Thursday, July 10, 2008

Crisis wipes $1 trillion from financial stocks

Crisis wipes $1 trillion from financial stocks

By JOE BEL BRUNO

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U.S. financial companies have lost more than $1 trillion in value this year, and yet another decline on Monday shows concerns aren't going away soon.

Banks and brokerages began the week lower on the same fears that have been proven toxic since last summer in the ongoing credit crisis. The financial sector was hit with a confluence of troubles on Monday: cautious remarks from a Federal Reserve official and new capital concerns at Freddie Mac and Fannie Mae .

The drop in names like Lehman Brothers , Morgan Stanley and Merrill Lynch caused the financial section of the Standard & Poor's 500 index to lose almost $150 billion in value on Monday, according to the rating agency. That means S&P 500's 85 financial components have lost some $1.3 trillion since the sector reached a high last October.

Even more startling is that shares of 35 of the companies, which include insurers, have lost more than half their value so far this year. The financial sector used to be the index's main driver, and many economists believe that the broader market will rise or fall on their health.

"Some would argue that perhaps the sell-off in financials is overdone, but at the same time there is just much uncertainty out there about write-offs, loan losses, and how bad the housing market is," said Jim Herrick, a director of equity trading at Baird & Co. "For a period of time the pain was in the big money center banks, but now it's spreading."

Fannie and Freddie fell sharply after Lehman Brothers analyst Bruce Harting said the two government-backed lenders might need to raise billions of dollars in new capital. Both are facing a proposed change to accounting standards that would require financial services firms move bonds backed by pools of loans, also known as securitizations, off their balance sheets.

If this rule is passed, it would end Freddie and Fannie's primary source of generating new revenue. Harting said Fannie Mae would need to raise $46 billion in cash to meet capital requirements, while Freddie Mac would need $29 billion.

The broader financial sector was hurt after San Francisco Federal Reserve President Janet Yellen said problems in the housing market and banking system could get even worse before the economy recovers. Global banks and brokerages have lost nearly $300 billion from investments in mortgage-backed securities and other risky investments since the credit crisis began one year ago.

And there are fresh signs that Wall Street's biggest investment houses are having trouble navigating through volatile markets.

Goldman Sachs Group Inc., the world's biggest investment bank, disclosed in a regulatory filing that it lost at least $100 million on nine trading days during the second quarter. Goldman reported that total trading revenue in the second quarter fell 17 percent to $4.87 billion, according to the filing.

The firm, known for aggressive trading tactics that can cause big swings from week to week, still far surpassed many of its rivals on the Street. That has put more focus on Merrill Lynch, which will report its quarterly results next Thursday.

John Thain , Merrill's CEO, is said to be examining the sale of stakes the brokerage has in asset manager BlackRock Inc. and in Bloomberg LP. Money raised would be used to offset big write-downs expected at the brokerage.

A spokeswoman declined to comment about numerous media reports. However, Thain in the past has said he is open to selling the stakes if Merrill can fetch a good price.

Howard Silverblatt, S&P's senior index analyst, said financial stocks will likely continue to be hurt until some signs develop that show banks and brokerages have a better grip on credit problems. Merrill's earnings next week could provide that.

"There's still lots of uncertainty out there," he said. "And, the financials need to turn around if the whole index wants to recover."

From The Bad To The Really Sinister

From The Bad To The Really Sinister

By The Mogambo Guru

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T
he first half of the year is over, and now all those brokerage accounts and retirement accounts will be sending out statements to hapless account holders, and it is bad news in spades. This is why (I assume) the Plunge Protection Team (composed of the US Federal Reserve, the Treasury and bank insiders) tried to drive the stock markets up on Monday, June 30 - to make those account statements look not quite as bad, and, hopefully, prevent people from dumping all of their stock and bond holdings in a desperate attempt to save something before the whole idiotic, fiat-currency, unlimited-fractional-banking thing just collapses.

Perhaps this drop in the market averages (as demand overwhelms supply) is what prompted John Williams at shadowstats.com to write, "Overhanging the markets for a number of years has been the question as to when the major holders of excess US dollars in the global financial system might look to dump those holdings. An opportunity for that dumping is at hand."

The reason is that "Most central banks know that their unwanted dollar hoards are going to generate long-term losses, but the oil markets have opened up an opportunity to mitigate some of those losses. For the rest of the world, dollar dumping now would reduce inflation risks outside the United States."

This means that "Over the longer term, US equities, bonds and the greenback should suffer terribly, while gold and silver prices should boom."

And it is not just him and me that are so gloomy, but a new study from the Bank for International Settlements (BIS) noted that a plunge in the dollar "may happen", as the dollar has slid 14% against the euro in the past year, handing foreign investors in US dollar assets "big losses measured in dollars, and still bigger ones measured in their own currency", and which is making people so nervous that "a sudden rush for the exits cannot be ruled out completely."

Bob Janjuah, analyst at the Royal Bank of Scotland, has also advised clients that "A very nasty period is soon to be upon us - be prepared," which goes along with that bank's warning that inflation has paralyzed the world's central banks, and that of a full-fledged crash in global stock and credit markets over the next three months looks more and more likely.

And the stupid banks (always the cause of all of economic troubles) are suffering from their own stupidity, and Bill Buckler of The-Privateer.com newsletter notes that "US banks have suffered US$391 billion of losses and write-downs from mortgage-related securities since the start of 2007, according to the data compiled by Bloomberg. US banks could lose another $300 billion on real estate loans during the year ahead."

What makes this $691 billion loss so special is that "such losses could jeopardize balance sheets because the US banking system had only $1,350 billion of equity capital". Hahaha! They've lost two-thirds of the banks capital! Hahaha! Morons!

Since all things are connected to all things, he says, "The sum of it all is that the entire US banking and financial system is so threadbare, fragile and short of capital that a collapse or crash in one place could knock the underpinnings out from under several other US financial sectors which would take even more down with them. A systemic crash - at any time - is today a distinct possibility."

This is all in addition to the fact that morons who have kept investing in the American stock market are suffering losses, proving once again that the majority of investors must lose money over the long term. Spengler at atimes.com notes that when he says, "American equity markets show no real capital gains since 1997. That is, an American who bought the equivalent of the Standard & Poor's 500 Index at $954 in January 1997 and sold today at $1,278 would have exactly the same number of inflation-adjusted dollars." Mr Spengler concludes, "My advice to individual investors? Invest in some popcorn, because the next six months will be something to watch." (See How to stop the Great Crash of '08, Asia Times Online, July 1, 2008.)

Jim Sinclair of jsmineset.com is more humorously laconic when he says, "You can be sure something really stupid is about to happen."

He might have been referring to me, but I am usually stupid to start with, and so why would he just be mentioning it now? So, I think he means something more sinister. Much more sinister. And ugly.

Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.

US officials can now tap phones officially

US officials can now tap phones officially

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US intelligence services now have the power to tap telephone calls and emails from outside the country after the passing of a bill in the US Senate.

Intelligence agents will be able to tap phones and Internet services without permission from a judge and telecoms companies will also be protected from claims for damages from their bugged clients.

