure know though, I wouldn't want Marvin Bush being the person.
We are indeed up s*its creek without a paddle.
(and I do believe it naturally will come back at some point, no matter what/who is in anyhow, like the Baseball spring training, like clockwork, it appears).
speaking of where we are this very moment
black Friday, THE shopping day
I personally took it as sport the last few years and woke up, went out, and found stuff
This year, I stayed home, eveyrone I know stayed home.
I don't have ANY extra dollars to spend, even if it is a good sale, it is MORE than I wish to spend.
And the way I am, just going to observe is impossible. (Who would go to a store to observe anyhow???)
So if there are lots of people like me, today is going to suck $$$$$ wise in the stores, big time.
black Friday, THE shopping day
I personally took it as sport the last few years and woke up, went out, and found stuff
This year, I stayed home, eveyrone I know stayed home.
I don't have ANY extra dollars to spend, even if it is a good sale, it is MORE than I wish to spend.
And the way I am, just going to observe is impossible. (Who would go to a store to observe anyhow???)
So if there are lots of people like me, today is going to suck $$$$$ wise in the stores, big time.
QUOTE(graham4anything @ Nov 28 2008, 06:40 AM)
(and I do believe it naturally will come back at some point, no matter what/who is in anyhow, like the Baseball spring training, like clockwork, it appears).
Being from the country, graham, I would say that whatever we have is a result of PEOPLE and not government ...
IF it comes back or goes south, it won't be the result of "government" because there is no such thing .....
THERE IS ONLY PEOPLE ...
Organized into a working government that promotes peace and prosperity ...
Or as part of a HOWLING MOB tearing down the walls of the city ...
And so ...
I think that what we are seeing, graham, is one of the GREATEST RIP-OFFS of a society to come down the pike, EVER ...
Where has $7 TRILLION of OUR money just disappeared to, here?
Did it go out into space, do you think?
Or into somebody's pocket?
How many TRILLION do you have in your bank account, graham?
How about Timothy Geithner?
Or Barack Obama?
WHERE DO YOU JUST SIMPLY LOSE $7 TRILLION DOLLARS TO, graham?
Or doesn't it matter, anymore?
And so ...
Where has $7 TRILLION of OUR money just disappeared to, here?
Did it go out into space, do you think?
Or into somebody's pocket?
How many TRILLION do you have in your bank account, graham?
How about Timothy Geithner?
Or Barack Obama?
WHERE DO YOU JUST SIMPLY LOSE $7 TRILLION DOLLARS TO, graham?
Or doesn't it matter, anymore?
And so ...
FIRE ALL OF YOUR GUNS AT ONCE AND EXPLODE INTO SPACE!
And so ...
And so ...
QUOTE(Livyjr @ Nov 28 2008, 07:22 AM)
I think that what we are seeing, graham, is one of the GREATEST RIP-OFFS of a society to come down the pike, EVER ...
Where has $7 TRILLION of OUR money just disappeared to, here?
Did it go out into space, do you think?
Or into somebody's pocket?
How many TRILLION do you have in your bank account, graham?
How about Timothy Geithner?
Or Barack Obama?
WHERE DO YOU JUST SIMPLY LOSE $7 TRILLION DOLLARS TO, graham?
Or doesn't it matter, anymore?
And so ...
Where has $7 TRILLION of OUR money just disappeared to, here?
Did it go out into space, do you think?
Or into somebody's pocket?
How many TRILLION do you have in your bank account, graham?
How about Timothy Geithner?
Or Barack Obama?
WHERE DO YOU JUST SIMPLY LOSE $7 TRILLION DOLLARS TO, graham?
Or doesn't it matter, anymore?
And so ...
THEY got it.
It wasn't Obama.
Just whomever Bush and THEY are.
All planned in advanced, coordinated, hit and run done.
Someone's swiss bank accounts (or similiar) are loaded up
and the 7 trillion is NOT where they said it would go.
But they rushed to judgement again, and from HAVE TO HAVE IT OR ELSE
to got it
All of a sudden the world did not end
AGAIN
so it reminds me of a old bxw movie that had a monster needing a sacrifice
Monster happy when it ate
Then a little while later needed another serving of sacrifice
Seems that is what the bush's (or whomever it is) want
A $7trillion dollar sacrifice
QUOTE(graham4anything @ Nov 28 2008, 06:40 AM)
QUOTE(Livyjr @ Nov 28 2008, 06:30 AM)
Do you like being lied to, graham?
Do you mind it?
Do you tolerate it?
Do you encourage people to lie to you?
Are lies easier to take than the truth?
And so ...
Do you mind it?
Do you tolerate it?
Do you encourage people to lie to you?
Are lies easier to take than the truth?
And so ...
no
no
no
no
no
I was one who constantly over the years said PLEASE, NO CLINTONITES in the Obama administation
However, one thing I can't quite now that Obama won figure out is, where would the people come from if not those already here?
So I look for people who slapped the Clinton's down (at least in public), like Bill Richardson and Tom Daschle, and about 1/2 the people he has named.
I look for the posts created for the people who slapped the Clinton's down
Bill Richardson if you take it as a good thing, in Commerce is genius.
As for the treasury choices...Geithner is not in my book a good choice. But who would one pick?
You gotta take some baby steps to stand up
I could say I am not corrupt, or you livyjr are not corrupt, however, nobody is calling our name to be the one, nor would at least I, have any idea
how the actual system runs, so I would not be a good choice.
Makes it oh so complicated, and THEY plant people in all fields, so of course, it is THEM who get called.
I was one of the people who said 9-11 was a robbery, that WE all looked up, THEY stole down. And THEY continnue to steal down.
Answers? I have none.
But specifics? I can't specifically name someone who would be any less "bad" than this Geithner person.
I sure know though, I wouldn't want Marvin Bush being the person.
We are indeed up s*its creek without a paddle.
(and I do believe it naturally will come back at some point, no matter what/who is in anyhow, like the Baseball spring training, like clockwork, it appears).
I wasn't sure whether you mean the market will come back or whether corruption will come back?
QUOTE(Livyjr @ Nov 28 2008, 07:18 AM)
QUOTE(graham4anything @ Nov 28 2008, 06:40 AM)
(and I do believe it naturally will come back at some point, no matter what/who is in anyhow, like the Baseball spring training, like clockwork, it appears).
Being from the country, graham, I would say that whatever we have is a result of PEOPLE and not government ...
IF it comes back or goes south, it won't be the result of "government" because there is no such thing .....
THERE IS ONLY PEOPLE ...
Organized into a working government that promotes peace and prosperity ...
Or as part of a HOWLING MOB tearing down the walls of the city ...
And so ...
How do we get our selves better organized?
QUOTE(rla @ Nov 28 2008, 08:39 AM)
QUOTE(graham4anything @ Nov 28 2008, 06:40 AM)
QUOTE(Livyjr @ Nov 28 2008, 06:30 AM)
Do you like being lied to, graham?
Do you mind it?
Do you tolerate it?
Do you encourage people to lie to you?
Are lies easier to take than the truth?
And so ...
Do you mind it?
Do you tolerate it?
Do you encourage people to lie to you?
Are lies easier to take than the truth?
And so ...
no
no
no
no
no
I was one who constantly over the years said PLEASE, NO CLINTONITES in the Obama administation
However, one thing I can't quite now that Obama won figure out is, where would the people come from if not those already here?
So I look for people who slapped the Clinton's down (at least in public), like Bill Richardson and Tom Daschle, and about 1/2 the people he has named.
I look for the posts created for the people who slapped the Clinton's down
Bill Richardson if you take it as a good thing, in Commerce is genius.
As for the treasury choices...Geithner is not in my book a good choice. But who would one pick?
You gotta take some baby steps to stand up
I could say I am not corrupt, or you livyjr are not corrupt, however, nobody is calling our name to be the one, nor would at least I, have any idea
how the actual system runs, so I would not be a good choice.
Makes it oh so complicated, and THEY plant people in all fields, so of course, it is THEM who get called.
I was one of the people who said 9-11 was a robbery, that WE all looked up, THEY stole down. And THEY continnue to steal down.
Answers? I have none.
But specifics? I can't specifically name someone who would be any less "bad" than this Geithner person.
I sure know though, I wouldn't want Marvin Bush being the person.
We are indeed up s*its creek without a paddle.
(and I do believe it naturally will come back at some point, no matter what/who is in anyhow, like the Baseball spring training, like clockwork, it appears).
I wasn't sure whether you mean the market will come back or whether corruption will come back?
The market will come back (and the economy in general). What goes up comes down and goes back up (normally).
I think all three of us, RLA, LIVYJR AND G4A have a, "charasmatic" and, "evangelical"
"mission" to REFORM our Social System from our particular sub-systems...and would therefore like to COLLABORATE for our own Self Interest and that of the Social System--of which we are apart...
"mission" to REFORM our Social System from our particular sub-systems...and would therefore like to COLLABORATE for our own Self Interest and that of the Social System--of which we are apart...
QUOTE(rla @ Nov 28 2008, 10:27 AM)
I think all three of us, RLA, LIVYJR AND G4A have a, "charasmatic" and, "evangelical"
"mission" to REFORM our Social System from our particular sub-systems...and would therefore like to COLLABORATE for our own Self Interest and that of the Social System--of which we are apart...
"mission" to REFORM our Social System from our particular sub-systems...and would therefore like to COLLABORATE for our own Self Interest and that of the Social System--of which we are apart...
MEMES are the order of the day.
Speaking of MEMES, Did you notice that the THANKSGIVING thread fall in the middle of the CGCS
frequent postings?
frequent postings?
QUOTE(rla @ Nov 28 2008, 10:27 AM)
I think all three of us, RLA, LIVYJR AND G4A have a, "charasmatic" and, "evangelical" mission to REFORM our Social System from our particular sub-systems...and would therefore like to COLLABORATE for our own Self Interest and that of the Social System--of which we are apart...
Well, at least we are talking in here, rla ....
That is a start ....
I don't know how charismatic I am, though ...
People tell me that I look like an old, lame version of that guy who used to be on the cover of Mad magazine, except I look rode hard and put up wet ...
And so ...
"Meltdown far from over, new mortgage crisis looms"
By MATT APUZZO, Associated Press Writer
28 NOVEMBER 2008
WASHINGTON – Black Friday's retail shoppers hunting for holiday bargains won't be enough to stave off what's likely to become the next economic crisis.
Malls from Michigan to Georgia are entering foreclosure, commercial victims of the same events poisoning the housing market.
Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.
That pace is expected to quicken.
The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies' credit.
"We're probably in the first inning of the commercial mortgage problem," said Scott Tross, a real estate lawyer with Herrick Feinstein in New Jersey.
That's bad news for more than just property owners.
When businesses go dark, employees lose jobs.
Towns lose tax revenue.
School budgets and social services feel the pinch.
Companies have survived plenty of downturns, but economists see this one playing out like never before.
In the past, when businesses hit rough patches, owners negotiated with banks or refinanced their loans.
But many banks no longer hold the loans they made.
Over the past decade, banks have increasingly bundled mortgages and sold them to investors.
Pension funds, insurance companies, and hedge funds bought the seemingly safe securities and are now bracing for losses that could ripple through the financial system.
"It's a toxic drug and nobody knows how bad it's going to be," said Paul Miller, an analyst with Friedman, Billings, Ramsey, who was among the first to sound alarm bells in the residential market.
Unlike home mortgages, businesses don't pay their loans over 30 years.
