Tuesday, April 29, 2008

Shell profits up 25 pct on record high oil prices

Shell profits up 25 pct on record high oil prices

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Anglo-Dutch energy giant Royal Dutch Shell said Tuesday that first-quarter net profits leapt 25 percent to 4.58 billion pounds because of record-breaking crude oil prices.

Crude oil prices smashed record after record in the first quarter and hit an all-time high of almost 120 dollars per barrel on Monday on the back of a British refinery strike and simmering tensions in key producer Nigeria.

Net earnings on a current cost of supply (CCS) basis, excluding fluctuations in the value of inventories, were up 12 percent to 3.92 billion pounds in the three months ending March 31, compared with the same period of 2007.

Stripping out the impact of one-off items, net CCS earnings grew to 3.96 billion pounds, which beat market expectations for a CCS profit of 3.41 billion pounds.

Shell said production increased by 0.4 percent in the first quarter to 3.52 million barrels of oil equivalent per day, while revenue climbed 55.6 percent to 57.69 billion pounds.

"Good operating performance, combined with increased oil and gas prices, offset the impact of downstream conditions in the first quarter 2008," said chief executive Jeroen van der Veer in an earnings release.

"We have delivered another competitive set of earnings for Shell's shareholders."

The company also raised its quarterly shareholder dividend by 11 percent to 40 cents per share.

Royal Dutch Shell, the biggest European energy major in terms of stock market capitalisation, returned a total of 1.7 billion pounds to shareholders during the first quarter in the form of dividends and share buybacks.

The results were well received by the markets in London.

In late morning trade, Shell saw its 'B' shares up 4.42 percent to 2,008 pence on the FTSE 100 index of leading companies, which in turn rose 0.48 percent to 6,119.50 points.

In commodities markets on Monday, the price of New York light sweet crude hit an all-time peak of 119.93 dollars -- a gain of more than 80 percent from a year ago.

The price of Brent North Sea crude oil struck an historic high 117.56 dollars in London trading last Friday.

BP's first-quarter profit jumps 63 percent

BP's first-quarter profit jumps 63 percent

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BP has reported a 63 percent jump in profits in the first quarter compared to the same period a year ago.

The oil company on Tuesday reported a profit of $7.6 billion compared to $4.4 billion in the first quarter of 2007.

First-quarter profit was up 73 percent compared to the previous quarter.

BP's closely watched replacement cost profit rose 48 percent to $6.59 billion. This compared to US$4.44 billion in the first quarter of 2007.



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In election years such as this one, the word "Democracy" is constantly bandied about. It would seem that every politician running wants to make the USA more "Democratic."

That is very interesting because the United States of America was not set up as a "Democracy," nor has it ever been a "Democracy."

The USA is a Representative Republic which is a far cry from a "Democracy."

According to George Washington and the founders of the USA, the government of the country derives from the people. They do this by electing Representatives and Senators.

Theoretically these elected officials are suppose to vote the will of the people. There is, however, one big catch: they're not legally obligated to vote for anyone but themselves (and more and more for their campaign contributors who helped to get them elected).

It seems evident that elected officials don't vote the will of the electorate when over 70% of the population wants us out of Iraq and they keep voting funding for the war. That is only one of hundreds of possible examples.

It is foolhardy and naive to think that anyone running for the office of President will get the country out of Iraq without the express approval of their corporate backers or the "Military Industrial Complex." This is as true for Ron Paul as it is for anyone else.

Ron Paul backers will, of course, say that it is not true because Paul does not take corporate contributions. Ron Paul will be hamstrung if he actually gets elected and tries to stop the war, because at that time Congress will actually reassert its constitutional authority as a co-branch of government. It can't be any other way because most of Congress is bought and paid for by corporations and the "Military Industrial Complex (try closing a munitions or arms manufacturer in any Congressmen's district).

When one studies newspapers, magazine and what's posted on the net, one immediately becomes aware of the discontent in the country as it is being operated. This is true of people who want election reform, tax reform, a true investigation into 9-11, the anti-abortion contingency, gun-rights advocates, et cetera, et cetera.

It is blatantly apparent that politicians are a major part of the problem; however, how can one take voting seriously when it is a choice between two evils. And oftentimes the lesser of the two evils does not win. Besides that, with the Diebold machines now in use it is apparently easier to steal a US election than one in a third world country. One should not forget what happened in 2,000 and 2,004.

There are people upset over foreign policy, the "Justice" Department, the CIA, Diebold voting machines, mandatory Ids, the continued presence of the Electoral College (where apparently cheat sheets can be bought). The list goes on and on.

Everyone seems to be bitching and complaining about something, but no one is really offering much in the way of how to change the system which is stacked in favor of the wealthy and corporate interests.

Twenty-four states in the Union offer their registered voters the right of initiative or referendum. This allows the electorate to bring issues that are of interest to them before the voters. A simple majority will pass an issue, and it generally becomes law once the governor signs it (this, of course, varies from state to state). No governor in his or her right mind would not sign such a referendum into law if they want to remain in office.

There is now a national movement gathering signatures of registered voters (natural individuals and not corporations) via the internet to give the people of the entire country the right of initiative and referendum. Once 50,000,000 signatures are gathered the initiative will be put before the entire electorate. If approved it will be come the law of the land.

With that quantity of signatures no president or legislature can ignore it, nor the corporately controlled media.

This will truly give the electorate a say in the running of government, and it should spark a much more profound fire of interest in the electorate as to how their country is administered.

The movement is called The National Initiative For Democracy.

For anyone serious about changing the direction the country is headed and not just whining about it, it would behoove them to learn more about this movement at www.ni4d.us.

Truth or Neo-Consequences

Truth or Neo-Consequences

By Morgan Strong

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An obscure academic dispute – over whether Israeli archeology sought to obscure the land’s last two millennia of history and promote a continual Jewish claim of ownership – has shown again how tensions in the Middle East can reverberate in unlikely ways in the United States.

The dispute centered on whether Barnard College should grant tenure to Nadia Abu El-Haj, an American-born scholar of anthropology who, in the 1990s, challenged the scientific integrity of what she saw as the Israeli use of archeology in a politically motivated way to justify Jewish settlements on territory that had belonged to Palestinians.

Although the controversy wasn’t new – it had been argued out within archeological circles in Israel for years – El-Haj became a lightning rod because she was the first academic of Palestinian descent to publicize the debate in a 2001 book, Facts on the Ground: Archeological Practice and Territorial Self-Fashioning in Israeli Society.

This academic debate boiled over the past two years when El-Haj – who had been a professor at Barnard College since 2002 – applied for tenure in 2006 and became a target of neoconservative attack groups determined to punish her for undermining Israel’s claims to the Holy Land.

On Aug. 7, 2007, a petition entitled “Deny Nadia Abu El-Haj Tenure” was posted on petitionline.com, describing her as a scholar of “demonstrably inferior caliber” who had unfairly assailed the methodology of Israeli archeological digs.

The petition – prepared by Paula Stern, a 1982 graduate of Barnard and a resident of the occupied West Bank – also accused El-Haj of calling the ancient Israelite kingdoms a “pure political fabrication” and of lacking basic skills to undertake her studies, including an ability to “speak or read Hebrew.” The petition said, “We fail to understand how a scholar can pretend to study the attitudes of a people whose language she does not know.”