In the wake of the 11 September attacks in 2001, President George Bush authorised the National Security Agency to tap emails and telephone calls made by any US citizen.

Since 2001, the measure has been repeatedly extended without any government control or special legal restrictions.

The official approval electronic spying is being hailed as a victory by the Bush government, although civil liberties councils have strong reservations

The FBI’s Plan to ‘Profile’ Muslims

The FBI's Plan to 'Profile' Muslims

By Juan Cole

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The U.S. Justice Department is considering a change in the grounds on which the FBI can investigate citizens and legal residents of the United States. Till now, DOJ guidelines have required the FBI to have some evidence of wrongdoing before it opens an investigation. The impending new rules, which would be implemented later this summer, allow bureau agents to establish a terrorist profile or pattern of behavior and attributes and, on the basis of that profile, start investigating an individual or group. Agents would be permitted to ask "open-ended questions" concerning the activities of Muslim Americans and Arab-Americans. A person's travel and occupation, as well as race or ethnicity, could be grounds for opening a national security investigation.

The rumored changes have provoked protests from Muslim American and Arab-American groups. The Council on American Islamic Relations, among the more effective lobbies for Muslim Americans' civil liberties, immediately denounced the plan, as did James Zogby, the president of the Arab-American Institute. Said Zogby, "There are millions of Americans who, under the reported new parameters, could become subject to arbitrary and subjective ethnic and religious profiling." Zogby, who noted that the Bush administration's history with profiling is not reassuring, warned that all Americans would suffer from a weakening of civil liberties.

In fact, Zogby's statement only begins to touch on the many problems with these proposed rules. The new guidelines would lead to many bogus prosecutions, but they would also prove counterproductive in the effort to disrupt real terror plots. And then there's Attorney General Michael Mukasey's rationale for revising the rules in the first place. "It's necessary," he explained in a June news conference, "to put in place regulations that will allow the FBI to transform itself as it is transforming itself into an intelligence-gathering organization." When did Congress, or we as a nation, have a debate about whether we want to authorize the establishment of a domestic intelligence agency? Indeed, late last month Congress signaled its discomfort with the concept by denying the FBI's $11 million funding request for its data-mining center.

Establishing a profile that would aid in identifying suspects is not in and of itself illegal, though the practice generally makes civil libertarians nervous. When looking for drug couriers, Drug Enforcement Agency agents were permitted by the Supreme Court in United States v. Sokolow (1989) to use indicators such as the use of an alias, nervous or evasive behavior, cash payments for tickets, brief trips to major drug-trafficking cities, type of clothing, and the lack of checked luggage. This technique, however, specifically excluded the use of skin color or other racial features in building the profile.

In contrast, using race and ethnicity as the — or even a — primary factor in deciding whom to stop and search, despite being widespread among police forces, is illegal. Just this spring, the Maryland State Police settled out of court with the ACLU and an African-American man after having been sued for the practice of stopping black and Latino men and searching them for drugs. New Jersey police also got into trouble over stopping people on the grounds of race.

The New Jersey Supreme Court ruled last year in State v. Calvin Lee that a defendant's plausible allegation that the arrest was initiated primarily because of race would be grounds for discovery: The defense attorney could then request relevant documents from the prosecution that might show discriminatory attitudes and actions on the part of the police. Because racial profiling is most often felt by juries to be inappropriate, its use could backfire on the FBI. Suspects charged on the basis of an investigation primarily triggered by their race could end up being acquitted as victims of government discrimination.

If the aim is to identify al-Qaida operatives or close sympathizers in the United States, racial profiling is counterproductive. Such tiny, cultlike terror organizations are multinational. Richard Reid, the shoe bomber, is a Briton whose father hailed from Jamaica, and no racial profile of him would have predicted his al-Qaida ties. Adam Gadahn, an al-Qaida spokesman, is from a mixed Jewish and Christian heritage and hails from suburban Orange County, Calif. When I broached the topic of FBI profiling to some Muslim American friends on Facebook, a scientist in San Francisco replied, "Profiling Muslims or Arabs will just make al-Qaida look outside Islam for its bombers. There are many other disgruntled groups aside from those that worship Allah."

It is a mystery why the Department of Justice has not learned the lesson that terrorists are best tracked down through good police work brought to bear on specific illegal acts, rather than by vast fishing expeditions. After Sept. 11, the DOJ called thousands of Muslim men in the United States for what it termed voluntary interviews. Not a single terrorist was identified in this manner, though a handful of the interviewees ended up being deported for minor visa offenses. Once it became clear that the interviews might eventuate in arbitrary actions against them, the willingness of American Muslims to cooperate declined rapidly, and so the whole operation badly backfired.

The fiasco of the prosecution of the Detroit Four should also have been instructive. These four Arab men apparently had the misfortune to be in the wrong place at the wrong time, having moved into an apartment in southwest Detroit recently vacated by a man suspected of al-Qaida ties. The prosecution alleged that innocent vacation videotapes of places such as Disneyland found in the apartment were part of a terror plot, and that vague doodles in a notebook depicted targets abroad such as a Jordanian hospital and Incirlik Air Force Base in Turkey. The prosecution relied heavily on an Arab-American informer who might reduce his own prison sentence for various acts of criminal fraud if a conviction were obtained, and whose testimony against the four suspects evolved dramatically over time. The initial conviction of two of the men, Karim Koubriti and Abdel-Ilah Elmardoudi on charges of giving material support to terrorism, which was hailed as an achievement by the Bush administration, was overturned when the prosecution was discovered to have withheld key exculpatory evidence.

In a startling reversal, two members of the prosecuting team were tried for criminal misconduct, and although they were acquitted, their misconduct was not in question. A Detroit judge even apologized to a third man, who was held for three and a half years on a minor fraud charge and then deported. The entire affair raised questions about whether Muslim-Americans could hope for justice if for any reason they got accidentally caught up in the Justice Department's frantic search for Muslim terror cells on American soil (very few have been found). The flimsy case against the four men would have had no plausibility at all had they been white upper-middle-class residents of Connecticut.

Not only has the Justice Department engaged in prosecutorial misconduct with regard to Muslims, but at least one FBI operation also appears to have involved actual entrapment. Narseal Batiste, Patrick Abraham, Burson Augustine, Rothschild Augustine, Stanley Grant Phanor, Naudimar Herrera and Lyglenson Lemorin were arrested in June 2006, and accused of being an al-Qaida cell plotting to blow up the Sears Tower in Chicago. Batiste, aka Brother Naz or Prince Manna, led a small cult in a poor neighborhood of Miami called Seas of David, which was apparently an offshoot of the Moorish Temple Science, an African-American folk religion. The cult mixed themes from Judaism, Christianity and Islam but was not identifiably Muslim. The group met in a warehouse and talked big.

