November 27, 2007

Lawrence Summers: "Wake up to the dangers of a deepening crisis"

Lately it seems as though everyone wants to take a poke at the dollar. Last week, it was the Brazilian supermodel who demanded euros for her jaunts on the catwalk instead of USD. The week before that, hip-hop impresario, Jay-Z, released a video dissin' the dollar and praising the euro as the "baddest Dude in the 'hood."

Lambasting the greenback has become trendy. It's a favorite pastime of politicians, too. At the November OPEC meeting in Riyadh, Iran's president Mahmoud Ahmadinejad asked the assembled finance ministers to "study the feasibility of selling oil in another currency." Ahmadinejad disparaged the dollar as "a worthless piece of paper."

The fiery Venezuelan President, Hugo Chavez, followed Ahmadinejad's lead predicting that the demise of the dollar would mean the "end of the Empire."

Hugo may be on to something. The dollar is America's Achilles heel; if the dollar tanks, so does the empire. That means the taxpayer will have to foot the bill for Bush's bloody-interventions in Iraq and Afghanistan, rather than the Chinese. That also means that the US will have to export something of greater value than Daisy Cutters and gulags. That could be a tall-order, now that Bush has boarded up the factories, hollowed out the industrial base, and outsourced 3 million manufacturing jobs. We'll have to scrape the rust off the machinery and get back into the widget-making business like we were before the Free Trade fiasco.

Central banks across the globe are trying to figure out how to ditch their dollar reserves without triggering a stampede for the exits. No one wants to see that. But, then, nobody wants to be stuck with vaults full of Uncle Sam's green confetti either. So, the question arises; What is the best way to divest oneself of $5.6 trillion (total USD held overseas) before the Lusitania capsizes?

Kuwait, Venezuela, Iran, Russia, and Norway have already opted to ignore the destabilizing effects of "conversion" from dollars and are in some stage of divestiture. Others will follow. The UAE, Bahrain, Qatar, Oman and Saudi Arabia are considering switching from the dollar-peg to a basket of currencies so they can hedge against the inflation that's battering their economies. It's only a matter of time before the Petrodollar System – which links the dollar to petroleum sales and creates a de facto "international currency" – unravels completely, precipitating the final collapse of Breton Woods.

Talk of America's impending currency disaster is no longer relegated to the Internet blathershere. Mainstream journalists have joined the chorus and are sending up their own red flags. The UK Telegraph's economics' editor, Liam Halligan, made this grim observation in his recent article, "Bet Your Bottom Dollar Tensions Will Follow":

"The importance of "dollar divestment" cannot be overstated. At the very least it means the greenback has much further to fall – plunging the US into recession. But it begs a bigger, more alarming, question. How will Washington react to the end of the US hegemony?"

The dollar was savaged by the monetary policies of the Federal Reserve. The Fed's policies were designed to coincide with Bush's Middle East Crusade. They were supposed to work like two wheels on the same axle. The administration believed that, by 2007, the military would need only 30,000 or so troops to maintain security in Iraq. That would give Bush's legions the chance to turn east and push on to the next target-state, Iran. If things went according to plan – and no one thought the high-tech US war machine could be stopped – the US would control two-thirds of the world's oil. This would allow America to keep writing bad checks on green paper for the next century.

But then, of course, the plan hit a snag. The Iraqi resistance mushroomed, the US got bogged down in an "unwinnable" war, and the once-mighty dollar shriveled into nothingness. Now we're at a turning point and our leaders are in a state of denial. Bush is still playing Teddy Roosevelt, while Paulson and Bernanke are just plain shell-shocked. They probably know the game is over. As the dollar continues to wither; the frustration is beginning to mount in Europe. Liam Halligan sums it up like this:

"Europe has finally had enough of America's "benign neglect" dollar policy. As a large economic area, with a floating exchange rate, the eurozone suffers most. Over the past seven years, the single currency has risen by a shocking 82 per cent against the greenback. That's hammered eurozone exports – provoking serious trade disputes between the EU and US, the world's two biggest trading blocks. No wonder French President Nicolas Sarkozy describes America's drooping dollar as "a precursor to economic war." (UK Telegraph, "Bet Your Bottom Dollar tensions Will Follow")

Sarkozy is leading the charge for "intervention"; the buzzword for shoring the greenback through exchange controls and buying up billions of dollars. But it's a risky business; especially when net capital inflows – which are the monthly purchases of US-backed securities and Treasuries – have gone negative for the last two months. That means the US isn't attracting enough foreign investment to finance its trade deficit. So the dollar will have to fall to compensate.

So, how much loot is Sarkozy willing to put up to keep the dollar from slumping further – $100 billion, $500 billion, $1,000 billion? And where's the bottom?

The fact is, the greenback took a "header" down the stairwell and by the time it picks itself up, it could be eye to eye with the peso. Who knows? Maybe its time we all learned Spanish?

More than two-thirds of all sovereign foreign exchange holdings are denominated in dollars. When those dollars are converted into back into foreign currencies and start recycling into the US; we're in deep trouble. Inflation will soar. Surely, the Fed must have known this day would come when they were pumping trillions of dollars into subprime mortgages and complex debt-instruments which served no earthly purpose except to fatten the bottom line for rapacious bankers and hedge-fund managers. The Fed also knew that the nation's wealth was not being "efficiently deployed" for capital improvements on factories, technology or industry. Oh, no. That would have ensured that America would remain competitive in the global marketplace into the new century. Instead, the money was shoveled into the bottomless sinkhole of stucco homes with composition roofing and toxic credit default swaps.

The stock market lost another 237 points yesterday; the third 200-plus slide in a week. Now all three indexes are down more than 10% since their record high on Oct 9. Treasury yields are plunging as investors flee the stock market looking for safety. That means the Fed will have to slash rates again at its December 11 meeting to provide more low interest crack for the investor class. Traders see an 82% chance that Bernanke will cut the Fed Fund's rate by another quarter point to 4.25%. All that is likely to do is put the dollar into free fall and send food, oil and gold prices to the moon. It won't pay off the overdue mortgage payments and it won't remove the billions of dollars of debt from the banks' balance sheets. It's pointless. The US is headed for a "hard landing" and its dragging the rest of the world along with it.

Harvard Economics professor, Lawrence Summers offered this sobering warning yesterday in an article in the Financial Times, "Wake up to the dangers of a deepening crisis":

"Three months ago it was reasonable to expect that the subprime credit crisis would be a financially significant event but not one that would threaten the overall pattern of economic growth. This is still a possible outcome but no longer the preponderant probability. Even if necessary changes in policy are implemented, the odds now favor a US recession that slows growth significantly on a global basis. Without stronger policy responses than have been observed to date, moreover, there is the risk that the adverse impacts will be felt for the rest of this decade and beyond. Several streams of data indicate how much more serious the situation is than was clear a few months ago."

We're doomed.




November 26, 2007

EU Gold Move

But it won't work. Note, no one is moving to a "euro standard" but a "basket of currencies". Actually, China is starting to accumulate Gold at the current low prices. (just imagine, you can get a peice of gold for the toilet paper in your hand)

If the EU REALLY wanted to make the fortune of it's life it would print Euros like if there's no tomrrow and buy gold from the revenue as soon as people start to switch due to short-term low prices.






November 20, 2007

Tragic Comedy

Many economists had hoped that a strong export performance tied to a weaker dollar would keep the U.S. manufacturing sector growing and buffer an economy already taking a big hit from a meltdown in the subprime mortgage market.

More here

It's not fraudulent. It's tragically funny. This is so funny it's beyond words. The US will devalue at some 80% rate today. It's hunger level now, not just homelessness, unemployment.



