Eeyore's News and View

Jim Rogers: Food Prices Will Skyrocket
Wednesday, May 13, 2009 12:21 PM
By: Dan Weil Article Font Size
Renowned investor Jim Rogers says that the rally in stocks and the dollar will soon end, thanks to the Federal Reserve’s massive easing policy.
“I’m not buying shares anywhere,” he tells Bloomberg TV.
“I’m not selling short yet. But…if it keeps going like this, I’ll have to start selling short eventually. I don’t see the stock market as a great place to be in the next two to three years, maybe even the next decade.”
As for the dollar, “we’re going to have a currency crisis probably this fall or the fall of 2010,” Rogers says.
“It’s been building up for a long time. We’ve had a huge rally in the dollar, an artificial rally. …
The U.S. dollar is a very flawed currency.”
Bonds also are overvalued, he says.
And where does Rogers see investment opportunities? Commodities, as he has argued for months.
“The only place I know where the fundamentals are getting better is raw materials,” he explains. “We’re going to have serious food shortages. … Prices are going to go through the roof.”
Whether the economy rebounds or not, “commodities are going to lead it,” Rogers says.
“Commodities are still the best place to be because supply is declining, and governments are printing huge amounts of money.”
Nassim Nicholas Taleb, famous for his prescient financial forecasts, agrees with Rogers.
With governments around the world wildly printing money, gold and copper may “rally massively,” he told a recent conference.
http://moneynews.newsmax.com/streett...mo_code=7FCC-1
http://frc4u.org/phpbb/index.php?topic=1343.0;topicseen

Pakistan Is Rapidly Adding Nuclear Arms, U.S. Says
WASHINGTON — Members of Congress have been told in confidential briefings that Pakistan is rapidly adding to its nuclear arsenal even while racked by insurgency, raising questions on Capitol Hill about whether billions of dollars in proposed military aid might be diverted to Pakistan’s nuclear program.
Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, confirmed the assessment of the expanded arsenal in a one-word answer to a question on Thursday in the midst of lengthy Senate testimony. Sitting beside Defense Secretary Robert M. Gates, he was asked whether he had seen evidence of an increase in the size of the Pakistani nuclear arsenal.
“Yes,” he said quickly, adding nothing, clearly cognizant of Pakistan’s sensitivity to any discussion about the country’s nuclear strategy or security.
Inside the Obama administration, some officials say, Pakistan’s drive to spend heavily on new nuclear arms has been a source of growing concern, because the country is producing more nuclear material at a time when Washington is increasingly focused on trying to assure the security of an arsenal of 80 to 100 weapons so that they will never fall into the hands of Islamic insurgents.
The administration’s effort is complicated by the fact that Pakistan is producing an unknown amount of new bomb-grade uranium and, once a series of new reactors is completed, bomb-grade plutonium for a new generation of weapons. President Obama has called for passage of a treaty that would stop all nations from producing more fissile material — the hardest part of making a nuclear weapon — but so far has said nothing in public about Pakistan’s activities.
Bruce Riedel, the Brookings Institution scholar who served as the co-author of Mr. Obama’s review of Afghanistan-Pakistan strategy, reflected the administration’s concern in a recent interview, saying that Pakistan “has more terrorists per square mile than anyplace else on earth, and it has a nuclear weapons program that is growing faster than anyplace else on earth.”
Obama administration officials said that they had communicated to Congress that their intent was to assure that military aid to Pakistan was directed toward counterterrorism and not diverted. But Admiral Mullen’s public confirmation that the arsenal is increasing — a view widely held in both classified and unclassified analyses — seems certain to aggravate Congress’s discomfort.
Whether that discomfort might result in a delay or reduction in aid to Pakistan is still unclear.
The Congressional briefings have taken place in recent weeks as Pakistan has descended into further chaos and as Congress has considered proposals to spend $3 billion over the next five years to train and equip Pakistan’s military for counterinsurgency warfare. That aid would come on top of $7.5 billion in civilian assistance.
None of the proposed military assistance is directed at the nuclear program. So far, America’s aid to Pakistan’s nuclear infrastructure has been limited to a $100 million classified program to help Pakistan secure its weapons and materials from seizure by Al Qaeda, the Taliban or “insiders” with insurgent loyalties.
But the billions in new proposed American aid, officials acknowledge, could free other money for Pakistan’s nuclear infrastructure, at a time when Pakistani officials have expressed concern that their nuclear program is facing a budget crunch for the first time, worsened by the global economic downturn. The program employs tens of thousands of Pakistanis, including about 2,000 believed to possess “critical knowledge” about how to produce a weapon.
The dimensions of the Pakistani buildup are not fully understood. “We see them scaling up their centrifuge facilities,” said David Albright, the president of the Institute for Science and International Security, which has been monitoring Pakistan’s continued efforts to buy materials on the black market, and analyzing satellite photographs of two new plutonium reactors less than 100 miles from where Pakistani forces are currently fighting the Taliban.
“The Bush administration turned a blind eye to how this is being ramped up,” he said. “And of course, with enough pressure, all this could be preventable.”
As a matter of diplomacy, however, the buildup presents Mr. Obama with a potential conflict between two national security priorities, some aides concede. One is to win passage of a global agreement to stop the production of fissile material — the uranium or plutonium used to produce weapons. Pakistan has never agreed to any limits and is one of three countries, along with India and Israel, that never signed the Nuclear Nonproliferation Treaty.
Yet the other imperative is a huge infusion of financial assistance into Afghanistan and Pakistan, money considered crucial to helping stabilize governments with tenuous holds on power in the face of terrorist and insurgent violence.
Senior members of Congress were already pressing for assurances from Pakistan that the American military assistance would be used to fight the insurgency, and not be siphoned off for more conventional military programs to counter Pakistan’s historic adversary, India. Official confirmation that Pakistan has accelerated expansion of its nuclear program only added to the consternation of those in Congress who were already voicing serious concern about the security of those warheads.
During a hearing of the Senate Armed Services Committee on Thursday, Senator Jim Webb, a Virginia Democrat, veered from the budget proposal under debate to ask Admiral Mullen about public reports “that Pakistan is, at the moment, increasing its nuclear program — that it may be actually adding on to weapons systems and warheads. Do you have any evidence of that?”
It was then that Admiral Mullen responded with his one-word confirmation. Mr. Webb said Pakistan’s decision was a matter of “enormous concern,” and he added, “Do we have any type of control factors that would be built in, in terms of where future American money would be going, as it addresses what I just asked about?”
Similar concerns about seeking guarantees that American military assistance to Pakistan would be focused on battling insurgents also were expressed by Senator Carl Levin of Michigan, the committee chairman.
“Unless Pakistan’s leaders commit, in deeds and words, their country’s armed forces and security personnel to eliminating the threat from militant extremists, and unless they make it clear that they are doing so, for the sake of their own future, then no amount of assistance will be effective,” Mr. Levin said.
A spokesman for the Pakistani government contacted Friday declined to comment on whether his nation was expanding its nuclear weapons program, but said the government was “maintaining the minimum, credible deterrence capability.” He warned against linking American financial assistance to Pakistan’s actions on its weapons program.
“Conditions or sanctions on this issue did not work in the past, and this will not send a positive message to the people of Pakistan,” said the official, who spoke on condition of anonymity because his country’s nuclear program is classified.
http://www.theledger.com/article/20090518/ZNYT03/905183012?Title=Pakistan-Is-Rapidly-Adding-Nuclear-Arms-U-S-Says

WHO annual meeting dominated by swine flu
GENEVA (AP) - Swine flu and the possibility of a vaccine topped the agenda Monday as the World Health Organization opened its annual meeting amid concern that the virus continues to spread - and kill - around the globe.
WHO said health experts are examining newly reported cases in Spain, Britain and Japan, where more than 120 people have been infected, prompting school closures and cancellations of public events.
In the New York borough of Queens a school assistant principal became the city's first death linked to the disease.
The five-day meeting in Geneva, which involves health officials from the agency's 193 member states, will focus on fighting the swine flu outbreak and efforts to produce a vaccine.
WHO Director-General Dr. Margaret Chan will give experts' recommendations on which companies should produce a vaccine, how much they should make and how it could best be distributed.
The issue of producing a vaccine is sensitive, particularly for southern hemisphere countries where the annual flu season is about to begin. Seasonal flu can claim as many as 500,000 lives a year globally. But to have enough vaccine to confront a pandemic from a new strain such as swine flu, companies would switch production from vaccine production for seasonal flu.
WHO estimates up to 2 billion doses of swine flu vaccine could be produced yearly, though the first batches would not be available for four to six months.
As of Sunday, the swine flu virus - which WHO calls the A (H1N1) virus - has sickened at least 8,480 people in 40 countries, killing 75 of them, mostly in Mexico.
Chile was the latest country to announce its first case of swine flu on Sunday.
Japan's Health Ministry confirmed dozens of new cases Sunday, prompting the government to close schools and cancel events such as Kobe's annual festival. By Monday, Japan's tally rose from five confirmed cases to more than 120.
Most of the new cases involved high school students in the western prefectures of Hyogo and Osaka who had not traveled overseas. Health officials said they were recovering in local hospitals or at home.
WHO spokesman Gregory Hartl said in-country transmission rates were a key factor in whether the global body decides to increase its pandemic alert level. Right now, the world is at phase 5 - out of a possible 6 - meaning a global outbreak is "imminent."
"We already know about the UK and Spain, that they have a relatively high number of cases compared to other European countries. So by simple virtue of the fact that they have more cases they need to be kept an eye on," Hartl said in an interview Sunday with AP Television News.
"There seems to have been activity in the last few days in Japan so we need to watch that, too," he said.
Spain and Britain have had the highest numbers of cases in Europe, reporting 103 and 101 cases, respectively. Britain on Sunday announced 14 new cases - 11 of them transmitted within the country.
A pandemic could be triggered if the virus starts to be transmitted from person to person on a large scale outside the Americas, WHO experts have said. But it would have to jump among people outside schools, hospitals and other institutions that typically pass on such viruses quickly.
"We don't want to prejudge anything, but certainly this is something we are watching with interest," Hartl said of the weekend developments in Japan.
U.N. Secretary-General Ban Ki-moon will visit WHO on Tuesday to meet with senior representatives from the vaccine industry, but the U.N. declined to name the companies.
WHO's health assembly will run through May 22, five days shorter than initially planned because health ministries are busy fighting the swine flu outbreak.
Taiwan received an observer seat on the World Health Assembly and is taking part for the first time in 38 years.
http://apnews.myway.com/article/20090518/D988JC080.html

Developments on swine flu worldwide
May 18, 2009 - 7:03am By The Associated Press
(AP) - Key developments on swine flu outbreaks, according to U.S. Centers for Disease Control and Prevention, World Health Organization and government officials:
_Deaths: Global total of 76 _ 68 in Mexico, six in U.S., one in Canada and one in Costa Rica. Officials said Canadian, U.S. and Costa Rican victims also had other medical conditions.
_Confirmed cases: WHO says 40 countries have reported more than 8,829 cases, mostly in U.S. and Mexico.
_CDC says 46 U.S. states plus District of Columbia have combined 4,714 confirmed and probable cases. Most probable cases are eventually confirmed.
_The World Health Organization opens its annual meeting in Geneva amid concern that swine flu continues to spread _ and kill _ around the world.
_A high school assistant principal has become the first New York City death linked to the outbreak. He had been sick for nearly a week before his school was closed on Thursday.
_A wave of new confirmations sends the number of swine flu cases in Japan soaring to 135, health officials say, prompting the government to order the closure of nearly 2,000 schools and the cancelation of community events.
_South Korea quarantines Vietnamese traveler after preliminary tests show she probably has swine flu.
_Chile confirms its first two cases of swine flu in two women who arrived from the Dominican Republic. The women, ages 25 and 32, are hospitalized and in good condition, Health Minister Alvaro Erazo said.
_Officials in Peru say a U.S. man living in that country has become the South American nation's second confirmed case of swine flu. Health Minister Oscar Ugarte says the 37-year-old man is a resident of the southern city of Arequipa.
___
On the Net:
CDC: http://www.cdc.gov/h1n1flu
WHO: http://sn.im/who-flu