The FBI put an informant among them who repeatedly offered them money and equipment for their activities, some of which he appears to have suggested. Batiste maintained in the trial that he was just stringing along the informant in hopes of extracting a promised $50,000, and that he was insincere in pledging allegiance to al-Qaida. When the Justice Department announced the arrest in 2006, the indictment went on about the belief of the group in jihad, or Muslim holy war, but it is a little unlikely that these individuals knew anything about Islam at all. Both attempts to prosecute them ended in mistrials, primarily because the FBI could produce no evidence that when they were arrested they had any weapons or explosives in their possession. They were full of crazy talk, but even some of that was suggested to them by the Department of Justice.

Muslim Americans and Arab-Americans, along with members of some other ethnic groups, are therefore understandably alarmed that the Department of Justice may soon have the tools to bring them under investigation without any proof of wrongdoing. As CAIR national legislative director Corey Saylor noted in a statement, "Any new Justice Department guidelines must preserve the presumption of innocence that is the basis of our entire legal system … Initiating criminal investigations based on racial or religious profiling is both unconstitutional and un-American." Muslim Americans and Arab-Americans have already suffered from being profiled in a de facto sense. Unsurprisingly, to have that injustice become policy concerns them. The protests would be even louder if so many in the community were not afraid to speak up and draw attention to themselves, as one of my Muslim American Facebook correspondents pointed out to me. Another remarked sadly that not only had George W. Bush not brought democracy to the Muslim Middle East, but he had also damaged its prospects in America itself.

Juan Cole teaches Middle Eastern and South Asian history at the University of Michigan. His most recent book Napoleon's Egypt: Invading the Middle East (New York: Palgrave Macmillan, 2007) has just been published. He has appeared widely on television, radio and on op-ed pages as a commentator on Middle East affairs, and has a regular column at Salon.com. He has written, edited, or translated 14 books and has authored 60 journal articles. His weblog on the contemporary Middle East is Informed Comment.

The New Era

The New Era

By Peter Zeihan

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" As students of geopolitics, we at Stratfor tend not to get overexcited when this or that plan for regional peace is tabled. Many of the world’s conflicts are geographic in nature, and changes in government or policy only rarely supersede the hard topography that we see as the dominant sculptor of the international system. Island states tend to exist in tension with their continental neighbors. Two countries linked by flat arable land will struggle until one emerges dominant. Land-based empires will clash with maritime cultures, and so on.

Petit vs. Grand Geopolitic
But the grand geopolitic — the framework which rules the interactions of regions with one another - is not the only rule in play. There is also the petit geopolitic that occurs among minor players within a region. Think of the grand geopolitic as the rise and fall of massive powers-the onslaught of the Golden Horde, the imperial clash between England and France, the U.S.-Soviet Cold War. By contrast, think of the petit geopolitic as the smaller powers that swim alongside or within the larger trends - Serbia versus Croatia, Vietnam versus Cambodia, Nicaragua versus Honduras. The same geographic rules apply, just on a smaller scale, with the added complexity of the grand geopolitic as backdrop.

The Middle East is a region rife with petit geopolitics. Since the failure of the Ottoman Empire, the region has not hosted an indigenous grand player. Instead, the region serves as a battleground for extra-regional grand powers, all attempting to grind down the local (petit) players to better achieve their own aims. Normally, Stratfor looks at the region in that light: an endless parade of small players and local noise in an environment where most trends worth watching are those implanted and shaped by outside forces. No peace deals are easy, but in the Middle East they require agreement not just from local powers, but also from those grand players beyond the region. The result is, well, the Middle East we all know.

All the more notable, then, that a peace deal — and a locally crafted one at that - has moved from the realm of the improbable to not merely the possible, but perhaps even the imminent.

Israel and Syria are looking to bury the hatchet, somewhere in the Golan Heights most likely, and they are doing so for their own reasons. Israel has secured deals with Egypt and Jordan already, and the Palestinians - by splitting internally - have defeated themselves as a strategic threat. A deal with Syria would make Israel the most secure it has been in millennia.

Syria, poor and ruled by its insecure Alawite minority, needs a basis of legitimacy that resonates with the dominant Sunni population better than its current game plan: issuing a shrill shriek whenever the name “Israel” is mentioned. The Alawites believe there is no guarantee of support better than cash, and their largest and most reliable source of cash is in Lebanon. Getting Lebanon requires an end to Damascus’ regional isolation, and the agreement of Israel.

The outline of the deal, then, is surprisingly simple: Israel gains military security from a peace deal in exchange for supporting Syrian primacy in Lebanon. The only local loser would be the entity that poses an economic challenge (in Lebanon) to Syria, and a military challenge (in Lebanon) to Israel - to wit, Hezbollah.

Hezbollah, understandably, is more than a little perturbed by the prospect of this tightening noose. Syria is redirecting the flow of Sunni militants from Iraq to Lebanon, likely for use against Hezbollah. Damascus also is working with the exiled leadership of the Palestinian group Hamas as a gesture of goodwill to Israel. The French - looking for a post-de Gaulle diplomatic victory - are re-engaging the Syrians and, to get Damascus on board, are dangling everything from aid and trade deals with Europe to that long-sought stamp of international approval. Oil-rich Sunni Arab states, sensing an opportunity to weaken Shiite Hezbollah, are flooding petrodollars in bribes - that is, investments - into Syria to underwrite a deal with Israel.

While the deal is not yet a fait accompli, the pieces are falling into place quite rapidly. Normally we would not be so optimistic, but the hard decisions - on Israel surrendering the Golan Heights and Syria laying preparations for cutting Hezbollah down to size - have already been made. On July 11 the leaders of Israel and Syria will be attending the same event in Paris, and if the French know anything about flair, a handshake may well be on the agenda.

It isn’t exactly pretty - and certainly isn’t tidy - but peace really does appear to be breaking out in the Middle East.

A Spoiler-Free Environment
Remember, the deal must please not just the petit players, but the grand ones as well. At this point, those with any interest in disrupting the flow of events normally would step in and do what they could to rock the boat. That, however, is not happening this time around. All of the normal cast members in the Middle Eastern drama are either unwilling to play that game at present, or are otherwise occupied.

The country with the most to lose is Iran. A Syria at formal peace with Israel is a Syria that has minimal need for an alliance with Iran, as well as a Syria that has every interest in destroying Hezbollah’s military capabilities. (Never forget that while Hezbollah is Syrian-operated, it is Iranian-founded and -funded.) But using Hezbollah to scupper the Israeli-Syrian talks would come with a cost, and we are not simply highlighting a possible military confrontation between Israel and Iran.

Iran is involved in negotiations far more complex and profound than anything that currently occupies Israel and Syria. Tehran and Washington are attempting to forge an understanding about the future of Iraq. The United States wants an Iraq sufficiently strong to restore the balance of power in the Persian Gulf and thus prevent any Iranian military incursion into the oil fields of the Arabian Peninsula. Iran wants an Iraq that is sufficiently weak that it will never again be able to launch an attack on Persia. Such unflinching national interests are proving difficult to reconcile, but do not confuse “difficult” with “impossible” - the positions are not mutually exclusive. After all, while both want influence, neither demands domination.

