2/12/2009 News Radar

by JASON | 7:51 AM in |

Russia's take on the US...

The print article...

Improvements in air travel...

Side note: Isn't it ironic that Obama puts out an Executive Order to seal presidential records after fighting to keep his records sealed in the courts for over 6 months while facing multiple lawsuits concerning his Constitutional eligibility to serve as President?

Sorry I couldn't help interjecting that one....anyways on to the news...

COLUMBUS, Ohio (AP) -- Oil prices slid closer to a new multiyear low Thursday because of growing doubts that the $789 billion stimulus package will reinvigorate the U.S. economy and demand for energy.

The number of people requesting first-time unemployment benefits dropped slightly last week, but remained near a 26-year high as companies lay off thousands of workers amid a deepening recession. The Commerce Department said the number of initial jobless benefit claims dropped to a seasonally adjusted 623,000, from an upwardly revised figure of 631,000 the previous week. The latest tally still was above analysts' expectations of 610,00 claims.

The 631,000 figure was the highest number since October 1982, when the economy was emerging from a steep recession, though the labor force has grown by about half since then.

Retail sales surprised analysts by rising 1 percent in January, reversing a six-month trend. Analysts said the rise was unlikely to last though and that much of the increase was due to rising gasoline prices.

The Energy Information Administration said Wednesday that crude inventories for the week ended Friday jumped 4.7 million barrels to 350.8 million barrels, surpassing the expectations of analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., who expected a boost of 3.4 million barrels. Including last week's buildup, crude inventories have increased by more than 30 million barrels in the past five weeks.

Oil analyst Stephen Schork said crude levels are at their highest point in more than a year and approaching the record level of 391.9 million barrels.

Gasoline inventories last week, however, slipped by 2.6 million barrels, or 1.2 percent, and demand for the four weeks ended Friday rose 0.1 to 8.8 million barrel a day, suggesting that more people may be spending money on fuel. Analysts expected stockpiles of the motor fuel to rise by 900,000 barrels.

U.S. refineries ran at 81.6 percent of total capacity on average, a drop of 1.9 percent from the prior week. Analysts expected capacity to slip to 83 percent. Refiners took in 214,000 fewer barrels of crude last week and gasoline production fell, the EIA reported.

Couple points - retail sales up due to increase in gas prices. Gas prices up because inventories slipped. Gas inventory slipped because refineries slowed production. Oil prices still falling despite multiple production volume drops.

Demand for oil will fall this year at the fastest rate since 1982, the International Energy Agency has forecast. The rich countries’ energy think-tank has again cut sharply its prediction for world oil demand this year, and now expects it to average 84.7m barrels per day, down 1m b/d from last year, because of the steep downturn in the world economy. This year is expected to mark two successive years of falling demand for the first time since 1982-83.

Opec cut its agreed production levels by 4.2m b/d in the second half of last year, and could well cut production again at its next meeting on March 15 in a bid to raise oil prices from this week’s levels below $40.

Demand is particularly weak in the industrial sector; consumption of naptha, used as a feedstock for manufacturing plastics and synthetic fibres, ”virtually collapsed” in Germany at the end of last year, and has fallen ”off a cliff” in Japan.

Gear up for some nasty deflation as demand "falls off the cliff."

Feb. 12 (Bloomberg) -- European industrial production dropped the most on record in December, pointing to a deepening economic slump in the fourth quarter.

Output in the euro region fell 12 percent from the year- earlier month after an 8.4 percent decline in November, the European Union’s statistics office in Luxembourg said today. The December drop was larger than the 9.5 percent median estimate of 19 economists in a Bloomberg survey and was the biggest since the data series began in 1986. From the previous month, production fell 2.6 percent, the most in almost 20 years.

Nearly 100 federal banking regulators descended on Citigroup in New York on Wednesday morning. Dozens more fanned out through Bank of America, JPMorgan Chase and other big banks across the nation.

It was just another workday. For years, regulators have embedded themselves inside the nation’s major banks to monitor their financial health.

But now these regulators could become the arbiters of American finance. Treasury Secretary Timothy F. Geithner is empowering them to decide which banks are strong enough to survive on their own — and which must be compelled to accept new bailouts from Washington, along with any strings that might be attached to them.

At the center of this effort, part of the Obama administration’s plan to shore up the nation’s financial industry, is a new stress test for banks that federal officials are devising.

Details are scant. But exams for 18 or so of the biggest banks are set to begin immediately, and the first results could arrive within weeks. They are not expected to be made public for every institution. Regulators were also discussing whether to apply the stress test to small and midsize banks, according to an administration official.

The exams could be used not only to determine which large banks would receive additional aid but also to help weed out small, unhealthy banks, hastening consolidation in the industry.

Analysts said the program hints at a creeping nationalization of the banking industry. “There is no way you can survive the failure of the stress test without having the government inject large amounts of taxpayer money,” said Jaret Seiberg, a policy analyst at the Stanford Group in Washington. “That means the government will own a majority of the bank.”

Paul J. Miller, a longtime banking analyst with Friedman Billings Ramsey, said the test might provide the government with political cover to take a more heavy-handed approach. “It gives them the mechanism they need to take giant steps with capital infusions,” he said.