'Killer Chip' tracks humans, releases poison
Saudi inventor applies for rights to GPS-linked lethal security device
Posted: May 16, 200911:00 pm Eastern
By Jay Baggett© 2009 WorldNetDaily
You can run, but you cannot hide ... and if you try, one push of a button will cause a lethal poison to immediately begin flowing through your body.
That's the Orwellian future a Saudi inventor was seeking to bring to Germany until that nation's patent office announced last week it was rejecting his request to patent what has been dubbed the "Killer Chip."
The tiny semiconductor device is intended to be surgically implanted or injected into the body, according to the patent application, for the purpose of tracking visitors from other nations by global-positioning satellites and preventing them from overstaying their visas.
A German Patent and Trademark Office spokeswoman told Deutsche Presse Agentur the inventor's application, titled "Implantation of electronic chips in the human body for the purposes of determining its geographical location," was submitted in October 2007 and published 18 months later, as required by law, in a patents database.
Under Germany's patent law, inventions that are unethical or a danger to the public are not recognized.
In recent times the number of people sought by security forces has increased," the Jeddah-based inventor wrote in his application.
Patent application diagram
The device would emit encrypted radio waves that would be picked up by satellites and "used to track fugitives from justice, terrorists, illegal immigrants, criminals, political opponents, defectors, domestic help, and Saudi Arabians who don't return home from pilgrimages," Sweden's The Local reported.
The application included a request to patent a model B of the device that could release poison to "eliminate" the individual if he or she became a security risk.
"I apply for these reasons and for reasons of state security and the security of citizens," the statement reads.
German law allows foreigners to apply for patents in the country through a local representative. In the case of the "Killer Chip," a Munich law firm
was used.
"Most people apply for a patent in several countries, and this inventor probably did too," Stephanie Krüger of the Patent Office said.
That leaves open the possibility the Saudi inventor will find success in another country.
http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=98386

This guy reminds me of Jimmy Carter, without the face lift
Biden Reveals Location of Secret VP Bunker
Vice President Joe Biden, well-known for his verbal gaffes, may have finally outdone himself, divulging potentially classified information meant to save the life of a sitting vice president.
According to a report, while recently attending the Gridiron Club dinner in Washington, an annual event where powerful politicians and media elite get a chance to cozy up to one another, Biden told his dinnermates about the existence of a secret bunker under the old U.S. Naval Observatory, which is now the home of the vice president.
The bunker is believed to be the secure, undisclosed location former Vice President Dick Cheney remained under protection in secret after the 9/11 attacks.
Eleanor Clift, Newsweek magazine's Washington contributing editor, said Biden revealed the location while filling in for President Obama at the dinner, who, along with Grover Cleveland, is the only president to skip the gathering.
According to the report, Biden "said a young naval officer giving him a tour of the residence showed him the hideaway, which is behind a massive steel door secured by an elaborate lock with a narrow connecting hallway lined with shelves filled with communications equipment."
Clift continued: "The officer explained that when Cheney was in lock down, this was where his most trusted aides were stationed, an image that Biden conveyed in a way that suggested we shouldn't be surprised that the policies that emerged were off the wall."
In December 2002, neighbors complained of loud construction work being done at the Naval Observatory, which has been used as a residence by vice presidents since 1974.
The upset neighbors were sent a letter by the observatory's superintendent, calling the work "sensitive in nature" and "classified" and that it was urgent it be completed "on a highly accelerated schedule."
Residents said they believed workers were digging deep into the ground, which would support Biden's report of a secret bunker, but officials never confirmed the purpose of the work performed.
The revelation is the latest from Biden, who has a long history of political blunders.
Most recently, he said in a televised interview that if a family member asked him about traveling he'd advise staying away from public transportation or confined spaces to avoid swine flu -- a remark described as "borderline fearmongering" by an airline spokesman.
http://www.foxnews.com/politics/2009/05/17/oops-biden-reveals-location-secret-vp-bunker/?test=latestnews

Eeyores News and View

Zardari Says Pakistan Isn’t Adding Nuclear Weapons
May 10 (Bloomberg) -- Pakistani President Asif Ali Zardari said his country isn’t adding to its nuclear arsenal and doesn’t have to disclose the location of its weapons to the U.S.
Pakistan is “not adding to our stockpile as such,” Zardari said today on NBC’s “Meet the Press” program. “Why do we need more?”
Asked whether Pakistan would tell U.S. intelligence officials where all its nuclear weapons are located, to allow for a joint strategy to keep them secure, Zardari said Pakistan is a sovereign country.
“Why don’t you do the same with other countries yourself?” Zardari said in the interview taped May 7. “I think this is a sovereignty issue, and we have a right to our own sovereignty.”
President Barack Obama said last month that, while Pakistan’s civilian government is “very fragile,” he is confident that the country’s nuclear arsenal is secure. He also said that Pakistan’s military is taking the threat of internal enemies seriously and recognizes the hazard of nuclear weapons “falling into the wrong hands.”
“We have confidence in their security procedures and elements and believe that the security of those sites is adequate,” General David Petraeus, the head of U.S. Central Command, said today on “Fox News Sunday.”
Taliban Threat
Obama has tied Pakistan to his strategy for dealing with Afghanistan as militant Islamic Taliban forces and other extremists threaten both nations from bases along their border. As part of an effort to reduce the appeal of extremists to Pakistan’s people, Obama has said he will support legislation increasing nonmilitary aid by $1.5 billion a year.
U.S. aid has not been enough, Zardari said.
“Altogether this aid package is not even one-tenth of what you give AIG,” Zardari said, referring to New York-based American International Group Inc., the insurer bailed out four times by the U.S. government, including an injection of as much as $70 billion in capital, $52.5 billion to buy assets owned or backed by AIG, and a $60 billion credit line. “So let’s face it, we need in fact much more help.”
The House version of the legislation would impose conditions on Pakistan such as proof of “substantial progress” on strengthening democracy and fighting the Taliban before more than half the money is spent.
Aid Conditions
“We’re going to have to figure out a way, though, to verify that what our money is doing is furthering a cause we all believe in,” Bob Corker, a U.S. Senator from Tennessee, said on CNN’s “State of the Union” program. “That obviously has been less than the case in the past.”
Zardari said the additional aid shouldn’t come with any conditions.
“I think it’s doubting an ally before you go into action together,” the Pakistani leader said. “We should have a result-oriented relationship, where I should be given a timeline and I’ll give you all a timeline, so we can both give each other timelines and meet the timelines on the positive.”
Obama is pressing Zardari to use more soldiers to fight the Taliban, who have seized Pakistani territory and strengthened their base to attack U.S. troops in Afghanistan. Thousands of Pakistani troops, plus fighter planes and helicopter gunships, have attacked what the army says are about 4,000 Taliban guerrillas in Swat, a mile-high valley northwest of the capital.
Swat Offensive
Pakistani troops intensified their operations in Swat last week after Prime Minister Yousuf Raza Gilani ordered an “all- out assault” to retake control of the northwestern region. Pakistani forces said yesterday that they killed 55 militants in the region.
Zardari said Pakistan has 135,000 ground troops battling the Taliban in the western part of country.
“We think they’re sufficient,” he said. Zardari said that’s three times as many troops as the U.S. has fighting the Taliban in Afghanistan.
The U.S. has about 38,000 soldiers in Afghanistan, and Obama has ordered 17,000 more combat personnel and 4,000 trainers to deploy. The North Atlantic Treaty Organization has about 58,000 military personnel in Afghanistan, operating alongside U.S. coalition forces.
Afghanistan President Hamid Karzai said the U.S. should have sent the additional troops six years ago.
“It’s a bit late,” he said in a separate “Meet the Press” interview. “But as we all know, it’s never too late for a good thing to do.”
U.S. Air Strikes
Karzai called for an end to U.S. air strikes, saying the civilian casualties are undermining the Afghan people’s support for the war on terrorism.
“The United States must stand on a much higher moral platform in order for us together to win this war,” he said.
James Jones, Obama’s national security adviser, said that while the U.S. would make efforts to avoid wounding or killing civilians, it would not take any options off the table.
“I think that we’re going to take a look at trying to make sure that we correct those things we can correct, but certainly to tie the hands of our commanders and say we’re not going to conduct air strikes, it would be imprudent,” Jones said on ABC’s “This Week.” http://www.bloomberg.com/apps/news?pid=20601087&sid=aVurOu8Dl53k&refer=worldwide

Swine FluUnited States has 1,639 cases of new flu, CDC says
08 May 2009 15:25:29 GMT
Source: Reuters
CHICAGO, May 8 (Reuters) - The United States has 1,639 cases of the new H1N1 flu in 43 states, with two deaths, the U.S. Centers for Disease Control and Prevention reported on on Friday.
U.S. officials have said they expect the swine influenza virus to spread to all 50 states and to cause many infections ranging from mild to severe. The case count on Thursday was 896 but there has been a backlog of likely cases that need extra testing to confirm.
http://www.alertnet.org/thenews/newsdesk/N08459646.htm

Canada says woman with swine flu dies
TORONTO (AP) - A Canadian health official says a woman with swine flu has died.
Alberta's chief medical officer says the woman from northern Alberta was in her 30s and did not travel recently. He says she also had other medical conditions.
Dr. Andre Corriveau made the announcement at a news conference Friday.
It would be the first death from swine flu in Canada. Mexico has confirmed 45 deaths and there have been two deaths in the United States.
http://www.breitbart.com/article.php?id=D98272F00&show_article=1

US, Costa Rica swine flu deaths reported May 10, 2009 - 3:19pm
SEATTLE (AP) - The number of swine flu-related deaths outside Mexico has inched up to five with the U.S. reporting its third fatality and Costa Rica its first, both involving men who also had underlying illnesses.
The number of confirmed cases of the infection in the U.S. has risen to 2,532 in 44 states, the Centers for Disease Control and Prevention reported Sunday.
Washington state health officials said the victim there was a man in his 30s who had underlying heart conditions and viral pneumonia when he died Thursday from what appeared to be complications from swine flu. The state Department of Health said in a statement Saturday that swine flu was considered a factor in his death.
"We're working with local and federal partners to track this outbreak," said Washington State Secretary of Health Mary Selecky.
The man was not further identified. He began showing symptoms on April 30, and was treated with anti-viral medication. Dr. Gary Goldbaum, Snohomish Health District medical director, said medical officials hadn't been able to isolate any "risk factors" for the man to identify where he might have been exposed.
The death of a 53-year-old man in Costa Rica on Saturday was the first involving swine flu outside North America. He also suffered from diabetes and chronic lung disease, the Health Ministry said.
Most of the victims in Mexico, the center of the outbreak where 48 people with swine flu have died, have been adults aged 20 to 49, and many had no reported complicating factors.
Previously, U.S. authorities reported swine flu deaths of a toddler with a heart defect and a woman with rheumatoid arthritis, and Canadian officials said the woman who died there also had other health problems but gave no details.
Mexico, which raised its count of confirmed cases to 1,626 based on tests of earlier patients, has been gradually lifting a nationwide shutdown of schools, businesses, churches and soccer stadiums.
But an upswing in suspected _ though not confirmed _ cases in parts of Mexico prompted authorities in at least six of the country's 31 states to delay plans to let primary school students return to class Monday after a two-week break.
"It has been very stable ... except for those states," Health Department spokesman Carlos Olmos said, referring to states in central and southern Mexico.
Mexican health authorities released a breakdown of the first 45 of the country's 48 flu deaths that showed that 84 percent of the victims were between the ages of 20 and 54. Only 2.2 percent were immune-depressed, and none had a history of respiratory disease.
http://wtop.com/?nid=106&sid=1655772