The petition became a hot topic among American neoconservatives.

Campus Watch, a right-wing organization that monitors the teaching of Middle Eastern studies in the United States, joined in the attacks on El-Haj. Campus Watch was founded in 2002 by Daniel Pipes, a prominent neoconservative and son of Richard Pipes, a key figure in the Cold War-era Committee on the Present Danger.

A blog of pro-Israeli professors known as Scholars for Peace in the Middle East also joined in the anti-tenure campaign. Stern’s petition eventually attracted about 2,500 signatures including many alumni from Barnard and its affiliate, Columbia University in New York City.

Errors Admitted

However, two months after Stern posted the petition, she acknowledged to The Jewish Week that some of the petition’s criticisms of El-Haj and her book were inaccurate.

Stern “incorrectly quotes from Abu El-Haj’s book in charging she is grossly ignorant of Jerusalem geography,” according to The Jewish Week article by Larry Cohler-Esses. “Stern also conceded attributing to Abu El-Haj a viewpoint that Abu El-Haj does not voice as her own in her book. The petition does so by taking a quote fragment from a section in which Abu El-Haj describes others as having the opposite viewpoint.”

The article also noted that the petition ignored references in El-Haj’s book to Hebrew language sources and an acknowledgement to her Hebrew tutor. [The Jewish Week, Oct. 25, 2007]

Despite its inaccuracies, the petition – and the anti-tenure campaign – threatened to exact a price from Barnard and Columbia for granting tenure to El-Haj; the schools would stand to suffer financial harm from offended alumni withholding contributions.

This pattern of ugly controversies whenever a Muslim or an Arab-American criticizes Israel or is seen as promoting some Islamic agenda has become more and more common, with influential neoconservative groups now operating in a concerted way to destroy careers and livelihoods.

Often the strategy succeeds, as the New York Times reported on April 28 in connection with the forced resignation of Debbie Almontaser, the founder of New York’s Khalil Gibran International Academy, which had a goal of teaching Arabic to children of various ethnicities, including Arab-Americans.

Almontaser, who had a reputation as a Muslim moderate, stepped down after confronting a campaign that labeled her a “radical,” a “jihadist” and a “9/11 denier.” The Times reported that the campaign was part of “a growing and organized movement to stop Muslim citizens who are seeking an expanded role in American public life.”

Some of the leaders of the battle against Almontaser – such as Daniel Pipes – also participated in the anti-tenure campaign at Barnard against El-Haj, reflecting how these activists view the marginalizing of Muslims as a coordinated national struggle.

“It’s a battle that’s really just begun,” Pipes told the Times, claiming that this new enemy – “lawful Islamists” – must be stopped before they made enough inroads to enable them to impose sharia law from the Koran on Americans.

“It is hard to see how violence, how terrorism will lead to the implementation of sharia,” Pipes said. “It is much easier to see how, working through the system – the school system, the media, the religious organizations, the government, businesses and the like – you can promote radical Islam.” [NYT, April 28, 2008]

So, this strategy holds that Muslims and their non-Muslim allies especially in academia must be marginalized and denied legitimacy. To achieve these ends, neoconservatives and sympathetic media outlets often turn small issues into huge controversies that create enormous pressure on mainstream politicians to distance themselves from the targets.

That was the case with Almontaser when Rupert Murdoch’s neoconservative New York Post linked the school principal to a group that lent office space to an Arab-American organization that promoted t-shirts reading “Intifada NYC.” Amid the furor, the mayor’s office of New York City pushed Almontaser into resigning, although federal judges have since agreed that the Post “inaccurately reported” her words.

Barnard’s El-Haj tenure struggle followed a similar pattern, with key roles played by some of the same activists. In both cases, the battle involved neoconservatives who distorted the words of their targets in order to build a public hysteria strong enough to overwhelm the principle of academic freedom.

The Barnard Battle

El-Haj was born in New York, the daughter of a mother of French-Norwegian descent and a Palestinian father, who had received his Doctorate in Economics from Columbia in the late 1950s.

In 1975, her family lived in Teheran, where her father was employed by the United Nations and where she learned Farsi. A few years later, the family moved to Lebanon where she became fluent in Arabic. Her family frequently visited her father’s relatives in East Jerusalem.

In 1980, she undertook her undergraduate education at Bryn Mawr. In 1990, as a graduate student at Duke University, she decided on a project in epistemology, “to examine knowledge in a social context, connected to time, place, politics and identity.”

Wanting to find a place where that identity was in dispute, she chose Israel/Palestine. She then spent months in Israel learning Hebrew and examining Israeli archeology’s role in the creation of, and establishment of, the State of Israel.

Israeli archeology, from the founding of Israel in 1948, claimed to have uncovered evidence supporting an ancient and continuous Hebrew presence, which in turn provided legitimacy to Israeli government claims that Palestinian land should be part of the modern state of Israel.

After achieving her Doctorate in 1995, she adapted her doctoral thesis into a book, Facts on the Ground, published by the University of Chicago Press in 2001.
The book examined the role of Israeli archeology in what was essentially a political context. El-Haj traced the history of how archeological discoveries – pottery, ancient stones, even human remains – were used in a manipulative way to establish the legitimacy of Israeli claims to Palestinian land.

El-Haj questioned the veracity of some Israeli claims, saying the science of archeology had been exploited in the "formation and enactment of [Israel’s] colonial-national historical imagination and ... the substantiation of its territorial claims."

Her book cites the example of an archeological dig in Jezreel, in the Galilee region. El-Haj said British and Israeli archeologists used bulldozers “to get down to the earlier strata, which are saturated with national significance, as quickly as possible."

Bulldozing a site – or using large shovels – to a specific depth of an archaeological dig, where one could expect to find remnants of an ancient Hebrew settlement, or not excavating to lower levels eliminates the possibility of finding evidence that other civilizations preceded or followed the Hebrews.

Israeli archeologist David Ussiskin of the University of Tel Aviv denied that bulldozers at the site were used in the fashion alleged by El-Haj’s book or that evidence of more recent strata had been damaged.

Despite a spirited debate about her book, El-Haj’s academic career continued to advance. She taught at the University of Chicago before moving to Barnard College in 2002 and sought tenure in April 2006.

That’s when El-Haj was caught up in the surging neoconservative campaign to keep Islam – and criticism of Israel – as far out of mainstream American thought as possible.

In this case, however, the neocons did not prevail. El-Haj was awarded tenure on Nov. 1, 2007, representing at least one moment when free speech and academic freedom won out over the sophisticated political pressure that neoconservatives have made their hallmark.

Some War Veterans Find GI Bill Falls Short

Some War Veterans Find GI Bill Falls Short

By Susan Kinzie

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Two years after a rocket-propelled grenade hit Nathan Toews during an ambush in southern Afghanistan, sending shrapnel shooting into his skull and spiderwebbing through his brain, he has recovered enough to ask: What now?

Like so many leaving the military, after years of taking orders, he's facing an almost infinite number of choices about his future.