Commercial mortgages are usually written for five, seven or 10 years with big payments due at the end.
About $20 billion will be due next year, covering everything from office and condo complexes to hotels and malls.
The retail outlook is particularly bad.
Circuit City and Linens 'n Things have sought bankruptcy protection.
Home Depot, Sears, Ann Taylor and Foot Locker are closing stores.
Those retailers typically were paying rent that was expected to cover mortgage payments.
When those $20 billion in mortgages come due next year — 2010 and 2011 totals are projected to be even higher — many property owners won't have the money.
Some will survive, but those property owners whose loans required little money up front will have less incentive to weather the storm.
Refinancing formerly was an option, but many properties are worth less than when they were purchased.
And since investors no longer want to buy commercial mortgages, banks are reluctant to write new loans to refinance those facing foreclosure.
California, New York, Texas and Florida — states with a high concentration of mortgages in the securities market, according to Fitch — are particularly vulnerable.
Texas and Florida are already seeing increased delinquencies and defaults, as are Michigan, Tennessee and Georgia.
The worst-case scenario goes something like this: With banks unwilling to refinance, a shopping center goes into foreclosure.
Nobody can buy the mall because banks won't write mortgages as long as investors won't purchase them.
"Credit markets have seized up," corporate securities lawyer Michael Gambro said.
"People are not willing to take risks."
"They're not buying anything."
That drives down investments already on the books.
Insurance companies are seeing their stock prices fall on fears they are too invested in commercial mortgages.
"The system has never been tested for a deep recession," said Ken Rosen, a real estate hedge fund manager and University of California at Berkeley professor of real estate economics.
One hope was that the U.S. would use some of the $700 billion financial bailout to buy shaky investments from banks and insurance companies.
That was the original plan.
But Treasury Secretary Henry Paulson has issued a stunning turnabout, saying the U.S. no longer planned to buy troubled securities.
For those watching the wave of commercial defaults about to crest, the announcement was poorly received.
"He's created havoc in the marketplace by changing the rules," Rosen said.
"It was the stupidest statement on Earth."
The Securities and Exchange Commission is considering another option that might ease the crisis, one that would change accounting rules so banks don't have to declare huge losses whenever the market declines.
But the only surefire remedy is for the economy to stabilize, for businesses to start expanding and for investors to trust the market again.
Until then, Tross said, "There's going to be a lot of pain going forward."
By MATT APUZZO, Associated Press Writer
28 NOVEMBER 2008
WASHINGTON – Black Friday's retail shoppers hunting for holiday bargains won't be enough to stave off what's likely to become the next economic crisis.
Malls from Michigan to Georgia are entering foreclosure, commercial victims of the same events poisoning the housing market.
Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.
That pace is expected to quicken.
The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies' credit.
"We're probably in the first inning of the commercial mortgage problem," said Scott Tross, a real estate lawyer with Herrick Feinstein in New Jersey.
That's bad news for more than just property owners.
When businesses go dark, employees lose jobs.
Towns lose tax revenue.
School budgets and social services feel the pinch.
Companies have survived plenty of downturns, but economists see this one playing out like never before.
In the past, when businesses hit rough patches, owners negotiated with banks or refinanced their loans.
But many banks no longer hold the loans they made.
Over the past decade, banks have increasingly bundled mortgages and sold them to investors.
Pension funds, insurance companies, and hedge funds bought the seemingly safe securities and are now bracing for losses that could ripple through the financial system.
"It's a toxic drug and nobody knows how bad it's going to be," said Paul Miller, an analyst with Friedman, Billings, Ramsey, who was among the first to sound alarm bells in the residential market.
Unlike home mortgages, businesses don't pay their loans over 30 years.
Commercial mortgages are usually written for five, seven or 10 years with big payments due at the end.
About $20 billion will be due next year, covering everything from office and condo complexes to hotels and malls.
The retail outlook is particularly bad.
Circuit City and Linens 'n Things have sought bankruptcy protection.
Home Depot, Sears, Ann Taylor and Foot Locker are closing stores.
Those retailers typically were paying rent that was expected to cover mortgage payments.
When those $20 billion in mortgages come due next year — 2010 and 2011 totals are projected to be even higher — many property owners won't have the money.
Some will survive, but those property owners whose loans required little money up front will have less incentive to weather the storm.
Refinancing formerly was an option, but many properties are worth less than when they were purchased.
And since investors no longer want to buy commercial mortgages, banks are reluctant to write new loans to refinance those facing foreclosure.
California, New York, Texas and Florida — states with a high concentration of mortgages in the securities market, according to Fitch — are particularly vulnerable.
Texas and Florida are already seeing increased delinquencies and defaults, as are Michigan, Tennessee and Georgia.
The worst-case scenario goes something like this: With banks unwilling to refinance, a shopping center goes into foreclosure.
Nobody can buy the mall because banks won't write mortgages as long as investors won't purchase them.
"Credit markets have seized up," corporate securities lawyer Michael Gambro said.
"People are not willing to take risks."
"They're not buying anything."
That drives down investments already on the books.
Insurance companies are seeing their stock prices fall on fears they are too invested in commercial mortgages.
"The system has never been tested for a deep recession," said Ken Rosen, a real estate hedge fund manager and University of California at Berkeley professor of real estate economics.
One hope was that the U.S. would use some of the $700 billion financial bailout to buy shaky investments from banks and insurance companies.
That was the original plan.
But Treasury Secretary Henry Paulson has issued a stunning turnabout, saying the U.S. no longer planned to buy troubled securities.
For those watching the wave of commercial defaults about to crest, the announcement was poorly received.
"He's created havoc in the marketplace by changing the rules," Rosen said.
"It was the stupidest statement on Earth."
The Securities and Exchange Commission is considering another option that might ease the crisis, one that would change accounting rules so banks don't have to declare huge losses whenever the market declines.
But the only surefire remedy is for the economy to stabilize, for businesses to start expanding and for investors to trust the market again.
Until then, Tross said, "There's going to be a lot of pain going forward."
"Obama team repackaging Clinton after campaign digs"
By NANCY BENAC, Associated Press Writer
Sat Nov 29, 8:28 am ET
WASHINGTON – It wasn't too long ago that Barack Obama and his advisers were tripping over one another to tear down Hillary Rodham Clinton's foreign policy credentials.
She was dismissed as a commander in chief wanna-be who did little more than sip tea and make small talk with foreign leaders during her days as first lady.
"What exactly is this foreign policy experience?" Obama said mockingly of the New York senator.
"Was she negotiating treaties?"
"Was she handling crises?"
"The answer is no."
That was in March, when Clinton was Obama's sole remaining rival for the Democratic presidential nomination.
Now, Clinton is on track to become Obama's secretary of state.
And, unsurprisingly, the sniping at her foreign policy credentials is a thing of the past.
Obama adviser William Daley over the weekend said Clinton would be "a tremendous addition to this administration."
"Tremendous."
Senior adviser David Axelrod called Clinton a "demonstrably able, tough, brilliant person."
Last spring, though, Clinton was targeted with a steady stream of criticism via conference call, e-mail and campaign-trail digs from the Obama camp, all aimed at shredding her self-portrait as an experienced and confident leader on the international stage.
Some of those doing the sniping will be taking up key positions — most likely along with Clinton — in the new Obama administration.
Greg Craig, selected to serve as White House counsel in the Obama administration, delivered a withering attack during the primaries on Clinton's claims that she could rightfully share in the credit for some of the foreign policy successes of her husband's presidency.
"She did not sit in on any National Security Council meetings when she was first lady," Craig insisted in one conference call.
He went on to knock down Clinton's claims to influence in the Northern Ireland peace process, opening borders for refugees during the war in Kosovo, and making a dangerous visit to Bosnia.
"There is no reason to believe ... that she was a key player in foreign policy at any time during the Clinton administration," Craig wrote in a campaign memo.
Susan Rice, an Obama adviser who could land a spot in the new administration, mocked the idea that Clinton could lay claim to foreign policy credentials by marriage.
"There is no crisis to be dealt with or managed when you are first lady," Rice sniffed last March.
"You don't get that kind of experience by being married to a commander in chief."
Clinton was only too happy to make light of Obama's own foreign policy credentials, suggesting his biggest selling point was a 2002 speech against going to war with Iraq.
"Many people gave speeches against the war then," she said in a February debate.
Robert Gelbard, an adviser to the Obama campaign on foreign policy who worked in the Clinton administration, said in March that Clinton had more involvement in foreign policy than a lot of first ladies, but added that "her role was limited and I've been surprised at the claims that she had a much greater role."
Well, never mind about all of that now.
"That was then; this is now," said David Gergen, who has served as an adviser to both Republican and Democratic presidents.
"Campaigns are ever thus."
"Generally speaking," Gergen said, "there is a recognition that campaigns bring a certain amount of hyperbole, and when it's over you try to find the most talented people you can find to work with you."
Clinton may not have been at the table when her husband made the big decisions, Gergen said, but "she's been imbibing questions on foreign policy and decision-making since 1992."
A spokesperson for the Obama transition team declined to comment on the shift in tone.
It also should be said that some of the wounds to Clinton's foreign policy credentials during the primaries were self-inflicted, most famously her inflated account of the drama associated with a visit she made to Bosnia.
"I remember landing under sniper fire," she recounted in a speech.
"There was supposed to be some kind of a greeting ceremony at the airport, but instead we just ran with our heads down to get into the vehicles to get to our base."
Soon enough, video footage surfaced of Clinton's unremarkable airport arrival ceremony, where she was welcomed by dignitaries and posed for photos with children.
Clinton brought up the Bosnia trip to counter Obama's suggestion that her experiences as first lady amounted to having tea at an ambassador's house.
"I don't remember anyone offering me tea," she said of the Bosnia visit.
Clinton, in an April debate, blamed her Bosnia gaffe on campaign fatigue.
But she did not back away from her claim to broad foreign policy experience as first lady.
"I was not as accurate as I have been in the past," she said.
"But I know, too, that being able to rely on my experience of having gone to Bosnia, gone to more than 80 countries, having represented the United States in so many different settings, gives me a tremendous advantage going into this campaign."
Well, maybe not in the campaign, as it turned out.
But maybe, just perhaps, as secretary of state.
By NANCY BENAC, Associated Press Writer
Sat Nov 29, 8:28 am ET
WASHINGTON – It wasn't too long ago that Barack Obama and his advisers were tripping over one another to tear down Hillary Rodham Clinton's foreign policy credentials.
She was dismissed as a commander in chief wanna-be who did little more than sip tea and make small talk with foreign leaders during her days as first lady.
"What exactly is this foreign policy experience?" Obama said mockingly of the New York senator.
"Was she negotiating treaties?"
"Was she handling crises?"
"The answer is no."
That was in March, when Clinton was Obama's sole remaining rival for the Democratic presidential nomination.
Now, Clinton is on track to become Obama's secretary of state.
And, unsurprisingly, the sniping at her foreign policy credentials is a thing of the past.
Obama adviser William Daley over the weekend said Clinton would be "a tremendous addition to this administration."
"Tremendous."
Senior adviser David Axelrod called Clinton a "demonstrably able, tough, brilliant person."
Last spring, though, Clinton was targeted with a steady stream of criticism via conference call, e-mail and campaign-trail digs from the Obama camp, all aimed at shredding her self-portrait as an experienced and confident leader on the international stage.
Some of those doing the sniping will be taking up key positions — most likely along with Clinton — in the new Obama administration.