US threatens military force against hackers
Cyber espionage and attacks from well-funded nations or terror groups are the biggest threats to the military’s computer networks, a top US
officer said. Gen Kevin Chilton, who heads US Strategic Command, said he worries that foes will learn to disable or distort battlefield communications. Chilton said even as the Pentagon improves its network defences against hackers, he needs more people, training and resources to hone offensive cyber war capacity. At the same time, he asserted that the US would consider using military force against an enemy who attacks and disrupts the nation’s critical networks. “Our job would be to present options. I don’t think you take anything off the table when you provide options” to the president, in the wake of an attack, whether the weapon is a missile or a computer program, he said. Chilton’s comments shed the most light to date on the Pentagon’s ongoing debate over how to beef up its abilities to wage and defend against cyber warfare. And they came as the military is planning to set up a new cyber command at Fort Meade not far from Washington that would report to Strategic Command. Chilton said that his biggest fear is that enemies hack into military battlefield systems, and when an American commander sends out an order that says forces should go left, it is changed to say forces should go right. While most systems are classified and walled off, he said there are often ways to cross into those networks. The other worry is more internal. When a soldier or sailor sits down at a computer, Chilton said “it’s like he’s stepping to the guard gate at his base,” and can open the digital gate and let adversaries in.
http://timesofindia.indiatimes.com/World/US/US-threatens-military-force-against-hackers/articleshow/4501327.cms

Report: Hackers broke into FAA air traffic control systems
Hackers have broken into the air traffic control mission-support systems of the U.S. Federal Aviation Administration several times in recent years, according to an Inspector General report sent to the FAA this week.
In February, hackers compromised an FAA public-facing computer and used it to gain access to personally identifiable information, such as Social Security numbers, on 48,000 current and former FAA employees, the report said.
Last year, hackers took control of FAA critical network servers and could have shut them down, which would have seriously disrupted the agency's mission-support network, the report said. Hackers took over FAA computers in Alaska, becoming "insiders," according to the report dated Monday.
Then, taking advantage of interconnected networks, hackers later stole an administrator's password in Oklahoma, installed "malicious codes" with the stolen password and compromised the FAA domain controller in the Western Pacific Region, giving them the access to more than 40,000 FAA user IDs, passwords, and other data used to control a portion of the mission-support network, the report said.
And in 2006, a virus spread to the air traffic control (ATC) systems, forcing the FAA to shut down a portion of its systems in Alaska, according to the report.
The attacks so far have primarily disrupted mission-support functions, but attacks could spread over network connections from those areas to the operational networks where real-time surveillance, communications and flight information is processed, the report warned.
"In our opinion, unless effective action is taken quickly, it is likely to be a matter of when, not if, ATC systems encounter attacks that do serious harm to ATC operations," the report concluded.
An audit of the FAA's air traffic control cybersecurity protection measures finds them lacking and says there have been several breaches by hackers and a virus.(Credit: U.S. Department of Transportation, Office of Inspector General)
The breaches were possible because Web applications that support the air traffic control system operations are not properly secured to prevent unauthorized access and network intrusion-detection software is not adequately being used to monitor and detect cyberattacks, the report concluded.
The FAA's increasing use of commercial software and Internet Protocol-based technologies as part of an effort to modernize the air traffic control systems poses a higher security risk to the systems than when they relied primarily on proprietary software, the report said.
"Now, attackers can take advantage of software vulnerabilities in commercial IP products to exploit ATC systems, which is especially worrisome at a time when the Nation is facing increased threats from sophisticated nation-state-sponsored cyber attacks," the report said.
In general, the nation's critical infrastructure is increasingly at risk as previously isolated and closed systems are moved to the Internet and commercial software, like Windows, is used, security experts have said.
The air traffic control system auditors said they discovered more than 760 high-risk vulnerabilities in the Web applications tested, including holes that provided "front-door access" to the systems and could allow attackers to inject malicious code onto FAA user computers. Web applications were not adequately configured and the applications with known vulnerabilities were not patched in a timely manner, auditors found.
Meanwhile, intrusion detection systems (IDS) are deployed at only 11 of hundreds of air traffic control facilities and none of the IDS sensors is installed to monitor operational systems at those sites, the report said. Cyber incidents are not effectively monitored or fixed quickly, the report concluded.
In 2008, more than 870 cyber incident alerts were issued to the organization responsible for air traffic control operations and by the end of the year 17 percent (more than 150 incidents) had not been remediated, "including critical incidents in which hackers may have taken over control" of operations computers, the report said.
The FAA is "identifying and fixing weaknesses," FAA spokeswoman Laura Brown told The Wall Street Journal. "We are working on developing security architecture for that whole system."
However, Brown dismissed the notion that hackers could get access to critical air traffic control operational systems.
The audit of the air traffic control systems was requested by the ranking minority members of the House Committee on Transportation and Infrastructure and its Aviation Subcommittee.
http://news.cnet.com/8301-1009_3-10236028-83.html

Eeyore's News and View

The story that the news people won't let die. That might be a little unfair, but it is not really that much of an exaggeration. I guess it was yeasterday that the flu went to over 1000 confirmed cases, with over 50% being in mexico, 25% being in the us and the rest scattered but mostly being in europe (that we know of), a lot of the totalitarian countries won't say. Anyway i figured i would pass along a few more today. http://wtop.com/?nid=345&sid=1660998
Predicting Flu With the Aid of (George) Washington
The best way to track the spread of swine flu across the United States in the coming weeks may be to imagine it riding a dollar bill.
The routes taken by millions of them are at the core of a computer model at Northwestern University that is predicting the epidemic’s future. Reassuringly, it foresees only about 2,000 cases by the end of this month, mostly in New York, Los Angeles, Miami and Houston.
In the past decade, the Internet has allowed health agencies to spot emerging viruses much sooner: local public health reports posted on the Web along with items from newspapers and radio stations are harvested by keyword-scanning programs. Now, in tandem with that, supercomputers are being enlisted to predict their spread.
Such models are too new to have established a track record, but last week two separate teams — the one at Northwestern and a friendly rival at Indiana University, using different algorithms — both made predictions that matched almost exactly: flu from Mexico, if left utterly unchecked, would infect only 2,000 to 2,500 people in the United States in four weeks.
Although the number of cases appears to be rising faster than the two models predicted, the Northwestern projection was “still in the ballpark” as of Sunday, said Dirk Brockmann, the engineering professor who leads the epidemic-modeling team at the Northwestern Institute on Complex Systems. The model projected 150 to 170 cases by Sunday, compared with the 226 confirmed by the Centers for Disease Control and Prevention.
“If it was an order of magnitude off, like 1,000 cases instead of 10,000, I’d be worried,” Dr. Brockmann said.
At the heart of his simulation are two immense sets of data: air traffic and commuter traffic patterns for the entire country, and the yield of a whimsical Web site, Where’s George?
Where’s George? was started more than 10 years ago by Hank Eskin, a programmer who marked each dollar bill he received with a note asking its next owner to enter its serial number and a ZIP code into the Web site, just for the fun of seeing how far and fast bills traveled. By 2006, the site had the histories of 100 million bills.
Dr. Brockmann, visiting from Germany, heard about it in idle chatter and realized that it was just what he needed: a map of face-to-face transactions, exactly the kind that spread influenza.
He was nervous about using it, he said, until another study, tracking millions of cellphones to show how people moved around the country, produced a similar map.
His projection is remarkably detailed — by clicking on a map one can see how many cases a rural county in North Dakota can expect in two weeks versus how many Queens County in New York City can expect.
Dr. Brockmann can put out a simulation in two days, since each update needs 10 hours of computing time after data is updated. Indiana’s model takes about the same on its supercomputer, Big Red, said its team leader, Alessandro Vespignani, an informatics professor.
His model covers the globe, and it is based on air and land travel records for nearly the whole world. “In Africa, predictions are less accurate, but we have truck traffic,” he said.
Like Dr. Brockmann’s, Dr. Vespignani’s domestic model also names New York, California and Texas as future hot spots, followed by Illinois and Florida.
“We were stunned that our maps were very, very similar,” Dr. Vespignani said. “It’s encouraging about the robustness of our methods.”
They do make some similar assumptions. For example, the typical flu has a reproductive number of 1.7 to 2.8 — that is, the number of people each victim infects. Both chose low reproductive numbers, consistent with early data from Mexico. Both generate worst-case scenarios, knowing they are unrealistic.
“My wife just went to gymnastics with our daughter, and people were flipping out because a kid was coughing,” Dr. Brockmann said. Widespread fear “shapes the data,” he said, because it slows flu transmission, as do deliberate interventions like school closings and treatment with the antiviral drug Tamiflu.
Both models can be adjusted for those factors. Both team leaders declined to prophesy beyond four weeks, because the flu and politicians are unpredictable.
Indeed, the models are not so reassuring if one multiplies the four-week projection by the typical so-called doubling time for a flu pandemic, in which the number of cases doubles every 2.3 days. Do that, and every person in the United States is infected by mid-July. “But we don’t do that,” Dr. Brockmann said, “because that would be completely unscientific.”
A C.D.C. spokesman declined to comment on the two models, but he said he knew that school closings had an effect and cited a 2008 study of French school vacations by researchers at Imperial College London.
The study predicted that prolonged closures could cut flu cases by about 15 percent, which in the peak of a pandemic could cut emergency room admissions by 40 percent. But it only worked if the schoolchildren were kept apart, not seeing each other in day care or at the mall.
On Saturday, the New York City Department of Health released the results of a computer survey it gave to 1,996 students and 210 staff members at St. Francis Preparatory School in Queens. It showed a spike of cases from April 19, the day six students came back from Mexico feeling sick, and April 23, when 259 students and staff members reported flu symptoms.
Perusing the results, Dr. Brockmann sounded excited. “This looks like an epidemic curve,” he said. “I can use this.”
Yes, he agreed, that spike could include students who merely panicked. But it could also mean that in a closed setting like a school, the new flu could be transmitted surprisingly quickly.
“Averages don’t tell you very much,” he said of reproductive numbers. “You could have a student transmitting to 15 others, while the average in Queens is 0.1. It’s like putting Bill Gates down in Ethiopia and saying the country has a pretty high average income.”
But one thing remains true: “People have a very weird perception of large numbers,” he said. “If you have 2,000 cases of flu in a country of 300 million, most people think they’re going to be one of the 2,000, not one of the 299,998,000.”
http://www.nytimes.com/2009/05/04/health/04model.html?_r=2&scp=1&sq=dollar%20bill&st=cse