Remarkable progress has been made during the past six months. The two sides have cooperated in bringing down violence in Iraq, now at its lowest level since the aftermath of the 2003 invasion itself. Washington and Tehran also have attacked the problems of rogue Shiite militias from both ends, most notably with the neutering of Muqtada al-Sadr and his militia, the Medhi Army. Meanwhile, that ever-enlarging pot of Sunni Arab oil money has been just as active in Baghdad in drawing various groups to the table as it has been in Damascus. Thus, while the U.S.-Iranian understanding is not final, formal or imminent, it is taking shape with remarkable speed. There are many ways it still could be derailed, but none would be so effective as Iran using Hezbollah to launch another war with Israel.

China and Russia both would like to see the Middle East off balance - if not on fire in the case of Russia - although it is hardly because they enjoy the bloodshed. Currently, the United States has the bulk of its ground forces loaded down with Afghan and Iraqi operations. So long as that remains the case - so long as Iran and the United States do not have a meeting of the minds — the United States lacks the military capability to deploy any large-scale ground forces anywhere else in the world. In the past, Moscow and Beijing have used weapons sales or energy deals to bolster Iran’s position, thus delaying any embryonic deal with Washington.

But such impediments are not being seeded now.

Rising inflation in China has turned the traditional question of the country’s shaky financial system on its head. Mass employment in China is made possible not by a sound economic structure, but by de facto subsidization via ultra-cheap loans. But such massive availability of credit has artificially spiked demand, for 1.3 billion people no less, creating an inflation nightmare that is difficult to solve. Cut the loans to rein in demand and inflation, and you cut business and with it employment. Chinese governments have been toppled by less. Beijing is desperate to keep one step ahead of either an inflationary spiral or a credit meltdown - and wants nothing more than for the Olympics to go off as hitch-free as possible. Tinkering with the Middle East is the furthest thing from Beijing’s preoccupied mind.

Meanwhile, Russia is still growing through its leadership “transition,” with the Kremlin power clans still going for each other’s throats. Their war for control of the defense and energy industries still rages, their war for control of the justice and legal systems is only now beginning to rage, and their efforts to curtail the powers of some of Russia’s more independent-minded republics such as Tatarstan has not yet begun to rage. Between a much-needed resettling, and some smacking of out-of-control egos, Russia still needs weeks (or months?) to get its own house in order. The Kremlin can still make small gestures - Russian Prime Minister Vladimir Putin chatted briefly by phone July 7 with Iranian President Mahmoud Ahmadinejad on the topic of the nuclear power plant that Russia is building for Iran at Bushehr - but for the most part, the Middle East will have to wait for another day.

But by the time Beijing or Moscow have the freedom of movement to do anything, the Middle East may well be as “solved” as it can be.

The New Era
For those of us at Stratfor who have become rather inured to the agonies of the Middle East, such a sustained stream of constructive, positive news is somewhat unnerving. One gets the feeling that if the progress could hold up for just a touch longer, not only would there be an Israeli-Syrian deal and a U.S.-Iranian understanding, the world itself would change. Those of us here who are old enough to remember haven’t sensed such a fateful moment since the weeks before the tearing down of the Berlin Wall in 1989. And - odd though it may sound - we have been waiting for just such a moment for some time. Certainly since before 9/11.

Stratfor views the world as working in cycles. Powers or coalitions of powers form and do battle across the world. Their struggles define the eras through which humanity evolves, and those struggles tend to end in a military conflict that lays the groundwork for the next era. The Germans defeated Imperial France in the Franco-Prussian War in 1871, giving rise to the German era. That era lasted until a coalition of powers crushed Germany in World Wars I and II. That victorious coalition split into the two sides of the Cold War until the West triumphed in 1989.

New eras do not form spontaneously. There is a brief - historically speaking - period between the sweeping away of the rules of the old era and the installation of the rules of the new. These interregnums tend to be very dangerous affairs, as the victorious powers attempt to entrench their victory as new powers rise to the fore - and as many petit powers, suddenly out from under the thumb of any grand power, try to carve out a niche for themselves.

The post-World War I interregnum witnessed the complete upending of Asian and European security structures. The post-World War II interregnum brought about the Korean War as China’s rise slammed into America’s efforts to entrench its power. The post-Cold War interregnum produced Yugoslav wars, a variety of conflicts in the former Soviet Union (most notably in Chechnya), the rise of al Qaeda, the jihadist conflict and the Iraq war.

All these conflicts are now well past their critical phases, and in most cases are already sewn up. All of the pieces of Yugoslavia are on the road to EU membership. Russia’s borderlands - while hardly bastions of glee - have settled. Terrorism may be very much alive, but al Qaeda as a strategic threat is very much not. Even the Iraq war is winding to a conclusion. Put simply, the Cold War interregnum is coming to a close and a new era is dawning.

A CITIZENS' AUDIT OF AN AMERICAN ELECTION

A CITIZENS' AUDIT OF AN AMERICAN ELECTION

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I have been writing about vote fraud since 1993 when I ran for Congress the first time. You see, I had read a book titled, Vote Scam: The Stealing of America, and the light bulb went on about incumbents getting "reelected" for decades - incumbents the voters wanted gone. How could these buzzards continue to "win" elections when the electorate didn't want them? Vote Scam pinned it down for me. I realized our elections had been stolen from the late 1960s.

Of course, when I "lost" in 1994 and 1996, and brought up the issue of vote fraud, it was a case of "sour grapes" or "sore loser." I knew better and have stayed on this issue ever since. My many columns are available, just use any search engine and they will pop up. Those dozens of columns are filled with links about provable vote fraud. The stealing of our elections via electronic machines and scanners is real. Due to the Herculean efforts of thousands of Americans, we have brought this issue to the fore front and made huge gains in getting rid of ALL electronic machines and scanners. However, the job is far from over.

Regular readers of my columns know I would never vote for Al Gore, John Kerry, George Bush, Barack Hussein Obama or Juan McCain, if my life depended on it. What's important here is that vote fraud hurts everyone. The rigging of our elections isn't just at the presidential level, it affects votes for Congress, sheriff, judges, mayors, ballot measures and the electoral college. Our Founding Fathers gave we the people the ballot box to get rid of rotten, corrupt, incompetent politicians and the bullet box to back it up if necessary. Gasp! Yes, that actually happened in what is known as the Battle of Athens (Tennessee) in 1946.

Progress has been in made in getting rid of these easily rigged voting machines, but replacing them with scanners is just as bad. Electronic voting on-line is stupidity in its highest form. If you click here you can watch a video showing how a scanner recorded a zero vote in the test, but after the ballots were fed in, the final count was upside down. After my alleged loss to Congressman Wally the Waffle Herger [R-CA] in March 1996, I wrote my booklet, Blind Loyalty. It is a damning portrait of how our elections were being stolen. Over the years, outstanding organizations like BlackBoxVoting.org have done nothing short of remarkable work in proving massive vote fraud.

The biggest mistake the shadow government made regarding vote fraud was the 2000 Bush v Gore election and the State of Florida. However, while that mess thrust the issue of vote fraud to the forefront, that didn't stop the chicanery and the 2004 presidential "election" was just as corrupted.