Another big step in the banking roll up process. Highlights - Banking regulators now get to decide who will stay and who will go. The test is secret. As the analysts point out...its a tool for nationalization of the banking system. The end result is one big government bank. The following step will be getting chipped and you won't be able to buy or sell without it!

Foreclosure activity was still 18 percent higher than a year earlier, the 37th consecutive month with a year-over-year increase. Nevertheless, the fall in foreclosure filings last month provides a glimmer of hope for the hard-hit U.S. housing market.

Home foreclosure filings in January totaled 274,399, down 10 percent from December, RealtyTrac, an online market of foreclosure properties, said in its U.S. Foreclosure Market Report. The figure is a total of default notices, auction sale notices and bank repossessions.

No mention of seasonality which is the culprit.

Feb. 12 (Bloomberg) -- China’s new loans rose by a record in January and money supply expanded at the fastest pace in more than a year as the government pressured banks to support a 4 trillion yuan ($585 billion) stimulus package.

Banks extended 1.62 trillion yuan of new local-currency loans and M2, the broadest measure of money supply, climbed 18.8 percent from a year earlier, the People’s Bank of China said today on its Web site.

Feb. 12 (Bloomberg) -- President Barack Obama’s stimulus plan will be insufficient to avert the biggest U.S. economic decline since 1946 as consumer spending posts its longest slide on record, according to a monthly Bloomberg News survey.

The world’s largest economy will contract 2 percent this year, half a percentage point more than last month’s forecast, according to the median of 50 projections in the survey taken Feb. 2 to Feb. 10.

The federal budget deficit as a percentage of GDP will average 10 percent this year, a postwar high, analysts said, as the administration spends to tackle the recession.

A new lawsuit is being prepared by a California attorney who already has four cases pending over the issue of President Obama's eligibility to occupy to Oval Office, and this one will include a demand from state lawmakers who forward state funds to Washington for documentation of his qualifications.

Orly Taitz told WND today she's preparing the complaint but is holding onto it and will file it shortly to give state legislators a chance to join the action as plaintiffs.

Four already have signed up, including state Rep. Eric Swafford of Tennessee, who agreed to be a plaintiff "for a Writ of Mandamus to obtain original birth certificate, immigration records, passports and other vital records for Barry Soetero aka Barack Hussein Obama."

US and Russian communications satellites have collided in space in what is thought to be the biggest incident of its kind to date. The US commercial Iridium spacecraft hit a defunct Russian satellite at an altitude of about 800km (500 miles) over Siberia on Tuesday, NASA said. The impact produced a cloud of debris, which will be tracked into the future. Litter in orbit - caused in part by the break-ups of old satellites - has increased to such an extent that it is now the biggest threat to a space shuttle in flight. Mr Johnson said that at the beginning of this year about 17,000 manmade pieces of debris were orbiting Earth.

The items, some as small as 10cm (four inches), are tracked by the US Space Surveillance Network - sending information to help spacecraft operators avoid the debris. Of the 6,000 satellites sent into orbit since 1957, about 3,000 remain in operation, according to NASA.

Multiple sources have now reported the collision. Some 600 pieces of debris are already being tracked from the event, which reportedly took place over northern Siberia at an altitude of 491 miles. This is well within the most popular band of low Earth orbit for satellites. The collision appears to have involved the Iridium 33 (NORAD ID 24946) communications satellite, launched in 1997, which had been reported by Iridium to be operational. The Russian craft was the Cosmos 2251 (NORAD ID 22675) communications relay satellite, launched in 1993 and widely reported to be nonoperational.

This is the first case in history of two satellites colliding. The orbital altitude where the collision took place is among the most crowded in low Earth orbit, but statistically speaking, the enormous scale of space makes the chance that this kind of direct collision would occur completely by accident infinitesimal.

This unlikelihood is compounded by the fact that the U.S. Air Force Space Surveillance Network provides space situational awareness and tracks some 18,000 satellites, orbital debris and other objects orbiting the earth. Though the network’s tracking of each of these objects is not constant, all objects of a certain size or larger are catalogued; potential collisions or near misses are generally spotted, and satellites can usually be maneuvered to avoid them.

As an operational satellite providing regular service, Iridium 33’s orbit should have been stable. (Iridium has said that its global service has been only minimally affected.) The same is true of Cosmos 2251, even though it is likely slowly decaying. Stratfor notes this event first and foremost as anomalous — an important part of the intelligence process. We will continue to monitor the situation closely.

Good analysis of the satellite's history and possible purpose behind destruction...

LYON, France (AFP) — Interpol on Tuesday issued a global security alert for 83 Saudi nationals and two Yemenis described as highly dangerous and suspected of plotting terror attacks against Saudi Arabia.

It was the first time that the world police organisation had issued a so-called "Orange notice" for such a large group of suspects, said Interpol secretary general Ronald Noble.

The men are wanted in Saudi Arabia on terrorism-related charges, including links to Al-Qaeda in the kingdom, Iraq and Afghanistan, said an Interpol statement issued at its headquarters in Lyon, central France.

They are described as "highly dangerous" and "could be armed, violent and suicidal," according to the security alert.

"By asking for Interpol's assistance, Saudi Arabia wishes to ensure that all Interpol member-countries are made aware that these men are dangerous and that their activities represent a security concern not only for Saudi Arabia and the entire region but also for the world as a whole," said Noble.