So now it has come full circle with a twist, now when we infected the pig, we infected the pig with the new virus. I guess that is an ironic twist.
Canada reports pigs infected with H1N1
For the first time, a sick farmworker has infected pigs with the H1N1 virus, or swine flu, World Health Organization officials said Sunday.
A farmworker who recently had traveled to Mexico has infected a herd of pigs in Alberta, Canada, Peter Ben Embarek, a WHO food safety scientist, said at a news conference. The worker returned to the farm in mid-April, and the animals began getting sick eight to 10 days later, Embarek said.
The infection was mild, and the farmworker and pigs have recovered.
The virus that infected the pigs is the same one that is in circulation among people, and there is no indication that the transfer between species has caused the flu bug to mutate into a new or dangerous form, Embarek said.
"This is not a big surprise," he said, noting that officials had expected that pigs could be infected in areas where the virus is circulating.
Although farmworkers are at risk of contracting the virus from pigs, Embarek emphasized that people cannot become infected from eating pork. Both heat and the curing process used to make ham kill the virus, and the virus doesn't live long on surfaces.
"You can continue to safely eat your prosciutto," Embarek said.
http://www.usatoday.com/news/health/2009-05-03-canada-flu_N.htm

The Taliban's Atomic Threat
At his press conference Wednesday evening, President Barack Obama endorsed Pakistan's official position that it has secure control over its nuclear-weapons arsenal. Mr. Obama said he was "gravely concerned" about the situation there, but "confident that the nuclear arsenal will remain out of militant hands."
His words are not reassuring in light of the Taliban's military and political gains throughout Pakistan. Our security, and that of friends and allies world-wide, depends critically on preventing more adversaries, especially ones with otherworldly ideologies, from acquiring nuclear weapons. Unless there is swift, decisive action against the Islamic radicals there, Pakistan faces two very worrisome scenarios.
One scenario is that instability continues to grow, and that the radicals disrupt both Pakistan's weak democratic institutions and the military.
Often known as Pakistan's "steel skeleton" for holding the country together after successive corrupt or incompetent civilian governments, the military itself is now gravely threatened from within by rising pro-Taliban sentiment. In these circumstances -- especially if, as Secretary of State Hillary Clinton testified recently, the nuclear arsenal has been dispersed around the country -- there is a tangible risk that several weapons could slip out of military control. Such weapons could then find their way to al Qaeda or other terrorists, with obvious global implications.
The second scenario is even more dangerous. Instability could cause the constitutional government to collapse entirely and the military to fragment. This could allow a well-organized, tightly disciplined group to seize control of the entire Pakistani government. While Taliban-like radicals might not have even a remote chance to prevail in free and fair elections, they could well take advantage of chaos to seize power. If that happened, a radical Islamicist regime in Pakistan would control a substantial nuclear weapons capacity.
Not only could this second scenario give international terrorists even greater access to Pakistan's nuclear capabilities, the risk of nuclear confrontation with India would also increase dramatically. Moreover, Iran would certainly further accelerate its own weapons program, followed inexorably by others in the region (e.g., Saudi Arabia, Egypt and Turkey) obtaining nuclear weapons, perhaps through direct purchase from Islamabad's new regime.
To prevent either scenario, Pakistan must move to the top of our strategic agenda, albeit closely related to Afghanistan. (Pashtuns on both sides of the border are the major source of Taliban manpower, although certainly not the only locus of radical support.) Contrary to Western "international nannies," the primary conflict motivators in both countries are ethnic and tribal loyalties, religious fanaticism and simple opportunism. It is not a case of the "have nots" rising against the "haves," but of True Believers on a divine mission. Accordingly, neither greater economic assistance, nor more civilian advisers upcountry, nor stronger democratic institutions will eliminate the strategic threat nearly soon enough.
We didn't get here overnight. We are reaping the consequences of failed nonproliferation policies that in the past penalized Pakistan for its nuclear program by cutting off military assistance and scaling back the International Military Education and Training (IMET) program that brought hundreds of Pakistani officers to the U.S. Globally, this extraordinarily successful program has bound generations of foreign military leaders to their U.S. counterparts. Past cut-offs with Pakistan have harmed our bilateral relationship. Perhaps inevitably, the Pakistani officers who haven't participated in IMET are increasingly subject to radical influences.
Moreover, the Bush administration, by pushing former President Pervez Musharraf into unwise elections and effectively removing him from power, simply exacerbated the instability within Pakistan's already frail system. Mr. Musharraf's performance against the terrorists left much to be desired, and he was no democrat. But removing him was unpleasantly reminiscent of the 1963 coup against South Vietnam's Diem regime, which ushered in a succession of ever-weaker, revolving-door governments, thus significantly facilitating the ultimate Communist takeover. Benazir Bhutto's assassination, while obviously unforeseen, was a direct consequence of our excessive electoral zeal.
To prevent catastrophe will require considerable American effort and unquestionably provoke resistance from many Pakistanis, often for widely differing reasons. We must strengthen pro-American elements in Pakistan's military so they can purge dangerous Islamicists from their ranks; roll back Taliban advances; and, together with our increased efforts in Afghanistan, decisively defeat the militants on either side of the border. This may mean stifling some of our democratic squeamishness and acquiescing in a Pakistani military takeover, if the civilian government melts before radical pressures. So be it.
Moreover, we must strive to keep Indo-Pakistani relations stable, if not friendly, and pressure Islamabad to put nuclear-weapons proliferator and father of Pakistan's nuclear program A.Q. Khan back under house arrest. At the same time, we should contemplate whether and how to extract as many nuclear weapons as possible from Pakistan, thus somewhat mitigating the consequences of regime collapse.
President Obama's talks next week in Washington with the presidents of Afghanistan and Pakistan provide a clear opportunity to take the hard steps necessary to secure Pakistan's nuclear arsenal and defeat the Taliban. Failure to act decisively could well lead to strategic defeat in Pakistan.
http://online.wsj.com/article/SB124121967978578985.html#mod=rss_opinion_main

Guess how DHS defines who is a terrorist now
May 02, 2009 By Drew Zahn
Two weeks before the U.S. Department of Homeland Security penned its controversial report warning against "right-wing extremists" in the United States, it generated a memo defining dozens of additional groups – animal rights activists, black separatists, tax protesters, even worshippers of the Norse god Odin – as potential "threats."
Though the "Domestic Extremism Lexicon" was reportedly rescinded almost immediately, Benjamin Sarlin of The Daily Beast recently obtained and published online a copy of the unclassified memo, dated March 26, 2009.
While many of the groups listed in the lexicon – such as Aryan prison gangs and neo-Nazis – may indeed be widely considered extremists, others will likely take offense at being described as a potential "threat."
Are you ready for a second Declaration of Independence? Sign the petition promoting true freedom once again!
For example, the memo defines the "tax resistance movement" – also referred to in the report as the tax protest movement or the tax freedom movement – as "groups or individuals who vehemently believe taxes violate their constitutional rights. Among their beliefs are that wages are not income, that paying income taxes is voluntary, and that the 16th Amendment to the U.S. Constitution, which allowed Congress to levy taxes on income, was not properly ratified."
The report, however, continues in its assessment of tax protesters, asserting that members "have been known to advocate or engage in criminal activity and plot acts of violence and terrorism in an attempt to advance their extremist goals."
Similarly, the lexicon concludes its definition of "black separatists" by asserting, "Such groups or individuals also may embrace radical religious beliefs. Members have been known to advocate or engage in criminal activity and plot acts of violence directed toward local law enforcement in an attempt to advance their extremist goals."
In his blog piece titled "Who You Calling an Extremist?" Sarlin writes, "Partisans leapt to decry the first DHS memo as part of a Democratic conspiracy to marginalize right wingers. But it became clear that DHS's broad descriptions of extremists were symptomatic of an ongoing agency problem that crossed ideological lines."
The lexicon states its purpose is to provide "definitions for key terms and phrases that often appear in DHS analysis that addresses the nature and scope of the threat that domestic, non-Islamic extremism poses to the United States."
Apparently, the DHS analyzes the "threat" level of Internet news websites like WorldNetDaily, for the lexicon defines "alternative media" as "a term used to describe various information sources that provide a forum for interpretations of events and issues that differ radically from those presented in mass media products and outlets."
The term "black power," widely used in a variety of contexts, also merits a definition in the lexicon: "A term used by black separatists to describe their pride in and the perceived superiority of the black race."
The DHS memo also includes precursors to the ill-fated "Right-wing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment" report, which prompted outrage from legislators and a campaign calling for the resignation of DHS Secretary Janet Napolitano.
For example, the lexicon contains virtually the same broad-stroke language the right-wing extremism report used.
"Rightwing extremism," the lexicon defines as those "who can be broadly divided into those who are primarily hate-oriented, and those who are mainly antigovernment and reject federal authority in favor of state or local authority. This term also may refer to rightwing extremist movements that are dedicated to a single issue, such as opposition to abortion or immigration."
The lexicon further points to those who oppose driver's licenses for illegal immigrants.
"Anti-immigration extremism," the lexicon defines as "a movement of groups or individuals who are vehemently opposed to illegal immigration, particularly along the U.S. southwest border with Mexico, and who have been known to advocate or engage in criminal activity and plot acts of violence and terrorism to advance their extremist goals. They are highly critical of the U.S. Government's response to illegal immigration and oppose government programs that are designed to extend 'rights' to illegal aliens, such as issuing driver's licenses or national identification cards and providing in-state tuition, medical benefits, or public education."
Unlike the right-wing extremism report, however, the lexicon includes definitions of extremism across a broad spectrum of issues: anarchy, animal rights extremism, black nationalism, Cuban independence, environmentalism, Jewish extremism, Mexican separatism, right-wing militias, white supremacists, the anti-war movement and more.
Among the more curious groups the DHS appears to be monitoring is the "racial Nordic mysticism" group, defined as "an ideology adopted by many white supremacist prison gangs who embrace a Norse mythological religion, such as Odinism or Asatru."
Among the more comical definitions is the description given of what "racist skinheads" wear, enabling law officers, it appears, to identify skinheads by their preferred brand of footwear:
"Dress may include a shaved head or very short hair," the report states, "jeans, thin suspenders, combat boots or Doc Martens, a bomber jacket, and tattoos of Nazi-like emblems."
Sarlin, who first publicized the memo, reports that a spokesperson for DHS told him the memo was recalled "within minutes" of being issued but declined to offer any details on the reasons for its withdrawal.
http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=96916