Greg Craig, selected to serve as White House counsel in the Obama administration, delivered a withering attack during the primaries on Clinton's claims that she could rightfully share in the credit for some of the foreign policy successes of her husband's presidency.
"She did not sit in on any National Security Council meetings when she was first lady," Craig insisted in one conference call.
He went on to knock down Clinton's claims to influence in the Northern Ireland peace process, opening borders for refugees during the war in Kosovo, and making a dangerous visit to Bosnia.
"There is no reason to believe ... that she was a key player in foreign policy at any time during the Clinton administration," Craig wrote in a campaign memo.
Susan Rice, an Obama adviser who could land a spot in the new administration, mocked the idea that Clinton could lay claim to foreign policy credentials by marriage.
"There is no crisis to be dealt with or managed when you are first lady," Rice sniffed last March.
"You don't get that kind of experience by being married to a commander in chief."
Clinton was only too happy to make light of Obama's own foreign policy credentials, suggesting his biggest selling point was a 2002 speech against going to war with Iraq.
"Many people gave speeches against the war then," she said in a February debate.
Robert Gelbard, an adviser to the Obama campaign on foreign policy who worked in the Clinton administration, said in March that Clinton had more involvement in foreign policy than a lot of first ladies, but added that "her role was limited and I've been surprised at the claims that she had a much greater role."
Well, never mind about all of that now.
"That was then; this is now," said David Gergen, who has served as an adviser to both Republican and Democratic presidents.
"Campaigns are ever thus."
"Generally speaking," Gergen said, "there is a recognition that campaigns bring a certain amount of hyperbole, and when it's over you try to find the most talented people you can find to work with you."
Clinton may not have been at the table when her husband made the big decisions, Gergen said, but "she's been imbibing questions on foreign policy and decision-making since 1992."
A spokesperson for the Obama transition team declined to comment on the shift in tone.
It also should be said that some of the wounds to Clinton's foreign policy credentials during the primaries were self-inflicted, most famously her inflated account of the drama associated with a visit she made to Bosnia.
"I remember landing under sniper fire," she recounted in a speech.
"There was supposed to be some kind of a greeting ceremony at the airport, but instead we just ran with our heads down to get into the vehicles to get to our base."
Soon enough, video footage surfaced of Clinton's unremarkable airport arrival ceremony, where she was welcomed by dignitaries and posed for photos with children.
Clinton brought up the Bosnia trip to counter Obama's suggestion that her experiences as first lady amounted to having tea at an ambassador's house.
"I don't remember anyone offering me tea," she said of the Bosnia visit.
Clinton, in an April debate, blamed her Bosnia gaffe on campaign fatigue.
But she did not back away from her claim to broad foreign policy experience as first lady.
"I was not as accurate as I have been in the past," she said.
"But I know, too, that being able to rely on my experience of having gone to Bosnia, gone to more than 80 countries, having represented the United States in so many different settings, gives me a tremendous advantage going into this campaign."
Well, maybe not in the campaign, as it turned out.
But maybe, just perhaps, as secretary of state.
"House to push $500 billion stimulus bill"
By Richard Cowan
1 DECEMBER 2008
WASHINGTON (Reuters) – U.S. House of Representatives Speaker Nancy Pelosi met leading governors on Monday to discuss the size and shape of an economic stimulus package that one Democratic aide said was likely to cost around $500 billion.
The aide, who asked not to be identified, said the legislation would include a middle-class tax cut, billions of dollars for road, bridge and mass transit construction, expanded aid to states and investments in renewable energy.
Speaking to reporters earlier, Pelosi said she hoped the job-creating legislation, which she did not detail, would be ready for President-elect Barack Obama to sign when he takes office on January 20.
"We'd like to have it ready for the president-elect," Pelosi told reporters before meeting Govs. Ed Rendell, a Pennsylvania Democrat, and Jim Douglas, a Vermont Republican.
"I think we will be coming to some agreements today."
Rendell chairs the National Governors Association and Douglas is the vice chairman.
Obama and Vice President-elect Joe Biden will meet U.S. governors in Philadelphia on Tuesday to discuss the economic crisis.
The House passed a $61 billion stimulus in September but opposition from Senate Republicans backed by a Bush administration veto threat killed the bill in the Senate.
Pelosi's meeting with the governors came as the National Bureau of Economic Research said the U.S. economy entered a recession in December, 2007.
U.S. unemployment has been rising, the financial industry is reeling even with the recent enactment of a $700 billion government bailout, and Congress must decide whether to rescue domestic automakers, who face a Tuesday deadline to provide Washington with restructuring plans.
Governors and state legislatures are asking Congress to act quickly on an aid and job-creation bill, noting they face severe budget shortfalls in 2009 and 2010.
At $500 billion, the measure would dwarf the $168 billion economic stimulus that was enacted last February, which consisted mostly of tax rebates for families and small business tax benefits.
The new emergency spending would add to spiraling government spending which sent the budget deficit to a record $455 billion in the fiscal year that ended September 30.
Hoping to blunt Republican criticism that Democrats are cobbling together a massive bill full of wasteful spending, Pelosi said the measure would be aimed at "creating jobs for the 21st century," with a focus on energy projects.
Obama has said that his first priority when taking office would be signing an economic stimulus bill into law.
(Editing by Alan Elsner)
By Richard Cowan
1 DECEMBER 2008
WASHINGTON (Reuters) – U.S. House of Representatives Speaker Nancy Pelosi met leading governors on Monday to discuss the size and shape of an economic stimulus package that one Democratic aide said was likely to cost around $500 billion.
The aide, who asked not to be identified, said the legislation would include a middle-class tax cut, billions of dollars for road, bridge and mass transit construction, expanded aid to states and investments in renewable energy.
Speaking to reporters earlier, Pelosi said she hoped the job-creating legislation, which she did not detail, would be ready for President-elect Barack Obama to sign when he takes office on January 20.
"We'd like to have it ready for the president-elect," Pelosi told reporters before meeting Govs. Ed Rendell, a Pennsylvania Democrat, and Jim Douglas, a Vermont Republican.
"I think we will be coming to some agreements today."
Rendell chairs the National Governors Association and Douglas is the vice chairman.
Obama and Vice President-elect Joe Biden will meet U.S. governors in Philadelphia on Tuesday to discuss the economic crisis.
The House passed a $61 billion stimulus in September but opposition from Senate Republicans backed by a Bush administration veto threat killed the bill in the Senate.
Pelosi's meeting with the governors came as the National Bureau of Economic Research said the U.S. economy entered a recession in December, 2007.
U.S. unemployment has been rising, the financial industry is reeling even with the recent enactment of a $700 billion government bailout, and Congress must decide whether to rescue domestic automakers, who face a Tuesday deadline to provide Washington with restructuring plans.
Governors and state legislatures are asking Congress to act quickly on an aid and job-creation bill, noting they face severe budget shortfalls in 2009 and 2010.
At $500 billion, the measure would dwarf the $168 billion economic stimulus that was enacted last February, which consisted mostly of tax rebates for families and small business tax benefits.
The new emergency spending would add to spiraling government spending which sent the budget deficit to a record $455 billion in the fiscal year that ended September 30.
Hoping to blunt Republican criticism that Democrats are cobbling together a massive bill full of wasteful spending, Pelosi said the measure would be aimed at "creating jobs for the 21st century," with a focus on energy projects.
Obama has said that his first priority when taking office would be signing an economic stimulus bill into law.
(Editing by Alan Elsner)
"Bernanke: more action needed to cut foreclosures - Bernanke calls for more action to stem foreclosures, outlines options"
By JEANNINE AVERSA, Associated Press
Last updated: 5:55 p.m., Thursday, December 4, 2008
WASHINGTON -- Federal Reserve Chairman Ben Bernanke called on the government Thursday to ramp up efforts to stem soaring home foreclosures, which are feeding into the country's deep economic troubles.
Although a flurry of actions have been taken to ease the housing crisis, foreclosures still remain "too high" with adverse consequences for struggling homeowners, squeezed lenders and the broader economy, Bernanke said in remarks to a Fed conference on housing finance.
"More needs to be done," he declared.
Lenders appear to be on track to initiate 2.25 million foreclosures this year, up from an average annual pace of less than 1 million during the pre-crisis period, he said.
To provide additional relief, Bernanke outlined a number of what he called "promising options" to reduce preventable foreclosures.
Under one plan, Bernanke called on Congress to ease the terms of a government program called "Hope for Homeowners," which lets distressed homeowners refinance into more affordable, federally insured mortgages if the lender writes down the amount owed on the mortgage and pays an upfront insurance premium.
Bernanke suggested Congress lower the lender's upfront insurance premium as well as reducing the interest rate borrowers pay, which presently is quite high, roughly 8 percent.
To bring down this interest rate, Treasury could buy Ginnie Mae securities, which fund the mortgage program, or Congress could decide to subsidize the rate.
Another option would ease the terms of a loan-modification plan put forward by the Federal Deposit Insurance Corp. that seeks to make monthly mortgage payments more affordable.
The FDIC put this plan into effect at IndyMac Bank, a large savings and loan that failed earlier this year, and has used it to modify mortgages at other financial institutions.
Under the so-called IndyMac plan, struggling home borrowers pay interest rates of about 3 percent for five years.
Rates are reduced so that borrowers aren't paying more than 38 percent of their pretax income on housing.
Bernanke suggested this threshold could be lowered to perhaps 31 percent of income, with the government sharing some of the cost.
Yet another option would have the government purchase delinquent or at-risk mortgages in bulk and then refinance them into the "Hope for Homeowners" or another government program that insures home mortgages.
Other options include a broader push for lenders to forgive a portion of the home loan for certain borrowers, and other permanent modifications over the longer term so that people don't fall back into distress again.
Bernanke's call for more action, though, failed to comfort Wall Street investors.
The Dow Jones industrials tumbled more than 215 points.
The housing crisis has driven up foreclosures and forced financial companies to take massive losses on soured mortgage investments.
The housing debacle touched off the worst financial crisis since the 1930s that Bernanke and Treasury Secretary Henry Paulson have been desperately trying to bring under control.
All the fallout has plunged the country into a painful recession.
Bernanke stressed the importance of curbing the foreclosure mess because it is so inter-linked with the economy's health.
"Weakness in the housing market has proved a serious drag on overall economic activity," he said.
"Steps that stabilize the housing market will help stabilize the economy as well."
Fielding questions after his speech, Bernanke didn't foresee government intervention specifically aimed at boosting sagging home prices.
"I don't think we would be either willing or able to target house prices."
"I think that would probably be an impossible thing to do given the size of the national housing market," Bernanke said.
Instead, the government can take steps to improve the functioning of the mortgage market, which would allow more people to secure home loans and help stabilize the housing market, he said.
The Fed chief's remarks come as the Treasury Department weighs new plans to revive the moribund housing market.
Under one plan backed by the financial industry, Treasury would seek to lower the rate on a 30-year mortgages to 4.5 percent by purchasing mortgage-backed securities from Fannie Mae and Freddie Mac.
It's unclear exactly how much the plan would cost.
It is possible that Paulson will ask Congress for the second $350 billion installment of the $700 billion financial bailout package to bankroll the effort.
Neel Kashkari, the Treasury Department official who is in charge of the $700 billion rescue effort, confirmed Thursday that the plan was one of the options the administration had under review.
But other regulators said such a proposal can only help with part of the problem.
"Getting mortgage rates down is ... positive, but it doesn't help people that currently have unaffordable mortgages because it doesn't help them refinance," said FDIC chief Sheila Bair.