"We know that we are approaching the 16th anniversary of the first World Trade Center bombing on February 26, 2009 and therefore must be especially vigilant of fugitive Al-Qaeda terrorists," he said.

The 85 men, most of whom are aged between 20 and 35, are suspected of having left Saudi Arabia, probably for Iraq or Afghanistan.

The United States Conference of Mayors has assembled the most ridiculous and repulsive example of government excess I think I have ever seen. Here is a PDF file of the document which stretches to 344 pages. One of the most alarming features of this civic gluttony is the gift list request for funds to buy military SWAT assault equipment for police forces.

Support documents...


The war against the Taliban and al-Qaeda in Afghanistan will be lost by the end of the summer without dramatic changes in counter-insurgency strategy, according to a leading US military expert.

The assessment of Col John Nagl, who is consulting the US government as it conducts four separate policy reviews on Afghanistan, comes amid fears that unless the insurgents' advance is halted, Afghanistan will become the new president's Vietnam.

Adm Mullen has said he expected to announce the deployment of a further 30,000 US troops soon, even though the Obama administration is waiting to evaluate the reviews.

"The commander on the ground has asked for additional forces and meeting those requirements against the overall strategy is something that I have an expectation to get directed to do," he said.

The anticipation in military circles is that the president will agree not only to the extra troops but to the adoption of the approach that worked well in Iraq, whereby US forces concentrate less seeking out and killing insurgents. Instead they followed a "clear, hold, build" strategy designed to consolidate gains and prevent captured towns falling back into enemy hands.

Like other experts and Pentagon officials, he believes the current Afghan army size of 70,000 – just a quarter of the Iraqi army – will need to double if not triple to establish itself as a convincing security force.

This is ridiculous. They can't keep up with the demand for drugs. Here's some more background...

WASHINGTON — The FBI is conducting more than 500 investigations of corporate fraud amid the financial meltdown, FBI Deputy Director John Pistole told the Senate Judiciary Committee on Wednesday, and there is an even bigger mountain of mortgage fraud cases in which hundreds of millions of dollars may have been swindled from the system.

Pistole says there are 530 active corporate fraud investigations, and 38 of them involve corporate fraud and financial institution matters directly related to the economic crisis.

When the tide goes out you get to see who's been swimming naked!

WASHINGTON – See the jar, the congressman challenged Stewart Parnell, holding up a container of the peanut seller's products and asking if he'd dare eat them. Parnell pleaded the Fifth.

The owner of the peanut company at the heart of the massive salmonella recall refused to answer the lawmaker's questions — or any others — Wednesday about the bacteria-tainted products he defiantly told employees to ship to some 50 manufacturers of cookies, crackers and ice cream.

"Turn them loose," Parnell had told his plant manager in an internal e-mail disclosed at the House hearing. The e-mail referred to products that once were deemed contaminated but were cleared in a second test last year.

Summoned by congressional subpoena, the owner of Peanut Corp. of America repeatedly invoked his right not to incriminate himself at the House Energy and Commerce subcommittee hearing on the salmonella outbreak that has sickened some 600 people, may be linked to nine deaths — the latest reported in Ohio on Wednesday — and resulted in one of the largest product recalls of more than 1,900 items.

More info....

Everyone is terrified that a second bank bailout will push up government borrowing at a time when bond markets have growing doubts over the ability of countries such as Spain, Greece, Portugal, Ireland, Italy and Britain, to pay it back.

"Estimates of total expected asset write-downs suggest that the budgetary costs - actual and contingent - of asset relief could be very large both in absolute terms and relative to GDP in member states," a confidential EC document, seen by The Daily Telegraph, cautioned.

"It is essential that government support through asset relief should not be on a scale that raises concern about over-indebtedness or financing problems."

The more the doubt there is over high levels of government borrowing, the more the markets have asked governments to pay to service their borrowing and all the more indebted countries become.

Ministers and officials fear that the process could lead to vicious spiral that threatens to tear both the euro and the EU apart.

"Such considerations are particularly important in the current context of widening budget deficits, rising public debt levels and challenges in sovereign bond issuance," the EC paper warned.

"The limitations on the budgetary capacity of some member states in providing asset relief are already evident in a significant widening in the spreads on government bond yields relative to benchmarks."

"It is clear that investors have become more discriminating among sovereign issuers on the basis of credit risk."

Selling bullets may be the most secure job in Florida as long as supplies last. After months of heavy buying, gun dealers across the state are experiencing shortages.

Some say it began with the election of President Barack Obama. Others say it's about the economic downturn or fear of crime. Whatever the reasons, ammunition has been selling like plywood and bottled water in the days before a hurricane.

Demand for bullets is so strong that suppliers are restricting deliveries.

"Where we used to get 20 to 30 cases [in a shipment], we may get two to three cases now," said Vic Grechniw of Florida Ammo Traders in Tampa. "The supply just isn't there. . . . Everybody is pretty much rushing out to get their hands on whatever they can."

Most in demand is handgun ammunition, including 9 mm and .45-caliber for semiautomatic pistols and .38-caliber for revolvers. Clerks at local Walmart stores, including Apopka and Kissimmee, say those sizes, along with .22-caliber, are on back order at the chain's warehouses.