Eeyores news and view

Iranian nuclear smugglers working in teams
April 30, 2009 - 6:52am J.J. Green, WTOP.com
Two weeks ago, a 35-year-old Toronto man was arrested in Canada allegedly trying to smuggle nuclear components to Iran. Mahmoud Yadegari was arrested alone, but an international security source close to the case says he's part of a larger group that has succeeded in smuggling parts to Iran for use in building a weapon.
The source is convinced that "there are teams of operatives working on behalf of the Iranian government that receive orders to procure parts and then scramble to get as much as they can. Some are successful and others are caught."
Yadegari was charged by the Royal Canadian Police on April 17 with attempting to procure and export items known as pressure transducers. Pressure transducers have a dual purpose - they can be used in the production of enriched uranium as well as other military applications.
The Royal Canadian Police investigation indicates Yadegari was trying to hide the specifications of the transducers in order to export them without the required permits.
U.S. agents involved in the case indicate there was a U.S. connection.
"The target here in Toronto attempted to source pressure transducers from the United States and ship them to Iran," said Timothy Gildea, special agent with U.S. Immigration and Customs Enforcement office in Toronto.
Gildea says ICE's Counter Proliferation Investigations Unit is aggressively combing the world for nuclear proliferation red flags and teaching U.S. companies how to recognize the signs.
This time the outreach paid off.
"That's essentially how this case was initiated," says Gildea.
A tip led authorities to Yadegari.
Canadian customs officials have seized more than two dozen nuclear-related components in the past year from smugglers.
The international security source says he and other counter-proliferation authorities are "confident the smugglers are working together, but we have been unsuccessful in figuring out the relationship between them."
Even though a number of high-level seizures have been made in the last 12 months, staying hot on the smuggler's trail is no easy task.
"It takes a lot of tedious hard work," says Gildea. "There is no magic wand. You have to stay current on nukes, reading things about nukes and trusting your gut."
Another mistake to be avoided is accidentally tipping their hand.
"A lot of time we come across high level intelligence, and we have to use it in a way so as not to expose sensitive intelligence or the sources," says Gildea.
The source says we shouldn't be surprised to learn that "many of the smugglers may be active inside the U.S."
Regardless of where they are, the source says law enforcement and security personnel that may stumble across clues in their everyday lives need to know how to connect the dots and think analytically about what they see.
"If a police officer opens a big box of ball bearings during fraud investigations, that officer needs to trace that box back to it's origin and then advance the investigation by answering where are they headed," said the source.
http://wtop.com/?nid=778&sid=1664530

Obama says Pakistan nukes in safe hands
By Farhan Bokhari in Islamabad and James Lamont in New Delhi
April 30 2009 06:08
US president Barack Obama on Wednesday has backed assurances from Pakistan’s military, saying he believed the country’s nuclear arsenal of as many as 100 warheads was in safe hands.
Speaking at a White House news conference late Wednesday night, Mr Obama said while he was “gravely concerned” about the overall situation in Pakistan, he added that Pakistan’s military recognised the hazard of the country’s nuclear weapons “falling in to the wrong hands”.
Pakistan is currently locked in a struggle with Taliban militants who last week advanced to within 100km of the capital Islamabad. Pakistan is secretive about its nuclear programme, developed outside the nuclear non-proliferation treaty in an arms race with India.
A senior western envoy in Islamabad said diplomats had been given assurances about the security in place for the weapons systems and also their distance from Taliban-held territory.
Pakistan’s senior civil and military officials are sharing tightly held information about the country’s nuclear weapons programme with western countries in a bid to allay fears about the security of warheads in the face of a Taliban advance.
Pakistani officials presented this as a move to satisfy the west that its weapons would not fall into Taliban hands. “We have renewed our pledge to keep our nuclear weapons safe,” said a senior Pakistani official. The briefings were aimed, he said, at “reassuring” the international community that there were adequate safety measures “to keep a complete lid on our weapons”.
On Wednesday night, the Pakistani army claimed it had halted the latest Taliban incursion in the Buner district, 100km north-west of Islamabad, after two days of fighting. At dawn on Wednesday, the army, which has been accused in the west of failing to challenge the militants, airlifted troops behind Taliban lines and, it claimed, forced them to retreat.
“We have successfully blocked the Taliban advances and confined them just to a pocket,” Rehman Malik, the interior minister, said.
The Taliban’s territorial gains beyond Pakistan’s border regions in recent months and the lack of resistance put up by the country’s army have raised fears – particularly in India - that nuclear weapons might fall into the hands of religious extremists.
Although the whereabouts of Pakistan’s weapons are secret, analysts say that some are placed far from the Indian border to allow Islamabad adequate response time in the event of an attack from its old enemy, and fellow nuclear power, India.
Western diplomats said yesterday a Taliban advance on Islamabad threatened to bring militants perilously close to some of Pakistan’s main nuclear installations. But they doubted militants were capable of overwhelming heavily protected installations.
At the weekend, Hillary Clinton, the US secretary of state, described the toppling of the Pakistani government and capture of nuclear weapons as “unthinkable”.
US officials in Islamabad have assured that the threat of “loose nukes” is small.
Western diplomats say the nuclear programme resides in a “ringfenced” part of the military under the command of a well-respected general and protected from rogue elements within the army that might seek to capture a weapon. Although improvements in the locks and decoupling of weapons systems have been made, Pakistan has not complied with the high level of security recommended to it.
Worries over the security of Pakistan’s nuclear weapons date back to 2004 when the proliferation network of Abdul Qadeer Khan, founder of the nuclear programme, came to light.
One of the dangers identified by the international community was that one of AQ Khan’s scientists might helpextremists gain a “dirty bomb”. Since then, the Pakistani military has tightened monitoring of individual scientists and introduced new inventory systems to track individual components of the bombs.
Some analysts say the greatest threat to nuclear security is from within the army itself.
“An army, which eventually looks exhausted and [has lost] territory could then be in danger of becoming divided,” said Hasan Askari Rizvi, a Pakistani security and defence expert. “It is crucial that the Pakistan army does not lose control over parts of the country. That is essential for the safety of the nuclear weapons”.
http://www.ft.com/cms/s/0/a92fbbc2-34e4-11de-940a-00144feabdc0.html?nclick_check=1

N Korea threatens fresh nuclear tests
By Christian Oliver in Seoul, Harvey Morris in New York and Jamil Anderlini in Beijing April 29 2009 17:30
North Korea vowed on Wednesday to test a nuclear device unless the United Nations Security Council apologised for imposing sanctions, its strongest threat yet in an increasingly tense game of diplomatic brinkmanship.
The provocative statement elicited a muted response from the US and its allies in the region and diplomatic sources suggested they had decided to adopt a strategy of “malign neglect” in the face of North Korean brinkmanship.
Pyongyang was responding to sanctions imposed after it launched a long-range rocket over Japan on April 5. Were it to test a nuclear device it would be the second such test; an atomic device was detonated underground with uncertain success in 2006.
That explosion sparked international outrage from countries convinced that North Korea was trying to develop a warhead small enough to fit on a ballistic missile, of which it has a steadily increasing arsenal.
“If the UN Security Council does not apologise, we are going to conduct an intercontinental ballistic missile test and a nuclear test, as a self-defence measure,” the foreign ministry said in a statement released by the official KCNA news agency.
A western diplomat on the security council brushed aside the demand for an apology and noted that the council had produced a united response to the rocket launch.
Pyongyang’s latest statement did not require any action by the council, the diplomat said. “But if it steps up its activities with a nuclear test, the council is bound to become engaged.”
North Korea’s resumption of its nuclear programme had already put it in violation of undertakings it made as part of the six-party process aimed at establishing a nuclear-free zone in the Korean peninsula, the diplomat said.
Pyongyang defended its rocket launch this month by saying it was intending to put a satellite into orbit. The international community largely viewed this as an excuse for testing a missile.
Even China and Russia, traditionally sympathetic to Pyongyang, did not oppose the security council action.
North Korea’s foreign ministry also said the reclusive communist state planned to develop its own uranium-enrichment technologies.
The US has accused Pyongyang of running a clandestine uranium-enrichment programme, using centrifuges from the black-market network of Abdul Qadeer Khan, father of Pakistan’s nuclear bomb.
South Korean security sources do not believe the centrifuge cascades have reached the industrial level needed to be effective.
Tensions are running at a 10-year high on the peninsula, and the North insists a second Korean war is imminent. Pyongyang has torn up its non-aggression pacts with the affluent South and is threatening not to recognise a tense maritime border.
North Korea’s dictator, Kim Jong-il, is furious that Lee Myung-bak, South Korea’s conservative president, has insisted that Pyongyang apply to Seoul for vital food aid. This is anathema to the North, which regards itself as the only legitimate government on the peninsula. Some political analysts speculate Mr Kim could be trying to win direct talks with Barack Obama, the US president, through his latest round of brinkmanship.
However, the US has said it would not be bullied into negotiations by Pyongyang’s sabre-rattling.
Aidan Foster-Carter, honorary senior research fellow at Leeds University in England, said it was more likely the unusually rapid escalation in tensions was related to internal politics, which remained a mystery. “For someone whose normal tone of voice is a shout, this is a particularly hoarse shout.”
Military advances particularly in the field of ballistics play well as propaganda in North Korea, where US attack is always perceived as imminent. North Korea gave no indication of when it might be ready to carry out its tests, but Daniel Pinkston, north-east Asia deputy project director at the International Crisis Group in Seoul, said its scientists might be able to mobilise quickly.
“This is wholly speculation, but I would think there is something there to test if there is a political need.” North Korea is believed to have enough plutonium for six to eight bombs.
http://www.ft.com/cms/s/0/2043629c-3498-11de-940a-00144feabdc0.html

N Korea ‘resumes plutonium extraction’By Christian Oliver in Seoul and Harvey Morris at the United Nations
April 26 2009 16:35
North Korea says it has resumed reprocessing spent nuclear fuel rods to extract plutonium, further raising the diplomatic stakes after it launched a long-range rocket over Japan earlier this month.
.... (the rest you can read here if you want)
http://www.ft.com/cms/s/0/e1ee7cec-3218-11de-8b45-00144feabdc0.html

Holder urges allies to take share of detainees
By DEVLIN BARRETT – 16 hours ago
BERLIN (AP) — The United States and its allies must make sacrifices to close the Guantanamo Bay detention center, U.S. Attorney General Eric Holder said Wednesday in a high-profile appeal for Europe's help.
Holder spoke to the American Academy in Berlin, not long after telling reporters that the United States had approved the release of about 30 Guantanamo detainees.
"We must all make sacrifices and we must all be willing to make unpopular choices," said Holder.
"The United States is ready to do its part, and we hope that Europe will join us — not out of a sense of responsibility, but from a commitment to work with one of its oldest allies to confront one of the world's most pressing challenges," he said.
There are currently 241 inmates at the facility at Guantanamo Bay, Cuba, and Holder spent the past several days privately asking European leaders in London, Prague and Berlin for help relocating detainees the United States wants to set free.
Holder spoke before a select group of policy experts, academics and journalists in a crowded room of about 100.
In answer to a question about Bush administration officials' decisions to authorize tough interrogation techniques, Holder said he believed that many of them would, privately, admit to having made some mistakes in the pressure and worry that followed the Sept. 11 attacks.
"I don't suspect that would be true of Vice President Dick Cheney," Holder added.
At another point, a questioner earnestly asked of those Guantanamo detainees who are believed to be innocent could be put in a hotel somewhere.
"Hotels might be a possibility, it depends on where the hotel is," joked Holder.
Before the speech, Holder met with reporters, saying the United States has made decisions on a group of about 30 detainees, but has not yet decided where it wants to send them.
He said the United States is weeks away from asking certain countries to take detainees.
"We have about 30 or so where we've made the determination that they can be released. So we will, I think, relatively soon, be reaching out to specific countries with specific detainees and ask whether or not there might be a basis for the moving of those people from Guantanamo to those countries," Holder said.
Germany's former justice minister, Herta Daubler-Gmelin, a fierce critic of previous President George W. Bush, said Holder "made a very good impression. He's very honest about this society in transformation in America."
She said she expected Germany would eventually be one of the countries that accepts Guantanamo detainees.
The Bush administration had approved about 60 detainees for release, and Holder aides would not say if the 30 he was referring to were part of that group. Additionally, about 20 detainees have been ordered released by the courts, though those cases remain unresolved.
President Barack Obama has ordered the controversial detention site shuttered in the next nine months and assigned Holder to oversee that effort.
Holder said he has been telling European officials over the past week that "the problem that it created is best solved by a unified response."
Closing Guantanamo is good for all nations, he argued, because anger over the prison has become a powerful global recruiting tool for terrorists.
Yet when it comes to the prospect of having former international terror suspects living free, the Obama administration is trying to overcome the not-in-my-backyard sentiment that exists on both sides of the Atlantic.
Several European nations, including Portugal and Lithuania, have said they will consider taking such detainees. Others, like Germany, are divided on the issue.
French President Nicolas Sarkozy already has made what was billed as a symbolic gesture of agreeing to take one Guantanamo detainee.
In speaking to reporters Wednesday, Holder also said it is possible the United States could cooperate with a foreign court's investigation of Bush administration officials.
Holder spoke before the announcement that a Spanish magistrate had opened an investigation of Bush officials on harsh interrogation methods. Holder didn't rule out cooperating in such a probe.
"Obviously, we would look at any request that would come from a court in any country and see how and whether we should comply with it," Holder said.
"This is an administration that is determined to conduct itself by the rule of law and to the extent that we receive lawful requests from an appropriately created court, we would obviously respond to it," he said.
Pressed on whether that meant the United States would cooperate with a foreign court prosecuting Bush administration officials, Holder said he was talking about evidentiary requests and would review any such request to see if the U.S. would comply.
http://www.google.com/hostednews/ap/article/ALeqM5gS_wCwVf04MPhiRv1lwDohnZy8gAD97SBFS80