November 16, 2007

US Debt

The fact is the US is BANKRUPT. If it were a person or a small business, wolves would be tearing it's flesh away. It's in debt to the tune of $60 trillion. We need to deal with this fact, and act accordingly in a responsible fiscal manner.




November 12, 2007

No Fax Payday Loans

Are you in need of a quick cash advance, say between $100 and $1,500? You’ll be able to pay back within a short time frame, won’t you? No Fax Payday Loans might be what you need. They will provide you with that quick cash advance for that new television, knowing that you will have the cash in two weeks.

No Fax Payday Loans stays ahead of the pack, to give you all the information you need on registered lenders who properly adhere to the regulations of the lending practice. You can find the loan that is right for you, provided you apply and provide accurate information. Multiple quotes on payday loans are available when this is done. When you’ve selected the features, your new funds can be electronically deposited into your checking account on prearranged days. This is the essence of No Fax Payday Loans .

Another reason to spend some time with the good folks at No Fax Payday Loans. There you will finda most remarkable fee calculator.




Damage Assesment

As I've always said, recession is a normal part of the business cycle. There is no avoiding it. The upcoming recession is shaping up to be worse than its predecessors. A real catastrophe. The markets are in a shambles, and investors are battered. Their confidence is gone.
An unwinding of the economy is required in order for debts to be written off. Businesses also need to transform for the future.
The damage caused by the excessive Federal credit has been considerable. It will take years to fix the damage, and set the house aright too.

Universal Slang

Even though its only since around 90s that we great "masses" have become familiar with credit cards and been bombarded with their jargons. Since our childhoods, we have been "programmed" to associate certain words with certain events or other happenings.

Such association in itself mean nothing by common relation within our language base, but the meaning is well known and is explainable when related to universal slang.





Bankrupt Banks

I think someone asked me once why I thought the top one hundred city banks were bankrupt Well one reason is derivative positions that have just been published.

"There's already plenty of chatter about dealers' Level 3 exposure. Take Citigroup, for instance. In a recent SEC filing, they said they had $135-billion (U.S.) in Level 3 assets. They have an equity base of $128-billion, so their Level 3 exposure is 105 per cent of equity. Goldman has $72-billion in Level 3, or 185 per cent of their $35-billion in equity."

"And a report from the Royal Bank of Scotland this week predicted the total losses from Level 3 writedowns will be somewhere between $250-billion and $500-billion."






Garage Floors

Our garage floors are so under rated. I always see the old oil stain in my old concrete garage floor, but never ponder to think much about it. If you’re in a similar situation, and you’re thinking of remodeling your home, don’t overlook the garage since what seems difficult is usually easy and cheap to fix.

Don’t get confused by all the options that might be thrown at you. The solution to older stained garage floors, according to my new friends at garage floors is to tile over the stain. A band-aid fix that works!

The experts on garage floors, garage floors should be your first stop for all your questions on what to do with your garage floors.

November 11, 2007

Correcting the Market

It may be possible that the macro-economic trends may have reversed to correct the account imbalances that the U.S.A. faces. However, the impact will not be noticed for quite some time.

Just for the sake of discussion: say, the U.S. did do everything right to address the realities impacting the macro-economic problems that it faces? The problem is that the positive effects will take at least about 15 years to become visually apparent.

The only thing that is going to keep the world out of recession in 2008 is if the European modestly reduce interest rates to boost consumption. And if China can keep from raising their interest rates too much to address inflation. But it's going to be a close call.








Credit Card Philosophy

There is nothing inherently evil with credit cards, especially interest free credit cards. They offer a means to and end, that is, they allow one to purchase goods with ease and flexibility. Especially in this age of online purchases, credit cards can help someone buy a product online for much cheaper than he or she can find in a typical store (you just have to know where to look. So, why are people in so much credit card debt? Because the misuse their credit cards.

