Eeyores news and view

Plan to protect D.C. from nuke EMP attack
Defense initiative focuses on saving government
Posted: June 25, 2009 12:00 am Eastern © 2009 WorldNetDaily
Editor's Note: The following report is excerpted from Joseph Farah's G2 Bulletin, the premium online newsletter published by the founder of WND. Subscriptions are $99 a year or, for monthly trials, just $9.95 per month for credit card users, and provide instant access for the complete reports.
Air Force One
WASHINGTON – As North Korea threatens a missile launch on Hawaii and Iran continues to develop its own nuclear war capabilities, President Obama has greenlighted a plan to save the federal government from the devastating capabilities of a nuclear electro-magnetic pulse attack on the U.S, according to a report in Joseph Farah's G2 Bulletin.
As WND has reported, a high-altitude nuclear EMP attack potentially could disrupt or damage electronic systems over much of the U.S., William Graham, chairman of the Commission to Assess the Threat to the United States From Electromagnetic Pulse Attack, told a hearing of the House Armed Services Committee in July 2008.
The commission concluded Iran is not only covertly developing nuclear weapons. Since 2005 Tehran has been testing ballistic missiles designed to destroy America's technical infrastructure, effectively neutralizing the world's lone superpower.
Detonated at a height of 60 to 500 kilometers above the continental U.S., one nuclear warhead could cripple the country – knocking out electrical power and circuit boards and rendering the U.S. domestic communications impotent.
Keep in touch with the most important breaking news stories about critical developments around the globe with Joseph Farah's G2 Bulletin, the premium, online intelligence news source edited and published by the founder of WND.
In 2005, the Senate Judiciary Subcommittee on Terrorism, Technology and Homeland Security chaired by Sen. John Kyl, R-Ariz., held a hearing on the EMP threat.
"An electromagnetic pulse (EMP) attack on the American homeland, said one of the distinguished scientists who testified at the hearing, is one of only a few ways that the United States could be defeated by its enemies – terrorist or otherwise," wrote Kyl. "And it is probably the easiest. A single Scud missile, carrying a single nuclear weapon, detonated at the appropriate altitude, would interact with the Earth's atmosphere, producing an electromagnetic pulse radiating down to the surface at the speed of light. Depending on the location and size of the blast, the effect would be to knock out already stressed power grids and other electrical systems across much or even all of the continental United States, for months if not years."
While few preparations have been made since 2005 to protect the American heartland, the Defense Information Systems Agency plans to install a presidential network in the Washington area this year that will be able to survive an attack by a nuclear weapon that generates a high-altitude electromagnetic pulse.
The agency started work on the network last year to install communications equipment resistant to damage by an EMP attack. The network was developed at the direction of the "National Security Presidential Directive on Survivable Senior Leadership Communications in a HEMP Environment." It features Promina network switches from Network Equipment Technologies Inc. and manage communications over a specially designed and deployed Voice over Internet Protocol network.
DISA developed the HEMP system, which includes upgrades to a UHF network serving senior leadership in the Washington area, as part of a National Emergency Action Decision Network to serve the president, secretary of defense and other senior leaders. John Garing, DISA chief information officer and director of strategic planning, said the network supports radio systems on helicopters and feeds into the HEMP network. Funding for all systems in the National Emergency Action Decision Network is pegged at less than $1 million.
The systems will be installed in ground installations and executive aircraft, including Air Force One, four VIP Boeing 757s and two VIP Boeing 737 aircraft.
DISA also asked for $49.5 million in its fiscal 2010 budget for the Crisis Management System, a "high-performance, closed network that provides classified multimedia teleconferencing for the president, Cabinet secretaries, designated agency directors and their staffs," budget documents noted.
http://wnd.com/index.php?fa=PAGE.view&pageId=102023

Well almost Judicial Restraint, i guess as close as we will come too it.
Court says strip search violated girl's rights
WASHINGTON — The Supreme Court's decision Thursday striking down the strip search of an eighth-grade girl for prescription-strength ibuprofen requires schools nationwide to weigh more carefully how intrusively they search for drugs.
By an 8-1 vote, the justices ruled that school officials in a rural Arizona district violated the Fourth Amendment rights of Savana Redding when they forced her to take off her clothes after an unverified tip that she had the pain relief pills. The court emphasized the difference between a routine search of a backpack and a search that exposes a student's private parts. Justice Clarence Thomas dissented.
The decision, which differs from signals the justices sent during oral arguments in April, also departs from a recent trend giving administrators wide latitude to search for drugs in schools.
Writing for the court, Justice David Souter said an official must have a "reasonable suspicion of danger" regarding the drugs sought and a belief they could be hidden in a student's underwear before making "the quantum leap from outer clothes and backpacks to exposure of intimate parts."
Matthew Wright, lawyer for the Safford school district, predicted the decision would have a "chilling effect" on administrators responding to threats of drugs. Francisco Negron, lawyer for the National School Boards Association, said the decision could be confusing for school officials, who typically lack formal training in drugs yet would have to consider whether the contraband they seek is dangerous enough to do to a strip search.