"Low interest rates help some consumers, but the ones that really need help and can't refinance are not helped."
Rates on 30-year mortgages fell nearly half a percentage point this week to 5.53 percent, the lowest level since January and the largest one-week drop in 27 years, mortgage giant Freddie Mac said Thursday.
Paulson and his Bush administration colleagues have come under fire by Democrats and some Republicans for not doing enough to help Americans at risk of losing their homes.
President-elect Barack Obama signaled a desire Wednesday to use a significant portion of the $700 billion pot to stanch foreclosures.
"The deteriorating assets in the financial markets are rooted in the deterioration of people being able to pay their mortgages and stay in their homes," he said.
Paulson has been opposed to tapping the bailout pool to fund a mortgage-relief program championed by the FDIC's Bair.
The $24 billion FDIC plan would use some of the rescue money to help back refinanced mortgages that would lower monthly payments.
Fed Governor Randall Kroszner, who also spoke to the housing finance conference, said it will take time for investor confidence to be rebuilt in the market for mortgage-backed securities issued by private companies.
"The recovery ... is bound to be a gradual process," he said.
------
AP Business Writer Marcy Gordon and Economics Writer Martin Crutsinger contributed to this report.
By JEANNINE AVERSA, Associated Press
Last updated: 5:55 p.m., Thursday, December 4, 2008
WASHINGTON -- Federal Reserve Chairman Ben Bernanke called on the government Thursday to ramp up efforts to stem soaring home foreclosures, which are feeding into the country's deep economic troubles.
Although a flurry of actions have been taken to ease the housing crisis, foreclosures still remain "too high" with adverse consequences for struggling homeowners, squeezed lenders and the broader economy, Bernanke said in remarks to a Fed conference on housing finance.
"More needs to be done," he declared.
Lenders appear to be on track to initiate 2.25 million foreclosures this year, up from an average annual pace of less than 1 million during the pre-crisis period, he said.
To provide additional relief, Bernanke outlined a number of what he called "promising options" to reduce preventable foreclosures.
Under one plan, Bernanke called on Congress to ease the terms of a government program called "Hope for Homeowners," which lets distressed homeowners refinance into more affordable, federally insured mortgages if the lender writes down the amount owed on the mortgage and pays an upfront insurance premium.
Bernanke suggested Congress lower the lender's upfront insurance premium as well as reducing the interest rate borrowers pay, which presently is quite high, roughly 8 percent.
To bring down this interest rate, Treasury could buy Ginnie Mae securities, which fund the mortgage program, or Congress could decide to subsidize the rate.
Another option would ease the terms of a loan-modification plan put forward by the Federal Deposit Insurance Corp. that seeks to make monthly mortgage payments more affordable.
The FDIC put this plan into effect at IndyMac Bank, a large savings and loan that failed earlier this year, and has used it to modify mortgages at other financial institutions.
Under the so-called IndyMac plan, struggling home borrowers pay interest rates of about 3 percent for five years.
Rates are reduced so that borrowers aren't paying more than 38 percent of their pretax income on housing.
Bernanke suggested this threshold could be lowered to perhaps 31 percent of income, with the government sharing some of the cost.
Yet another option would have the government purchase delinquent or at-risk mortgages in bulk and then refinance them into the "Hope for Homeowners" or another government program that insures home mortgages.
Other options include a broader push for lenders to forgive a portion of the home loan for certain borrowers, and other permanent modifications over the longer term so that people don't fall back into distress again.
Bernanke's call for more action, though, failed to comfort Wall Street investors.
The Dow Jones industrials tumbled more than 215 points.
The housing crisis has driven up foreclosures and forced financial companies to take massive losses on soured mortgage investments.
The housing debacle touched off the worst financial crisis since the 1930s that Bernanke and Treasury Secretary Henry Paulson have been desperately trying to bring under control.
All the fallout has plunged the country into a painful recession.
Bernanke stressed the importance of curbing the foreclosure mess because it is so inter-linked with the economy's health.
"Weakness in the housing market has proved a serious drag on overall economic activity," he said.
"Steps that stabilize the housing market will help stabilize the economy as well."
Fielding questions after his speech, Bernanke didn't foresee government intervention specifically aimed at boosting sagging home prices.
"I don't think we would be either willing or able to target house prices."
"I think that would probably be an impossible thing to do given the size of the national housing market," Bernanke said.
Instead, the government can take steps to improve the functioning of the mortgage market, which would allow more people to secure home loans and help stabilize the housing market, he said.
The Fed chief's remarks come as the Treasury Department weighs new plans to revive the moribund housing market.
Under one plan backed by the financial industry, Treasury would seek to lower the rate on a 30-year mortgages to 4.5 percent by purchasing mortgage-backed securities from Fannie Mae and Freddie Mac.
It's unclear exactly how much the plan would cost.
It is possible that Paulson will ask Congress for the second $350 billion installment of the $700 billion financial bailout package to bankroll the effort.
Neel Kashkari, the Treasury Department official who is in charge of the $700 billion rescue effort, confirmed Thursday that the plan was one of the options the administration had under review.
But other regulators said such a proposal can only help with part of the problem.
"Getting mortgage rates down is ... positive, but it doesn't help people that currently have unaffordable mortgages because it doesn't help them refinance," said FDIC chief Sheila Bair.
"Low interest rates help some consumers, but the ones that really need help and can't refinance are not helped."
Rates on 30-year mortgages fell nearly half a percentage point this week to 5.53 percent, the lowest level since January and the largest one-week drop in 27 years, mortgage giant Freddie Mac said Thursday.
Paulson and his Bush administration colleagues have come under fire by Democrats and some Republicans for not doing enough to help Americans at risk of losing their homes.
President-elect Barack Obama signaled a desire Wednesday to use a significant portion of the $700 billion pot to stanch foreclosures.
"The deteriorating assets in the financial markets are rooted in the deterioration of people being able to pay their mortgages and stay in their homes," he said.
Paulson has been opposed to tapping the bailout pool to fund a mortgage-relief program championed by the FDIC's Bair.
The $24 billion FDIC plan would use some of the rescue money to help back refinanced mortgages that would lower monthly payments.
Fed Governor Randall Kroszner, who also spoke to the housing finance conference, said it will take time for investor confidence to be rebuilt in the market for mortgage-backed securities issued by private companies.
"The recovery ... is bound to be a gradual process," he said.
------
AP Business Writer Marcy Gordon and Economics Writer Martin Crutsinger contributed to this report.
"Palin got $30K more in clothes"
Kenneth P. Vogel
Thu Dec 4, 2:34 pm ET
The Republican National Committee will report Thursday that it spent about another $30,000 on clothes and accessories for Sarah Palin during her vice presidential bid, a GOP source tells Politico.
Palin took a major public relations hit when Politico revealed that the RNC in September shelled out $150,000 for clothes and accessories from high-end retailers for the Alaska governor, who built her political persona around a folksy, regular-gal demeanor.
The additional spending will be detailed on the committee's post-general election report, which is due to be filed with the Federal Election Commission before midnight.
The filing will show less than $30,000 worth of "accessories" purchased before the general election for Palin and her family in coordination with the McCain-Palin campaign, according to the source, who said any clothes in the committee's possession will be given to charity.
Kenneth P. Vogel
Thu Dec 4, 2:34 pm ET
The Republican National Committee will report Thursday that it spent about another $30,000 on clothes and accessories for Sarah Palin during her vice presidential bid, a GOP source tells Politico.
Palin took a major public relations hit when Politico revealed that the RNC in September shelled out $150,000 for clothes and accessories from high-end retailers for the Alaska governor, who built her political persona around a folksy, regular-gal demeanor.
The additional spending will be detailed on the committee's post-general election report, which is due to be filed with the Federal Election Commission before midnight.
The filing will show less than $30,000 worth of "accessories" purchased before the general election for Palin and her family in coordination with the McCain-Palin campaign, according to the source, who said any clothes in the committee's possession will be given to charity.
"Suicide blasts kill 17 as Iraqi council OKs pact"
By ROBERT H. REID, Associated Press Writer
4 DECEMBER 2008
BAGHDAD – Suicide bombers killed 17 people — including two American soldiers — and wounded more than 100 in a string of blasts in two Iraqi cities Thursday as a timetable for withdrawing all U.S. troops won final government approval.
The brazen attacks in areas where the U.S. military has struggled for years to maintain order raised questions about Iraq's ability to ensure its own security as the U.S. scales down its own combat role under the newly ratified U.S.-Iraqi security pact, which calls for an American withdrawal within three years.
Iraq's three-member presidential council signed off on the pact Thursday, removing the last legal barrier so that the agreement can take effect Jan. 1.
But the latest bombings underscore the fragility of Iraq's recent security gains, adding new urgency to U.S. efforts to train and equip an Iraqi security force capable of maintaining order after American troops have gone home.
The two Americans were killed when a suicide driver detonated an explosive-laden car near an Iraqi checkpoint in the northern city of Mosul, military spokesman Lt. Col. Dave Doherty said.
Iraqi police said eight people were wounded, most of them civilians.
But the deadliest attacks occurred in Fallujah, the country's most heavily guarded city and once the symbol of Sunni Arab resistance to the U.S. occupation.
Truck bombers struck within minutes of each other outside the concrete barriers surrounding two police stations in different parts of the city, killing 15 people, wounding more than 100 and shattering nearby buildings, police and hospital officials said.
An al-Qaida front group, the Islamic State of Iraq, purportedly claimed responsibility for the attack in a statement posted on a militant Web site.
The thunderous blasts could be heard across the city of about 400,000 and sent giant plumes of black smoke rising over the dust-brown buildings.
"I was drinking tea in my house when a big explosion took place."
"It was like an earthquake," said Saad Ibrahim, a 34-year-old mechanic who lives near one of the police stations.
"I could hear the cry of a child trapped in a house."
"... We tried to help him, but the police and firefighters arrived and asked us to leave the area."
Local authorities announced a curfew and closed all exits and entrances to the city.
Police said the blasts were so huge that investigators could not find the chassis or the engines of the two trucks used in the attacks.
"It looks like the trucks evaporated," a senior police official told The Associated Press.
All the police and hospital officials spoke on condition of anonymity because they weren't authorized to release the information.
Northeast of Baghdad, a bomb left on a parked motorcycle exploded near a restaurant in Baqouba, another one-time Sunni militant stronghold, killing three people and wounding 10, according to police at the security headquarters for the surrounding Diyala province.
U.S. commanders say attacks are down 80 percent nationwide since last March but that al-Qaida and other militants remain capable of staging limited but high-profile attacks.
The bombings in Fallujah, 40 miles west of Baghdad in Anbar province, were significant because they show the resilience of an insurgency that has suffered severe setbacks over the past two years as many Sunnis turned against al-Qaida and other religious extremists.
Fallujah was effectively the headquarters of the Sunni insurgency until U.S. troops seized control of the city in November 2004 after the fiercest fighting of the Iraq war.
In the aftermath, U.S. and Iraqi authorities imposed stringent security measures, sealing off the city with checkpoints, restricting vehicle movements and requiring residents to enter and leave only after submitting to strict searches.
However, security responsibility in Anbar province was turned over to the Iraqis last September.
Since then, residents said restrictions had been relaxed and people were allowed to enter the city without showing special resident identification cards.
Decisions on easing security are going to be left increasingly to the Iraqis under the security agreement that replaces a U.N. mandate giving the U.S.-led coalition sweeping powers to conduct military operations.