Credit card misuse is simply living beyond your means with the help of credit. Such action has negative consequences for both the economy of the nation and the economy of the household. In the worst cases not event interest free credit cards will be able to save a poor soul from the ills of credit card debt.

Credit cards are easy to get, the best being interest free credit cards. Mail advertising credit cards flow into the mailbox. The information in those ads then flow to the brain. Easy cash! WRONG!! What credit card companies need to make sure is that they educate their users in proper use of the credit card. Simply focusing on the message that credit cards are not cash might help people get the idea out of their head that on $5.25 an hour they can buy that brand new projection screen and projector (while having to pay bills, rent and other living expenses). There is room for such purchases when they are well planned, but the slippery slop of habitual purchases with credit cards is clear and present in our economy.

Like cigarette companies, credit card companies should include warnings on their mailing packages, agreements, etc. Caution: credit card misuse might lead to telephone calls from debt collectors in the wee hours of the night.

The best type of credit card is the one that you use, not misuse. Pay your full bill on time every month, and you are using, not misusing your card. You can start with these interest free credit cards.






Trigger Events

Every thing such as 40-year low interest rates (housing bubble), massive liquidity (insolvent banks), massive deficit spending (failed wars), massive tax cuts (for the rich) has FAILED to reverse the US economy from its downward spiral.

None of these measures can be retried.

If the Fed raises rates, to protect the collapsing dollar, the domestic economy will collapse in a sea of more foreclosures and debt.

If the Fed, lowers rates, to protect the collapsing domestic economy and squirt more lighter fluid onto the stock market bonfire, the dollar will accelerate both its collapse and replacement as the global reserve currency used to price oil.

If the Fed does nothing, the game will go on until some trigger event overwhelms the economic reality.






Coupons Galore

It is imperative for those considering various ways to get out of debt to pay close attention to the coupons coming in the mail (email and snail mail) . This can be a tedious task that wears on the patience. With less patience, there will be an increase in the probability of a person in debt to not save because of a missed opportunity in finding a coupon.

Computer equipment is expensive. At this site, you can save big with Dell coupons and 123Inkjets coupon codes available on the coupon site.

NCNatural Coupons is just what is needed to help people out. Before making a purchase, use this site as a savings research tool to help deflate the expenses you will incur when making that purchase. By updating daily, offering hundreds of merchants, and offering a straightforward site design, you are sure to find a coupon to match your needs. This site is also good for those who are not in debt, since the best way to wealth is to save. Saving equal prosperity, so use coupons to save and become a little more prosperous.







Dollars and Sense

Today the dollar index is just a mere 75.3 and falling even faster. THOSE STILL ON BOARD are still hoping that the Titanic will not sink since THEY JUST DO NOT KNOW THAT THE CAPTAIN GOT THE ORDER TO SINK THE BOAT REGARDLESS!


It’s no secret that the dollar is on a downward spiral. Its value is dropping, and the Fed isn’t doing a whole lot to change that. As a result, a number of countries are considering a shift away from the dollar to preserve their assets. These are seven of the countries currently considering a move from the dollar, and how they’ll have an effect on its value and the US economy.


1. Saudi Arabia: The Telegraph reports that for the first time, Saudi Arabia has refused to cut interest rates along with the US Federal Reserve. This is seen as a signal that a break from the dollar currency peg is imminent. The kingdom is taking “appropriate measures” to protect itself from letting the dollar cause problems for their own economy. They’re concerned about the threat of inflation and don’t want to deal with “recessionary conditions” in the US. Hans Redeker of BNP Paribas believes this creates a “very dangerous situation for the dollar,” as Saudi Arabia alone has management of $800 billion. Experts fear that a break from the dollar in Saudi Arabia could set off a “stampede” from the dollar in the Middle East, a region that manages $3,500 billion.