Despite being able to buy 100,000 rounds at a time, Shoot Straight can't find any copper-jacketed bullets for .380-caliber pistols, popular as concealed weapons. The shops have adequate supplies of other calibers.

"You've got to beat the bushes and take deals," Anderson said. "Now I take whatever I can get instead of being finicky."

National chains are seeing the same increased levels of customers buying guns and ammunition in recent months, said Larry L. Whiteley, a spokesman for Bass Pro Shops.

"Why, we don't know," he said.

One major regional manufacturer, Georgia Arms, has seen bullet sales jump 100 percent since the November election.

"People are just stockpiling," said company spokeswoman Judy Shipley. "A gun is just like a car. If you can't get gas, you can't use it."

I'll take a stab at guessing why....people aren't stupid...they see the signs of collapse and have a gut feel for the storms on the horizon!

Four Southern states — Texas, South Carolina, Oklahoma and Arkansas — are considering legislation that would allow people to carry handguns openly in a holster.

These generally Second Amendment-friendly states are among the last six holdouts against open carrying of guns. Openly carrying handguns is legal in most states, even those that ban concealed firearms. New York and Florida also bar openly carrying handguns.

The four other states that ban so-called open carry "are extremely gun-friendly. They understand the individual-rights aspect. Yet for whatever reason, the carry laws in these states are restrictive," says John Pierce, a co-founder of OpenCarry.org, which promotes gun rights.

Most states have strict laws governing concealed weapons. Illinois and Wisconsin ban carrying them entirely, according to the National Rifle Association. Concealing a weapon "was seen in the early days of our nation as something of an unwholesome act. People would bear arms openly," Pierce says.

Says Paul Helmke, president of the Brady Campaign to Prevent Gun Violence, which opposes open-carry laws: "We don't want more people carrying guns either openly or concealed because the more guns you have in a situation, the more likely you are to get gun violence."

Legislation is getting varying degrees of traction:

• In South Carolina, Republican Rep. Dan Cooper sponsored a bill endorsed by 36 other legislators to allow anyone who legally owns a handgun to carry it openly.

• In Oklahoma, Republican Rep. Mike Ritze is the sole sponsor of a bill filed Feb. 2 that would allow open carry.

• In Arkansas, a legislator is moving forward with a similar bill, Stollenwerk says.

• In Texas, Ian McCarthy, a student who chairs the Texas Open Carry Work Group, started the online petition in late 2007. He says a concealed gun is uncomfortable during hot Texas summers, takes longer to draw in self-defense and won't deter a criminal.

"If a criminal sees you're armed, he's not going to mess with you," McCarthy says.

Feb. 10 (Bloomberg) -- Treasury Secretary Timothy Geithner pledged government financing for as much as $2 trillion of efforts to spur new lending and address banks’ toxic assets, seeking to end the credit crunch hobbling the economy.

“Instead of catalyzing recovery, the financial system is working against recovery,” Geithner said in unveiling the Obama administration’s financial-bailout overhaul in Washington today. “At the same time, the recession is putting greater pressure on banks. This is a dangerous dynamic, and we need to arrest it.”

AUSTIN -- Texas officials are working on a plan to respond to a potential collapse of the Mexican government and the specter of thousands fleeing north in fear for their lives after recent reports indicated the country could be on the verge of chaos.

"You hope for the best, plan for the worst," Katherine Cesinger, spokeswoman for Gov. Rick Perry, said last week. "At this point, we've got a contingency plan that's in development."

Late last year the U.S. Department of Defense issued a report that listed Pakistan and Mexico as countries that could rapidly collapse. The report came after similar alarms sounded by the U.S. Department of Homeland Security and former U.S. drug czar Barry McCaffrey.

"I think their fears are well-grounded," Texas Home land Security Director Steve McCraw told lawmakers recently at a border security briefing.

Lawmakers expressed concern that the state's southern neighbor, embroiled in drug violence and facing uncertain economic conditions, could send thousands north in search of safety.

HOUSTON — More than 200 American citizens have been killed since 2004 in Mexico's escalating wave of violence, amounting to the highest number of unnatural deaths in any foreign country outside military combat zones, according to the U.S. State Department.

Carlos Slim, the Mexican billionaire whose $250 million cash infusion bailed the New York Times out of a tight cash crunch last week, has long-standing business ties with wealthy Mexican businessmen suspected of involvement in Mexico's so-called “Cartel of the Southeast,” the drug trafficking organization (DTO) based in Cancun which came to light two years ago with the crash on Mexico’s Yucatan Peninsula of an American-registered (N987SA) Gulfstream jet carrying nearly four tons of cocaine.

A long-time lieutenant of Carlos Slim's, Fernando Chico Pardo, left Slim's employ to take over ASUR, a publicly-traded corporation which observers accuse of moving large quantities of cocaine through Cancun International Airport, which the company runs and manages.

Regardless of how his investment in the New York Times does, analysts say, Carlos Slim comes out a winner. His quarter-billion dollar investment buys him prestige as an owner of one of the world's best-known and most-influential newspapers that his status as the world's second-richest man cannot.