Even now that he's picked a school he'd like to go to, there are plenty of unknowns: His admissions interview included questions about whether the 24-year-old veteran could share a dorm room with a teenager, whether his head injury might keep him from completing the foreign language requirement, and just what, exactly, the government would pay for.

Decades after the GI Bill transformed American society after World War II, another generation of veterans is returning home - more than 800,000 as of last summer. What they find is quite different from the comprehensive benefits that once covered all the costs of an education, from undergraduate straight through Harvard Law. The current GI benefit covers just half the national average cost for tuition, room and board, veterans' advocates say. "It falls dramatically short," said Eric Hilleman of the Veterans of Foreign Wars.

For those who, like Toews, were badly wounded, there are more benefits, so he expects his college costs to be covered. But it's not just the money - there are physical and emotional roadblocks, too. A recent survey found that nearly half of recent veterans are un- or underemployed, and advocates say education can be key to a successful reentry. So a patchwork of efforts, public and private, have sprung up.

"These are people ... who served the country at a time when very few people did," said Sen. James Webb (D-Va.), who is pushing a bill that would expand benefits for veterans, including active-duty guards and reservists, to cover the cost of the most expensive public universities and to match contributions from private schools with higher tuition, for four academic years. "We should give them the best shot at a good future."

An earlier version of the bill stalled in Congress; the U.S. Department of Veterans Affairs opposed it as too expensive, too complex to administer and too likely to tempt troops to move back to civilian life. The bill, substantially revised, now has 58 co-sponsors, including both Democratic presidential candidates.

There are dozens of other bills, including one announced last week by senators including Sen. John McCain (R-Ariz.), also a presidential candidate. Hundreds of supporters of Webb's bill plan to rally today on Capitol Hill.

Many people enlist to earn money for college, and almost everyone signs up for the education benefits - which, in the case of the main GI Bill, requires a service member to pay about $1,200 into the plan- but not everyone takes advantage of it. And that buy-in is not returned even if the benefits are unused.

About 70 percent use at least some part of it, said Keith Wilson, director of the education service, but the VA does not track how many earn degrees.

An independent study found that just over half use some part of the benefits, said Ray Kelley of AMVETS, a veterans support group, and only 8 percent use all. "Congress is realizing we're not giving them the benefits we say we're giving them," Kelley said. "They only have 36 months from the time they start using it to the time they finish." That means going to school full time, year-round.

Students apply for the flat-rate benefit monthly and get a check once it is confirmed that they are still enrolled. Luke Stalcup, 27, of Student Veterans of America, who served in Iraq and will attend Georgetown University for graduate study in the fall, said he paid his rent late every month after the GI bill check came in. Now he relies on loans and scholarships to cover the rest of the cost at Columbia University.

Some states, such as Maryland, supplement federal benefits with state aid. That helped Laurissa Flowers, who used to put her University of Maryland bill on her credit card, paying it down as she received each month's benefits. Flowers said other issues can be just as daunting as the money, so she started a veterans' group on campus.

Private donors are trying to help, too: B.G. and Charlotte Beck of Fairfax Station gave $1 million to Arkansas State University to provide training, rehabilitation, guidance and extensive support for veterans on campus.

In June, the American Council on Education will host a conference hoping to spur colleges to start or expand initiatives for veterans. Dartmouth College President James Wright said he realized after visiting wounded soldiers that most of them were eager to go to school but had no idea where to begin. He worked with the education council, raising money to pay for a counselor at four military hospitals.

So this past year, Heather Bernard, a former college counselor with a son serving in Iraq, has been working with wounded soldiers and Marines at Walter Reed Army Medical Center and the National Naval Medical Center. She helps them plan ahead, choose schools, dig up old transcripts, prepare for standardized tests.

She found an evening art class for Calvin Linnette and Andre Knight, two soldiers who have to schedule around daytime medical appointments, at Montgomery College because it is close enough to Walter Reed that they can get there despite their injuries. The professor often helps them with a ride.

This month, Bernard was waiting nervously outside the admissions dean's office at Dickinson College in Pennsylvania, where Toews was interviewing.

High school was easy; Toews got good grades and SAT scores and was accepted into the engineering program at California Polytechnic State University. But his family couldn't afford tuition. About a year after Sept. 11, 2001, he enlisted.

He spent a year in Baghdad, then volunteered to serve in Afghanistan.

In 2006, he was a gunner for a small convoy, bringing supplies for an offensive when the trucks slowed down in rough terrain and "all hell broke loose," Toews said.

Two weeks later, he woke up in a hospital bed in Bethesda with no idea where he was or why. He spent the next couple of years getting surgeries and rehab.

As people at Walter Reed kept telling him how amazing his recovery has been, it hit him: He could work with brain-injured patients. "If I could somehow help one guy, encourage him or make things easier for him and his family, that I should do it," Toews said.

He still had a lot to figure out; that could mean studying neuroscience or social work or occupational therapy. And to write a college application essay? "It's been six years since I've done that kind of thing," he said.

Bernard coached him through it all, taking him to visit a big university and then to Dickinson. He talked with the admissions director about some of the challenges he might face, such as the phys ed requirement and a taking on a heavy course load after being out of school.

A freshman asked him what he had done in his time off since high school. "I joined the military," he said, skin grafts shining on his forearm, thick scars from a craniotomy tracing arcs on his skull, visible through his hair.

"Oh, that's cool," she said politely.

He and Bernard got lunch in the cafeteria, and he looked at the students swarming through. "They're all such ... little ... kids," he said.

Witness: Fundraiser Spoke of Plan to Fire US Attorney

Witness: Fundraiser Spoke of Plan to Fire US Attorney

By Mike Robinson

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Chicago - A government witness testified Monday that a prominent political fundraiser for the governor told him three years ago that Chicago's chief federal prosecutor would be fired and replaced by someone chosen by then-U.S. House Speaker Dennis Hastert.

Restaurant owner Elie Maloof testified that Antoin "Tony" Rezko told him that the person picked to replace Patrick J. Fitzgerald as U.S. attorney in Chicago would end a federal investigation into corruption under Gov. Rod Blagojevich.

"The federal prosecutor would no longer be the federal prosecutor, Patrick Fitzgerald would be eliminated," Maloof said at Rezko's fraud trial.

Prosecutors said last week that former Illinois Finance Authority executive director Ali Ata, who is set to take the witness stand as early as Thursday, will testify Rezko told him of a plan to replace Fitzgerald.

Prosecutors told U.S. District Judge Amy J. St. Eve that Ata would say he talked with Rezko about such efforts on the part of Springfield lobbyist Robert Kjellander and former presidential adviser Karl Rove.

Kjellander denied he had ever discussed such a thing. Rove's lawyer, Robert Luskin, said his client does not remember Kjellander ever talking to him about Fitzgerald and is certain he never spoke to anyone at the White House about removing Fitzgerald.

U.S. attorneys are nominated by the president but traditionally are chosen by the senior senator of the president's party.

Maloof's testimony Monday was the first time Hastert's name came up during Rezko's trial.

An aide to Hastert, Brad Hahn, said Hastert had never heard anything about a plan to dismiss Fitzgerald. He said the testimony was puzzling.

"We can't begin to speculate on where this comes from or what is being suggested," Hahn said.