2. South Korea: In 2005, Korea announced its intention to shift its investments to currencies of countries other than the US. Although they’re simply making plans to diversify for the future, that doesn’t mean a large dollar drop isn’t in the works. There are whispers that the Bank of Korea is planning on selling $1 billion US bonds in the near future, after a $100 million sale this past August.

3. China: After already dropping the dollar peg in 2005, China has more trouble up its sleeve. Currently, China is threatening a “nuclear option” of huge dollar liquidation in response to possible trade sanctions intended to force a yuan revaluation. Although China “doesn’t want any undesirable phenomenon in the global financial order,” their large sum of US dollars does serve as a “bargaining chip.” As we’ve noted in the past, China has the power to take the wind out of the dollar.

4. Venezuela: Venezuela holds little loyalty to the dollar. In fact, they’ve shown overt disapproval, choosing to establish barter deals for oil. These barter deals, established under Hugo Chavez, allow Venezuela to trade oil with 12 Latin American countries and Cuba without using the dollar, shorting the US its usual subsidy. Chavez is not shy about this decision, and has publicly encouraged others to adopt similar arrangements. In 2000, Chavez recommended to OPEC that they “take advantage of high-tech electronic barter and bi-lateral exchanges of its oil with its developing country customers,” or in other words, stop using the dollar, or even the euro, for oil transactions. In September, Chavez instructed Venezuela’s state oil company Petroleos de Venezuela SA to change its dollar investments to euros and other currencies in order to mitigate risk.

5. Sudan: Sudan is, once again, planning to convert its dollar holdings to the euro and other currencies. Additionally, they’ve recommended to commercial banks, government departments, and private businesses to do the same. In 1997, the Central Bank of Sudan made a similar recommendation in reaction to US sactions from former President Clinton, but the implementation failed. This time around, 31 Sudanese companies have become subject to sanctions, preventing them from doing trade or financial transactions with the US. Officially, the sanctions are reported to have little effect, but there are indications that the economy is suffering due to these restrictions. A decision to move Sudan away from the dollar is intended to allow the country to work around these sanctions as well as any implemented in the future. However, a Khartoum committee recently concluded that proposals for a reduced dependence on the dollar are “not feasible.” Regardless, it is clear that Sudan’s intent is to attempt a break from the dollar in the future.

6. Iran: Iran is perhaps the most likely candidate for an imminent abandonment of the dollar. Recently, Iran requested that its shipments to Japan be traded for yen instead of dollars. Further, Iran has plans in the works to create an open commodity exchange called the Iran Oil Bourse. This exchange would make it possible to trade oil and gas in non-dollar currencies, the euro in particular. Athough the oil bourse has missed at least three of its announced opening dates, it serves to make clear Iran’s intentions for the dollar. As of October 2007, Iran receives non-dollar currencies for 85% of its oil exports, and has plans to move the remaining 15% to currencies like the United Arab Emirates dirham.

7. Russia: Iran is not alone in its desire to establish an alternative to trading oil and other commodities in dollars. In 2006, Russian President Vladmir Putin expressed interest in establishing a Russian stock exchange which would allow “oil, gas, and other goods to be paid for in Roubles.” Russia’s intentions are no secret–in the past, they’ve made it clear that they’re wary of holding too many dollar reserves. In 2004, Russian central bank First Deputy Chairmain Alexei Ulyukayev remarked, “Most of our reserves are in dollars, and that’s a cause for concern.” He went on to explain that, after considering the dollar’s rate against the euro, Russia is “discussing the possibility of changing the reserve structure.” Then in 2005, Russia put an end to its dollar peg, opting instead to move towards a euro alignment. They’ve discussed pricing oil in euros, a move that could provide a large shift away from the dollar and towards the euro, as Russia is the world’s second-largest oil exporter.

What does this all mean?

Countries are growing weary of losing money on the falling dollar. Many of them want to protect their financial interests, and a number of them want to end the US oversight that comes with using the dollar. Although it’s not clear how many of these countries will actually follow through on an abandonment of the dollar, it is clear that its status as a world currency is in trouble.