eeyores news and view

Be a recycler, think small and outside the box. You don't need a Mcmansion
An $800 Portable House
When Bill Case told me that his combination house and pottery studio had cost him only $800 to construct, I was impressed. Then, when he pointed out that the entire structure was portable to boot, I was simply amazed!
"Well, I was broke at the time I built it," Bill explained. "I came to New Mexico in 1974 with nothing but my truck and the clothes I was wearing. The only asset I had was a friend's promise to let me use a piece of land he owned."
For an innovator like Bill, that offer seems to have been enough. He went to his pal's place at Canada de Los Alamos . . . leveled some of the land with a hand shovel . . . and—relying on his own ingenuity and an assortment of recycled materials—managed to pull a shelter up over himself.
"In order to earn a little pocket money, I arranged to haul trash from two motorcycle shops in Santa Fe," Case explained. "But instead of dumping the discards at the local landfill, I kept the material to use when building my house."
CRATE CREATIVITY
Bill, you see, had noted that many of the motorcycle crates were made up of a wealth of building materials. First, every one contained styrofoam padding in slabs from 2" to 8" thick. The enclosed bikes were also wrapped in a heavy plastic bag, and further protected by a stout mahogany frame. (Case figured that even the thick cardboard containers that surrounded all the other material would have some value.)
So, when he'd amassed enough crates, Bill combined them with a scrounged supply of scrap 2 X 4's to fabricate his home's well-insulated walls (see the accompanying diagram). The innermost styrofoam surface, of course, provides interior insulation. The next layer is a frame of cardboard-covered 2 X 4's (the paper product traps air pockets between the studs). Finally, plastic bags that once wrapped two-wheelers form a vapor barrier over the cardboard, and the shipping crate mahogany provides the exterior sheath.
When it came time to assemble a home from the made-up walls, Bill decided to build a portable dwelling. After all, he didn't own the land (and therefore didn't want to invest his effort in a house that he'd have to leave someday). Furthermore, since he'd be working alone, Case wanted to erect the house in sections that could be managed by one person.
To do so, Bill constructed his walls in 8' X 8' prefabricated panels, which are simply joined to each other with removable bolts. Braces were needed to hold the first pair of sections up, but the rest were able to stand unsupported once they were bolted together.
The home's ceiling was made from the same materials—and in the same man ner—as were the walls. "Putting on the roof was the hardest part of the job," Case recalls. "I had to raise a 20-foot beam and set it in place . . . climb up to get it squared away . . . climb back down to check it out . . . and climb up again if any adjustments were needed. I built the whole roof like that."
INEXPENSIVE INNOVATIONS
Bill made his own creosote (a mixture of tar and gasoline) to protect the structure's sole plate and any other areas that might otherwise have been prone to rotting as a result of contact with the earth. The preservative was applied over a batting of scrounged plastic bags.
Although Case had studied architecture, he says he used more common sense than planning when he designed his home: "All I did was make a few notes on the back of some envelopes." The builder did, however, devote a lot of thought to the placement of his windows. "I wanted them to look out over the most pleasing locations, and to let their sizes and shapes be determined by those of the pieces of glass I could obtain at little or no cost."
The glazing was scrounged from construction sites and picture frame shops, and the windows were positioned to bring in as much light as possible while opening upon views of the timbered hills around his home (and avoiding vistas cluttered with a neighbor's abandoned cars).
Bill's friends worried that the house—which has no foundation—would collapse in the first high wind . . . but their fears were unfounded. The building has withstood four angry New Mexico winters and seems likely to stand until Case decides to take it down.
Again, his mode of anchoring the structure was determined by economics. He just piled local rock against the interior walls and earth-bermed the outside. (Bags of pottery clay also help to hold down the studio's inside walls.)
A PROFITABLE STOVE
With the house erected and ready for occupancy, Bill attacked the problem of warming his dwelling. He built a fireplace, but it failed to "keep the icicles off the furniture". So the resourceful recycler set out in search of an efficient woodstove.
Finding commercially available heaters to be quite expensive, Case decided to go into debt for a $300 welding outfit instead. He then got hold of plans for a stove built from a 55-gallon drum and put together a couple of the woodburners. "They're pretty ugly," Bill admits, "but I learned enough by making mistakes on those two to construct a much better unit." The self-taught lessons proved to be worthwhile, too . . . because Bill went on to build 40 more such stoves that he sold to support himself and pay for the welding equipment.
All in all, Case finds that his heated house is quite adequate. He has a 12' X 16' living area and a 16' X 24' pottery studio . . . and the entire initial investment in his home and shop totals just $800. (Later, however, he spent an additional $200 for a yard light and a double layer of carpeting . . . which was used to cover the recycled plastic bags that, in turn, cover the dirt floor of his living quarters.)
What's more, he can take the whole house with him if he ever moves! "All I have to do is cut the sheathing over the joints with a Skilsaw . . . unbolt each section . . . pack the whole thing in my truck . . . and go! " Case laughs.
However, he isn't likely to leave soon, because Bill's now head of Arts and Crafts Marketing for the New Mexico Department of Commerce and Industry . . . and, despite the fact that he has a steady income, he still lives in his recycled home in Canada de los Alamos.
"It's not an attractive house," Bill summarized. "Everything about it was dictated by economic necessity. Nevertheless, the structure is quite livable . . . and such a house would be an inexpensive and workable way for a back-to-the lander to get through the first winter while building a permanent dwelling on his or her property."
ANOTHER SUGGESTION
While the $800 abode lacks thermal mass and is therefore difficult to heat with solar energy, the packing crate walls could be combined with either of two popular and inexpensive New Mexico building methods to remedy that shortcoming. The "Case Wall" could, for example, enclose an adobe structure (the material is wonderful for storing heat, but doesn't, by itself, provide good insulation) . . . or a person could erect such a wall around one of the stone and adobe-mortared houses popular in eastern New Mexico, which—again—provide thermal mass but have poor insulating qualities.
Even in its original form, however, Bill's portable dwelling stands as proof that there's no reason for anyone to freeze in a tent (or pay "double rent" by maintaining a dwelling in town) while building a dream house on his or her homestead acres . . . especially not while motorcycle shops are throwing away an awful lot of valuable building material!
EDITOR'S NOTE: Although many motorcycle manufacturers were using the crates described above when Bill Case built his low-cost shelter, you may have to do a little looking to locate such high-quality containers nowadays. Most firms now ship their products in less expensive plastic and/or metal-framed boxes, and those that still use the fine wooden crates—or their dealers—may well be asking a (usually reasonable) price for then.
http://www.motherearthnews.com/Modern-Homesteading/1980-09-01/An-800-Portable-House.aspx

Political Interference Seen in Bank Bailout Decisions
Barney Frank Goes to Bat for Lender, and It Gets an Infusion
Troubled OneUnited Bank in Boston didn't look much like a candidate for aid from the Treasury Department's bank bailout fund last fall.
The Treasury had said it would give money only to healthy banks, to jump-start lending. But OneUnited had seen most of its capital evaporate. Moreover, it was under attack from its regulators for allegations of poor lending practices and executive-pay abuses, including owning a Porsche for its executives' use.
Nonetheless, in December OneUnited got a $12 million injection from the Treasury's Troubled Asset Relief Program, or TARP. One apparent factor: the intercession of Rep. Barney Frank, the powerful head of the House Financial Services Committee.
Mr. Frank, by his own account, wrote into the TARP bill a provision specifically aimed at helping this particular home-state bank. And later, he acknowledges, he spoke to regulators urging that OneUnited be considered for a cash injection.
View Full ImageThe Washington Times /Landov
Rep. Barney Frank (D., Mass.), seen here leaving a December news conference, urged regulators to consider TARP money for a local bank.

As President Barack Obama's team sets about revising the $700 billion TARP program, following last week's release of the second half of the money, among the issues it faces is widespread dissatisfaction with way the program has been implemented. Treasury Secretary nominee Timothy Geithner, testifying Wednesday at his Senate confirmation hearing, acknowledged "there are serious concerns about transparency and accountability...confusion about the goals of the program, and a deep skepticism about whether we are using the taxpayers' money wisely."
Bankers, regulators and politicians complain of a secretive and opaque process for deciding which banks get cash and which don't. The goal of aiding only banks healthy enough to lend -- laid out by the Treasury when the program began -- clearly seems to have shifted, but in a way that's hard to pin down and that the Treasury has declined to explain. Part of the problem is that some powerful politicians have used their leverage to try to direct federal millions toward banks in their home states.
"It's totally arbitrary," says South Carolina Gov. Mark Sanford. "If you've got the right lobbyist and the right representative connected to Washington or the right ties to Washington, you get the golden tap on the shoulder," says Gov. Sanford, a Republican.
Several Ohio banks received funds after Ohio's congressional delegation complained bitterly about the treatment of Cleveland-based National City Corp., which regulators forced into a merger rather than provide with cash. And in Alabama, the state's top banking official says a windfall there -- five banks are slated to receive funds -- is testament to the influence of two powerful Alabama lawmakers who sit on key congressional committees.
TARP Funds by State
Click below for a sortable chart and interactive map detailing allocations by state and by institution.