Savana Redding, who was 13 at the time of the search and is now 19, said, "I'm so glad that they recognized that my rights were violated. I don't want this to happen to anyone else." Her lawyer, Adam Wolf, a lawyer with the American Civil Liberties Union who argued the case, added, "Today's ruling affirms that schools are not constitutional dead zones."
In October 2003, after Assistant Principal Kerry Wilson heard from a student that Redding might have ibuprofen, he asked a school nurse and administration assistant, both women, to search Savana in the nurse's office. They asked her to take off her shirt and pants, then to pull out her bra and underpants to see whether she was hiding any pills.
No pills were found. Savana's mother, April Redding, sued, saying school officials breached Savana's rights under the Fourth Amendment protection from unreasonable searches. A lower U.S. appeals court ruled for Redding and said Safford officials were financially responsible for harm to her.
In affirming that her rights were violated, Souter said a strip search requires officials to have an "indication of danger (and) reason to suppose that Savana was carrying pills in her underwear."
Souter was joined by Chief Justice John Roberts and Justices John Paul Stevens, Antonin Scalia, Anthony Kennedy, Ruth Bader Ginsburg and Stephen Breyer and Samuel Alito. Dissenting Justice Thomas said the decision allows judges "to second-guess" officials trying to ensure student safety.
By a separate vote of 7-2, the court said that because rulings in this area of the law have not been clear, Safford officials are shielded from financial responsibility for their actions. Stevens and Ginsburg dissented from that part of the ruling in Safford Unified School District No. 1 v. Redding.
During oral arguments April 21, many justices voiced more sympathy for school administrators than for Redding. Several, including Souter and Roberts, appeared open to arguments that administrators need considerable leeway to look for drug abuse. Ginsburg was most forceful on the other side. In a concurring opinion Thursday, Ginsburg emphasized the humiliation Savana endured, including being forced to sit on a chair outside Wilson's office even after the search found no pills.
http://www.usatoday.com/news/washington/judicial/2009-06-25-scotus-strip-search_N.htm

US swine flu cases may have hit 1 million June 26, 2009 - 12:53am AP Medical Writer
ATLANTA (AP) - Swine flu has infected as many as 1 million Americans, U.S. health officials said Thursday, adding that 6 percent or more of some urban populations are infected. The estimate voiced by a government flu scientist Thursday was no surprise to the experts who have been closely watching the virus.
"We knew diagnosed cases were just the tip of the iceberg," said Dr. William Schaffner, a Vanderbilt University infectious diseases expert who was in Atlanta for the meeting of a vaccine advisory panel.
Lyn Finelli, a flu surveillance official with the Centers for Disease Control and Prevention, made the 1 million estimate in a presentation to the vaccine panel. The number is from mathematical modeling, based on surveys by health officials.
Regular seasonal flu sickens anywhere from 15 million to 60 million Americans each year.
The United States has roughly half the world's swine flu cases, with nearly 28,000 reported to the CDC so far. The U.S. count includes 3,065 hospitalizations and 127 deaths.
The percentage of cases hospitalized has been growing, but that may be due to closer scrutiny of very sick patients. It takes about three days from the time symptoms appear to hospitalization, Finelli said, and the average hospital stay has been three days.
Other health problems have been a factor in most cases: About one in three of the hospitalized cases had asthma, 16 percent diabetes, 12 percent have immune system problems and 11 percent chronic heart disease.
The numbers again highlight how the young seem to be particularly at risk of catching the new virus. But data also show that the flu has been more dangerous to adults who catch it.
The average age of swine flu patients is 12, the average age for hospitalized patients is 20, and for people who died, it was 37. It seems to be deadliest to people 65 and older, with deaths in more than 2 percent of elderly people infected, Finelli said.
Also at the meeting, CDC officials made projections about flu vaccines expected to be available to protect against both seasonal and swine flu this fall.
More than 25 million doses of seasonal flu vaccine should be available by early September, CDC officials and vaccine manufacturers said.
The same five manufacturers that make the seasonal vaccine are producing swine flu vaccine as well. As many as 60 million doses of vaccine to protect against the new virus could be ready by September, said Robin Robinson, an official with the federal agency that oversees vaccine manufacture and distribution. That prediction seemed a bit optimistic, others at the meeting said.
The vaccinations might be given as two shots, spaced 21 days apart. But the vaccine has to be tested before it's made available to the public.
http://wtop.com/?nid=106&sid=1661303

H1N1 / 6,000 Deaths / The Pandemic is Here
Those who dismiss H1N1 as a panic-fest are profoundly wrong - even the mild version in a country like Canada could kill thousands. And the nightmare scenario? That would be really scary
So it's here at last. After months of will-it-won't-it anticipation, H1N1 officially went pandemic on June 11.
Yet despite increasing numbers of cases in over 70 countries, many still think it a fuss over nothing: "What's the big deal? It's just ordinary flu." It is worrying that even Canadians are saying this, although they know from recent memory what it is to experience a big disease outbreak.
Many in Britain are saying the same thing. One high-profile commentator, Simon Jenkins in the Guardian newspaper, asserted that swine flu was a panic stoked in order "to posture and spend," saying that health scares such as this enable media-hungry doctors, public-health officials and drug companies to benefit by manipulating fright.
Those who dismiss H1N1 as a panic-fest are profoundly wrong. This "ordinary flu" might have real consequences to many Canadians.