Richard Hayes Phillips, a former college professor, has written a new book titled, Witness to a Crime: A Citizens' Audit of an American Election. This monstrous undertaking covers the 2004 election results in the State of Ohio. Remember, the chief executive for the biggest vote fraud machine operation in this country said he would deliver Ohio to Bush. He did. What makes Phillips investigation so compelling is the book is filled with concrete proof that the voters of Ohio were robbed of their right to fair and impartial elections. The amount of work that went into this investigation is staggering: 30,0000 images of forensic evidence, then personally examining 126,000 ballots, 127 poll books and 141 voter signature books from 18 counties in Ohio. This is the definitive and documented evidence of crimes that cannot, must not be ignored.

One thing that showed up in his findings was the same thing I wrote about back in 1996: discrepancies in the numbers during the voting process - where are they? If you click here and go to page seven of my findings, you'll see what I'm talking about. I knew what happened: vote rigging and it was done by the machines. We saw the same thing repeat itself during this last phony primary season. A recount was paid for and done in the State of New Hampshire. The so-called final audit of the numbers did not agree with the results as recorded on primary night. Of course, the numbers continue to change for weeks after a primary or election; I've covered this in previous columns in detail.

What is the current status in NH? To my knowledge, while Bev Harris has done a great job out there, nothing has happened to bring this to an official investigation. Nothing will happen unless the people of New Hampshire demand a criminal investigation by their Attorney General. I filed a Right to Know request in an effort to get some documentation. The first box of documents I received weighed a hundred pounds. In the box wasn't a single thing I requested, just a ton of tally sheets. Two weeks ago I received more documents. These are copies of pay vouchers for New Hampshire State Police regarding the escort of the ballot boxes for the recounts, which I did not request. The rest of my Right to Know request has been ignored altogether:

- All records, memos, directives, correspondence, phone memos, hand written communication, computer generated documents and email by you or any personnel in your office pertaining to the recount cited above.

- Any written or electronic communications, hand written communications, memos or directives, to include phone memos, computer generated documents and email between you or any personnel in your office with Attorney General Kelly A. Ayotte, or any personnel in her office.

All correspondence, electronic, hand written or computer generated, memos, directives and phone messages between you or any personnel in your office with an entity or persons known as 'Butch & Hoppy,’ who transported the ballots to the location where the recount is being conducted.

- All correspondence, records, memos, phone records, electronic, hand written or computer generated between you or any personnel in your office with Colonel Frederick H. Booth, Director, Division of State Police or any personnel in his office pertaining to the transporting of the ballots for said recount.

I live 2,000 miles from Concord, New Hampshire, the capitol. Ron Paul supporters were justifiably incensed about the results of their fake primary. The only way justice will be done is if a large enough group of them force the issue with the Attorney General. I know Bev Harris is working on some further documentation, but in the end, it has to be the voters who raise enough hell for an investigation. I can tell you that if I lived in the State of New Hampshire, I would have already made this a major issue with the General Court (legislature), the AG and the media. This issue is too important to simply drop. Fair and impartial elections are the only way we have in booting out those who are destroying this country.

If we had real newspapers in this country, the vote fraud issue and the repeal of the insidious Motor Voter Law of 1993, would be resolved by now. The American people would realize how they're being cheated and descend on their state capitols, regardless of party. I'm excited to say that the first edition of USA Tomorrow is now out and being delivered to 1.5 MILLION households in selected areas of Northern California and Houston. A full color, 24 page newspaper with the truth reaching our fellow Americans without computers and to those who have a PC, but aren't getting on the right web sites. One American put up a king's purse to get this new publishing venture on its way, which is also helping Americans earns extra income delivering the papers. If you would like a complimentary copy of the first edition, just click here.

The US~Observer is a 16-year old newspaper that has had tremendous impact on the Southern Oregon area and the politicial landscape. Just imagine if all 67 distributorships are up and running in all 50 states by November, the impact it would have on local issues as well as the elections at all levels! Like our Founding Fathers, we have to have real newspapers to change the direction of this country. If you would like to become part of newspaper history, please contact the US~Observer (Tedd Peck) at 928-777-8851 or their offices in Oregon at 1.541.474.7885.

Americans want their newspaper as well as the Internet. No censorship, just hard hitting facts right into American homes. Recently, I told Ed Snook, owner of the US~ Observer, that the shadow government must be praying to Satan that these two ventures fail because they are a huge threat to their plans for world domination. Time is short as we all know. The noose continues to tighten as both parties in Congress not only continue to pass draconian laws, the drums for war grow louder for another unconstitutional military action (using another resolution instead of the required Declaration of War) against Iran. Many of you have seen the report from Congressman Ron Paul that members of Congress want to simply nuke Iran! Does anyone see this bloody situation spiraling out of control by this mad man in the White House and these crazies in Congress?

If you're a state legislator, county commissioner, county board of supervisor, mayor other elected official, you should get Phillips book and share it with your colleagues and stop all electronic machines and scanners from being used in November 2008. This book also contains a CD; order here.

America: Don't let your state legislator or local official tell you machines and scanners are "cheaper." BULL. They are grossly expensive and have destroyed fair and impartial elections. How many tens of millions have been spent on lawyers over the presidential elections, lawsuits against the states, etc.? Here's the facts about that weak argument. Who wants 'fast food' elections? I want accurate, fair elections. How about you?

No matter your political party, we must return to hand counted paper ballots with no electronic machines or those easily pre-programmed scanners. No exceptions. No machines in any form. Every county in the country MUST purge their voting rolls of illegals. These hand counted paper ballots must be counted in the precincts in front of anyone who wants to watch. As a candidate for Congress, I can tell you, I would rather have waited 2-3 days to find out the real results than to be cheated by machines. All those wonderful people who supported me, both financially and with their time, were also cheated and that is not the American way.

Important links:

1 - Video: Butch & Hoppy chase - MUST watch
2 - Part II (These are short videos)
3 - Computer Scientists: '2008 U.S. Presidential Election Can Be Hacked'
4 - HACKED! High Tech Election Theft in America
5 - Lobbyists Hack Your Elections
6 - Destruction Of Ohio Ballots, 800 pages Missing From Federal Court Filing
7 - UNCOUNTED is an explosive new documentary
8 - July 2, 2008: Initial certification testing uncovered thousands
of defects and New York counties are reporting receiving machines that don't work
9 - NJ: Voting machine test results will be released to the public
10 - Indiana's Incredible Shrinking Voter List (scroll short way down til you see head line
11 - Arkansas: 'Paper Trails' Said to Have Been Correct, but Internal Numbers Wrong
12 - Sequoia Touch-Screen Voting Machines Subpoenaed in NJ
13 - Oregon's Surprising Election Data
14 - Sacramento: Machine vendor miscalibrated vote scanners, county officials say
15 - Miller’s relative counted ballots in District 73 race, voters demand investigation
16 - Colorado kills any hope of honest elections
17 - Illegals stealing our elections

Social Security: An 'Absolute Disgrace?'

Social Security: An 'Absolute Disgrace?'