Owning a piece of the New York Times, goes this reasoning, provides the kind of “cover” which credit card commercials call “priceless.”

"Carlos Slim's stake is a danger to the New York Times," said the Seattle Times in a scathing editorial. While calling it "an ominous move," the editorial neglected to mention any of Slim's more unsavory connections. American newspapers don't mention "narco-politicos." It is something approaching a taboo.

Start with a universally acknowledged fact: Despite occasionally valiant efforts by our Southern neighbor, Mexico’s chief growth industry is drug trafficking.

Is Carlos Slim being tainted unfairly for having risen to the top in a troubled country better-known as a corrupt cesspool of gangsters and narco-traffickers than as an incubator for world-class entrepreneurs ready to take on Warren Buffett for the title of "world's richest man?"

Let's take a look. We pretend to no great accounting expertise. We never worked for Arthur Anderson. (Well, maybe that's a bad example.)

But Carlos Slim's numbers don’t add up. Drug Lord and Lord of the Skies Amado Fuentes, recall, managed to salt away no more than $10 or $15 billion a decade. And he was in the cocaine business, where counting your money can be a bigger problem than making it.

Carlos Slim owned Sears. Was there an epic sort of run in Mexico on Kenmore washer-dryers?

Has anyone ever made $50 billion before--or anything close--in just ten years?

Shouldn't ownership of the New York Times be treated as a matter of national security, just like that of, say, Raytheon? And most puzzling of all, why has a revered (well, semi-revered) institution like the Times let Slim buy his way to such a large stake?

The answer to that last questions was answered indirectly last week, by the Executive Director of the United Nations' crime and drug watchdog group, UNODC. "Money made in the illicit drug trade has been used to keep banks afloat in the global financial crisis," Reuters quoted Antonio Maria Costa.

"In the midst of the current world financial crisis, drug money is, in many instances, currently the only liquid investment capital," said Costa. "With little unemployment, the drug trade at this time could be the world's only growth industry."

Most people, perhaps naively, think of drug money as bad. Carlos Slim's investment in the N.Y. Times, on the other hand, may illustrate that some don't consider all drug money to be bad.

More info...

A little CIA involvement?
The CIA Drug Plane Scandal grew exponentially last week when European Union officials broke an official 40-year-long silence on the previously-taboo subject of the CIA’s worldwide involvement in drug trafficking.

Last week Mexico City newspaper El Universal reported that The European Organization for the Safety of Air Navigation has begun an investigation one of the planes, the cocaine-laden Gulfstream II business jet (N987SA), for suspected use in CIA "rendition" flights in which prisoners are covertly transferred to a third country or US-run detention centers.

The plane crash-landed after running out of fuel in the jungle near the small town of Tixkokob, 40 miles outside the Yucatan capital of Merida on September 24th of last year.

...and the DEA?

The exclusive "Cocaine One" series of investigative reports by this reporter appearing on this website for the past two years made the news, finally... not in the U.S., but in Mexico City, where it was cited by a principal in the drug trafficking scandal in newspaper interviews to support his allegation of selective prosecution against the DEA.

It is one of several recent new developments in the scandal, which began two years ago with the capture in the Yucatan by the Mexican military of two American-registered airplanes.

Both planes had taken off from St. Petersburg FL., flown to Colombia and Venezuela, and then were busted when they stopped in the Yucatan to refuel on the way back to Florida.

They were caught carrying an astonishing cumulative total of ten tons of cocaine, as well as a still-undisclosed amount of heroin.


The House overwhelmingly adopted legislation this week mandating the creation of a new kind of terrorist watchlist: a database of people who aren't terrorists, but are routinely flagged at airports anyway.

The U.S. government maintains a list of about a million names of suspected terrorists that is crosschecked with passenger names ahead of airline boarding. The list has been dogged for years by sloppy name matches that have ensnared innocent travelers, children, prominent politicians and government officials, the U.S. Conference of Catholic Bishops' secretary of education and all men named David Nelson.

Under the new plan, approved late Tuesday 413-3, innocent victims of the terrorist watchlist must prove to the Department of Homeland Security, through an undetermined appeals process, that they are not terrorists. They would then get their names put on what the legislation calls the "Comprehensive Cleared List."

Bold italics mine. What happened to innocent until proven guilty...oh it died along with the Constitution some time ago!

THE government is building a secret database to track and hold the international travel records of all 60m Britons.

The intelligence centre will store names, addresses, telephone numbers, seat reservations, travel itineraries and credit card details for all 250m passenger movements in and out of the UK each year.

The computerised pattern of every individual’s travel history will be stored for up to 10 years, the Home Office admits.

The government says the new database, to be housed in an industrial estate in Wythenshawe, near Manchester, is essential in the fight against crime, illegal immigration and terrorism. However, opposition MPs, privacy campaigners and some government officials fear it is a significant step towards a total surveillance society.

UK is leading the way in these efforts. The canary in the coal mine to keep your eye on.

BEIJING — Parts of China's parched north got light rain after authorities fired shells loaded with cloud-seeding chemicals into the sky, but there was no end in sight for its worst drought in five decades, the government said Sunday.

Beijing has declared an emergency across China's north, where 4.4 million people lack adequate drinking water and winter wheat crops are withering.

"The drought situation will not be eased in the near future," said a national weather bureau statement.