Canada has an excellent flu vaccination program and good access to medical care. Nonetheless, 6,000 to 8,000 Canadians die of seasonal flu each year, mostly older people or those with other health problems. These are people's mothers and grandfathers, uncles and fathers. Ordinary flu causes a great many deaths, even in a country such as Canada.
Let's say that H1N1 continues to be mild and is no worse than seasonal flu. "Mild" means having up to five days feeling really unwell with fever, cough, sore throat and muscle aches, and then a further week before one feels able to return to work and normal life.
The old story about the difference between flu and a cold holds good: If a $50 bill is dropped outside your front door, if you've got a cold, you'll go pick it up; if you've got flu, not even $50 will get you out of bed.
This is a novel flu. While people over 50 seem to have some immunity, perhaps because of the Asian flu of 1957, those who are younger have not been exposed before and have no defences in place. Current H1N1 attack rates are about 20 per cent. That is, one in five people exposed to this new flu will come down with symptoms like the ones above; exposure can result from merely touching a surface where there are viruses, because someone else has touched it. Pretty much everyone who comes into contact with other people will be exposed to this flu, sooner or later.
4-PER-CENT IMPACT ON GDP
That means 20 per cent of the population becoming sick, with perhaps another 10 per cent of the working population home looking after them. Think about the effects on business, on transport, on day-to-day life, of so many people being off sick at the same time. Flu is estimated to have a 4-per-cent impact on a country's GDP.
And think about its effect on hospitals. Not on its effect on patients requiring intensive care, but its effect on staffing. A tanker drivers' strike in Britain bought our hospitals to a halt in less than a week. Why? Because schools didn't have fuel for heating and were closed, working mothers had to stay home to look after their children. Where are there are large proportion of working mothers? In nursing and allied health services.
There are 33 million people in Canada. At an attack rate of 20 per cent, six million people would develop flu. The death rate in Canada is currently tiny, at roughly 0.1 per cent (12 deaths, 4,905 cases). But 0.1 per cent of six million is 6,000. These 6,000 will not be just the old and the sick, whose deaths, extraordinarily, don't seem to greatly concern many commentators, but will include previously healthy twentysomethings (such as three of those admitted to intensive care units in Britain), pregnant women and a disproportionate number of those sections of the population that are genetically particularly susceptible. Such effects are already appearing in Canada with outbreaks of severe illness among previously healthy native people in Manitoba.
This is not scaremongering. This is reality.
Many people expect that all medical staff will turn up for work during a flu pandemic. Toronto's experience of SARS in 2003 shows that they won't, and cannot be made to do so. Many of them won't be able to, because they are looking after family at home, and some will fear catching flu and its effects. Normal hospital schedules will grind to a halt, meaning that far fewer elective procedures such as hip replacements and heart surgery can take place. It will inevitably cause deaths that should have been preventable. This is without the strain on services from many more people requiring respiratory support because of flu.
So why couldn't the hospital authorities make flu vaccines mandatory for health-care staff when they become available? Britain does not make this mandatory, and only 13 per cent of National Health Service Staff front-line staff voluntarily had seasonal flu vaccination in 2008-2009. Why? It's principally because staff think of flu as "ordinary," not something that causes severe illness. Recently, unvaccinated NHS staff were shown by Britain's Health Protection Agency to have been the cause of a major outbreak of flu among patients who were already critically ill in a hospital in Liverpool.
When people look upon the threat to themselves as "mild," they will not consider vaccination, which they feel has greater risks than the illness.
Playing in the background are current attitudes to vaccines, coloured by the long-running contention that the MMR vaccine is linked to autism, but also by the experience of swine flu in the United States in 1976.
THE FORT DIX PRECEDENT
In January, 1976, scores of army recruits at Fort Dix, N.J., complained of flu symptoms - not unusual at that time of year. But 18-year old Private David Lewis, with the bravado of youth, decided to ignore medical advice to go to bed; he went out on a strenuous all-night exercise in the bitter cold. At the end of the exercise, he collapsed. He died a few hours later. An autopsy revealed that his death was caused by a previously unknown variant of swine flu A/H1N1. But what really spooked the Centers for Disease Control was its similarity to the strain that had killed more than 40 million people across the world in 1918.
The CDC rightly decided to develop a swine-flu vaccine for use in the following flu season. But there were many production problems. It was on the point of being cancelled, when there was an outbreak of fatal pneumonia after the Pennsylvania convention of the American Legion. The media linked it with swine flu (although today it is known to have been what is called legionnaires' disease), and politicians joined in the clamour to push forward the swine-flu vaccination program.
The threat from swine flu was vastly exaggerated in the media, although it was already clear that the outbreak (which involved no more than 300 people) was over. President Gerald Ford took personal charge of a mass vaccination program, and it had deadly consequences.
With all manufacturing capacity devoted to swine flu, seasonal flu production stopped. That year, there was a particularly virulent strain of seasonal flu, and there were thousands more regular flu deaths than normal, largely in unvaccinated seniors. There was also the problem of vaccine side effects.
SIDE EFFECTS BECOME NUMEROUS
When millions of people are vaccinated, very rare side effects become numerous. About nine in every million of those vaccinated then developed Guillain-Barré syndrome, a paralytic disease. There were 500 cases and 25 deaths.