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During a recent town hall meeting in Denver, CO, Sen. John McCain (R-AZ) called the "present" Social Security "setup" -- in which "we are paying present-day retirees with the taxes paid by young workers in America today" -- "an absolute disgrace" that's "gotta be fixed." McCain's disavowal of the way Social Security works raises concerns about his commitment to preserving the successful retirement security program, and has even led some economists to question McCain's basic understanding of the program. In response to McCain's comments, Gerald McEntee, International President of the American Federation of State, County and Municipal Employees (AFSCME) union, issued a statement arguing that "McCain's ignorance about Social Security is the real 'disgrace.' ... Working Americans understand that Social Security is the contract between the generations. It has served our country well since FDR signed it into law." Former congresswoman Barbara Kennelly, President of the National Committee to Preserve Social Security and Medicare, pointed out thats "since its inception, Social Security has been a pay-as-you-go system. That's not new and it's certainly not a disgrace. To suggest that Social Security is fundamentally 'broken' because of this fact, shows a lack of understanding of the program, its traditional role and the need to preserve and strengthen it for the future." McCain's remarks come on the heels of his support for President Bush's failed campaign to privatize social security and highlight the inconsistencies between McCain's rhetoric, policy proposals, and voting record.

MCCAIN'S FLIP-FLOPS ON SOCIAL SECURITY: Currently, McCain says he supports "supplementing the current Social Security System with personal accounts." But in 2006, McCain voted for and strongly backed Bush's privatization scheme, which
would have allowed workers to "divert a portion of Social Security payroll taxes to fund private accounts." McCain proposed diverting "a portion of Social Security payroll taxes to fund private accounts" during the 2000 campaign and suggested privatization in 2004 and 2008. In fact, during a March interview with the Wall Street Journal, McCain said, "I'm totally in favor of personal savings accounts…along the lines that President Bush proposed." When questioned why his website proposed merely "supplementing" the current system with personal accounts, McCain promised to "change the website," the Journal reported.

BUSH'S FAILED PUSH FOR PRIVATIZATION: Shortly after being reelected in 2004, Bush immediately began a campaign to privatize Social Security. As White House officials told the New York Times in April 2005, conservatives planned to "lure Democrats into negotiations on the program's solvency and prepare for an endgame in which Mr. Bush will make an all-out push to convince the country that individual investment accounts will reduce the pain of benefit cuts or tax increases." Realizing that Bush's proposal would add trillions to the national debt, cut retirement benefits, and raise taxes, the public ultimately compelled the president to end his social security privatization tour. By the end of the campaign, an ABC News-Washington Post poll showed that 64 percent of Americans disapproved of Bush's handling of Social Security, up from 56 percent in March when the tour began. During a press conference in Oct. 2005, Bush admitted that his reform efforts failed, saying that "there seems to be a diminished appetite in the short term" for dealing with Social Security.

PRESERVING AN EFFICIENT SYSTEM: Americans have a "diminished appetite" for dramatically reforming Social Security because they understand that there is "no Social Security crisis." Despite conservative fear mongering about the insolvency of the Social Security trust fund, the program is fairly strong. In fact, "Social Security is more financially sound today then it has been throughout most of its 69-year history," the Center for Economic and Policy Research stated in 2005.
In March, "Social Security's trustees issued a report on the program's financial status which stated that the program 'passes our short-range test of financial adequacy.'" According to the Congressional Budget Office, without any changes at all, the Social Security program can pay all benefits though at least 2052. And while McCain has not explained how he would prevent the projected shortfall, progressives have pointed out that the long-term social security shortfall is smaller than the cost of Bush's tax cuts for the top 1 percent of Americans, which McCain has promised to extend. While McCain often invokes the 1983 Social Security compromise as a model for a bipartisanship solution to prevent the budget shortfall, insuring that the system remains solvent for the indefinite future requires much more moderate proposals.

Housing Market Meltdown Will Cause Massive Losses in Household Wealth

Housing Market Meltdown Will Cause Massive Losses in Household Wealth

Plummeting house prices will leave millions of homeowners dependent almost exclusively on Social Security in their retirement

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As Senators McCain and Obama fine-tune their plans for Social Security in preparation for the 2008 presidential election, a new report from the Center for Economic and Policy Research (CEPR) shows that, due to the collapse of the housing bubble, the vast majority of Americans have accumulated little or no wealth. This means that they will be almost completely reliant on Social Security and Medicare to support them in their retirement years.

The study, “The Impact of the Housing Crash on Family Wealth,” analyzed the wealth holdings of families in all age cohorts in 2004 and projected the wealth of these families in 2009. The findings are presented by income quintile under three scenarios- real house prices remain at current levels, real house prices fall by an additional 10 percent, or real house prices fall by an additional 20 percent. In all three scenarios, the vast majority of these families will have little or no housing wealth in 2009.

“This extraordinary destruction of wealth will have tremendous implications for millions of families,” said report co-author Dean Baker. “Coupled with a very low personal savings rate, this means that many people, especially those near retirement will only have Social Security and Medicare to rely on once they leave the workforce.”

The report projects that if house prices stay the same through 2009, the median household headed by a person between the ages of 45 and 54, those in their prime earning years, will have 24.7 percent less wealth than did the median household in this age group in 2004. These households will have accumulated just $113,268 in net worth in 2009, barely $15,000 more than their counterparts in 1989, whose net worth totaled $97,600.

If real house prices fall 10 percent, the median household in the 45 to 54 cohort will see a 34.6 percent loss in wealth compared with the median in 2004 while families in the 18 to 34 cohort will lose of 67.6 percent. If prices fall by 20 percent, the most pessimistic scenario, families in the 55-64 cohort will experience a loss of 49.6 percent of their wealth compared to the same cohort in 2004.

This analysis should also prompt serious re-examination of policy proposals to cut Social Security and Medicare for near retirees. Baker commented, “policies that perhaps could have been justified at the peak of the housing bubble make much less sense now that tens of millions of near-retirees have just seen most of their wealth disappear.”

In analyzing wealth holdings for these families, the authors used data from the Federal Reserve Board’s 2004 Survey of Consumer Finance. The authors also used the S&P 500 and the Case-Shiller 20-City Composite Index to adjust for equity values and home price changes between 2004 and 2009.

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The Center for Economic and Policy Research is an independent, nonpartisan think tank that was established to promote democratic debate on the most important economic and social issues that affect people's lives. CEPR's Advisory Board of Economists includes Nobel Laureate economists Robert Solow and Joseph Stiglitz; Richard Freeman, Professor of Economics at Harvard University; and Eileen Appelbaum, Professor and Director of the Center for Women and Work at Rutgers University.

Congress studies how people track your online use

Congress studies how people track your online use

By JOELLE TESSLER

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Executives from major Internet players — Microsoft Corp., Google Inc. and Facebook Inc. — are due for a grilling about online privacy in a Senate committee Wednesday, but the company likely to get the most scrutiny is a small Silicon Valley startup called NebuAd Inc.

NebuAd has drawn fierce criticism from privacy advocates in recent weeks for working with Internet service providers to track the online behavior of their customers and then serve up targeted banner ads based on that behavior.