Some areas got a sprinkling of rain and sleet Saturday and Sunday after clouds were hit with 2,392 rockets and 409 cannon shells loaded with chemicals, the weather bureau said. It said clouds were thin and moving out of the region, making conditions poor for more rainmaking.

Rainfall in northern and central China is 50% to 80% below normal, according to the Flood Control and Drought Relief Office. The official Xinhua News Agency said the drought that started in November threatens up to half the wheat crop in eight provinces — Hebei, Shanxi, Anhui, Jiangsu, Henan, Shandong, Shaanxi and Gansu.

“Dead,” she spits. “If it doesn’t rain soon, I’ll have no harvest at all.”

Nor will millions of other peasant farmers in the drought-stricken belt of northern China that normally produces 95 percent of the country’s winter wheat. “Winter crops are entering a critical period,” the head of China’s drought-relief efforts, Er Jingping, said on Tuesday. “If it does not rain in the next 15 days, we will face an even more daunting task.”

The most prolonged drought for half a century has parched fields and stunted crops in this remote village at a particularly difficult time. Many of the residents who normally migrate to the cities, and send money home, have lost their jobs as China’s economic growth slows. Suddenly, the wheat harvest here in Zhaogou matters again as a question of subsistence.

Local authorities are keenly aware of the looming crisis and are digging new wells in the plains north of here in search of irrigation water. But that will not help Ms. Liu, or other farmers in the countless villages dotted around the hillsides of Henan Province, which grows one-quarter of China’s wheat. “We depend on the sky to survive,” she says.

Under a new law published on Monday and due to be in force in April, mobile phone companies will have a year to build up a database of their clients, complete with fingerprints. The idea would be to match calls and messages to the phones' owners.
The register, detailed in the government's official gazette, means new subscribers will now be fingerprinted when they buy a handset or phone contract.

BEIJING (Reuters) - Fire consumed a building in Beijing that formed part of Central China Television's new headquarters as residents set off fireworks throughout the city to celebrate the Lantern Festival on Monday evening.

Same size as World Trade Center 7. It didn't collapse from the fire though.

Feb. 12 (Bloomberg) -- C.R. “Rusty” Cloutier of MidSouth Bank wants to heed President Barack Obama’s call to lend money. It’s his customers who aren’t paying attention.

Cloutier, chief executive officer of MidSouth Bancorp Inc. in Lafayette, Louisiana, received a $20 million cash infusion from the U.S. government on Jan. 9 and instructed loan officers to line up borrowers. Then he went on the road to make personal appeals at 14 town hall meetings.

“What we want to do is make people aware we have $250 million to lend,” Cloutier said Jan. 28 at the branch in downtown Lafayette. The 20 or so in the audience were outnumbered by bank employees handing out cookies and bottled water. Nobody asked for an application.

We've hit the tipping point in our ability to take on more debt. Game over!

An AP investigation had just revealed that the Pentagon budget for “influence operations” this fiscal year is at least $4.8 billion, with about 27,000 civilian and military personnel assigned to information dissemination.

The penalty for failing to agree to the Pentagon’s terms of reporting, said Curley, was that he was told by top commanders that “if I stood and the AP stood by its journalistic principles, the AP and I would be ruined.”

Russia has accepted to allow the transit of non-military American cargos through its territory to Afghanistan. According to a source in the Russian Foreign Ministry, the decision will be effective shortly. Agreeing to provide support to the NATO-led International Security Assistance Force (ISAF), Moscow has made a sign that it is willing to cooperate with the new American administration. It is expected goods will be first transported via Russia and then go through Kazakhstan and Uzbekistan to Afghanistan.

Everyone wants their cut of the drug money. The whole bargaining position of Kazakhstan.

At a meeting of the Commission for Military-Technical Cooperation with Foreign States the Russian President announced $US 8.3 billion dollars income from arms sales, which is 10 percent more than last year. Russia is the second biggest arms exporter in the world after the U.S.

Good background reading on Russia...

The US military has failed to keep track of thousands of weapons shipped to Afghanistan, leaving them vulnerable to being lost or stolen, a report says. The report has been compiled by congressional auditors, the US Government Accountability Office (GAO). It found that, in the four years up to June 2008, the US military failed to keep complete records on some 222,000 weapons entering the country.

Nothing new!

MELBOURNE/LONDON (Reuters) - Chinese state-owned aluminum group Chinalco will invest $19.5 billion in miner Rio Tinto in a deal that will secure resource supplies for China and help cut Rio's heavy debt but also raise regulatory scrutiny.

SEOUL (Reuters) - Hermit North Korea would upset regional security and face greater isolation if it launched a missile, South Korea's foreign minister said on Thursday amid reports the communist state was planning a rocket launch.

"If North Korea does launch missiles, it will be a serious threat not only to inter-Korean relations but also to the security of the Korean peninsula and that of the East Asia," Foreign Minister Yu Myung-hwan said at a news briefing.

North Korea has made moves to prepare its longest-range Taepodong-2 missile for a test, U.S. and South Korean news reports said. Officials in Seoul said the secretive state may also be planning to test-fire short-range missiles.