Rezko, 52, is charged with scheming to split a $1.5 million bribe from a contractor who wanted state permission to build a hospital in the McHenry County suburb of Crystal Lake.

He is also charged with scheming to pressure kickbacks out of firms that sought to do business with a state teachers pension fund.

Rezko denies taking part in such a scheme.

Prosecutors say he raised enormous sums for Blagojevich's campaign and as a result gained the political clout to manipulate big-money decisions on hospital construction and which firms were allowed to do business with the pension fund. Blagojevich is not charged with wrongdoing.

The trial got under way March 3 and the prosecution case is now in its final stages. The court is giving the jury days off on Tuesday and Wednesday and the government tentative plans to rest early next week.

Since taking over as U.S. attorney in September 2001, Fitzgerald has launched a vigorous attack on corruption, sending former Gov. George Ryan and a number of other political insiders to federal prison.

Last year, the firings of several U.S. attorneys around the country provoked a backlash on Capitol Hill, where lawmakers questioned whether the moves were politically motivated. Alberto Gonzales later resigned as attorney general.

Cheney lawyer claims Congress has no authority over vice-president

Cheney lawyer claims Congress has no authority over vice-president

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The lawyer for US vice-president Dick Cheney claimed today that the Congress lacks any authority to examine his behaviour on the job.

The exception claimed by Cheney's counsel came in response to requests from congressional Democrats that David Addington, the vice-president's chief of staff, testify about his involvement in the approval of interrogation tactics used at Guantanamo Bay.

Ruling out voluntary cooperation by Addington, Cheney lawyer Kathryn Wheelbarger said Cheney's conduct is "not within the [congressional] committee's power of inquiry".

"Congress lacks the constitutional power to regulate by law what a vice-president communicates in the performance of the vice president's official duties, or what a vice president recommends that a president communicate," Wheelbarger wrote to senior aides on Capitol Hill.

The exception claimed by Cheney's office recalls his attempt last year to evade rules for classified documents by deeming the vice-president's office a hybrid branch of government - both executive and legislative.

The Democratic congressman who is investigating the legal framework for the violent interrogation of terrorist suspects, John Conyers, has asked Addington and several other top Bush administration lawyers to testify. Thus far all have claimed their deliberations are privileged.

However, Philippe Sands QC, law professor at University College, London, has agreed to appear in Washington and discuss the revelations in Torture Team, his new book on the consequences of the brutal tactics used at Guantanamo.

Excerpts from Torture Team were previewed exclusively by the Guardian earlier this month.

Two witnesses sought by Conyers, former US attorney general John Ashcroft and former US justice department lawyer John Yoo, claimed that their involvement in civil lawsuits related to harsh interrogations allows them to avoid appearing before Congress.

In letters to attorneys representing Ashcroft and Yoo, Conyers shot down their arguments and indicated he would pursue subpoenas if their clients did not testify at his May 6 hearing.

"I am aware of no basis for the remarkable claim that pending civil litigation somehow immunises an individual from testifying before Congress," Conyers wrote.

Conyers, who chairs the House of Representatives judiciary committee, also questioned the reasoning of Cheney's lawyer in a letter to Addington.

"It is hard to know what aspect of the invitation [to you] has given rise to concern that the committee might seek to regulate the vice president's recommendations to the president," Conyers wrote.

"Especially since far more obvious potential subjects of legislation are plentiful," he added, mentioning several: US laws on the use of torture on terrorist suspects, the 15-year-old War Crimes Act, and the rules that allowed the Bush White House to receive legal advice from a specialised office within the justice department.

Afghanistan's Insurgency Spreading North

Afghanistan's Insurgency Spreading North

By Anand Gopal

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Militant attacks are increasing outside the Taliban's southern stronghold, such as Sunday's on President Hamid Karzai.

Kabul, Afghanistan - The attempted assassination of President Hamid Karzai Sunday came as the latest sign of a trend worrying Western officials: that the insurgency is spreading from the Taliban stronghold of the south to the central and northern regions of the country.

The militant attack, the biggest in Kabul since mid-March, came during a public ceremony. Despite a massive security presence, militants managed to fire bullets and rockets at the president, killing two nearby lawmakers and a boy.

The insurgency in Afghanistan has not been "contained," Director of National Intelligence Michael McConnell testified before a Senate subcommittee in February. "It's been sustained in the south, it's grown a bit in the east, and what we've seen are elements of it spread to the west and the north."

A recent study by Sami Kovanen, an analyst with the security firm Vigilant Strategic Services of Afghanistan, echoed this assessment. He reported 465 insurgent attacks in areas outside the restive southern regions during the first three months of 2008, a 35 percent increase compared with the same period last year. In the central region around Kabul there have been 80 insurgent attacks from January through March of this year, a 70 percent jump compared to the first three months of last year.

The numbers are part of a nationwide trend of rising violence. In the southern and southeastern provinces, including the insurgent hotbeds of Kandahar and Helmand, guerrilla attacks spiked by 40 percent, according to Mr. Kovanen's research.

Kabul itself has been largely free from the violence, but as Sunday's attack shows, there are signs that the Taliban's presence is growing here, too. On the sprawling, serene campus of Kabul University, where the nation sends many of its best and brightest, the Taliban has reached an unprecedented level of influence, students say.

Young men gather in campus dorm rooms and watch slickly produced DVDs of the latest insurgent attacks. One video shows Taliban fighters firing rocket launchers and shrieking, "God is the greatest!" as orange fireballs reach their targets, presumably Coalition forces, in the distance. The attacks are set to religious music, backed by a staccato drumbeat meant to impassion and inspire viewers.

"Many of us have contact with Taliban leadership," says one student and Taliban member, who asked to be called Naqibullah. "I talk to commanders based in the south maybe once a week on the phone." Naqibullah and others like him disseminate Taliban propaganda throughout the university, hoping especially to reach students from various parts of the country.

Naqibullah suggests that places like Kabul University might be a fertile recruiting ground for operations in the capital and in northern areas of the country. "There are many students waiting to launch suicide attacks," he says. "One student launched a suicide attack in Bagram," an American base north of the capital.

"I, too, would like to become a suicide bomber," Naqibullah continues. "But educated Taliban like me are needed to teach the uneducated ones." Instead, the young man is training to become a doctor so he can eventually treat the war wounds of Taliban fighters.

Insurgents' influence is spreading to the northern and western regions of the country as well, analysts say. In the northern province of Baghlan, insurgent group Hizb-i-Islami is growing in presence, says Antonio Giustozzi, a researcher at the London School of Economics and an expert on the Afghan insurgency. Hizb-i-Islami, once the country's leading mujahideen party, was a US and Pakistani ally when the Soviet Union invaded Afghanistan. Today it is considered one of the most effective insurgent groups in the north and east, and it is aligned with the Taliban and Al Qaeda.

The group has received a surge of funding in the last year, says Mr. Giustozzi, allowing it to spread from its eastern stronghold near the Pakistani border Ð where it has launched many attacks against Coalition forces Ð into northern areas. "They are regrouping and reactivating old networks that existed during the Russian war and the '90s," he says.