According to Ari Schwartz, vice president of the Center for Democracy & Technology, a civil liberties group, NebuAd's business model raises many of the same concerns as an earlier generation of "adware" companies. Those companies developed software programs that — when downloaded to a computer — could track where a user went on the Internet and mine that information to deliver customized online ads. Several NebuAd executives in fact were once employed by Gator Corp., an adware company that later renamed itself Claria Corp.

Privacy activists say adware companies duped many Web surfers into downloading their software programs by bundling them with free screen savers, online games and other Internet applications. But NebuAd has a new twist: It works directly with Internet service providers to scan their customers' Web surfing habits and deliver ads presumed to be of interest to them.

By injecting its monitoring in between consumers and the Web sites they visit, NebuAd's technology could violate a 1986 federal wiretapping law that requires at least one party to a communication to consent to a wiretap, according to an analysis released Tuesday by the Center for Democracy & Technology. British technologists have leveled similar criticisms against a NebuAd-like system being prepared in that country by Phorm Inc.

"This is analogous to AT&T listening to your phone calls all day in order to figure out what to sell you in the middle of dinner," said Robert Topolski, a technology consultant to Public Knowledge and Free Press, two other public interest groups that have raised concerns about NebuAd.

Although no major Internet service providers are known to have partnered with NebuAd so far, a number of smaller ones have worked with the company, including Wide Open West, a privately held broadband company based in Denver.

Amid the publicity surrounding NebuAd, however, Wide Open West has stopped using the company's advertising software. And other ISPs that had been planning to conduct trials with the technology, including Charter Communications Inc., have put those plans on hold.

For its part, NebuAd has stressed that it does not collect any personally identifiable information about consumers and that it requires Internet service providers to notify their subscribers about its advertising system. On Tuesday, however, the Redwood City, Calif., company unveiled a new set of privacy protections, including an online notification system and an opt-out mechanism for consumers.

"NebuAd is committed to driving innovation in online advertising while pioneering industry-leading privacy practices," NebuAd chief executive Bob Dykes said in a statement.

Besides NebuAd, Wednesday's hearing in the Senate Commerce Committee may also examine Facebook's "Beacon" monitoring tool, which tracked online purchases made by Facebook members and sent alerts to their friends on the site.

In addition, the committee will explore the need for stronger online privacy protections in general. Among the issues on the table: whether Internet companies should be expected to make their programs "opt-in" (you're automatically excluded from a service unless you sign up) or whether "opt-out" (you're automatically in unless you speak up to say no) is acceptable.

While the committee has no online advertising legislation pending, the hearing could lead to new bills. The committee will also examine the potential role of agencies such as the Federal Trade Commission or the Federal Communications Commission. Last year, for example, the FTC released a set of proposed self-regulation guidelines for online advertising companies.

Witnesses testifying Wednesday include NebuAd's Dykes, Microsoft associate general counsel Mike Hintze, Google chief privacy counsel Jane Horvath and Facebook chief privacy officer Chris Kelly. Lydia Parnes, director of the consumer bureau for the Federal Trade Commission; Leslie Harris, chief executive of the Center for Democracy & Technology; and Clyde Wayne Crews Jr., vice president for policy at the Competitive Enterprise Institute, will also testify.

ACLU, EFF will challenge FISA update in court

ACLU, EFF will challenge FISA update in court

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As the Senate voted to endorse a Bush-administration backed plan to expand its surveillance authority and grant retroactive legal immunity to telecommunications companies that facilitated warrantless wiretapping, the American Civil Liberties Union unveiled plans to challenge the new law in court.

"This fight is not over. We intend to challenge this bill as soon as President Bush signs it into law," said Jameel Jaffer, Director of the ACLU National Security Project, in a statement provided to RAW STORY as the Senate was voting. "The bill allows the warrantless and dragnet surveillance of Americans' international telephone and email communications. It plainly violates the Fourth Amendment."

After defeating three attempts to improve the update to the Foreign Intelligence Surveillance Act, the Senate was expected to send President Bush a FISA update Wednesday. Senators approved the FISA update on a 69-28 vote.

After the vote, the Electronic Frontier Foundation, which is representing plaintiffs in lawsuits against the phone companies, also vowed to fight the bill in court, confirming plans outlined last week.

"We thank those senators who courageously opposed telecom immunity and vow to them, and to the American people, that the fight for accountability over the president's illegal surveillance is not over," said EFF Senior Staff Attorney Kurt Opsahl. "Even though Congress has failed to protect the privacy of Americans and uphold the rule of law, we will not abandon our defense of liberty. We will fight this unconstitutional grant of immunity in the courtroom and in the Congress, requesting repeal of the immunity in the next session, while seeking justice from the Judiciary. Nor can the lawless officials who approved this massive violation of Americans' rights rest easy, for we will file a new suit against the government and challenge warrantless wiretapping, past, present and future."

For two and a half years, Congress has been deliberating over how to update FISA, which became law in 1978, to account for technological advances in the last three decades. Critics say President Bush simply ignored the law in ordering the National Security Agency to eavesdrop on Americans' conversations with people abroad without first getting warrants from a secret FISA court.

The bill approved Wednesday, which has already passed the House, came despite the strenuous objection of civil liberties and privacy advocates. It legalizes much of the warrantless data-mining and surveillance Bush initially authorized, while essentially guaranteeing legal immunity to telecommunications companies that illegally facilitated the program, critics say.

Sens. Russ Feingold (D-WI) and Chris Dodd (D-CT) co-sponsored an amendment to the FISA bill that would have removed the retroactive immunity provision. It failed, as did two separate attempts to modify the immunity provision.

House Democrats, including Speaker Nancy Pelosi and Majority Leader Steny Hoyer, tried to present the bill as a "compromise," but Feingold, who from his seats on the Judiciary, Intelligence and Foreign Relations committees has probably seen more about the program than anyone, called it a "capitulation."

Nonetheless, once the House passed a FISA bill that came after negotiations with the Senate and White House, it's eventual fate became clear. Civil liberties advocates had succeeded in delaying Wednesday's vote as long as possible, but preparations for the next stage in the fight for oversight have been in the works for some time.

Foreclosures Rose 53% in June as U.S. Bank Repossessions Triple

Foreclosures Rose 53% in June, Bank Seizures Triple

By Dan Levy

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U.S. foreclosure filings rose 53 percent in June from a year earlier and bank repossessions increased the most since RealtyTrac Inc. began collecting data in January 2005 as deteriorating property values forced more people to give up their homes.

One in every 501 U.S. households either lost the home to foreclosure, received a default notice or was warned of a pending auction, RealtyTrac, an Irvine, California-based seller of default data, said today in a statement. Bank seizures rose 171 percent.

‘‘The foreclosure problem is getting worse and will stay with us well into the next decade,'' Mark Zandi, chief economist for Moody's Economy.com in West Chester, Pennsylvania, said in an interview. ‘‘The job market is eroding and homeowners have less equity. Lenders are much less willing to work with you if you've got negative equity, and you're more likely to give up your house if you're deeply underwater.''