The agreement gives Iraqis greater oversight of U.S. military operations.
It also requires American soldiers to leave the cities by the end of June and depart the country by the end of 2011.
Approval by the presidential council came one week after parliament signed off on the agreement, which was hammered out during months of tough negotiations that at times seemed on the point of collapse.
President Bush called Prime Minister Nouri al-Maliki and President Jalal Talabani to thank them for their work on the pact, the White House said Thursday.
The agreement is still subject to approval by Iraqi voters in a referendum by the end of July.
If voters reject the deal, Iraqi will ask the U.S. for a new round of talks.
The referendum was a concession to Sunni demands and has been endorsed by the country's leading Shiite cleric, Grand Ayatollah Ali al-Sistani.
His endorsement means it would be politically untenable for the Shiite-led government to cancel the referendum.
Under the agreement, Iraq will gain strict oversight over the nearly 150,000 American troops now on the ground, representing a step toward full sovereignty for Iraq and a shift from the sense of frustration and humiliation that many Iraqis feel at the presence of American troops on their soil for so many years.
President Jalal Talabani, a Kurd, and his two deputies Tariq al-Hashemi, a Sunni Arab, and Adel Abdul-Mahdi, a Shiite, signed the accord at their headquarters in Baghdad, council spokesman Nasser al-Ani told The Associated Press.
In Washington, the White House welcomed Thursday's decision.
White House press secretary Dana Perino said the Iraqi presidential council's approval sets a path for American troops to come home and called the agreement a "remarkable achievement for both of our countries."
__
Associated Press writer Sameer N. Yacoub contributed to this report.
By ROBERT H. REID, Associated Press Writer
4 DECEMBER 2008
BAGHDAD – Suicide bombers killed 17 people — including two American soldiers — and wounded more than 100 in a string of blasts in two Iraqi cities Thursday as a timetable for withdrawing all U.S. troops won final government approval.
The brazen attacks in areas where the U.S. military has struggled for years to maintain order raised questions about Iraq's ability to ensure its own security as the U.S. scales down its own combat role under the newly ratified U.S.-Iraqi security pact, which calls for an American withdrawal within three years.
Iraq's three-member presidential council signed off on the pact Thursday, removing the last legal barrier so that the agreement can take effect Jan. 1.
But the latest bombings underscore the fragility of Iraq's recent security gains, adding new urgency to U.S. efforts to train and equip an Iraqi security force capable of maintaining order after American troops have gone home.
The two Americans were killed when a suicide driver detonated an explosive-laden car near an Iraqi checkpoint in the northern city of Mosul, military spokesman Lt. Col. Dave Doherty said.
Iraqi police said eight people were wounded, most of them civilians.
But the deadliest attacks occurred in Fallujah, the country's most heavily guarded city and once the symbol of Sunni Arab resistance to the U.S. occupation.
Truck bombers struck within minutes of each other outside the concrete barriers surrounding two police stations in different parts of the city, killing 15 people, wounding more than 100 and shattering nearby buildings, police and hospital officials said.
An al-Qaida front group, the Islamic State of Iraq, purportedly claimed responsibility for the attack in a statement posted on a militant Web site.
The thunderous blasts could be heard across the city of about 400,000 and sent giant plumes of black smoke rising over the dust-brown buildings.
"I was drinking tea in my house when a big explosion took place."
"It was like an earthquake," said Saad Ibrahim, a 34-year-old mechanic who lives near one of the police stations.
"I could hear the cry of a child trapped in a house."
"... We tried to help him, but the police and firefighters arrived and asked us to leave the area."
Local authorities announced a curfew and closed all exits and entrances to the city.
Police said the blasts were so huge that investigators could not find the chassis or the engines of the two trucks used in the attacks.
"It looks like the trucks evaporated," a senior police official told The Associated Press.
All the police and hospital officials spoke on condition of anonymity because they weren't authorized to release the information.
Northeast of Baghdad, a bomb left on a parked motorcycle exploded near a restaurant in Baqouba, another one-time Sunni militant stronghold, killing three people and wounding 10, according to police at the security headquarters for the surrounding Diyala province.
U.S. commanders say attacks are down 80 percent nationwide since last March but that al-Qaida and other militants remain capable of staging limited but high-profile attacks.
The bombings in Fallujah, 40 miles west of Baghdad in Anbar province, were significant because they show the resilience of an insurgency that has suffered severe setbacks over the past two years as many Sunnis turned against al-Qaida and other religious extremists.
Fallujah was effectively the headquarters of the Sunni insurgency until U.S. troops seized control of the city in November 2004 after the fiercest fighting of the Iraq war.
In the aftermath, U.S. and Iraqi authorities imposed stringent security measures, sealing off the city with checkpoints, restricting vehicle movements and requiring residents to enter and leave only after submitting to strict searches.
However, security responsibility in Anbar province was turned over to the Iraqis last September.
Since then, residents said restrictions had been relaxed and people were allowed to enter the city without showing special resident identification cards.
Decisions on easing security are going to be left increasingly to the Iraqis under the security agreement that replaces a U.N. mandate giving the U.S.-led coalition sweeping powers to conduct military operations.
The agreement gives Iraqis greater oversight of U.S. military operations.
It also requires American soldiers to leave the cities by the end of June and depart the country by the end of 2011.
Approval by the presidential council came one week after parliament signed off on the agreement, which was hammered out during months of tough negotiations that at times seemed on the point of collapse.
President Bush called Prime Minister Nouri al-Maliki and President Jalal Talabani to thank them for their work on the pact, the White House said Thursday.
The agreement is still subject to approval by Iraqi voters in a referendum by the end of July.
If voters reject the deal, Iraqi will ask the U.S. for a new round of talks.
The referendum was a concession to Sunni demands and has been endorsed by the country's leading Shiite cleric, Grand Ayatollah Ali al-Sistani.
His endorsement means it would be politically untenable for the Shiite-led government to cancel the referendum.
Under the agreement, Iraq will gain strict oversight over the nearly 150,000 American troops now on the ground, representing a step toward full sovereignty for Iraq and a shift from the sense of frustration and humiliation that many Iraqis feel at the presence of American troops on their soil for so many years.
President Jalal Talabani, a Kurd, and his two deputies Tariq al-Hashemi, a Sunni Arab, and Adel Abdul-Mahdi, a Shiite, signed the accord at their headquarters in Baghdad, council spokesman Nasser al-Ani told The Associated Press.
In Washington, the White House welcomed Thursday's decision.
White House press secretary Dana Perino said the Iraqi presidential council's approval sets a path for American troops to come home and called the agreement a "remarkable achievement for both of our countries."
__
Associated Press writer Sameer N. Yacoub contributed to this report.
"Charged Blackwater guards ID'd: All decorated vets"
By MATT APUZZO and LARA JAKES JORDAN, Associated Press Writers
6 DECEMBER 2008
Matt Apuzzo And Lara Jakes Jordan, Associated Press Writers – 1 min ago
WASHINGTON – The five Blackwater Worldwide guards indicted for a deadly 2007 Baghdad shooting are all decorated military veterans who have served in some of the world's most dangerous hotspots.
According to lawyers for the guards, the men are: Donald Ball, a former Marine from West Valley City, Utah; Dustin Heard, a former Marine from Knoxville, Tenn.; Evan Liberty, a former Marine from Rochester, N.H.; Nick Slatten, a former Army sergeant from Sparta, Tenn.; and Paul Slough, an Army veteran from Keller, Texas.
The men are charged following the shooting of 17 Iraqi civilians in a busy Baghdad intersection.
Documents in the case remain sealed but are expected to become public Monday, when the men have been ordered to surrender.
"These are indictments that never should have been brought," Mark Hulkower, a lawyer for Slough, said Saturday.
"Paul Slough has served his country honorably for many years and has done nothing wrong."
"I look forward to clearing his name."
The character of the five men will be a critical part of the case.
Prosecutors are expected to describe the men as trigger-happy security guards who opened fire unprovoked.
Defense lawyers will describe the men as honorable veterans who, after completing their military service, joined Blackwater to protect U.S. diplomats overseas.
Young children were among the victims of the shooting, which strained relations between the U.S. and Iraq.
Following the shooting, Blackwater became the subject of congressional hearings in Washington and insurgent propaganda videos in Iraq.
"We strongly disagree with the Department of Justice's decision to bring charges against Dustin Heard," attorney David Schertler said Saturday.
Schertler said blame for the civilian casualties lies not with the Blackwater guards but with insurgents who have made downtown Baghdad a battlefield.
"Blackwater security guards were defending themselves and their comrades who were being shot at and receiving fire from Iraqis they believed to be enemy insurgents," he said.
An Iraqi government spokesman, Ali al-Dabbagh, said Baghdad welcomed any attempt to "hold the criminals accountable for their crime."
The Iraqi government, he said, has retained a law firm to pursue compensation for the families of the victims.
Some Iraqis said they were pleased by the latest developments in the case.
"I think it is a move in the right direction to make the security company employees realize that they are no longer above the law and they should stop behaving like cowboys on the streets of Baghdad," said Mohammed Latif, 52, a retired police officer in Baghdad.
The Justice Department obtained the indictment late Thursday and got it sealed.
A sixth guard who has been under investigation in the case was negotiating a plea deal with prosecutors.
Documents related to those negotiations were also under seal.
Lawyers braced for an indictment on assault and manslaughter charges.
But the most serious charge being considered involved a 1988 law, passed at the height of the crack epidemic, that requires 30-year mandatory sentences for using machine guns to commit violent crimes.
The cases faces some legal hurdles before it can get to trial.
To prosecute, authorities must argue that the guards can be charged under law meant to cover soldiers and military contractors.
Because Blackwater works for the State Department, not the military, it is unclear whether that law applies to its guards.
Prosecutors are expected to argue that, if not for Blackwater, military personnel would provide diplomatic security.
In that way, Blackwater could be seen as supporting the Defense Department's mission.
Early in the investigation, before the FBI even arrived in Iraq, the State Department erected another legal hurdle for prosecutors.
Department investigators granted all the guards limited immunity in exchange for their statements about the shooting.
That means prosecutors have to show they built their case without relying on those statements.
___
Associated Press writer Sameer N. Yacoub in Baghdad contributed to this report.
___
On the Net:
Blackwater: http://www.blackwaterusa.com/
By MATT APUZZO and LARA JAKES JORDAN, Associated Press Writers
6 DECEMBER 2008
Matt Apuzzo And Lara Jakes Jordan, Associated Press Writers – 1 min ago
WASHINGTON – The five Blackwater Worldwide guards indicted for a deadly 2007 Baghdad shooting are all decorated military veterans who have served in some of the world's most dangerous hotspots.
According to lawyers for the guards, the men are: Donald Ball, a former Marine from West Valley City, Utah; Dustin Heard, a former Marine from Knoxville, Tenn.; Evan Liberty, a former Marine from Rochester, N.H.; Nick Slatten, a former Army sergeant from Sparta, Tenn.; and Paul Slough, an Army veteran from Keller, Texas.
The men are charged following the shooting of 17 Iraqi civilians in a busy Baghdad intersection.
Documents in the case remain sealed but are expected to become public Monday, when the men have been ordered to surrender.
"These are indictments that never should have been brought," Mark Hulkower, a lawyer for Slough, said Saturday.
"Paul Slough has served his country honorably for many years and has done nothing wrong."
"I look forward to clearing his name."
The character of the five men will be a critical part of the case.