More on the Bailout
On Dec. 3, Rep. Spencer Bachus (R., Ala.) forwarded a Dec. 2 letter from Alabama bank regulators complaining about the complexities of applying for federal funds. Alabama banks later received billions in funds.
The FDIC and Massachusetts slapped OneUnited Bank in Boston with a cease and desist order on Oct. 27, 2008, less than two months after it received $12 million in capital from Treasury.
A link between such lobbying and the release of TARP cash can't be proved. Treasury officials have said that political influence plays no role in the selection process. "The decisions are made by a committee of officials at Treasury based on recommendations and data provided by the regulators through the applications process," said Brookly McLaughlin, who was a spokeswoman for the Treasury until the Bush administration ended on Tuesday.
Restoring Credit Flow
Treasury and Federal Reserve officials have repeatedly said the TARP program was successful in its primary purpose, which was to bring the credit markets back from the precipice.
The task of further restoring credit flow now falls to Mr. Obama's team, which has spoken in favor of pumping more money into banks, as has Fed Chairman Ben Bernanke. The new administration is weighing a range of ideas, including using at least $50 billion of the TARP money to prevent foreclosures, and possibly other measures such as setting up an "aggregator bank" to hold toxic assets now burdening banks' books.
The federal plan to invest in banks was controversial from the start. The Treasury said it would acquire preferred stock in banks, and sometimes warrants for common stock as well, but not any voting or management rights. Within the broad structure known as TARP, this is called the Capital Purchase Program.
At a hastily arranged meeting on Oct. 13, then-Treasury Secretary Henry Paulson basically forced the chiefs of the country's nine biggest banks to accept cash infusions. The government invested $125 billion in the nine. Citigroup Inc. and Bank of America Corp. subsequently returned for more money.
A further $125 billion was committed under the Bush administration to buy stakes in some of the remaining 8,500 U.S. banks and thrift institutions. More than 250 have received cash or commitments so far, totaling about $68 billion. The recipients range from large regional banks to Saigon National, a 12-employee lender catering to Vietnamese-American businesses in Southern California.
The procedure for getting a capital injection is complex. State and federal regulators sometimes complain that even they don't understand how it works.
A bank applies through its federal regulator, which either recommends to the Treasury that the bank receive money or quietly tells the bank to pull its application. A public turndown could be a death sentence because it would tell investors and consumers the government thinks the bank isn't viable.
If the regulator forwards the application, the Treasury decides whether to approve it. If the Treasury's reviewing team is uncertain, it sends the request to a panel of federal regulators to debate the matter.
The results have many in the industry scratching their heads. Two banks in Green Bay, Wis., have received federal investments. But in Arizona, a state hit hard by the housing slump, officials say they are perplexed that a dozen or so state-chartered banks haven't heard back from Treasury about the status of their applications.
Arizona's banking superintendent, Felecia Rotellini, says she is teaming up with local bankers and state legislators who plan to start lobbying Arizona's congressional delegation for help. "Some states are getting better treatment, and we just want it to be a level playing field," Ms. Rotellini says. "I think it's just a question of advocacy. It has to be a congressional voice."
A body set up to monitor the program, the Congressional Oversight Panel, has said the process of allocating money lacks transparency and accountability. The Treasury declines to explain why one bank is chosen for a federal investment and not another. Those that receive federal cash sometimes boast they have a government seal of approval, leaving banks that are shut out facing awkward questions about why they didn't.
In mid-October, days after summoning the nine big-bank executives to Washington to accept aid, the government took a far different approach with Cleveland's National City, which was struggling with soured real-estate loans.
National City executives consulted with their examiners at the Office of the Comptroller of the Currency, which is a division of Treasury, about whether they should apply for a capital injection. Local OCC officials gave them the green light, according to people familiar with the matter.
In Washington, National City got a chillier reception. The company was facing mounting losses stemming in part from its ill-timed purchases of two Florida banks shortly before the state's real-estate market imploded. Comptroller of the Currency John Dugan informed National City executives they shouldn't apply because their bank was too weak. Instead, he told the bank to sell itself. Within a week, it agreed to a $5.6 billion takeover by PNC Financial Services Group Inc. in Pittsburgh. (PNC declined to comment.)
A political firestorm erupted in Ohio when it became clear the government had turned down National City, a 163-year-old bank with deep roots in Cleveland. Ohio's congressional delegation sent dozens of letters to Messrs. Dugan and Paulson and threatened to hold hearings on how the Treasury had supposedly wrecked a bank they said wasn't in immediate danger of collapsing.
Some lawyers, bankers and analysts say the case marked a turning point in the Treasury's handling of capital injections. For one thing, since then, some weak regional banks have pocketed billions of dollars in TARP funds.
In addition, Ohio banks are now faring better. Twelve Ohio banks have subsequently received a total of $7.7 billion in taxpayer funds. In neighboring Michigan -- like Ohio, hurt by the auto-industry slump -- only two banks have had federal infusions and a third has preliminary approval, for infusions totaling $638 million.
Among the Ohio beneficiaries is Huntington Bancshares Inc., of Columbus. It received a $1.4 billion federal investment in November, even though, like National City, it was hurt by souring real-estate loans and the weak regional economy. Amid mounting losses, the bank last week replaced its chief executive.
In Alabama, Colonial BancGroup Inc. asked for Treasury cash in November. With its application blessed by its state regulator and the Federal Deposit Insurance Corp., the Montgomery bank figured it was a shoo-in for funds, say people familiar with the bank.
Real-Estate Loans
But because Colonial was weighed down by real-estate loans, the Treasury sent the bid to its panel for reviewing controversial applications, consisting of four federal regulatory bodies: the FDIC, the Fed, the OCC and the Office of Thrift Supervision. Negotiations lasted several weeks. Eventually, the Treasury gave preliminary approval to Colonial's request for $550 million in capital.
The slow process infuriated Alabama officials. The same day that Colonial announced its application had been approved, Trabo Reed, Alabama's deputy banking superintendent, wrote a letter to Rep. Spencer Bachus of Alabama, the top Republican on the House Financial Services Committee, complaining that the government had dragged its feet and kept banks and state officials in the dark. The letter didn't specifically cite Colonial (which had no comment).
Rep. Bachus's office forwarded the letter to the heads of bank regulatory agencies and asked them to examine the situation. Since the letter was forwarded, two more Alabama banks have received TARP funding. Five Alabama banks, including Colonial, are slated to collect a total of about $4.2 billion.
In all, about 50 state-chartered Alabama banks applied, according to state banking superintendent John Harrison. He says his office helped shepherd them through the process, figuring that "the more applied, the more had the chance to get it."
Mr. Harrison says that in addition to Rep. Bachus, Alabama Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee, "has been a big proponent for Alabama state-chartered banks...and he was really concerned that the TARP money went here." The banking official added: "We're blessed with a U.S. senator that was on the banking committee and Spencer Bachus being the ranking Republican" on the House panel. "I think [the Treasury] got the message."
Aides to Rep. Bachus said he did nothing more than forward Mr. Reed's letter and ask for consideration. Sen. Shelby has consistently opposed the financial-system bailout. His office denied that he was involved in helping Alabama banks get money. "Sen. Shelby has never intervened on anyone's behalf for TARP money," an aide to the lawmaker said.
The bank that Rep. Frank of Massachusetts went to bat for, OneUnited, saw its capital level sink in early September after the U.S. took control of the overextended mortgage giants Fannie Mae and Freddie Mac. OneUnited, a closely held Boston-based lender with offices in Florida and California too, held large amounts of Fannie Mae preferred shares. Their value plunged after the U.S. put Fannie and Freddie into a federal conservatorship, acquired preferred shares in them and took warrants entitling the government to nearly 80% of their common stock.
The moves left OneUnited's capital badly depleted. A measure called "Tier 1 risk-based capital" equaled only 1.88% of assets at the bank, versus a desired level of about 6%. A OneUnited lawyer, Robert Cooper, says he called Rep. Frank and Rep. Maxine Waters of California, both Democrats, to complain that the Treasury's move had hurt the bank.
Rep. Waters heads the House Financial Services subcommittee on housing, and until last spring her husband, Sidney Williams, was a OneUnited director. Rep. Frank, besides heading the Financial Services Committee, has longstanding ties to OneUnited, and recalls having had a deposit account at a predecessor bank in the 1960s.
Later that month, Rep. Frank was intimately involved in crafting the legislation that created the $700 billion financial-system rescue plan. Mr. Frank says that in order to protect OneUnited bank, he inserted into the bill a provision to give special consideration to banks that had less than $1 billion of assets, had been well-capitalized as of June 30, served low- and moderate-income areas, and had taken a capital hit in the federal seizure of Fannie Mae and Freddie Mac.
"I did feel that it was important to frankly try and save them since it was federal action that put them into the dumper," Mr. Frank says.
Porsche for Executives
On Oct. 27, the FDIC and Massachusetts bank regulatory officials, alleging poor lending practices and executive-compensation abuses by OneUnited, slapped it with a strong enforcement action, a cease-and-desist order. Among other things, the officials told the bank to get rid of a 2008 Porsche for executives.
Mr. Cooper, the bank's attorney, dismisses the order as a "hastily cobbled together" action. "What we are talking about is a hiccup, a blip on the screen of an otherwise-stellar enterprise," he says. Asked whether the bank had sold the Porsche, he said only that it was complying with the order.
Mr. Frank -- who has played a leading role in both the initial design of TARP and current planning to revamp it -- says he spoke with a federal regulator and asked that OneUnited be given consideration for TARP money, "without in any way impinging on their general safety and soundness rules." Mr. Frank said he didn't remember which federal regulator he spoke with.
On Dec. 19, OneUnited received $12 million from the Treasury, on condition it raise $20 million from its shareholders, which it did.
Ms. McLaughlin, the spokeswoman for the Bush administration Treasury, said that OneUnited's application was subject to the same review process as other banks faced.
Mr. Frank said he didn't try to interfere with the regulatory process. "We have never told the regulators that they should ease up on them or not order them to do this or that," he said.
He cites the bank's status as the state's only financial institution owned by African-Americans. "We did say, yes, I thought it would have been a social tragedy if the one minority bank in Massachusetts that has been working so hard and had been overextended into housing was to be wiped out by a federal action, the Fannie-Freddie preferred [shares] thing, and that's why I think it was important to try to help them."
Rep. Waters said she was unaware that the bank received money. OneUnited was "just a small" bank, she said.
http://online.wsj.com/article/SB123258284337504295.html