Obviously, an abandonment of the dollar is bad news for the currency. Simply put, as demand lessens, its value drops. Additionally, the revenue generated from the use of the dollar will be sorely missed if it’s lost. The dollar’s status as a cheaply-produced US export is a vital part of our economy. Losing this status could rock the financial lives of both Americans and the worldwide economy.







Soprano Environmental Services

Verifiable Carbon Offset Credits are the next big thing.






November 10, 2007

Win with Ultimate Paintball


Paintball is the safest, realest war simulation. As in war, the one with the best weapons wins. Therefore, paintball guns of superior quality are important. Some of the best products that will get you your claim to fame in the game are made by spyder paintball . Typically these are expensive and out of reach for the non-professional paintball player. Since you naturally play to win, it's only natural to feel the frustration of losing not because you lack a good strategy, but because your poor quality weaponry jammed at the last moment blowing your cover thereby allowing the hunted to blast you to oblivion.

Naturally, you play paintball to win. You want to turn your enemies clothes from camouflage to red (literally). That is the fun of paintball, but in order to achieve this goal, you’ve got to make serious purchases. If you’ve been relying on rental equipment provided by your favorite paintball club, it’s time you got serious, and stopped losing. Expensive, you say? Not one bit! The above links will take you to Ultimate Paintball, a goldmine of a store where you can find superior paintball guns, smart parts, and paintball masts at discounted prices.

The best advantage of Ultimate Paintball is that it offers free shipping, in addition to its discounted prices. So stop losing, visit the site. Hunt, don't be hunted.








Fools Fiat

Make no mistake, Euro is the fool's bet and so is gold. The US will confiscate gold once the depression is officially announced. They did it before and will certainly do it again. Armed troopers will go door to door punishing anyone who hives more than a few ounces of gold. And once they devalue or begin Amero replacement of the dollar, the Euro is gonna go in a flash moving the world's reserves to Ruble and Yuan and so on.

At least this is one probable future.






Are you scared, yet?

After the price of Gold expressed in Euros breaks out, I expect a free for all and my initial target is $1275.00, which is equivalent to the 1980 high, adjusted for the differential in Dollar and Gold supply during the last 27 years.

Next disaster in line is the SIV for which the big bankers are trying to arrange a $100 BILLION rescue fund to keep the losses off the Balance Sheets. But these and the CDO's are nothing compared to the illiquid $450 TRILLION worth of OTC Derivatives overhang that has NO precedent in history...

How ILLIQUID these OTC Derivatives are? Here is the short answer from Wikipedia:

Over-the-counter (OTC) derivatives on the other hand are not traded on exchanges, so their market prices are not as readily available. During their early development, OTC derivatives such as interest rate swaps were not marked to market frequently. Deals were monitored on a quarterly or annual basis, when gains or losses would be acknowledged or payments exchanged.

Products such as swaps, forward rate agreements, and exotic options are almost always traded in this way. The OTC derivatives market is huge. According to the Bank for International Settlements, the total outstanding national amount is USD 298 trillion (as of 2005)

As the practice of marking to market caught on in corporations and banks, some of them seem to have discovered that this was a tempting way to dress up the books, especially when the market price could not be objectively determined (because there was no real day-to-day market available), so assets were being 'marked to model' using estimated valuations derived from financial modeling, and sometimes marked to fantasies. See Enron.

Are you scared, yet???






November 9, 2007

Dentemp® O.S.Dental Cement First Aid

A while, a long ago, I was eating a jolly rancher and was transported back to the days of my youth, when I had good strong teeth. Biting the hard candy, I felt and immense pain that brought me back to the reality of the situation. I’m old, and with age come dental caps. Being the case that I was sitting in a meeting, I couldn’t just get up and excuse myself to run off to the dentist. People began to notice the pain and discomfort in my face, looked at me strangley. Finally, the director of the marketing department looks at me, pauses the meeting, and asks me directly, what in the hell is wrong with me. I inform them, they laugh, and I get sent to the dentist, like a child gets sent home from school.