Prosecutors are expected to describe the men as trigger-happy security guards who opened fire unprovoked.
Defense lawyers will describe the men as honorable veterans who, after completing their military service, joined Blackwater to protect U.S. diplomats overseas.
Young children were among the victims of the shooting, which strained relations between the U.S. and Iraq.
Following the shooting, Blackwater became the subject of congressional hearings in Washington and insurgent propaganda videos in Iraq.
"We strongly disagree with the Department of Justice's decision to bring charges against Dustin Heard," attorney David Schertler said Saturday.
Schertler said blame for the civilian casualties lies not with the Blackwater guards but with insurgents who have made downtown Baghdad a battlefield.
"Blackwater security guards were defending themselves and their comrades who were being shot at and receiving fire from Iraqis they believed to be enemy insurgents," he said.
An Iraqi government spokesman, Ali al-Dabbagh, said Baghdad welcomed any attempt to "hold the criminals accountable for their crime."
The Iraqi government, he said, has retained a law firm to pursue compensation for the families of the victims.
Some Iraqis said they were pleased by the latest developments in the case.
"I think it is a move in the right direction to make the security company employees realize that they are no longer above the law and they should stop behaving like cowboys on the streets of Baghdad," said Mohammed Latif, 52, a retired police officer in Baghdad.
The Justice Department obtained the indictment late Thursday and got it sealed.
A sixth guard who has been under investigation in the case was negotiating a plea deal with prosecutors.
Documents related to those negotiations were also under seal.
Lawyers braced for an indictment on assault and manslaughter charges.
But the most serious charge being considered involved a 1988 law, passed at the height of the crack epidemic, that requires 30-year mandatory sentences for using machine guns to commit violent crimes.
The cases faces some legal hurdles before it can get to trial.
To prosecute, authorities must argue that the guards can be charged under law meant to cover soldiers and military contractors.
Because Blackwater works for the State Department, not the military, it is unclear whether that law applies to its guards.
Prosecutors are expected to argue that, if not for Blackwater, military personnel would provide diplomatic security.
In that way, Blackwater could be seen as supporting the Defense Department's mission.
Early in the investigation, before the FBI even arrived in Iraq, the State Department erected another legal hurdle for prosecutors.
Department investigators granted all the guards limited immunity in exchange for their statements about the shooting.
That means prosecutors have to show they built their case without relying on those statements.
___
Associated Press writer Sameer N. Yacoub in Baghdad contributed to this report.
___
On the Net:
Blackwater: http://www.blackwaterusa.com/
"Indian police arrest 2 men in Mumbai investigation"
By AIJAZ HUSSAIN, Associated Press Writer
6 DECEMBER 2008
SRINAGAR, India – One of the two Indian men arrested for illegally buying mobile phone cards used by the gunmen in the Mumbai attacks was a counterinsurgency police officer who may have been on an undercover mission, security officials said Saturday, demanding his release.
The arrests, announced in the eastern city of Calcutta, were the first since the bloody siege ended.
But what was touted as a rare success for India's beleaguered law enforcement agencies, quickly turned sour as police in two Indian regions squared off against one another.
Senior police officers in Indian Kashmir, which has been at the heart of tensions between India and Pakistan, demanded the release of the officer, Mukhtar Ahmed, saying he was one of their own and had been involved in infiltrating Kashmiri militant groups.
Indian authorities believe the banned Pakistani-based militant group Lashkar-e-Taiba, which has links to Kashmir, trained the gunmen and plotted the attacks that left 171 people dead after a three-day rampage through Mumbai that began Nov. 26.
The implications of Ahmed's involvement — that Indian agents may have been in touch with the militants and perhaps supplied the SIM cards used in the attacks — added to the growing list of questions over India's ill-trained security forces, which are widely blamed for not thwarting the attacks.
Earlier Saturday, Calcutta police announced the arrests of Ahmed and Tauseef Rahman, who allegedly bought SIM cards by using fake documents, including identification cards of dead people.
The cards allow users switch their cellular service to phones other than their own.
Rahman, of West Bengal state, later sold them to Ahmed, said Rajeev Kumar a senior Calcutta police officer.
Both men were arrested Friday and charged with fraud and criminal conspiracy, Kumar said, adding that police were still investigating how the 10 gunmen obtained the SIM cards.
But the announcement had police in Srinagar, the main city in Indian-controlled Kashmir, fuming.
We have told Calcutta police that Ahmed is "our man and it's now up to them how to facilitate his release," said one senior officer speaking on condition of anonymity due to the sensitivity of the information.
Other police officials in Kashmir supported his account.
The officer said Ahmed was a Special Police Officer, part of a semiofficial counterinsurgency network whose members are usually drawn from former militants.
The force is run on a special funding from the federal Ministry of Home Affairs.
"Sometimes we use our men engaged in counterinsurgency ops to provide SIM cards to the (militant) outfits so that we track their plans down," said the officer.
Police said Ahmed was recruited to the force after his brother was killed five years ago, allegedly by Lashkar-e-Taiba militants for being a police informer.
About a dozen Islamic militant groups have been fighting in Kashmir since 1989, seeking independence from mainly Hindu India or a union with Muslim-majority Pakistan.
India and Pakistan have fought two of their three wars over the Himalayan region, which is divided between them and claimed by both in its entirety.
The Calcutta police denied the claims from Srinagar.
"This is not true," said Kumar.
The bungling and miscommunications among India's many security services comes as police said they were re-examining another suspected Lashkar militant who was arrested nine months before the attacks carrying hand-drawn sketches of Mumbai hotels, the train terminal and other targeted sites.
Rakesh Maria, a senior Mumbai police officer, said the man, Faheem Ansari, was being transported to Mumbai from northern India where he has been in custody for further questioning, hoping he could shed more light on the attacks.
Maria said there was a definite connection between Ansari and the Mumbai attacks.
"Ansari was trained by Lashkar and sent to do reconnaissance," he said.
And a day after India's top law enforcement official apologized for security "lapses" that allowed the gunmen to rampage through Mumbai, there were new embarrassments — this time with holes in the prime minister's security.
Police preparing for a visit of Prime Minister Manmohan Singh near Calcutta hired high-school children for the equivalent of $2.50 each to sit in trees for the day and look out for suspicious people.
Local police chief L.N. Meena defended using children in the prime minister's security detail, saying there were too many trees in the area and not enough policemen.
"The area is full of trees, so to check them to see if there were any anti-social elements or anyone making mischief, we employed the youths," he said.
Television footage showed dozens of the youngsters perched in trees, with yellow paper badges that read "security pass" pinned on their chests.
Meanwhile police continued the interrogation of the lone surviving gunman from the Mumbai attacks, Mohammed Ajmal Kasab, 21, who revealed that the gunmen had detailed pictures of the locations, Maria said.
"They were pretty elaborate photographs," he said, adding that they had also used maps from Google to study the targets.
Kasab has told interrogators he had been sent by Lashkar and identified two of the plot's masterminds as being involved, two Indian government officials familiar with the inquiry said.
Police had earlier identified the prisoner as Ajmal Amir Kasab.
Lashkar changed its name to Jamaat-ud-Dawa after it was banned in 2002 amid U.S. pressure, according to the U.S. State Department.
The U.S. lists both groups as terrorist organizations.
Kasab told police that a senior Lashkar leader, Zaki-ur-Rehman Lakhvi, the group's operations chief, recruited him for the attack, and that the assailants called another senior leader, Yusuf Muzammil, on a satellite phone before the attacks.
In Pakistan, the Interior Ministry chief told reporters he had no immediate information on Lakhvi or Muzammil.
According to the U.S., Lakhvi has directed Lashkar operations in Chechnya, Bosnia and Southeast Asia, training members to carry out suicide bombings and attack populated areas.
In 2004, he allegedly sent operatives and funds to attack U.S. forces in Iraq.
____
Associated Press writers Ravi Nessman, Muneeza Naqvi and Ramola Talwar Badam in Mumbai, Sam Dolnick and Ashok Sharma in New Delhi, and Manik Banerjee in Calcutta contributed to this report.
By AIJAZ HUSSAIN, Associated Press Writer
6 DECEMBER 2008
SRINAGAR, India – One of the two Indian men arrested for illegally buying mobile phone cards used by the gunmen in the Mumbai attacks was a counterinsurgency police officer who may have been on an undercover mission, security officials said Saturday, demanding his release.
The arrests, announced in the eastern city of Calcutta, were the first since the bloody siege ended.
But what was touted as a rare success for India's beleaguered law enforcement agencies, quickly turned sour as police in two Indian regions squared off against one another.
Senior police officers in Indian Kashmir, which has been at the heart of tensions between India and Pakistan, demanded the release of the officer, Mukhtar Ahmed, saying he was one of their own and had been involved in infiltrating Kashmiri militant groups.
Indian authorities believe the banned Pakistani-based militant group Lashkar-e-Taiba, which has links to Kashmir, trained the gunmen and plotted the attacks that left 171 people dead after a three-day rampage through Mumbai that began Nov. 26.
The implications of Ahmed's involvement — that Indian agents may have been in touch with the militants and perhaps supplied the SIM cards used in the attacks — added to the growing list of questions over India's ill-trained security forces, which are widely blamed for not thwarting the attacks.
Earlier Saturday, Calcutta police announced the arrests of Ahmed and Tauseef Rahman, who allegedly bought SIM cards by using fake documents, including identification cards of dead people.
The cards allow users switch their cellular service to phones other than their own.
Rahman, of West Bengal state, later sold them to Ahmed, said Rajeev Kumar a senior Calcutta police officer.
Both men were arrested Friday and charged with fraud and criminal conspiracy, Kumar said, adding that police were still investigating how the 10 gunmen obtained the SIM cards.
But the announcement had police in Srinagar, the main city in Indian-controlled Kashmir, fuming.
We have told Calcutta police that Ahmed is "our man and it's now up to them how to facilitate his release," said one senior officer speaking on condition of anonymity due to the sensitivity of the information.
Other police officials in Kashmir supported his account.
The officer said Ahmed was a Special Police Officer, part of a semiofficial counterinsurgency network whose members are usually drawn from former militants.
The force is run on a special funding from the federal Ministry of Home Affairs.
"Sometimes we use our men engaged in counterinsurgency ops to provide SIM cards to the (militant) outfits so that we track their plans down," said the officer.
Police said Ahmed was recruited to the force after his brother was killed five years ago, allegedly by Lashkar-e-Taiba militants for being a police informer.
About a dozen Islamic militant groups have been fighting in Kashmir since 1989, seeking independence from mainly Hindu India or a union with Muslim-majority Pakistan.
India and Pakistan have fought two of their three wars over the Himalayan region, which is divided between them and claimed by both in its entirety.
The Calcutta police denied the claims from Srinagar.
"This is not true," said Kumar.
The bungling and miscommunications among India's many security services comes as police said they were re-examining another suspected Lashkar militant who was arrested nine months before the attacks carrying hand-drawn sketches of Mumbai hotels, the train terminal and other targeted sites.
Rakesh Maria, a senior Mumbai police officer, said the man, Faheem Ansari, was being transported to Mumbai from northern India where he has been in custody for further questioning, hoping he could shed more light on the attacks.
Maria said there was a definite connection between Ansari and the Mumbai attacks.
"Ansari was trained by Lashkar and sent to do reconnaissance," he said.
And a day after India's top law enforcement official apologized for security "lapses" that allowed the gunmen to rampage through Mumbai, there were new embarrassments — this time with holes in the prime minister's security.