Taliban insurgents are making headway in some districts in the far western province of Badghis, according to Satar Barez, deputy governor of the neighboring Faryab Province. "There are now frequent bombings and kidnappings in Badghis," Mr. Barez says. In the first quarter of 2007 there was just one insurgent attack in Badghis, but the guerrillas have already launched 17 in the first three months of this year.

While violence in the north has not reached the levels seen in the restive south, Giustozzi says that in many areas insurgents are in the initial stages of infiltration and propaganda, just as they were in the south after the 2001 invasion.

"We have openly engaged the government and foreign forces in the south, but in the north we are quietly expanding our area," a Taliban commander told reporters past year.

In some northern provinces, the Taliban issue "night letters," documents posted to villagers' doors at night threatening them if they spport the government or Coalition forces, locals report. The tactic has been highly successful in intimidating residents in the south and quelling support for the international presence.

But analysts say the insurgency is spread not by fear alone: A weak central government and the country's declining socioeconomic situation also bolster militants' efforts. "The population of Afghanistan is becoming disillusioned with the government," Halim Kousary, an analyst with Centre for Conflict and Peace Studies, a Kabul-based think tank. "People in the north believe there hasn't been enough reconstruction."

Analysts suggest that the north is taking on increased importance to the Taliban because of the major drug smuggling routes that cut through it.

Bush Made Permanent

Bush Made Permanent

By Paul Krugman

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As the designated political heir of a deeply unpopular president - according to Gallup, President Bush has the highest disapproval rating recorded in 70 years of polling - John McCain should have little hope of winning in November. In fact, however, current polls show him roughly tied with either Democrat.

In part this may reflect the Democrats' problems. For the most part, however, it probably reflects the perception, eagerly propagated by Mr. McCain's many admirers in the news media, that he's very different from Mr. Bush - a responsible guy, a straight talker.

But is this perception at all true? During the 2000 campaign people said much the same thing about Mr. Bush; those of us who looked hard at his policy proposals, especially on taxes, saw the shape of things to come.

And a look at what Mr. McCain says about taxes shows the same combination of irresponsibility and double-talk that, back in 2000, foreshadowed the character of the Bush administration.

The McCain tax plan contains three main elements.

First, Mr. McCain proposes making almost all of the Bush tax cuts, which are currently scheduled to expire at the end of 2010, permanent. (He proposes reinstating the inheritance tax, albeit at a very low rate.)

Second, he wants to eliminate the alternative minimum tax, which was originally created to prevent the wealthy from exploiting tax loopholes, but has begun to hit the upper middle class.

Third, he wants to sharply reduce tax rates on corporate profits.

According to the nonpartisan Tax Policy Center, the overall effect of the McCain tax plan would be to reduce federal revenue by more than $5 trillion over 10 years. That's a lot of revenue loss - enough to pose big problems for the government's solvency.

But before I get to that, let's look at what I found truly revealing: the McCain campaign's response to the Tax Policy Center's assessment. The response, written by Douglas Holtz-Eakin, the former head of the Congressional Budget Office, criticizes the center for adopting "unrealistic Congressional budgeting conventions." What's that about?

Well, Congress "scores" tax legislation by comparing estimates of the revenue that would be collected if the legislation passed with estimates of the revenue that would be collected under current law. In this case that means comparing the McCain plan with what would happen if the Bush tax cuts expired on schedule.

Mr. Holtz-Eakin wants the McCain plan compared, instead, with "current policy" - which he says means maintaining tax rates at today's levels.

But here's the thing: the reason the Bush tax cuts are set to expire is that the Bush administration engaged in a game of deception. It put an expiration date on the tax cuts, which it never intended to honor, as a way to hide those tax cuts' true cost.

The McCain campaign wants us to accept the success of that deception as a fact of life. Mr. Holtz-Eakin is saying, in effect, "We're not engaged in any new irresponsibility - we're just perpetuating the Bush administration's irresponsibility. That doesn't count."

It's the sort of fiscal double-talk that has been a Bush administration hallmark. In any case, it offers no answer to the principal point raised by the Tax Policy Center analysis, which has nothing to do with scoring: the McCain tax plan would leave the federal government with far too little revenue to cover its expenses, leading to huge budget deficits unless there were deep cuts in spending.

And Mr. McCain has said nothing realistic about how he would close the giant budget gap his tax cuts would produce - a gap so large that eliminating it would require cutting Social Security benefits by three-quarters, eliminating Medicare, or something equivalently drastic. Talking, as Mr. Holtz-Eakin does, about fighting waste and reforming procurement doesn't cut it.

Now, Mr. McCain isn't unique in making promises he has no way to pay for - the same can be said, to some extent, of the Democratic candidates. But Mr. McCain's plan is far more irresponsible than anything the Democrats are proposing, and the difference in degree is so large as to be a difference in kind. Mr. McCain's budget talk simply doesn't make sense.

So what are Mr. McCain's real intentions?

If truth be told, the McCain tax plan doesn't seem to embody any coherent policy agenda. Instead, it looks like a giant exercise in pandering - an attempt to mollify the GOP's right wing, and never mind if it makes any sense.

The impression that Mr. McCain's tax talk is all about pandering is reinforced by his proposal for a summer gas tax holiday - a measure that would, in fact, do little to help consumers, although it would boost oil industry profits.

More and more, Mr. McCain sounds like a man who will say anything to become president.

Bomb Bomb Iran by Summer's End?

Bomb Bomb Iran by Summer's End?

By Steve Weissman

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When Senator John McCain serenaded reporters last April with his "Bomb Bomb Iran," I had to wonder. Was this a taste of his aging flyboy humor? Or was he telling us what to expect should he ever become president? We may never find out. If Vice President Dick Cheney has his way, he will beat McCain to the punch, possibly as soon as late May, after President George W. Bush returns from celebrating the 60th anniversary of Israel's creation.

The evidence is surprisingly public, though in several bits and pieces that fit together like a jigsaw. I hope that I'm wrong in how I've put the puzzle together, but here's how it looks to me.

On February 25 of this year, Cheney made a surprise visit to the Sultanate of Oman, a longtime military ally just across the Strait of Hormuz from Iran. He had come, an Omani official told The Associated Press, "to discuss regional security issues, including the US standoff with Iran over its nuclear program."

A little over three weeks later, Cheney returned to Oman as part of a ten-day visit to several countries in the region, including Israel, Turkey and Saudi Arabia. While in Oman, he gave an interview to Martha Raddatz of ABC News. "Can you foresee any point where military action would be taken?" Raddatz asked. Cheney tried to downplay the question, but Raddatz persisted, asking specifically about the National Intelligence Estimate (NIE), which concluded that Iran had shut down its nuclear arms program five years ago.

Cheney read the NIE differently. The Iranians definitely had a program to develop a nuclear warhead, which they apparently stopped in 2003, he insisted. "We don't know whether or not they've restarted." Cheney emphasized that the Iranians were continuing with their uranium enrichment, which - he said - would give them the fissile material to make nuclear weapons. He offered no evidence that the Iranian program would or could produce the highly enriched uranium they would need to make a bomb.

"VP: Iran May Have Resumed Weapon Program," the headlines ran. "Cheney: Iran might be next US target." The Israeli web site DEBKA added that Cheney was specifically talking about possible US military action in the region to shut down Iran's nuclear program.