NEW YORK (Reuters) - Prices of existing U.S. single-family homes dropped a record 12.4 percent in the fourth quarter from a year earlier to the lowest level since 2003, the National Association of Realtors said on Thursday.

The dip will be much bigger than the spike!

Effective Valentine's Day -- Feb. 14 -- you will no longer be able to get your FICO credit score from Experian, one of the three major credit bureaus.

The company notified Fair Isaac Corp., the firm that created the credit-scoring model most used by lenders, that it is terminating its relationship with MyFICO.com, a Web site that sold FICO credit scores and other information directly to consumers. This means generally that Experian customers will not be able to see the FICO scores that lenders are using in determining their credit levels.

"Experian's Valentine's Day present to 200 million American adults is to make sure they have no access at all to any Experian-based credit score that is widely used by lenders," said Craig Watts, public relations director for Fair Isaac. "Goodbye, transparency."

TEHRAN - IRAN is building seven new satellites, including three for high orbit positions, the communications minister said on Thursday, a week after Iran launched its first satellite amid international concerns.

'Four low-orbit satellites weighing under 100 kilograms are under design and construction,' Mohammad Soleymani was quoted as saying by the state broadcaster's website.

The other three will be high orbit spacecraft and all seven are being built by Iranian scientists, he said.

On February 2, Iran sent its first home-built Omid (Hope) satellite into space, carried by a Safir-2 rocket, setting alarm bells ringing among Western powers already at loggerheads with Tehran over its nuclear programme.

A simple line of erroneous computer coding caused a mistake that could cost the State of Washington millions. Washington State’s Department of Labor and Industries (L&I) said on Tuesday that it has corrected the duplicated line of computer coding.

L&I is Washington State’s worker compensation administrator, and performs functions at the state level similar to a large employment insurance provider. The coding was causing overpayments on refunds to customer in one of L&I’s programs.

The error, which dates back to at least 1994, was discovered by agency actuaries while they were preparing data for a state legislature request. Due to the size of the error—one half percent—it was too small to be detected in the process of a typical audit. The system affected by the error collects $1.6 billion in premiums annually, and the error could end up costing $10 million to $15 million per year.

While the great debate over the "stimulus" spending bill was the focus of President Obama's Monday sermon, some of the questions asked at a subsequent press conference dealt with foreign policy, including a pointed one by CNN's Ed Henry, and it was a double zinger:

"Thank you, Mr. President. You've promised to send more troops to Afghanistan. And since you've been very clear about a timetable to withdraw combat troops from Iraq within 16 months, I wonder, what's your timetable to withdraw troops eventually from Afghanistan?

"And related to that, there's a Pentagon policy that bans media coverage of the flag-draped coffins from coming in to Dover Air Force Base. And back in 2004, then-Senator Joe Biden said that it was shameful for dead soldiers to be, quote, 'snuck back into the country under the cover of night.'

"You've promised unprecedented transparency, openness in your government. Will you overturn that policy so the American people can see the full human cost of war?"

Hey, who let that guy in here, anyway?

Obama's answer is a study in obfuscation and chilling sanctimony eerily reminiscent of his predecessor: "Your question is timely," the president averred. "We got reports that four American service members have been killed in Iraq today. And, you know, obviously, our thoughts and prayers go out to the families."

Left vs Right facade...

Today’s economic collapse is the direct result of their planning philosophy. It actually was taught as “wealth creation” and still is, as supposedly more productive than the public regulation and oversight so detested by Wall Street and its Chicago School aficionados. The financial powerhouses created by this “free market” philosophy span the entire FIRE sector – finance, insurance and real estate, “financializing” housing and commercial property markets in ways guaranteed to make money by creating and selling debt. Mr. Obama’s advisors are precisely those of the Clinton Administration who supported trustification of the FIRE sector. This is the broad deregulatory medium in which today’s bad-debt disaster has been able to spread so much more rapidly than at any time since the 1920s.

The commercial banks have used their credit-creating power not to expand the production of goods and services or raise living standards but simply to inflate prices for real estate (making fortunes for their brokerage, property appraisal and insurance affiliates), stocks and bonds (making more fortunes for their investment bank subsidiaries), fine arts (whose demand is now essentially for trophies, degrading the idea of art accordingly) and other assets already in place.

The resulting dot.com and real estate bubbles were not inevitable, not economically necessary. They were financially engineered by the political deregulatory power acquired by banks corrupting Congress through campaign contributions and public relations “think tanks” (more in the character of Orwellian doublethink tanks) to promote the perverse fiction that Wall Street can be and indeed is automatically self-regulating. This is a travesty of Adam Smith’s “Invisible Hand.” This hand is better thought of as covert. The myth of “free markets” is now supposed to consist of governments withdrawing from planning and taxing wealth, so as to leave resource allocation and the economic surplus to bankers rather than elected public representatives. This is what classically is called oligarchy, not democracy.

This centralization of planning, debt creation and revenue-extracting power is defended as the alternative to Hayek’s road to serfdom. But it is itself the road to debt peonage, a.k.a. the post-industrial economy or “Information Economy.” The latter term is another euphemistic travesty in view of the kind of information the banking system has promoted in the junk accounting crafted by their accounting firms and tax lawyers (off-balance-sheet entities registered on offshore tax-avoidance islands), the AAA applause provided as “information” to investors by the bond-rating cartel, and indeed the national income and product accounts that depict the FIRE sector as being part of the “real” economy, not as an institutional wrapping of special interests and government-sanctioned privilege acting in an extractive rather than a productive way.