Boy do I wish that DENTEMP® O.S. was around then. Instead sitting at the conference table in pain, and then missing the rest of the important meeting at work, I could have been gone for about an hour, which is how long DENTEMP takes to work, and then made my presentation, instead of looking like a fool andmissing my presentation and meeting. Having learned from this experience, I would like to introduce you to DENTEMP® O.S.

DENTEMP® O.S. is a fast solution for dental pain and discomfort caused by loose caps and lost fillings. When the pain hits you in the middle of the night, you’re not going to get into the car and drive around until you find a dentist open (which you wont!) Instead, you’ll want to find some sort of solution to the problem for the night that will work until morning when you’ll want to check in with your dentist.

DENTEMP® O.S. has been proven safe in clinical tests. No need to worry about swallowing it since its safe enough to eat.

It's Easy!

Dental First Aid:

It's Strong:

Fully FDA Approved:

Provides fast, temporary relief of pain and discomfort.

Just remove it from its plastic vial and it's ready to use. No Mess! No Mixing! Several Applications in each vial.

Replaces lost fillings and may be used to temporarily cement loose crowns.

You can eat on it within 30 minutes of setting.

All products have been tested and fully comply with FDA Regulations for Oral Care.

For a more comprehensive review of the product, read the directions.

Buy Dentemp OS






Out of Control?

Like all systems, our financial system, once thrown off balance, proceeds exponentially, not linearly. Once the balance exceeds the damping factors, which are typically all controllable by the state economy dictators, it's no longer just oscillation, or in econ terms "recession", "depression" or any other cyclical phenomena caused by the nature of masturbating with the typical government inputs like the price of money, bond issues, yields, capitalization, inflation, employment, market tax and laws.

Once it goes, it goes, just like any chain reaction. And from there on, the system either converges to some steady state point, which could easily be the re-assessment of the west's collective worth and devaluation of its money accordingly or it diverges going completely off the scale.



The Mist Movie

The undisputed master of suspense is coming out with a new movie: The Mist by Stephen King opening at a theater near you on November 21.It’s sure to live up to the expectations of the King thriller/suspense genre, which Mr. King carved a nice niche for himself.

Personally, my favorite King novel is not one but two. The first is the Shining (also a movie!). Film adaptation of the book is nearly right on bar with the book, though Nicholoson’s performance is slightly eerier than that of the mental actor playing in my head as I read the book. The book overall is essentially just that, an exploration of how personal identity can shift over time in a person when put into an environment that induces such changes. It is not just about the power of the mind to change identity , but also to communicate (as can be seen with the communications taking place between the child and the old man inn keeper who are separated by hundred of miles in space, but are connected by mind).

The Stand is my other favorite King masterpiece. The book was turned into a mini-series on TV, and is the quintessential fight between good and evil in the aftermath of a global catastrophe in which 90% of humans have died.

The Mist is sure to follow in the footsteps of these great classic Stephen King films. It is closer to The Stand since it seems to be about a catastrophe and its effects on humans.

While I haven't read the book, yet, the trailer has me ready to go out and by the book. I will be the first in line to go and see the next great King flick.







US in a slowdown!

US in a slowdown? No. There's a shocker. What've I been saying this whole time!?

Well, I'm glad the Fed's gonna recover it now. Good. So no prob then....for now.




Euro FAQ

Euro CURRENCY MINI-FAQ

I don't claim this list is perfect.. there may be some date gaps..
But it is fairly accurate based on what I said.