The batches may have been contaminated with a bacterium. In any case, the vaccination program was stopped, having only treated 24 per cent of the population.
This is not then. There are already thousands of cases, and vaccine technology is better than it was. But no vaccine is absolutely safe. There will be very rare side effects with new H1N1 vaccines too, and most have not yet been tested on children, who are one of the groups that are most likely to be vaccinated as a priority, because they seem to be especially affected. But people can only ever see risk from their own perspective.
It seems probable that, despite knowing that 6,000 or more Canadians might be prevented from dying and tens of thousands more prevented from having serious illness, people will concentrate on their own individual risks, with many choosing to remain unvaccinated. This places individuals at risk but also friends, family and loved ones and those who are unable to be vaccinated for one reason or another.
All this comes from a mild illness that many people think is not a risk and claim to be overhyped. Everyone should think again about the seriousness of pandemic flu.
Let us hope that the nightmare scenario of a new virus with the virulence of H5N1 (bird flu) and the transmissibility if H1N1 does not come to pass. That really would be scary.
http://www.theglobeandmail.com/news/opinions/h1n1-6000-deaths-the-pandemic-is-here/article1190655/

Dollar Falls on China Call for World Currency; Stocks Pare Gain
June 26 (Bloomberg) -- The dollar weakened and stocks pared their advance after China’s central bank reiterated a call for a “super sovereign currency” and said the country’s financial institutions face a tougher environment this year.
The Dollar Index that measures the currency’s performance against six trading partners fell as much as 0.8 percent at 1:01 p.m. in London after China’s central bank also said the International Monetary Fund should manage part of members’ foreign reserves. The Dow Jones Stoxx 600 Index of European shares added 0.3 percent, trimming an advance of as much as 1.3 percent. Standard & Poor’s 500 Index futures fell 0.2 percent.
China, the biggest foreign owner of U.S. Treasuries, cut its holdings of government notes and bonds by $4.4 billion to $763.5 billion in April, according to data released on June 15 in Washington. People’s Bank of China Governor Zhou Xiaochuan in March urged the IMF to expand the functions of its unit of account and move toward an international reserve currency to reduce dependence on the dollar.
“In the longer term there will be diversification among global central banks,” said Beat Siegenthaler, chief emerging markets strategist at TD Securities Ltd. in London. “These comments tend to remind traders of that, but there’s still a question about the time horizon.”
The Dollar Index fell below 80 as the People’s Bank of China said that the IMF relies on too few foreign currencies. The central bank was commenting in an assessment of the country’s financial situation at the end of 2008 posted on its Web site today.
Special Drawing Rights
Group of 20 leaders on April 2 gave approval for the IMF to raise $250 billion by issuing Special Drawing Rights, or SDRs, the artificial currency that the agency uses to settle accounts among its member nations. It also agreed to put another $500 billion into the IMF’s war chest.
"There’s a very strong case to be made for reducing the reliance on the dollar,” said Steven Barrow, a currency strategist with Standard Bank Plc in London. “But the market is making a mountain out of a mole hill. Among the BRIC countries, China seems the least positive about the idea. If they talk down the dollar they’re talking down a vast bulk of their assets.”
The asset quality and profitability of China’s financial institutions face challenges and the correction in the country’s property market may raise banks’ credit risks, the central bank also said today.
The yen also headed for a weekly loss against the euro. Japan’s benchmark interest rate is 0.1 percent and the U.S.’s is between zero and 0.25 percent, compared with 1 percent in the euro region and Norway’s 1.25 percent.
OECD Forecast
Today’s gains in European stocks trimmed the Stoxx 600’s second-straight weekly drop to 1.5 percent after a three-month, 36 percent rally drove price-earnings valuations to the highest level in five years. The Organization for Economic Cooperation and Development boosted its forecast for the economy of its 30 member nations for the first time in two years this week, while a U.S. government report today may show consumer spending rose in May for the first time in three months.
“Risk appetite is coming back,” Peter Redward, the head of Asian emerging-markets research at Barclays Plc in Singapore, said in an interview with Bloomberg Television. “We’re now seeing the effects of fiscal and monetary stimulus beginning to kick in and those themes are going to continue.”
Stocks gained in Asia and Europe after Bridgestone Corp., the world’s largest tiremaker, narrowed its loss forecast. Bridgestone gained 8.5 percent in Tokyo.
Emerging Markets
The MSCI Emerging Markets Index rose 1.8 percent. While the 22-country benchmark has dropped 1.2 percent this month, it’s headed for the best quarterly gain on record, up 34 percent since March.
OAO Lukoil, Russia’s second-biggest oil producer, advanced 1.6 percent as crude gained, while OAO GMK Norilsk Nickel, the country’s biggest mining company, added 6.7 percent as copper climbed 1.8 percent this week to $5,119 a metric ton on the London Metal Exchange. The Micex is recovering from a retreat this month that sent it down more than 20 percent from its June 1 peak, the world’s first benchmark equity index to enter a bear market since global stocks began rallying in March.