None of this can solve today’s financial problem. The debt overhead far exceeds the economy’s ability to pay. If the banks would indeed do what Pres. Obama’s appointees are begging them to do and lend more, the debt burden would become even heavier and buying access to housing even more costly. When the banks look back fondly on what Alan Greenspan called “wealth creation,” we can see today that the less euphemistic terminology would be “debt creation.” This is the objective of the new bank giveaway. It threatens to spread the distortions that the large banks have introduced until the entire system presumably looks like Citibank, long the number-one offender of “stretching the envelope,” its euphemism for breaking the law bit by bit and daring government regulators and prosecutors to try and stop it and thereby plunging the U.S. financial system into crisis. This is the shakedown that is being played out this week. And the Obama administration blinked – as these same regulators did when they were in charge of the Clinton administration’s bank policy. So much for the promised change!

The three-pronged Treasury program seems to be only Stage One of a two-stage “dream recovery plan” for Wall Street. Enough hints have trickled out for the past three months in Wall Street Journal op-eds to tip the hand for what may be in store. Watch for the magic phrase “equity kicker,” first heard in the S&L mortgage crisis of the 1980s. It refers to the banker’s share of capital gains, that is, asset price inflation in Bubble #2 that the Recovery Program hopes to sponsor.

The first question to ask about any Recovery Program is, “Recovery for whom?” The answer given on Tuesday is, “For the people who design the Program and their constituency” – in this case, the bank lobby. The second question is, “Just what is it they want to ‘recover’?” The answer is, the Bubble Economy. For the financial sector it was a golden age. Having enjoyed the Greenspan Bubble that made them so rich, its managers would love to create yet more wealth for themselves by indebting the “real” economy yet further while inflating prices all over again to make new capital gains.

The problem for today’s financial elites is that it is not possible to inflate another bubble from today’s debt levels, widespread negative equity, and still-high level of real estate, stock and bond prices. No amount of new capital will induce banks to provide credit to real estate already over-mortgaged or to individuals and corporations already over-indebted. Moody’s and other leading professional observers have forecast property prices to keep on plunging for at least the next year, which is as far as the eye can see in today’s unstable conditions. So the smartest money is still waiting like vultures in the wings – waiting for government guarantees that toxic loans will pay off. Another no-risk private profit to be subsidized by public-sector losses.

So here’s the situation as I see it. The first objective is to preserve the wealth of the creditor class – Wall Street, the banks and the other financial vehicles that enrich the wealthiest 1% and, to be fair within America’s emerging new financial oligarchy, the richest 10% of the population. Stage One involves buying out their bad loans at a price that saves them from taking a loss. The money will be depicted to voters as a “loan,” to be repaid by banks extracting enough new debt charges in the new rigged game the Treasury is setting up. The current loss will be shifted the onto “taxpayers” and made up by new debtors – in both cases labor, onto whose shoulders the tax burden has been shifted steadily, step by step since 1980.

An “aggregator” bank (sounds like “alligator,” from the swamps of toxic waste) will buy the bad debts and put them in a public agency. The government calls this the “bad” bank. (This is Geithner’s first point.) But it does good for Wall Street – by buying loans that have gone bad, along with loans and derivative guarantees and swaps that never were good in the first place. If the private sector refuses to buy these bad loans at prices the banks are asking for, why should the government pretend that these debt claims are worth more. Vulture funds are said to be offering about what they were when Lehman Brothers went bankrupt: about 22 cents on the dollar. The banks are asking for 75 cents on the dollar. What will the government offer?

Perhaps the worst alternative is that is now being promoted by the banks and vulture investors in tandem: the government will guarantee the price at which private investors buy toxic financial waste from the banks. A vulture fund would be happy enough to pay 75 cents on the dollar for worthless junk if the government were to provide a guarantee. The Treasury and Federal Reserve pretend that they simply would be “providing liquidity” to “frozen markets.” But the problem is not liquidity and it is not subjective “market psychology.” It is “solvency,” that is, a realistic awareness that toxic waste and bad derivatives gambles are junk.

WASHINGTON (Reuters) - The U.S. Senate approved William Lynn, a former Raytheon Co lobbyist, to be deputy secretary of defense after he received a special White House waiver from strict new rules meant to close a "revolving door" between government and big business.

Lynn, the Pentagon's chief financial officer from November 1997 to January 2001 under former President Bill Clinton, was confirmed by a vote of 93 to 4 on Wednesday.

At Raytheon, the world's biggest missile-maker and the Pentagon's No. 6 supplier by sales, he was registered as the company's top lobbyist to the Defense Department from July 2002 until last year.

President Barack Obama's new ethics rules bar lobbyists for two years from working as appointees on matters they had lobbied about. The White House Office of Management and Budget gave Lynn a waiver to further "the public interest."

The U.S. Army recently reported that for the month of January in 2009, the number of soldiers who committed suicide surpassed the number of soldiers who were killed in combat in Iraq and Afghanistan. The number of suicides in January 2009 is more than five times as many as the total in January 2008.