Police preparing for a visit of Prime Minister Manmohan Singh near Calcutta hired high-school children for the equivalent of $2.50 each to sit in trees for the day and look out for suspicious people.
Local police chief L.N. Meena defended using children in the prime minister's security detail, saying there were too many trees in the area and not enough policemen.
"The area is full of trees, so to check them to see if there were any anti-social elements or anyone making mischief, we employed the youths," he said.
Television footage showed dozens of the youngsters perched in trees, with yellow paper badges that read "security pass" pinned on their chests.
Meanwhile police continued the interrogation of the lone surviving gunman from the Mumbai attacks, Mohammed Ajmal Kasab, 21, who revealed that the gunmen had detailed pictures of the locations, Maria said.
"They were pretty elaborate photographs," he said, adding that they had also used maps from Google to study the targets.
Kasab has told interrogators he had been sent by Lashkar and identified two of the plot's masterminds as being involved, two Indian government officials familiar with the inquiry said.
Police had earlier identified the prisoner as Ajmal Amir Kasab.
Lashkar changed its name to Jamaat-ud-Dawa after it was banned in 2002 amid U.S. pressure, according to the U.S. State Department.
The U.S. lists both groups as terrorist organizations.
Kasab told police that a senior Lashkar leader, Zaki-ur-Rehman Lakhvi, the group's operations chief, recruited him for the attack, and that the assailants called another senior leader, Yusuf Muzammil, on a satellite phone before the attacks.
In Pakistan, the Interior Ministry chief told reporters he had no immediate information on Lakhvi or Muzammil.
According to the U.S., Lakhvi has directed Lashkar operations in Chechnya, Bosnia and Southeast Asia, training members to carry out suicide bombings and attack populated areas.
In 2004, he allegedly sent operatives and funds to attack U.S. forces in Iraq.
____
Associated Press writers Ravi Nessman, Muneeza Naqvi and Ramola Talwar Badam in Mumbai, Sam Dolnick and Ashok Sharma in New Delhi, and Manik Banerjee in Calcutta contributed to this report.
"Idled workers occupy factory in Chicago"
By RUPA SHENOY, Associated Press Writer
6 DECEMBER 2008
CHICAGO – Workers laid off from their jobs at a factory have occupied the building and are demanding assurances they'll get severance and vacation pay that they say they are owed.
About 200 employees of Republic Windows and Doors began their sit-in Friday, the last scheduled day of the plant's operation.
Leah Fried, an organizer with the United Electrical Workers, said the Chicago-based vinyl window manufacturer failed to give 60 days' notice required by law before shutting down.
Workers also were angered when company officials didn't show up for a meeting Friday that had been arranged by U.S. Rep Luis Gutierrez, a Chicago Democrat, she said.
During the peaceful takeover, workers have been shoveling snow and cleaning the building, Fried said.
"We're doing something we haven't since the 1930s, so we're trying to make it work," Fried said.
Union officials said another meeting with the company is scheduled for Monday.
Representatives of Republic Windows did not immediately respond Saturday to calls and e-mails seeking comment.
Police spokeswoman Laura Kubiak said authorities were aware of the situation and officers were patrolling the area.
Crain's Chicago Business reported that the company's monthly sales had fallen to $2.9 million from $4 million during the past month.
In a memo to the union, obtained by the business journal, Republic CEO Rich Gillman said the company had "no choice but to shut our doors."
By RUPA SHENOY, Associated Press Writer
6 DECEMBER 2008
CHICAGO – Workers laid off from their jobs at a factory have occupied the building and are demanding assurances they'll get severance and vacation pay that they say they are owed.
About 200 employees of Republic Windows and Doors began their sit-in Friday, the last scheduled day of the plant's operation.
Leah Fried, an organizer with the United Electrical Workers, said the Chicago-based vinyl window manufacturer failed to give 60 days' notice required by law before shutting down.
Workers also were angered when company officials didn't show up for a meeting Friday that had been arranged by U.S. Rep Luis Gutierrez, a Chicago Democrat, she said.
During the peaceful takeover, workers have been shoveling snow and cleaning the building, Fried said.
"We're doing something we haven't since the 1930s, so we're trying to make it work," Fried said.
Union officials said another meeting with the company is scheduled for Monday.
Representatives of Republic Windows did not immediately respond Saturday to calls and e-mails seeking comment.
Police spokeswoman Laura Kubiak said authorities were aware of the situation and officers were patrolling the area.
Crain's Chicago Business reported that the company's monthly sales had fallen to $2.9 million from $4 million during the past month.
In a memo to the union, obtained by the business journal, Republic CEO Rich Gillman said the company had "no choice but to shut our doors."
AND FROM THE DEPARTMENT OF WTF ...
WHAT KIND OF GOVERNMENT DO WE NOW HAVE HERE, WHEN U.S. SENATORS GET TO DECIDE WHO SHOULD RUN WHAT COMPANY?
AND WHAT IS WITH THIS "MORE SIGNIFICANT BAIL-OUT" FOR THE AUTO INDUSTRY NEXT YEAR?
ARE WE NOW GOING TO HAVE YEARLY BAIL-OUTS?
OBAMA-NOMICS IN ACTION?
And so ...
"Senator calls for Chrysler merger, new CEO at GM"
7 DECEMBER 2008
WASHINGTON – A key senator says the nation's car companies should have to replace top executives in exchange for a long-term bailout package from Congress.
Sen. Chris Dodd heads the Senate Banking Committee.
He says he is hopeful Congress will pass a short-term $15 billion aid package for the automakers in the next several days.
But the Connecticut Democrat says the companies should have to restructure if they want a more significant bailout from Congress next year.
Dodd says the companies need quick cash to avoid collapse in the next several weeks.
But over the long-term, Dodd says Chrysler probably ought to merge with another company and General Motors should be required to replace chief executive Rick Wagoner.
Dodd says Ford is the healthiest of the Big Three U.S. automakers.
Dodd appeared Sunday on CBS' "Face the Nation."
WHAT KIND OF GOVERNMENT DO WE NOW HAVE HERE, WHEN U.S. SENATORS GET TO DECIDE WHO SHOULD RUN WHAT COMPANY?
AND WHAT IS WITH THIS "MORE SIGNIFICANT BAIL-OUT" FOR THE AUTO INDUSTRY NEXT YEAR?
ARE WE NOW GOING TO HAVE YEARLY BAIL-OUTS?
OBAMA-NOMICS IN ACTION?
And so ...
"Senator calls for Chrysler merger, new CEO at GM"
7 DECEMBER 2008
WASHINGTON – A key senator says the nation's car companies should have to replace top executives in exchange for a long-term bailout package from Congress.
Sen. Chris Dodd heads the Senate Banking Committee.
He says he is hopeful Congress will pass a short-term $15 billion aid package for the automakers in the next several days.
But the Connecticut Democrat says the companies should have to restructure if they want a more significant bailout from Congress next year.
Dodd says the companies need quick cash to avoid collapse in the next several weeks.
But over the long-term, Dodd says Chrysler probably ought to merge with another company and General Motors should be required to replace chief executive Rick Wagoner.
Dodd says Ford is the healthiest of the Big Three U.S. automakers.
Dodd appeared Sunday on CBS' "Face the Nation."
"Obama suggests some auto execs should lose jobs"
By PHILIP ELLIOTT
7 DECEMBER 2008
CHICAGO – President-elect Barack Obama announced support Sunday for a short-term government bailout of the nation's carmakers that is tied to industry restructuring.
He also accused auto executives of a persistent "head-in-the sand approach" to long-festering problems.
Obama said Congress was doing "the exact right thing" in drafting legislation that "holds the auto industry's feet to the fire" at the same time it tries to prevent its demise.
In an appearance on NBC's "Meet the Press" and later at a news conference, Obama suggested some executives should lose their jobs.
One leading Democrat in Congress, Sen. Christopher Dodd of Connecticut, was far blunter.
Rick Wagoner, the chief executive of General Motors Corp., "has to move on," said Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee.
In response, GM spokesman Steve Harris said the company appreciates Dodd's support for the loans, but added, "GM employees, dealers, suppliers and the GM board of directors feel strongly that Rick is the right guy to lead GM through this incredibly difficult and challenging time."
Last week, The Associated Press asked Wagoner if he would resign at the request of Congress, to which he replied, "It's not clear to me that experience in this industry should be viewed as a negative, but I'm going to do what's right for the company and I'm going to do it in consultation with the board."
GM's board recently has been meeting three times a week by telephone.
The criticism of industry leaders deepened as negotiators for the White House and Congress narrowed their differences over a plan to extend roughly $15 billion in short-term loans to any Detroit automaker that needs it.
Analysts say General Motors Corp. and Chrysler LLC, in particular, are at risk for running out of money in the next few weeks, and that Ford Motor Co. may need help if the economy deteriorates further.
Democratic Sen. Carl Levin of Michigan, whose state is ground zero for the battered industry, said he was confident an agreement would emerge within the next day.
Democratic leaders have said they hope to pass the measure this week.
While Levin declined to predict its approval, support among rank-and-file lawmakers presumably would improve dramatically if both White House and Obama were to signal their backing once the legislation is complete.
"The last thing I want to see happen is for the auto industry to disappear, but I'm also concerned that we don't put $10 billion or $20 billion or $30 billion or whatever billion dollars into an industry, and then, six months to a year later, they come back hat in hand and say, `Give me more,'" Obama said.
Obama, who takes office Jan. 20, has drawn some criticism from Democrats who want him to become more involved in efforts to save the industry.
The president-elect said his aides are monitoring developments and considering longer-term plans.
He expressed no support for calls to allow the big carmakers to enter bankruptcy and said, "We don't want government to run companies."
Instead, he said, "if taxpayer money is at stake — which it appears may be the case — we want to make sure that it is conditioned on an auto industry emerging at the end of the process that actually works, that actually functions."
"Taxpayers, I think are fed up."
"They're going through extraordinarily difficult times right now."
Obama did not single out any individual executive by name for criticism, and said there had been incremental progress in the past 15 years toward a more competitive line of products.
"What we haven't seen is a sense of urgency and the willingness to make tough decisions."
"And what we still see are executive compensation packages for the auto industry that are out of line compared to their competitors, their Japanese competitors, who are doing a lot better," he said.
Asked whether the top executives should remain in the jobs, he said:
"Here's what I'll say, that it may not be the same for all the companies."
"But what I think we have to put an end to is the head-in-the-sand approach to the auto industry that has been prevalent for decades now."
Later, at the news conference, he appeared to temper his comments, saying that current management should be ousted if it doesn't understand the urgent need to make changes in the industry.
A breakthrough on the long-stalled rescue came Friday when House Speaker Nancy Pelosi, D-Calif., yielded to President George W. Bush on a key point: allowing the aid to come from an existing fund set aside for the production of environmentally friendlier cars.
The Big Three executives spent two consecutive days on Capitol Hill this past week pleading for as much as $34 billion in loans to help their industry survive.
But they made clear that $15 billion would be enough to keep them running until the end of March 2009.
Dodd appeared on CBS' "Face the Nation" and Levin was on "Fox News Sunday."
__
AP Auto Writer Tom Krisher in Detroit contributed to this story.
By PHILIP ELLIOTT
7 DECEMBER 2008
CHICAGO – President-elect Barack Obama announced support Sunday for a short-term government bailout of the nation's carmakers that is tied to industry restructuring.
He also accused auto executives of a persistent "head-in-the sand approach" to long-festering problems.