Crude oil for August delivery rose as much as 1.5 percent to $71.29 a barrel on the New York Mercantile Exchange after Nigerian militants said they attacked a Royal Dutch Shell Plc offshore oil field late yesterday, hours after an offer of an amnesty by President Umaru Yar’Adua.
New Zealand’s dollar weakened 0.3 percent versus the U.S. dollar after the nation’s statistics bureau said gross domestic product declined 1 percent in the first quarter. The median of 11 estimates in a Bloomberg News survey was for a 0.7 percent contraction.
U.S. Consumer Spending
A report at 8:30 a.m. in Washington will show consumer purchases in the U.S. increased 0.3 percent after falling 0.1 percent in April, according to the median forecast of 76 economists surveyed by Bloomberg News.
A U.S. report yesterday showed gross domestic product shrank last quarter at a 5.5 percent pace, slower than the 5.7 percent decrease previously estimated by the government.
Futures on the S&P 500 slid 0.3 percent today after the GDP report helped send the gauge up 2.1 percent yesterday.
Stocks and credit markets have rebounded since the U.S. government and Federal Reserve pledged $12.8 trillion to combat the first global recession in five decades and almost $1.5 trillion in losses and writedowns at financial firms from the collapse of subprime mortgages.
The cost of borrowing in dollars for three months in London fell below 0.6 percent for the first time today, according to the British Bankers’ Association. The London interbank offered rate, or Libor, that banks charge for three-month loans fell less than half a basis point to 0.598 percent.
Libor-OIS
The Libor-OIS spread, which measures banks’ reluctance to lend, has narrowed to 38 basis points, from a record 364 basis points in October, following the collapse of Lehman Brothers Holdings Inc. Analysts covering S&P 500 companies began to boost 2009 profit estimates for the first time this year in May as economists predicted the U.S. economy will start to expand next quarter, weekly data compiled by Bloomberg show.
Global market liquidity is at its strongest level since November, according to an index updated today by the Bank of England. The index, which measures market prices, including gaps between bid and offer prices, the ratio of returns to trading volumes, and spreads in the credit market, reached a low in April.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aLpv3.MFL1Oc

Eeyore's News and View

U.S. may convert banks’ bailouts to equity share
White House: Approach will prevent need to seek more cash from Congress
April 19: As President Obama acknowledges that billions more may be needed to bail out struggling banks, he’s eager to be seen helping consumers as well. NBC’s John Check financial reports for each of 8,000 banks in the U.S. in the Bank Tracker, from msnbc.com and American University's Investigative Reporting Workshop.
By Edmund L. Andrews
updated 2:17 a.m. ET, Mon., April 20, 2009
WASHINGTON - President Obama’s top economic advisers have determined that they can shore up the nation’s banking system without having to ask Congress for more money any time soon, according to administration officials.
In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.
Converting those loans to common shares would turn the federal aid into available capital for a bank — and give the government a large ownership stake in return.
While the option appears to be a quick and easy way to avoid a confrontation with Congressional leaders wary of putting more money into the banks, some critics would consider it a back door to nationalization, since the government could become the largest shareholder in several banks.
The Treasury has already negotiated this kind of conversion with Citigroup and has said it would consider doing the same with other banks, as needed. But now the administration seems convinced that this maneuver can be used to make up for any shortfall in capital that the big banks confront in the near term.
More risk to taxpayers
Each conversion of this type would force the administration to decide how to handle its considerable voting rights on a bank’s board.
Taxpayers would also be taking on more risk, because there is no way to know what the common shares might be worth when it comes time for the government to sell them.
Treasury officials estimate that they will have about $135 billion left after they follow through on all the loans that have already been announced. But the nation’s banks are believed to need far more than that to maintain enough capital to absorb all their losses from soured mortgages and other loan defaults.
In his budget proposal for next year, Mr. Obama included $250 billion in additional spending to prop up the financial system. Because of the way the government accounts for such spending, the budget actually indicated that Mr. Obama might ask Congress for as much as $750 billion.
The most immediate expense will come in the next several weeks, when federal bank regulators complete “stress tests” on the nation’s 19 biggest banks. The tests are expected to show that at least several major institutions, probably including Bank of America, need to increase their capital cushions by billions of dollars each.
The change to common stock would not require the government to contribute any additional cash, but it could increase the capital of big banks by more than $100 billion.
The White House chief of staff, Rahm Emanuel, alluded to the strategy on Sunday in an interview on the ABC program “This Week.” Mr. Emanuel asserted that the government had enough money to shore up the 19 banks without asking for more.
“We believe we have those resources available in the government as the final backstop to make sure that the 19 are financially viable and effective,” Mr. Emanuel said. “If they need capital, we have that capacity.”
If that calculation is correct, Mr. Obama would gain important political maneuvering room because Democratic leaders in Congress have warned that they cannot possibly muster enough votes any time soon in support of spending more money to bail out some of the same financial institutions whose aggressive lending precipitated the financial crisis.
The administration said in January that it would alter its arrangement with Citigroup by converting up to $25 billion of preferred stock, which is like a loan, to common stock, which represents equity.
After the conversion, the Treasury would end up with about 36 percent of Citigroup’s common shares, which come with full voting rights. That would make the government Citigroup’s biggest shareholder, effectively nudging the government one step closer to nationalizing a major bank.