Punctuating Cheney's remarks, the US Navy continues to build up its forces in the region, which now include two nuclear aircraft carriers and strike groups capable of attacking Iran or defending against missile attacks from Iran. America's military brass are also chiming in. The Pentagon is considering "potential military courses of action" against Iran, warns the nation's top military officer - Adm. Michael Mullen, chairman of the Joint Chiefs of Staff. "It would be a mistake to think that we are out of combat capability."

Mullen presented his threat, he said, as a response to Iranian support for Iraqi militias fighting US forces, as well as their support for Hamas, Hezbollah and the Taliban in Afghanistan. He also repeated as fact Dick Cheney's belief that Iran was pursuing nuclear weapons. Mullen raised all this the day after the CIA reported to Congress that North Korea had supplied Syria with a nuclear reactor, which an Israeli air strike had destroyed last September. Mullen's timing added weight to his threat and raised the question of what role Israelis might play in an airstrike on Iran.

Cheney himself touched on the question when he returned from his ten-day trip. In an interview with neo-conservative journalist Hugh Hewitt, he mentioned the widely reported threats that Iranian President Mahmoud Ahmadinejad has made against Israel. "I know the Israelis well enough, and I was just there a couple of weeks ago, to know there isn't any way they're prepared to ignore those kinds of statements coming out of Tehran," said Cheney. "They have to take them seriously, given their history. And I think they perceive the possibility of an Iran armed with nuclear weapons as a fundamental threat to the very survival of the state of Israel."

What exactly would the Israelis do? Cheney refused to say. But an Israeli airstrike against Iran would prove far more difficult than the strike against Syria, and the Israelis would likely need American help in clearing the airspace over Iraq, guaranteeing non-interference from Saudi and other Arab air forces, sharing satellite intelligence, blinding Iranian radar, and possibly refueling the Israeli planes. The Israelis would, of course, use long-range F-15s and bunker-buster bombs that the US supplied, while the Iranians have announced that they will respond to any attack as coming from both Israel and the United States. With all this in mind, Cheney might well want the Israelis to make the first strike, and when the Iranians try to retaliate, American forces could intervene "in self-defense" and "defense of our ally Israel."

To be sure, others have previously predicted American and Israeli airstrikes against Iran, and those strikes never happened. Hopefully, my parsing of the tea leaves will fail as well, either because of intervening events or a decision by Bush not to press ahead. But Cheney has clearly started the war drums beating, and unless Congress shows far more gumption than it has on Iraq, I would not plan a late spring or summer trip to Iran or anywhere else in the Middle East or Persian Gulf.

U.S. Credit Card Debt Soars to Unprecedented Heights

U.S. Credit Card Debt Soars to Unprecedented Heights

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WASHINGTON—Studies indicate that credit card defaults and related write-offs increased drastically since 2006. Today, lenders write off 33 percent more in credit card debt than they did two years ago.

Statistics show that about 35 percent of all credit card holders are already exhibiting signs of possible default. Late credit card payments result in fees many consumers can't afford.

Credit card debt accelerated to unprecedented heights since bank loans began to dry up due to mortgage defaults. Total U.S. credit card debt reached almost $800 billion in November 2007, up from around $680 billion in March of last year, according to the latest available government statistics.

In the aftermath of the U.S. mortgage crisis, the credit card bubble may be next to burst. In the past few years, banks have aggressively marketed credit card ownership and usage to consumers with limited income and low credit scores. Credit card standards remain lax, while loan standards have tightened to a degree.

More than 50 percent of senior loan officers said in a January 2008 Federal Reserve survey that they performed a more rigorous analysis before approving a mortgage or car loan over the prior three months. Only 14 percent said so in a mid-2007 survey of the same nature. Banks and lenders have tightened their lending standards following the collapse of the subprime market.

With borrowing venues drying up, American consumers may be drawn to credit card debt, creating defaults similar to those in the mortgage market. Credit card debt—much like mortgages—are bundled and sold by investment banks as asset-backed securities.

The Next Credit Crisis?
"Rising credit card debt since April 2006 amid the decrease in the mortgage expansion rate resulted in a substantial shift to credit card borrowing from mortgage debt," according to a recent report titled "House of Cards: Consumers Turn to Credit Cards Amid the Mortgage Crisis, Delaying Inevitable Defaults." The report was published by the Center for American Progress (CAP), a nonpartisan Washington, D.C.-based research institute.

The rules of the credit card game usually aren't transparent and are difficult to follow even by many sophisticated consumers. Just take any credit card agreement: Caveats are written in difficult-to-understand "legalese." Words like "late fees, annual fees, over-limit fees, cash-advance fees, balance-transfer fees, annul fees, setup fees, fees to pay balance by telephone," and so on, are confusingly sprinkled throughout the contract.

"Credit card debt tends to carry substantially higher costs than other forms of credit, due to myriad fees in addition to high interest rates. The result is that many borrowers unwittingly slide deeper and deeper into debt as they fall prey to the lack of transparency in credit cards," said CAP staff.

"Double-cycling" billing is one of the most abused features by some credit card companies. For example, the cardholder charges $500 to the card, then repays $400 and leaves a $100 balance on the card. In "double-cycling" billing, the interest charge accrues not only on the $100 balance, but on the full $500 for the month. The terms are hidden somewhere in the initial credit agreement.

Students Most Vulnerable
University students are the most vulnerable victims of unscrupulous credit card tactics, according to a survey conducted between October 2007 and February 2008 by U.S. Public Interest Research Group (PIRG), a Boston, Mass.-based public interest advocate.

The study found that 66 percent of surveyed students have a credit card, 55 percent rely on credit cards for their daily needs and school supplies, and 30 percent have their charges paid for by their parents.

About 74 percent of surveyed students want credit card companies to curtail their marketing practices and establish monthly limits on how much the students can charge. They also would like universities to stop providing personal information—such as home address, e-mail address, and phone numbers—to credit card companies.

Credit card companies also offer student event funding and other "freebies" to campus associations and students.

Students are beginning to fight back and file complaints through legal and other venues because of "cards with unfair terms or 'tricks and traps' that result in massive penalty fees and the imposition of punitive interest rates at APRs [annual percentage rates] as high as 36 percent or more," according to the PIRG report.

The report included a solicitation letter from a credit card company to The University of Iowa Alumni Association playing on the emotional side of the student in the first sentence: "Imagine the convenience of being able to purchase supplies for your classes, without worrying about carrying a lot of cash."

The University of Iowa alumni leaders told PIRG that they earned around $1 million annually from Bank of America in credit card purchases by their members. They turn over $200,000 to the university; however, "some of the money given to the school is payment for $145,600 worth of football tickets used by Bank of America Representatives and others."

Taking Action Against Predatory Marketing

Sen. Robert Menendez (D-NJ) initiated legislation in March 2008 called "The Credit Card Reform Act of 2008" that aims to stop predatory credit card marketing. So far, 11 consumer groups and unions have co-signed a letter in support of this legislation.

"We cannot allow predatory and deceptive practices in the credit card industry to continue as we did in the subprime mortgage market. We cannot allow the credit card problem to become the next foreclosure crisis," said Menendez in a press release.