Obama said Congress was doing "the exact right thing" in drafting legislation that "holds the auto industry's feet to the fire" at the same time it tries to prevent its demise.
In an appearance on NBC's "Meet the Press" and later at a news conference, Obama suggested some executives should lose their jobs.
One leading Democrat in Congress, Sen. Christopher Dodd of Connecticut, was far blunter.
Rick Wagoner, the chief executive of General Motors Corp., "has to move on," said Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee.
In response, GM spokesman Steve Harris said the company appreciates Dodd's support for the loans, but added, "GM employees, dealers, suppliers and the GM board of directors feel strongly that Rick is the right guy to lead GM through this incredibly difficult and challenging time."
Last week, The Associated Press asked Wagoner if he would resign at the request of Congress, to which he replied, "It's not clear to me that experience in this industry should be viewed as a negative, but I'm going to do what's right for the company and I'm going to do it in consultation with the board."
GM's board recently has been meeting three times a week by telephone.
The criticism of industry leaders deepened as negotiators for the White House and Congress narrowed their differences over a plan to extend roughly $15 billion in short-term loans to any Detroit automaker that needs it.
Analysts say General Motors Corp. and Chrysler LLC, in particular, are at risk for running out of money in the next few weeks, and that Ford Motor Co. may need help if the economy deteriorates further.
Democratic Sen. Carl Levin of Michigan, whose state is ground zero for the battered industry, said he was confident an agreement would emerge within the next day.
Democratic leaders have said they hope to pass the measure this week.
While Levin declined to predict its approval, support among rank-and-file lawmakers presumably would improve dramatically if both White House and Obama were to signal their backing once the legislation is complete.
"The last thing I want to see happen is for the auto industry to disappear, but I'm also concerned that we don't put $10 billion or $20 billion or $30 billion or whatever billion dollars into an industry, and then, six months to a year later, they come back hat in hand and say, `Give me more,'" Obama said.
Obama, who takes office Jan. 20, has drawn some criticism from Democrats who want him to become more involved in efforts to save the industry.
The president-elect said his aides are monitoring developments and considering longer-term plans.
He expressed no support for calls to allow the big carmakers to enter bankruptcy and said, "We don't want government to run companies."
Instead, he said, "if taxpayer money is at stake — which it appears may be the case — we want to make sure that it is conditioned on an auto industry emerging at the end of the process that actually works, that actually functions."
"Taxpayers, I think are fed up."
"They're going through extraordinarily difficult times right now."
Obama did not single out any individual executive by name for criticism, and said there had been incremental progress in the past 15 years toward a more competitive line of products.
"What we haven't seen is a sense of urgency and the willingness to make tough decisions."
"And what we still see are executive compensation packages for the auto industry that are out of line compared to their competitors, their Japanese competitors, who are doing a lot better," he said.
Asked whether the top executives should remain in the jobs, he said:
"Here's what I'll say, that it may not be the same for all the companies."
"But what I think we have to put an end to is the head-in-the-sand approach to the auto industry that has been prevalent for decades now."
Later, at the news conference, he appeared to temper his comments, saying that current management should be ousted if it doesn't understand the urgent need to make changes in the industry.
A breakthrough on the long-stalled rescue came Friday when House Speaker Nancy Pelosi, D-Calif., yielded to President George W. Bush on a key point: allowing the aid to come from an existing fund set aside for the production of environmentally friendlier cars.
The Big Three executives spent two consecutive days on Capitol Hill this past week pleading for as much as $34 billion in loans to help their industry survive.
But they made clear that $15 billion would be enough to keep them running until the end of March 2009.
Dodd appeared on CBS' "Face the Nation" and Levin was on "Fox News Sunday."
__
AP Auto Writer Tom Krisher in Detroit contributed to this story.
"From hybrids to SUVs, unsold cars pile up"
By Nichola Groom
7 DECEMBER 2008
LONG BEACH, California (Reuters) – From pricey luxury sedans to popular hybrid cars, automobiles made overseas are stacking up at ports and parking lots around the United States as supplies far outstrip demand amid the nation's worst auto market in more than 25 years.
At the Long Beach port near Los Angeles, Toyota Motor Corp vehicles including Prius hybrids, FJ Cruiser sport utility vehicles and Lexus IS 250 luxury sedans are being stored on a vast construction site that will one day be a new container terminal.
The site became a gigantic parking lot when Toyota and Daimler AG's Mercedes-Benz asked the port for space to store thousands of vehicles that dealerships have not been able to take on due to sluggish sales.
"It's unusual that they would be here longer than a few days, but that's the situation now," said Art Wong, a spokesman for the Port of Long Beach.
"They can't move it through their pipeline fast enough so they are asking for additional space while they keep their vehicles here more than a few days, and in some cases more than a few weeks."
The port has not counted how many additional cars were being stored, but Wong said Toyota has leased an additional 23 acres of space while Mercedes-Benz has leased about 20 more acres.
Nissan Motor Co Ltd, which brings its cars in through the neighboring Los Angeles port, had been talking to Long Beach about leasing space, Wong said, though that arrangement fell through.
A Port of Los Angeles spokeswoman, Theresa Adams-Lopez, said Wallenius Wilhelmsen Logistics (WWL), which operates the terminal that brings in Nissan's vehicles, had shifted vehicle storage to another state.
Nissan spokeswoman Katherine Zachary said the company last increased its space at the Port of Los Angeles in February.
"As a normal course of business, we've got cars moving out of there all the time to various points across the country," Zachary said in an e-mail.
WWL, which is based in Norway, would not comment on specific customers, but said auto inventories were building up across the United States.
"We are seeing cargo buildup at ports of entry on both coasts as well as at other inventory points such as factories and rail yards and dealerships," Christopher Connor, the head of WWL's business in the Americas, said in a statement.
Other ports are also seeing a buildup of cars, though not all of them are leasing large tracts of land to automakers.
The San Diego port, which brings in Honda Motor Co, Volkswagen AG and Mitsubishi Corp vehicles, has about 14,000 cars on its property.
That's about 2,000 more vehicles than usual, according to spokesman John Gilmore, who said the additional cars belong to a range of manufacturers.
COLLAPSING DEMAND
Global automakers have been sideswiped by the collapsing demand for new cars and trucks.
A market slowdown that began in the United States has spread to Europe and Asia.
Detroit's embattled automakers have been pushed to the brink of failure by the downturn and are asking the U.S. Congress for a $34 billion rescue package.
But the sharp decline in sales in October and November blindsided even the industry's better-performing manufacturers like Toyota and Honda.
Toyota said on Friday that it was cutting North American output by idling factories that produce vehicles such as the Camry and Corolla, the Japanese automakers' top-selling cars.
Toyota spokesman Mike Goss said inventory had been pushed to "unacceptably high" levels that would take 80 to 90 days of sales to clear.
That is still less than the 115-day supply of inventory on average for General Motors Corp, Ford Motor Co and Chrysler LLC, but it is double Toyota's inventory levels of just a year earlier.
The surge in inventories has been a small blessing to some in the industry.
Automobile processors, who wash, repair and accessorize imported cars before they head to dealerships, said revenue from storing cars is helping offset the market's overall sluggishness.
MidTexas International Center Inc, whose Midlothian, Texas, facility processes vehicles for Kia Motors Corp, Mazda Motor Corp and Toyota's Lexus, expects to break even this year despite the dismal auto market because automakers are paying for cars to sit on its lots for longer.
"The inflow of vehicles is a lot greater than the outflow," MidTexas President Randy Denton said.
"That helps to offset the loss of income from the vehicles that we're not processing."
(Editing by Carol Bishopric)
By Nichola Groom
7 DECEMBER 2008
LONG BEACH, California (Reuters) – From pricey luxury sedans to popular hybrid cars, automobiles made overseas are stacking up at ports and parking lots around the United States as supplies far outstrip demand amid the nation's worst auto market in more than 25 years.
At the Long Beach port near Los Angeles, Toyota Motor Corp vehicles including Prius hybrids, FJ Cruiser sport utility vehicles and Lexus IS 250 luxury sedans are being stored on a vast construction site that will one day be a new container terminal.
The site became a gigantic parking lot when Toyota and Daimler AG's Mercedes-Benz asked the port for space to store thousands of vehicles that dealerships have not been able to take on due to sluggish sales.
"It's unusual that they would be here longer than a few days, but that's the situation now," said Art Wong, a spokesman for the Port of Long Beach.
"They can't move it through their pipeline fast enough so they are asking for additional space while they keep their vehicles here more than a few days, and in some cases more than a few weeks."
The port has not counted how many additional cars were being stored, but Wong said Toyota has leased an additional 23 acres of space while Mercedes-Benz has leased about 20 more acres.
Nissan Motor Co Ltd, which brings its cars in through the neighboring Los Angeles port, had been talking to Long Beach about leasing space, Wong said, though that arrangement fell through.
A Port of Los Angeles spokeswoman, Theresa Adams-Lopez, said Wallenius Wilhelmsen Logistics (WWL), which operates the terminal that brings in Nissan's vehicles, had shifted vehicle storage to another state.
Nissan spokeswoman Katherine Zachary said the company last increased its space at the Port of Los Angeles in February.
"As a normal course of business, we've got cars moving out of there all the time to various points across the country," Zachary said in an e-mail.
WWL, which is based in Norway, would not comment on specific customers, but said auto inventories were building up across the United States.
"We are seeing cargo buildup at ports of entry on both coasts as well as at other inventory points such as factories and rail yards and dealerships," Christopher Connor, the head of WWL's business in the Americas, said in a statement.
Other ports are also seeing a buildup of cars, though not all of them are leasing large tracts of land to automakers.
The San Diego port, which brings in Honda Motor Co, Volkswagen AG and Mitsubishi Corp vehicles, has about 14,000 cars on its property.
That's about 2,000 more vehicles than usual, according to spokesman John Gilmore, who said the additional cars belong to a range of manufacturers.
COLLAPSING DEMAND
Global automakers have been sideswiped by the collapsing demand for new cars and trucks.
A market slowdown that began in the United States has spread to Europe and Asia.
Detroit's embattled automakers have been pushed to the brink of failure by the downturn and are asking the U.S. Congress for a $34 billion rescue package.
But the sharp decline in sales in October and November blindsided even the industry's better-performing manufacturers like Toyota and Honda.
Toyota said on Friday that it was cutting North American output by idling factories that produce vehicles such as the Camry and Corolla, the Japanese automakers' top-selling cars.
Toyota spokesman Mike Goss said inventory had been pushed to "unacceptably high" levels that would take 80 to 90 days of sales to clear.
That is still less than the 115-day supply of inventory on average for General Motors Corp, Ford Motor Co and Chrysler LLC, but it is double Toyota's inventory levels of just a year earlier.
The surge in inventories has been a small blessing to some in the industry.
Automobile processors, who wash, repair and accessorize imported cars before they head to dealerships, said revenue from storing cars is helping offset the market's overall sluggishness.
MidTexas International Center Inc, whose Midlothian, Texas, facility processes vehicles for Kia Motors Corp, Mazda Motor Corp and Toyota's Lexus, expects to break even this year despite the dismal auto market because automakers are paying for cars to sit on its lots for longer.
"The inflow of vehicles is a lot greater than the outflow," MidTexas President Randy Denton said.
"That helps to offset the loss of income from the vehicles that we're not processing."
(Editing by Carol Bishopric)
This is a "lo-fi" version of our main content. To view the full version with more information, formatting and images, please click here.