Foreclosure activity is the highest since the Great Depression of the 1930s, said Rick Sharga, RealtyTrac's vice president of marketing. Home prices, which fell the most on record in April, according to the S&P/Case-Shiller index of 20 U.S. metropolitan areas, have created a cycle where shrinking equity drives homeowners into foreclosure, which in turn further pushes down home prices, Sharga said.

‘Faster Pace'

‘‘We'll have 1 million bank-owned properties by the end of the year,'' Sharga said in an interview. ‘‘That will represent between one-fourth and one-third of all home sales.''

About 53 percent of borrowers with subprime loans, those with poor or incomplete credit histories, will have negative equity in their homes at the end of the year, and the number will rise to 63 percent in 2009, New York-based analysts at Credit Suisse led by Rod Dubitsky said in an April 23 report.

About $3.5 trillion in homeowner equity has been wiped out since the spring of 2006, when housing prices were at their peak, Zandi said.

Rising mortgage defaults and auctions of foreclosed properties are adding to a glut of unsold homes and prolonging the housing slump. Efforts by the U.S. Congress to insure as much as $300 billion in refinanced mortgages and save up to 2 million borrowers from foreclosure can work only by ‘‘slowing down or reversing home price declines and equity deterioration,'' Credit Suisse said.

Nevada, California

Nevada had the highest foreclosure rate for the 18th consecutive month. One in every 122 households was in some stage of foreclosure, more than four times the national average, and 3,133 properties in the state were seized by lenders, said RealtyTrac. The company has a database of more than 1.5 million properties and monitors foreclosure filings including default notices, auction notices and bank seizures.

California ranked second, with one filing for every 192 households, 2.6 times the national average, and had 20,624 properties seized by banks. Arizona ranked third at one in 201 households, almost 2.5 times the national average, and had 4,297 bank seizures.

Florida, Michigan, Ohio, Colorado, Georgia, Indiana and Utah also ranked among the 10 states with the highest foreclosure rates.

‘Beyond the Sprawl'

California had seven of the 10 U.S. metro areas with the highest rates, including the top three. Stockton, in the state's central valley, was first with one in every 72 households in a stage of foreclosure, followed by Merced, about 110 miles east of San Francisco, with one in 77 households, and Modesto, near the Sierra Nevada mountains, with one in 86 households. Riverside-San Bernardino ranked fifth, Vallejo-Fairfield was seventh, Bakersfield was eighth and Salinas-Monterey was tenth.

‘‘The housing beyond the sprawl is going to suffer another serious leg down because of high oil prices,'' Peter Navarro, professor of economics and public policy at the University of California at Irvine, said in an interview. ‘‘A lot of people went out there to get cheaper homes, but this is going to take a big bite out of their mortgage.''

Cape Coral-Fort Myers and Fort Lauderdale, Florida, ranked fourth and ninth, respectively, and Las Vegas was sixth among metro areas with the 10 highest foreclosure rates.

California had the most total filings for the 18th consecutive month, increasing 77 percent in June from a year earlier to 68,666. Florida was second at 40,351 filings, an increase of 92 percent, and Ohio was third at 13,194, an increase of 11 percent.

New York filings increased 22 percent from a year earlier to 5,367, with one in every 1,473 households in a stage of foreclosure, the 32nd highest rate.

New Jersey filings rose 5 percent. The state had one in every 695 households in a stage of foreclosure, the 14th highest rate.

Filings fell 3 percent from May.

‘‘May was the highest month we've ever recorded, so a little bit of a drop off was inevitable,'' Sharga said.

Kucinich to bring single article of impeachment for misleading US into war

Kucinich to bring single article of impeachment for misleading US into war

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Rep. Dennis Kucinich (D-OH) is sticking to his drive to impeach President Bush.

Few in the House of Representatives have any intention of doing anything with the last 35 articles of impeachment Kucinich set before them last month, so the former presidential candidate appears to be lightening the load. Kucinich sent a letter to colleagues Tuesday asking them to support a single article of impeachment, to be introduced Thursday, which accuses President Bush of leading the country to war based on lies.

"There can be no greater offense of a Commander in Chief than to misrepresent a cause of war and to send our brave men and women into harm's way based on those misrepresentations," Kucinich wrote in the "Dear Colleague" letter.

"There has been a breach of faith between the Commander in Chief and the troops. Iraq had nothing to do with 9/11 or with Al Qaeda's role in 9/11. Iraq had neither the intention nor the capability of attacking the United States," he continued. "Iraq did not have weapons of Mass of Destruction. Yet George W. Bush took our troops to war under all of these false assumptions. Given the profound and irreversible consequences to our troops, if his decision was the result of a mistake, he must be impeached. Since his decision was based on lies, impeachment as a remedy falls short, but represents at least some effort on our part to demonstrate our concern about the sacrifices our troops have made."

Last month, Kucinich presented 35 articles of impeachment. Those have since been referred to the Judiciary Committee, where they are expected to die. Kucinich threatened to double the number of impeachment articles if the Judiciary Committee did not act.

In a video message, Kucinich thanked supporters for responding to his Independence Day call for Bush's impeachment. In the video, Kucinich said his threat for more articles was still operative and promised an update later this week.


Kucinich's full letter to his colleagues is reprinted below:

Dear Colleague,

During the Fourth of July holiday a WWII veteran stood ram-rod straight in his crisp dress uniform and saluted our flag as it passed in a parade. His silent reverential stance was a powerful reminder of the love of country that is reflected in our veterans of all generations and all services.

It is also a powerful reminder of the responsibilities of the President of the Untied States in his capacity as Commander in Chief.

It is worse than heartbreaking that George W. Bush, as Commander in Chief, caused this country to go to war based on information which was false, and which he knew to be false. The consequences for our troops have been devastating. We have lost 4,116 of our beloved servicemen and women since the war began, with over 30,000 physically wounded and countless others emotionally wounded. The toll on the service persons and their families will be felt throughout their lives.

There can be no greater responsibility of a Commander in Chief than to command based on facts on the ground, and to command in fact and in truth. There can be no greater offense of a Commander in Chief than to misrepresent a cause of war and to send our brave men and women into harm's way based on those misrepresentations.

There has been a breach of faith between the Commander in Chief and the troops. Iraq had nothing to do with 9/11 or with Al Qaeda's role in 9/11. Iraq had neither the intention nor the capability of attacking the United States. Iraq did not have weapons of Mass of Destruction. Yet George W. Bush took our troops to war under all of these false assumptions. Given the profound and irreversible consequences to our troops, if his decision was the result of a mistake, he must be impeached. Since his decision was based on lies, impeachment as a remedy falls short, but represents at least some effort on our part to demonstrate our concern about the sacrifices our troops have made.

This Thursday evening I will bring a privileged resolution to the House with a single Article of Impeachment of President Bush for taking our nation and our troops to war based on lies. We owe it to our troops who even at this hour stand as sentinels of America because they love this country and will give their lives for it. What are we willing to do to match their valor and the valor of their successors? Are we at least willing to defend the Constitution from the comfort and security of our Washington, DC offices?

Sincerely,
Dennis J. Kucinich

Member of Congress