Rep. Carolyn Maloney (D-NY) and Rep. Barney Frank (D-Mass.), the chair of the House Financial Services Committee, introduced H.R. 5244, the "Credit Cardholder's Bill of Rights" in February 2008.

New York Attorney General Andrew M. Cuomo charged First Premier Bank, based in South Dakota, with credit card fraud and fined the bank $105,000 in penalties last year. This bank also must make $4.5 million in restitution payments to customers it defrauded through its credit card program.

Ohio Attorney General Marc Dann went after Potbelly Sandwich Works, Citigroup, Inc., and Elite Marketing Group, Inc. for deceptive credit card practices on college campuses.

S&P/Case-Shiller U.S. Home-Price Index Fell 12.7%

S&P/Case-Shiller U.S. Home-Price Index Fell 12.7%

By Shobhana Chandra

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Home prices in 20 U.S. metropolitan areas fell in February by the most on record, pointing to an imbalance between supply and demand that shows no sign of ending.

The S&P/Case-Shiller home-price index dropped 12.7 percent from a year earlier, more than forecast and the most since the figures were first published in 2001. The gauge has fallen every month since January 2007.

Prices will probably keep sliding as foreclosures push even more properties onto the market just as stricter lending rules limit the number of qualified buyers. Shrinking home values have contributed to a slowdown in consumer spending that may already have tipped the economy into a recession.

“This is just one more strain for consumers, in addition to high energy prices and tight credit,'' said Michelle Meyer, an economist at Lehman Brothers Holdings Inc. in New York, which forecast a price decline of 12.4 percent. “Prices are going to continue to fall, probably through the end of next year.''

Prices dropped 2.6 percent in February from a month earlier, after a 2.4 percent decline in January, the report showed. The figures aren't adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of month-to-month.

The index was forecast to drop 12 percent following a 10.7 percent drop in January, according to the median estimate of 14 economists surveyed by Bloomberg News. Estimates ranged from declines of 12.6 percent to 11 percent.

The group's 10-city composite index, with a history back to 1987, fell 13.6 percent in the 12 months ended in February, also the most ever.

Las Vegas, Miami

Nineteen of the 20 cities in the index showed a year-over- year decrease in prices for February, led by a 23 percent slump in Las Vegas and a 22 percent decline in Miami. Charlotte was the only area showing a gain with a 1.5 percent increase.

Compared with January, homes in all 20 areas covered dropped in value.

“We're going to continue in this abyss for a while,'' said Ellen Zentner, an economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Inventories are getting worked off but it's a slow process. Sales and prices will go down.''

Prices remained under pressure in March, reports last week showed. The median price of existing homes sold last month fell 7.7 percent from March 2007, the National Association of Realtors said. The median value of new houses fell 13.3 percent, the most since July 1970, according to the Commerce Department.

The declines have yet to stir buyers. The total number of houses sold in March dropped to a 5.456 million annual pace, the fewest since comparable records began in 1999.

Reduce Foreclosures

Lenders are trying to devise ways to reduce foreclosures. Bank of America Corp., seeking approval of its Countrywide Financial Corp. takeover, yesterday said it will modify at least $40 billion in troubled mortgage loans over the next two years to keep customers in their homes. The move would help as many as 265,000 homeowners, company officials said.

GMAC LLC, the auto and home lender that General Motors Corp. sold to a private equity group, reported today it lost $589 million in the first quarter as more borrowers fell behind on mortgage payments.

Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University, and Karl Case, an economics professor at Wellesley College, created the home-price index based on research from the 1980s.

Other Measures

The S&P/Case-Shiller index and another by the Office of Federal Housing Enterprise Oversight track the same home over time and more accurately reflect price trends, economists said.

The gauges from the Commerce Department and the Realtors group can be influenced by changes in the types of homes sold. Higher sales of cheaper homes relative to more-expensive properties will bias the figures down.

Eli Broad, a philanthropist and co-founder of KB Home, the fifth-largest U.S. homebuilder by revenue, yesterday said he expects home prices to drop another 20 percent.

“I don't think we're anywhere near a bottom in housing,'' Broad told Bloomberg TV yesterday at the Milken Institute Conference in Beverly Hills, California. “We're going to have a big inventory of unsold, unoccupied homes that's going to take three or four years to clear out.''

Earnings at homebuilders are suffering as demand falters. Ryland Group Inc., the U.S. builder that targets first-time buyers in 15 states, last week reported a first-quarter loss as sales dropped.

“Business conditions have not improved,'' Chief Executive Officer Chad Dreier said in an April 24 conference call with analysts. Closings in the quarter dropped by almost a third from the same time last year and the average price fell by 14 percent, the company said.

Countrywide Reports $893 Million Loss From Bad Loans

Countrywide Reports $893 Million Loss From Bad Loans

By David Mildenberg and Ari Levy

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Countrywide Financial Corp., the mortgage lender that Bank of America Corp. plans to buy, reported a third straight quarterly loss as late payments and home foreclosures escalated.

The net loss was $893 million, or $1.60 a share, compared with a profit of $434 million, or 72 cents, in the year-earlier period, the Calabasas, California-based company said in a statement today.

Countrywide's latest loss may feed investor concern that Bank of America will reduce or cancel its January offer to acquire the nation's biggest mortgage lender for about $4 billion in stock. U.S. foreclosure filings more than doubled in the first quarter as payments rose for subprime adjustable mortgages, according to data vendor RealtyTrac Inc.

“The problem with Countrywide is that it comes with this portfolio that was not underwritten correctly and is very sloppy,'' said Paul Miller, an analyst at Friedman Billings Ramsey & Co., in an interview with Bloomberg Television. Miller expects Bank of America to end up buying Countrywide at a lower price than originally negotiated.

Countrywide declined 23 cents, or 3.9 percent, to $5.60 in early trading at 8:46 a.m. in New York. The lender has declined about 85 percent in the past 12 months.

Bank of America, the nation's second-biggest bank by assets behind Citigroup Inc., said April 21 that the sale remains on course for completion in the third quarter.

Combined Operations

Bank of America, based in Charlotte, North Carolina, dropped 12 cents yesterday to $38.18.

The Countrywide brand and its adjustable-rate loans with higher default rates will be discarded after the acquisition, while the lender's president, David Sambol, will run the combined mortgage operations.

The combination would make Bank of America the biggest U.S. mortgage lender, handling about one out of every four home loans. The bank ranked fifth in 2007, according to trade publication Inside Mortgage Finance.

The mortgage company posted a $703.5 million loss for all of last year, the first in 30 years, because of higher loan losses and writedowns of securities backed by home loans.

Provisions for credit losses were $1.5 billion in the first quarter, compared with $925 million in the preceding quarter and $158 million in the year-earlier period. Results included $441 million of impairment charges tied mostly to home-equity securitizations.


Countrywide wrote down $390 million of assets amid “disruption in the capital markets and declining liquidity'' for mortgages that aren't eligible for sale to Fannie Mae and Freddie Mac, the two largest U.S. providers of financing for home loans, the company said.

Foreclosures doubled to 1.64 percent of unpaid principal in February from 0.8 percent a year earlier at the servicing unit, Countrywide said on March 13. Home loan payments more than 60 days late declined to 7.44 percent of unpaid principal in February from 7.47 percent in the previous month, the company said in the same report. It has since stopped issuing monthly updates on overdue loans.