Nationalization, or even just the hint of nationalization, is a politically explosive step that White House and Treasury officials have fought hard to avoid.
Administration officials acknowledged that they might still have to ask Congress for extra money. Beyond the 19 big banks, which are defined as those with more than $100 billion in assets, the Treasury has also injected capital into hundreds of regional and community banks and may need to provide more money before the financial crisis is over.
Treasury officials say they have more money left in the rescue fund than might be apparent. Officials estimate that the fund will have about $134.5 billion left after the Treasury completes its $100 billion plan to buy toxic assets from banks and after it uses $50 billion to help homeowners avoid foreclosure.
In practice, the toxic-asset programs are not expected to start for another few months, and it could be more than a year before the Treasury uses up the entire $100 billion. Likewise, it will be at least a year before the Treasury uses up all the money budgeted for homeowners.
But the biggest way to stretch funds could be to convert preferred shares to common stock, a strategy that the government seems prepared to use on a case-by-case basis.
Ever since the Treasury agreed to restructure Citigroup’s loans, officials have made it clear that other banks could follow suit and convert their government loans to voting shares of common stock as well.
Setting yardsticks
In the stress tests now under way, regulators are examining whether the big banks would have enough capital to withstand an economic downturn in which unemployment climbs to 10 percent and housing prices fall much further than they already have.
As their yardstick, regulators are expected to examine a measure of bank capital called “tangible common equity.” By that measure of capital, every dollar a bank converts from preferred to common shares becomes an additional dollar of capital.
The 19 big banks have received more than $140 billion from the Treasury’s financial rescue fund, and all of that has been in exchange for nonvoting preferred shares that pay an annual interest rate of about 5 percent.
If all the banks that are found to have a capital shortfall fill that gap by converting their shares, rather than by obtaining more cash, the Treasury could stretch its dwindling rescue fund by more than $100 billion.
The Treasury would also become a major shareholder, and perhaps even the controlling shareholder, in some financial institutions. That could lead to increasingly difficult conflicts of interest for the government, as policy makers juggle broad economic objectives with the narrower responsibility to maximize the value of their bank shares on behalf of taxpayers.
Those are exactly the kinds of conflicts that Treasury and Fed officials were trying to avoid when they first began injecting capital into banks last fall.
This article, "U.S. May Convert Banks' Bailouts to Equity Shares," first appeared in The New York Times.
http://www.msnbc.msn.com/id/30300700/
Here are a couple links for the companion story in FT.com
http://www.ft.com/cms/s/0/f3bc75b2-2d1a-11de-8710-00144feabdc0.html
http://www.nytimes.com/2009/04/20/business/20bailout.html?partner=msnbcpolitics&emc=rss

It's possible: Imagine no phone, no food, no fuel
Book describes what reality could be after EMP attack
A new book that describes what might happen to America following an electromagnetic pulse attack, which would be expected to destroy the power grid, telephone systems and the Internet as well as food and fuel supply chains, is being used to highlight the danger the nation faces.
"As a scientist and engineer now serving my 17th year on the House Armed Services Committee, I have studied the threat of EMP with the world's experts," said U.S. Rep. Roscoe Bartlett. "It is real."
The book is "One Second After" by New York Times best-selling author William R. Forstchen, who talked about the possible impact of such an attack on the Sean Hannity Radio Show today.
The book traces the changes that could happen in the United States over the course of a year following such an attack, a year in which society could crumble as food supply chains are severed, fuel sources are left inoperable, computers and telephones don't function and even cars become lumps of metal in the driveway.
"It is very disturbing that EMP is well understood and EMP capability is actively pursued by America's potential foes, but is virtually unknown by the American public," the congressman said.
"Imagine a world where the only person you could talk to is the person next to you, the only way you could go anywhere is to walk and the electronic grid was destroyed," he continued. "That is the beginning of the impact from an EMP attack."
WND readers already know about the dangers of EMP attacks, with the numerous reports already published.
Last year WND reported on hearings in the House Armed Services Committee on the threat, a danger that had been highlighted in WND's report more than four years earlier.
The House Armed Services Committee in its hearing a year ago heard from William R. Graham, President Reagan's top science adviser and the chief of the Commission to Assess the Threat to the United States from Electromagnetic Pulse Attack.
Graham had warned in 2005 that Iran was not only covertly developing nuclear weapons but was already testing ballistic missiles specifically designed to destroy America's technical infrastructure with the aim of neutralizing the world's lone superpower.
The radical Shiite regime has conducted successful tests to determine if its Shahab-3 ballistic missiles, capable of carrying a nuclear warhead, can be detonated by a remote-control device while still in high-altitude flight, Graham said in his report.
Graham said then there was no other plausible explanation for such tests than preparation for the deployment of electromagnetic pulse weapons – even one of which could knock out America's critical electrical and technological infrastructure, effectively sending the continental U.S. back to the 19th century with a recovery time of months or years.
Iran would have that capability – at least theoretically – as soon as it has one nuclear bomb ready to arm such a missile.
The stunning report was first published in Joseph Farah's G2 Bulletin, the premium, online intelligence newsletter published by WND's founder.
You can subscribe to the G2 Bulletin here and now!.