Asian economic woe grows as China slows and Japanese exports plunge
China's economy may have ground to a halt entirely between the third and fourth quarters of last year and Japanese exports plunged 35pc in December, underlining the scale of the slowdown in Asia.
China's national statistics bureau said gross domestic product had grown at an annual rate of 6.8pc in the fourth quarter of 2008, compared to a gain of 9pc in the previous three months.
The annual rate of growth for the world's third-largest economy was the lowest since the second quarter of 1998. "The international financial crisis is deepening and spreading with a continuing negative impact on the domestic economy," said Ma Jiantang, head of the statistics bureau.
Although the annual rate of growth was 6.8pc, economists speculated that the actual growth between September and December last year could have been zero, or even negative.
"My rough assumption is that it was basically zero," said Stephen Green, an economist at Standard Chartered bank in Shanghai. However, he added, recent revisions to Chinese GDP figures made an accurate calculation impossible. Mr Green also predicted that GDP may not grow in the first quarter of this year, compared to the last quarter.
Japanese exporters endured a torrid December as demand for a range of goods fell sharply. Exports to the US fell 26pc, those to Europe dropped 41.8pc and those to China were down 35pc.
In China, much of the slowdown has been blamed on a lack of demand from the rest of the world for Chinese-made goods. Wen Jiabao, the prime minister, said earlier this week that the outlook for Chinese employment is "very grim" as factories shut down and foreign companies rein in their spending.
Mr Wen will visit the UK next week, and Gordon Brown has already called upon him to make sure that China plays its part in stabilising the global economy. "We need China to play a full role, in partnership with us, if we are to restore confidence, growth and jobs," said Mr Brown.
China, however, has insisted that it must get its own house in order first, and there are indications that the government has already instructed banks to unleash credit into the market. The value of loans issued in November and December soared by nearly 19pc.
"It is hard to overestimate the potential importance of this," said Mr Green. "Mature economies' banking systems are currently flooded with liquidity that is not being lent out. China's interbank market is similarly flooded, but the difference is that the banks are lending."
The banks are likely to be ordered to finance a large chunk of the Pounds400 billion fiscal stimulus package that the Chinese government announced in November. There is a further Pounds2 trillion of spending demands from local governments across China that they may also be called upon to help with, irrespective of the possibility of bad loans.
Other bright spots included a slight rebound in industrial production growth to 5.7pc in December from 5.2pc in November, and a strong set of retail sales figures, where growth was 19pc.
Goldman Sachs, which issued one of the most bearish predictions for Chinese economic growth in 2009, at 6pc, admitted that there are "rising upside risks" that they may be incorrect, given the money flooding into the market.
"Our checks with commercial banks suggest the value of loans extended in January is likely to be even larger than the amount in December," said Yu Song, an economist at Goldman, adding that falling inflation also raised the possibility of further interest rate cuts.
However, Goldman said that China could be hit by even weaker export demand and maintained its prediction for now. "It is way too early to even claim the worst is over," said Mr Green. "Exports and domestic consumption, as well as profit growth, are now slowing and they will continue to grind lower over the year. Property still looks fragile, as does private investor sentiment. Even if we reach 8pc growth for this year, it will not feel like it," he added.
http://www.telegraph.co.uk/news/worldnews/asia/china/4312120/Asian-economic-woe-grows-as-China-slows-and-Japanese-exports-plunge.html

Will China lead the world into depression?
Oh no!
Albert Edwards at Societe Generale has issued another terror alert:
Sell everything. Hide in a bunker with plenty of whisky. The S&P 500 index of US shares is about to crash through its half-century support line to 500.
"Technicals say it is time to bail out. Cut equity expose and prepare for rout. US depression looking likely. While China's 2009 implosion could get ugly."
Mr Edwards -- who is of an "Austrian" persuasion, ie hates excess debt -- was one of the very few economists to see this whole crisis coming, and to issue warnings clearly and emphatically (unlike others who now claim to have been seers, but in fact hedged). He said interests rates would be slashed to zero and that bond yields would fall to the lowest in history. All this has occurred.
The key argument is that markets have been sold a pup on the China growth miracle and have massively underestimated the risks for the global FX and trading system as this unravels.
"The Chinese economy is imploding and this raises the possibility of regime change. To prevent this, the authorities would likely devalue the yuan. A subsequent trade war could see a re-run of the Great Depression.... Do you really trust politicians to "do the right thing"?
Mr Edwards has been tactically bullish on equities since the end of October when the MACD (Moving Average Convergence /Divergence Oscillator) for the S&P 500 broke upwards. This technical indicator broke down again two days ago.
He said the CBOE put/call ratio had dropped to the lowest level in a year (a contrary indicator).. Don't ask me to explain.. I am a technical dolt.
While a "deflationary quagmire" lies in store, this will not be a repeat of Japan's Lost Decade. Fed stimulus a l'outrance points to an inflation denouement down the road (2-3 years?).. hopefully not hyper.
He notes that China's electric power output has fallen for three months. The OECD's leading indicator for China has fallen off a cliff. Exports have collapsed across Asia.
"We continue to emphasize our long-held view that emerging economies are particularly vulnerable to a reversal in the global liquidity pump."
Mr Edwards said investors have a "touching faith" that China's authorities are in control of events.
"Could the economic situation in China become so bad that it threatens the regime itself? Of course it could. But before being swept away in a tidal wave of worker unrest it has one key tool in its economic armoury it has used before. MEGA-DEVALUATION. China has a track record of such things. At the end of 1993 the authorities devalued the yuan by 33pc."
A replay would be the surest route to a Smoot-Hawley II.
"Amid confidence that the ongoing, massive, monetary and fiscal stimulus will prevent a repeat of the Great Depression, will it instead be competitive devaluation and implosion of world trade that we should watch out for."
This is not my view. I believe the Chinese leadership will hold the line and behave responsibly, as they did in 1998. I wouldn't want to bet the farm that Albert Edwards is wrong.
http://blogs.telegraph.co.uk/ambrose_evans-pritchard/blog/2009/01/15/will_china_lead_the_world_into_depression

Harley to cut 1,100 jobs as recession stings motorcycle maker
MILWAUKEE (AP) — Harley-Davidson (HOG) said Friday it will cut 1,100 jobs over two years, close some operations and consolidate others as it grapples with a slowdown in motorcycle sales.
The company also reported its fourth-quarter profit fell nearly 60%, and said it is slashing motorcycle shipments in 2009 to cope with reduced demand.

The iconic motorcycle maker said it will consolidate two engine and transmission plants in Milwaukee into its facility in Menomonee Falls, Wis. It will shrink its paint and frame operations in its York, Pa., plant and close its distribution facility in Franklin, Wis. Harley also said it will end its domestic transportation fleet operation.
The company said 70% of the job cuts will occur this year and the rest in 2010. The cuts will result in one-time charges of $110 million to $140 million over 2009 and 2010. Once they are finished, the cuts will save $60 million to $70 million per year.
Harley has been stung by the rapid downturn in motorcycle demand. The economic recession has prompted many consumers to put off purchases of its high-end bikes, while the credit crunch has kept some would-be customers from obtaining financing.
Harley said it is slashing motorcycle shipments in 2009 to 264,000 to 273,000 to cope with the down market. That would be a drop of 10% to 13% from a year earlier.
In 2008, Harley said it shipped 303,479 motorcycles, down 8% from 330,619 motorcycles in 2007.
Harley said its fourth-quarter profit fell 58% to $77.8 million, or 34 cents a share, for the quarter ended Dec. 31, compared with $186.1 million, or 78 cents a share, in the same quarter last year.
Revenue fell 6.8% to $1.29 billion from the year-ago quarter.
The results fell short of Wall Street estimates. Analysts surveyed by Thomson Reuters expected 57 cents a share on sales of $1.29 billion, on average.
Harley said its financial-services division swung to an operating loss of $24.9 million in fourth quarter.
The company said it is evaluating "a range of options" to provide funding for the ailing Harley-Davidson Financial Services. Many analysts have suggested the lending unit may have to be sold because it has been unable to unload its debt in the financial markets.
For the full year, Harley said its earnings fell 30% to $654.7 million, or $2.79 a share, from last year. Sales fell 2.3% to $5.59 billion.
Analysts expected $3.02 a share on sales of $5.61 billion in revenue.
Harley said it would not provide earnings guidance for 2009, but analysts call for $2.15 a share. Shares of Harley closed Thursday at $12.40 and are down 69% in the last 52 weeks.
http://www.usatoday.com/money/companies/earnings/2009-01-23-harley_N.htm?loc=interstitialskip

Missiles kill 7 in NW Pakistan
ISLAMABAD, Pakistan (AP) - Missiles fired from a suspected U.S. spy plane killed seven people Friday on the Pakistan side of the Afghan border, a lawless region where al-Qaida militants are known to hide out, officials said.
The strike was the first on Pakistani territory since the inauguration of President Barrack Obama.
Pakistani leaders had expressed hope Obama would halt the attacks, more than 30 of which have been launched since the middle of last year, reportedly killing several senior militants.
The pro-U.S. government routinely protests them as a violation of the country's sovereignty, but most observers speculate it has an unwritten agreement allowing them to take place.
One drone fired three missiles into the village of Zharki in North Waziristan, hitting two buildings, the intelligence officials said on condition of anonymity because they were not authorized to speak to the media.
At least seven people were killed, but there identities were not immediately known.
The United States rarely acknowledges firing the missiles, which are mostly fired from drones believed launched from neighboring Afghanistan.
Pakistan's air force is not known to possess drones. NATO officers in Afghanistan say they respect Pakistani sovereignty.
http://www.breitbart.com/article.php?id=D95SSHE80&show_article=1

Obama adviser: White males need not apply
Robert Reich tells House panel stimulus package should emphasize 'social return' over worker skill
Posted: January 22, 2009
12:17 pm Eastern
© 2009 WorldNetDaily
A top economic adviser to President Obama has told a congressional panel the billions of dollars in the proposed economic stimulus plan should be allocated with social issues in mind, to make sure the money doesn't go to just "white male construction workers" or the highly skilled.
Robert Reich, who served as labor secretary under President Clinton, was speaking to the House Steering and Policy Committee Jan. 7 about funding infrastructure projects across the nation.
"It seems to me that infrastructure spending is a very important and good way of stimulating the economy. The challenge will be to do it quickly, to find projects that can be done that will have a high social return, that also can be done with the greatest speed possible," Reich said.
"I am concerned, as I'm sure many of you are, that these jobs not simply go to high skilled people who are already professionals or to white male construction workers," he said.
The hearing took place two weeks before Obama was inaugurated.
"I have nothing against white male construction workers," Reich said. "I'm just saying there are a lot of other people who have needs as well.
"There are ways in which the money can be, criteria can be set so the money does go to others, the long term unemployed, minorities, women," he said.
Rep. Charles Rangel, D-N.Y., appeared to agree, suggesting federal money be directed to specific groups of people.
The federal government, he said, must "remove the discretion" about where the funds go, or what projects would be involved, even to the point of eliminating any input from governors or state legislatures.
Reich agreed: "Governors ought to be, should be given a choice of signing on the bottom line or not."
Then Rangel noted the "middle class" would be unlikely to create any opposition to funds directed to minorities.
"One thing that you can depend on, you don't have to be worried about what the middle class is going to do. Things are so bad, they have to put food on their tables, get clothes for their kids, get them in school," he said.
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Commentator Michelle Malkin said Reich's statements expose "the lie that the Obama administration is actually interested in revitalizing basic infrastructure for the good of the economy."
"No, what Team Obama really wants is to ensure that the least skilled, least qualified workers get jobs based on their chromosomes and pigment," she said.
Malkin cited Reich's own blog, where the Obama adviser wrote of the economic stimulus plan: "I'd suggest that all contracts entered into with stimulus funds require contractors to provide at least 20 percent of jobs to the long-term unemployed and to people with incomes at or below 200 percent of the federal poverty level."
This, Malkin wrote, is "spoken like a true-blue wealth redistributor. The 'needs' (read: demands) of politically protected minorities trump the need for competently build roads and bridges."
On his blog, Reich makes his case for, "The Stimulus: How to Create Jobs Without Them All Going to Skilled Professionals and White Male Construction Workers."
"At least 2 percent of project funds should be allocated to such training. In addition, advantage should be taken of buildings trades apprenticeships -- which must be fully available to women and minorities," he wrote.
Race already has become an issue several times in the Obama administration.
As WND reported, Democratic Party strategist Donna Brazile admitted she swiped Obama's complimentary blanket from his inauguration ceremony and then joked it was not a criminal offense because, "We have a black president ... this was free."
Outrage also erupted over the inauguration benediction by Rev. Joseph Lowery, the 87-year-old civil rights pioneer, for asking God to help mankind work for a day when "white would embrace what is right."
Obama reacted to the benediction with a smile.
Reich's statements were highlighted in a video by NakedEmporerNews, which is embedded here:
http://www.youtube.com/watch?v=opxuUj6vFa4

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