About 43 percent of Countrywide's $87 billion loan portfolio is in California, followed by 7 percent in Florida, the company said in a Feb. 29 regulatory filing. California had the nation's sharpest price decline in the fourth quarter, 6.6 percent, the Office of Federal Housing Enterprise Oversight said Feb. 26. Nevada dropped 5.9 percent and Florida slid 4.7 percent.

Net revenue more than doubled at Countrywide during the U.S. housing boom of 2002 through 2006 as the company loosened underwriting standards to compete for borrowers. That led to rising defaults, Sambol said in October.

New York Lawsuit

Countrywide faces a lawsuit by the New York city and state comptrollers and their pension funds, alleging Countrywide and securities and accounting firms defrauded investors with overly optimistic comments.

Countrywide Chief Executive Officer Angelo Mozilo, 69, has said he's facing an informal U.S. inquiry into his stock sales. Mozilo has sold about $450 million of Countrywide shares during the past four years, according to the New York comptrollers' lawsuit. He reported stock option gains of $121.5 million last year, while giving up $36 million in severance pay and consulting fees due to the Bank of America sale, according to an April 24 regulatory filing.

Mozilo said he's cooperating with the U.S. Securities and Exchange Commission and that he's confident the investigation won't find anything improper.

European Retail Sales Slumped in April

European Retail Sales Slumped in April, PMI Shows

By Jurjen van de Pol

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European retail sales dropped the most in more than four years in April as rising fuel and food prices squeezed shoppers' budgets, the Bloomberg purchasing managers index showed.

The measure of sales growth in the euro region declined for a second month to a seasonally adjusted 41.8 from 48.2 in March. A reading below 50 indicates contraction. The index, which is based on a survey of more than 1,000 executives compiled for Bloomberg News by NTC Economics Ltd., is at the lowest level since its introduction in January 2004. Sales also fell from a year earlier.

The fastest inflation in 16 years is squeezing retailers' margins and weighing on consumer spending while at the same time discouraging the European Central Bank from cutting interest rates. The European Commission yesterday cut its forecasts for economic growth this year and next in the 15-nation euro region.

“Rising inflation is hitting households' purchasing power and is undoing some of the positive stimulus, such as strong employment growth and rising wages,'' said Nick Kounis, an economist at Fortis Bank in Amsterdam. “The dilemma facing the ECB just gets worse.''

The euro fell almost half a cent after the retail sales report before recovering to trade at $1.5576 at 1:10 p.m. in Frankfurt.

Carrefour, Ikea Warning

Carrefour SA, the world's second-biggest retailer, and Ikea, the largest home-furnishings seller, said the industry is likely to suffer as global economic growth slows and commodity prices soar. Consumer companies have “never before faced so many challenges,'' Carrefour chief Jose Luis Duran said earlier this month at the World Retail Conference in Barcelona, Spain.

Sales fell across all three of the largest economies in the euro zone, led by Italy, where retail spending dropped at the fastest rate in the survey's history. In Germany, sales fell the most in three months, while in France they declined the most since January 2006.

“Italian indicators have been on a predictable and steady downward trend for the past year,'' said Morgan Stanley economist Vladimir Pillonca, who predicts Italy may be the first and only country in the euro region to enter into a recession this year.

Praktiker AG, Germany's second-largest home-improvement retailer, said April 23 that its first-quarter loss widened on weaker demand. Chief Executive Officer Wolfgang Werner said “the first three months were very bad in domestic sales.''

Sarkozy's Plan

Metro AG, Germany's largest retailer, today reported first- quarter operating profit increased about 14 percent as growth in Eastern Europe offset slowing sales at home.

While “rising real wages and rising employment will have a positive impact on Metro's German business,'' the dynamic in Western Europe “leaves something to be desired,'' Chief Executive Officer Eckhard Cordes said in a Bloomberg Television interview.

In France, “inflation and the end of the rise in real-estate prices, and of the ability to take on loans, are weighing on consumption,'' said Yann Lepape, an economist at Oddo & Cie. in Paris. “The trend is starting to go downward.''

French President Nicolas Sarkozy yesterday outlined measures to spur growth, including a push for price rebates at retailers, as accelerating inflation hurts consumer spending in the euro region's second-largest economy.

“Prices in supermarkets have increased more in France than in almost all other European countries,'' Sarkozy said last week in a nationally televised interview from the presidential palace. “That's not normal.''

Margins Shrink

Gross margins fell in April at the fastest rate in the survey's history as purchasing prices in Germany and Italy rose and sales missed targets to the second-largest extent on record, NTC said.

European consumer confidence fell to the lowest in more than two years in March, according to the European Commission. The commission yesterday forecast the euro-region economy will expand 1.7 percent this year and 1.5 percent in 2009, which would be the slowest since 2003. Last year it grew 2.6 percent.

By contrast, the International Monetary Fund predicts the U.S. economy will expand just 0.5 percent this year and 0.6 percent in 2009 amid a housing recession.

Defaults on U.S. subprime mortgages have caused about $309 billion in writedowns and losses at the world's biggest banks and financial institutions so far and pushed up borrowing costs globally.

ECB's Inflation Fight

While the Federal Reserve has lowered interest rates to bolster its economy, the ECB has left its benchmark rate at a six- year high of 4 percent to fight inflation.

NTC said a gauge of expected sales for the coming month increased to 59.1 from 53.3 in March, partly because food and drink retailers plan to raise prices.

Nestle SA, the world's largest food company, last week said first-quarter sales rose 6 percent after increasing prices by the most in a decade for products from Nescafe coffee to KitKat chocolate bars.

For the Bloomberg retail indicator, NTC recruited a panel of companies in Germany, France and Italy, which together make up around 75 percent of total euro-area retail sales by value. The panel includes large chain retailers as well as smaller stores.

National "DNA warehouse" (Newborn Genetic Screening) bill passes

National "DNA warehouse" bill passes

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Passing the House of Representatives on a voice vote, S. 1858 has been sent to President Bush for signature. The Newborn Genetic Screening bill was passed by the Senate last December. The bill violates the U.S. Constitution and the Nuremberg Code, writes Twila Brase, president of the Citizen’s Council on Health Care (CCHC). “The DNA taken at birth from every citizen is essentially owned by the government, and every citizen becomes a potential subject of government-sponsored genetic research,” she states. “It does not require consent and there are no requirements to inform parents about the warehousing of their child’s DNA for the purpose of genetic research. Already, in Minnesota, the state health department reports that 42,210 children of the 780,000 whose DNA is housed in the Minnesota ‘DNA warehouse’ have been subjected to genetic research without their parents’ knowledge or consent.”

The federal government lacks the Constitutional authority as well as the competence to develop a newborn screening program, states Rep. Ron Paul, M.D. (R-TX). He states that all hospitals will probably scrap their own newborn testing program and adopt the federal model, whatever its flaws, to avoid the loss of federal funding.

“Drafters of the legislation made no effort to ensure that these newborn screening programs do not violate the privacy rights of parents and children,” Dr. Paul noted.

Ms. Brase has called on President Bush to veto the bill.