Iran surprised intelligence analysts by describing the mid-flight detonations of missiles fired from ships on the Caspian Sea as "successful" tests. Even primitive Scud missiles could be used for this purpose. And top U.S. intelligence officials reminded members of Congress that there is a glut of these missiles on the world market. They are currently being bought and sold for about $100,000 apiece.
Then only days ago, North Korea launched a similar missile which later fell into the ocean 2,000 miles away.
When that missile was launched, former House Speaker Newt Gingrich on Fox News raised the issue of an EMP attack, and cited Fortschen's book.
"If you look at the new book … and you look at electromagnetic pulse capabilities, which can take out – one weapon could take out a third of the electric generating capacity of the United States," he warned.
"We do not appreciate the scale of threat that is evolving on the planet, and North Korea is a totally irresponsible dictatorship run by a person who is clearly out of touch with reality, and I think to say, you know, we're now going to have another meeting at the U.N. to have another paper resolution that has meaningless effect is very dangerous," he continued.
He said there are several techniques that could have been used to take out the North Korean missile test "to say we're not going to tolerate a North Korean missile launch, period."
President Obama sought U.N. action against North Korea for its launch, which violated previously U.N. statements, but ended up with nothing more than a letter of the "sense" of the U.N.
On previous occasions when the issue of EMP has been raised, other leaders reported their grave concerns about the lack of preparation for a defense of such an attack.
"A terrorist organization might have trouble putting a nuclear warhead 'on target' with a Scud, but it would be much easier to simply launch and detonate in the atmosphere," wrote Sen. John Kyl, R-Ariz., in the Washington Post in 2005 after reading Graham's report. "No need for the risk and difficulty of trying to smuggle a nuclear weapon over the border or hit a particular city. Just launch a cheap missile from a freighter in international waters – al-Qaida is believed to own about 80 such vessels – and make sure to get it a few miles in the air."
Detonated at a height of 60 to 500 kilometers above the continental U.S., one nuclear warhead could cripple the country – knocking out electrical power and circuit boards and rendering the U.S. domestic communications impotent.
The 2008 hearing was chaired by U.S. Rep. Ike Skelton, D-Mo., who said, "The potential damage that could be caused by an EMP attack on our country is significant."
Bartlett recalled his work during 1999 when he was on a team sent to Austria to meet with members of the Russian government, including Vladimir Lukin.
"Lukin was very angry, and he sat with his arms folded looking at the ceiling for a couple of days during these discussions. We developed a framework agreement, which about half a dozen days later was adopted by the G8 and ended the Kosovo controversy. At one point Vladimir Lukin looked up. He said, 'If we really wanted to hurt you with no fear of retaliation, we'd launch an SLBM from the ocean, detonate a nuclear weapon high above your country and shut down your power grid and your communications for six months or so,'" Bartlett recalled.
"And Alexander Shebonoff, the handsome blond Communist, smiled and said, 'If one weapon wouldn't do it, we'd have some spares, like about 10,000 I think,'" he said.
Bartlett said the book needs to be read by the American people.
"It was the story of a ballistic missile EMP attack on our country. The weapon was launched from a ship off our shore, and then the ship was sunk so that there were no fingerprints," he said. "The weapon was launched about 300 miles high over Nebraska, and it shut down our infrastructure country-wide. The story runs for a year … I understand that this is a realistic assessment of what a really robust EMP lay-down could do to our country."
He described the likely scenario: "There would be no electricity. ... Our substations and so forth would all be gone. The large transformers would be destroyed, and we don't make those. It would take a year and a half or so to buy them from somebody overseas who makes them. We would then be in a world – it's my understanding – where the only person you could talk to is the person next to you, unless you happen to be a ham operator with a vacuum tube set, which is a million times less susceptible. And the only way you could go anywhere is to walk, unless you happened to have a car that had coil-end distributor and you could get some gasoline to put in it."
William Graham in a Washington Times editorial last year said an EMP attack is "equally credible when compared to the threat of a weapon smuggled into the United States."
"But the DHS and their institutional advisers are so fixated on the 'conventional wisdom' of the threat from a nuclear bomb smuggled in that they are doing far too little to detect and prevent nuclear terrorists and their state sponsors from executing an electromagnetic pulse (EMP) attack on the United States," he said.
He continued, "A high-altitude EMP results from the detonation of a nuclear warhead at altitudes above 25 miles over the Earth's surface, and covers the area within line-of-sight from the bomb. The immediate effects of EMP are disruption of, and damage to, electronic systems that are indispensable to the operation of critical national infrastructures – the electric power grid, wired and cell telephone systems, fuel handling, land and air transportation, government operations, banking and finance, food storage and distribution, and water treatment and supply – that sustain our economy, military power and civilian population."
http://wnd.com/index.php?fa=PAGE.view&pageId=95085

UN chief: economic crisis threatens more racism
April 20, 2009 - 7:29am
GENEVA (AP) - U.N. Secretary-General Ban Ki-moon urged the world Monday to rally against the threat that intolerance could rise as a result of the economic crisis, saying "the time is now" to stamp out racism.
Ban, opening the global body's first racism conference in eight years, said racism including anti-Semitism and Islamophobia needed to be tackled.
"I fear that today's economic crisis, if not handled properly, could evolve into a full-scale political crisis marked by social unrest, weakened governments and angry publics who have lost faith in their leaders and their own future," the U.N. chief said.
"In such circumstances, the consequences for communities already victimized by prejudice or exclusion could be frightening."
He also said he regretted the absence of the United States and eight other Western nations that have pulled out because of fears Muslim nations will dominate the conference with calls for to denounce Israel and for a global ban on criticizing Islam.
"There comes a time to reaffirm our faith in fundamental human rights and the dignity and worth of us all," Ban told the gathering of thousands of ministers, diplomats and dignitaries at the U.N.'s European headquarters in Geneva.
The administration of Barack Obama, America's first black president, announced Saturday it would boycott the weeklong meeting because it makes reference to a declaration made in 2001 at the global body's first racism conference in Durban, South Africa.
That document was agreed after the United States and Israel walked out over attempts to liken Zionism _ the movement to establish a Jewish state in the Holy Land _ to racism.
Organizers have sought to steer clear of the controversies that marred the Durban meeting, but have run into many of the same contentious issues. Australia, Canada, Germany, Israel, Italy, Netherlands, New Zealand and Poland are also not participating, while Iran's hardline President Mahmoud Ahmadinejad is scheduled to take the floor later Monday.
The major sticking points in the draft final declaration prepared for the current meeting concern its implied criticism of Israel and an attempt by Muslim governments to ban all criticism of Islam, Sharia law, the prophet Muhammad and other tenets of their faith.
Obama, speaking in Trinidad on Sunday after attending the Summit of the Americas, said: "I would love to be involved in a useful conference that addressed continuing issues of racism and discrimination around the globe."
But he said the language of the U.N.'s draft declaration risked a reprise of Durban, during which "folks expressed antagonism toward Israel in ways that were often times completely hypocritical and counterproductive."
"We expressed in the run-up to this conference our concerns that if you adopted all of the language from 2001, that's not something we can sign up for," Obama said.
Ban said no society _ rich or poor, large or small _ is immune to the dangers of racism, which he called a "denial of human rights, pure and simple."
Addressing intolerance in its various forms, Ban said racism "may be institutionalized, as the Holocaust will always remind us," but that it may manifest itself in more subtle forms through the "hatred of a particular people or a class _ as anti-Semitism, for example, or the newer Islamophobia."
Many Muslim nations want curbs to free speech to prevent insults to Islam they claim have proliferated since the terrorist attacks in the United States on Sept. 11, 2001. They cite the 2005 cartoons of Muhammad published by a Danish newspaper that sparked riots in the Muslim world, and allegations that authorities in the West have targeted innocent Muslims through anti-terror and other police action.
Those demands had been largely resisted by the United States and other Western nations, some of whom are participating in the conference.
Ban steered clear of the issue of a global ban on religious defamation, as demanded by Muslim nations, but urged action against a "new politics of xenophobia" that is on the rise and could become dramatically worse as a result of new technologies that proliferate hatred.
http://wtop.com/?nid=105&sid=1612562

You knew this was coming, and was happening.
TiVo to sell instant data on what people watch, fast-forward
NEW YORK — The company that's made it so easy for television viewers to avoid watching ads will unveil Monday a plan to help stations sell them.
TiVo (TIVO) will challenge Nielsen, whose audience ratings provide the basis for most ad sales, with Stop/Watch Local Markets. It will supplement TiVo's measurements of national TV audiences with data from all but the smallest of the nation's 210 markets.
TiVo will offer stations, advertisers and program producers year-round, second-by-second information about the shows and commercials watched by people who have one of the company's DVRs. The anonymous data will come directly from the boxes.
"Imagine a local news department that has to decide where to put the sports and weather and how much time to devote," says Todd Juenger, TiVo's audience research and measurement general manager. "Having second-by-second graphs that show when the audience goes up, goes away or fast-forwards is a tremendous new piece of insight."
Advertisers likely will be the most interested in the data. Nielsen just measures local program viewing four months a year in all but the 21 largest communities.
Information about "who's viewing the commercial is a big plus for us," says Kevin Gallagher, executive vice president at ad buyer Starcom USA. "Is it a be-all and end-all? We'll have to look at it and see."
TiVo's sales of audience data supplement revenue from its struggling DVR business. The company has 3.3 million subscriptions, down 25% from its peak in early 2007. It would not discuss pricing for the data service.
TiVo's privacy-protection policies prevent it from collecting important information that Nielsen can provide, including the number of people watching a TV set and demographic breakdowns.
"Our ratings are based on samples that reflect the viewing behavior of all households, not just those who have DVRs," says Nielsen spokesman Gary Holmes.
Juenger says TiVo owners tend to be richer, better educated "and, unfortunately, a little more white" than the overall population, but "it isn't a gigantic difference."
He adds that DVRs will be "the way that most people will watch television in the near future."
TiVo says its data will come from most of the DVRs that use its service, including ones that get it from DirecTV. It wouldn't say whether Comcast will participate. Samples will range from 25,000 in the largest markets to 5,000 in small ones. Customers can opt out at TiVo's website. Nielsen's local samples range from 400 to 900.
http://www.usatoday.com/tech/news/2009-04-20-tivo-data-new-plan_N.htm