One Fix Too Many

Economic Outlook
1150 Seventeenth Street, N.W., Washington, D.C. 20036 202.862.5800 www.aei.org
Just as Wall Street was celebrating the presumed
end of the latest financial crisis by pushing stocks to
record highs, proclaiming continued strong earnings
growth, and continuing to recite the mantra
“slowdown, but no recession,” Treasury Secretary
Henry Paulson provided a vivid reminder that the
housing and mortgage crisis is not over. On Monday,
October 15, while Citibank was reporting that
compared with last year’s results its third-quarter
earnings had fallen by 57 percent, the Treasury’s
“super-SIV” plan was revealed. It seems that the
Goldman Sachs alumni at Treasury—Paulson and
his under secretary for domestic finance, Robert
Steel—had become concerned that the offbalance-
sheet special investment vehicles (SIVs)
held by commercial banks might not be financeable.
That would mean that not enough investors
could be found to provide the short-term financing
necessary to sustain SIVs, the repositories of hardto-
value securitized mortgages that continue to
plague bank balance sheets.
Why, wondered investors, if the mortgage crisis
had been successfully contained, would the Treasury
be stepping out of its usual role to initiate a
discussion among banks about financing SIVs?
Depository institutions such as Citibank, Bank of
America, and JPMorgan are the Federal Reserve’s
bailiwick, and if they have problems that need
addressing and that constitute systemic risk, it is
the Fed’s role to address those problems. At best,
the Treasury’s initiative seems a gratuitous bailout
effort, while, at worst, it seems an indication that
the banks’ balance sheet problems tied to the housing
collapse were worse than had been supposed.
Meanwhile, the Federal Reserve was keeping its
distance from the Treasury initiative, saying only
that it was being kept informed.
Markets Respond to Bad News
By the end of the week, on Friday, October 19, the
twentieth anniversary of the 1987 stock market
crash, after a week of gradually falling stock prices,
the U.S. stock market fell more than 2.5 percent
while interest rates and the dollar fell sharply—all
signals that investors were taking the recession
story more seriously than they had been before the
super-SIV plan was introduced. Of course they
had some help from other factors. On the Monday
evening after the super-SIV announcement, Fed
chairman Ben Bernanke appeared before the Economic
Club of New York to present a somber picture
of the downturn in the housing market and
the difficulties associated with pricing securities
whose value is tied to the hope and expectation
that house prices would rise instead of fall. On
Wednesday, October 17, the release of September
data on housing starts and permits revealed a virtual
collapse of housing construction, with a drop
of 56 percent in starts and 43 percent in permits,
both on a three-month annualized basis. When
builders are dumping houses with the help of 10
and 20 percent price reductions, they are hardly
inclined to step up housing starts.
The bad news continued throughout the week
as earnings disappointments spread in the financial
and manufacturing sectors. Broadly, estimates for
year-over-year earnings growth of S&P 500 companies
went from about 6 percent on August 17 to
–0.1 percent on October 12. Wall Street’s hype
One Fix Too Many
By John H. Makin
November 2007
John H. Makin (jmakin@aei.org) is a visiting scholar at AEI.
about the durability of earnings growth was undercut by
third-quarter earnings reports. Adding to the likelihood
that a recession was underway or impending, data released
on Thursday, October 18, showed a sharp rise in initial
jobless claims. One of the bulwarks of the “slowdown only”
camp has been the claim that employment and wages will
hold up enough to keep consumption
growing. If employment growth weakens
further, a recession goes from a possibility
to a virtual certainty.
Alan Greenspan chimed in on Friday,
October 19, to say that the Treasury’s
super-SIV plan—which had since evolved
to a $75 billion “master liquidity enhancement
conduit” (MLEC) proposed by Citigroup,
Bank of America, JPMorgan, and
Wachovia to take on the assets of troubled
investments—ran the risk of further
undermining already brittle confidence in
besieged credit markets. Greenspan went
on to point out that the MLEC plan was
not comparable to the New York Federal
Reserve’s rescue of Long-Term Capital
Management, thereby underscoring the
Fed’s coolness toward the Treasury’s super-SIV initiative.
Clearly, at a time when the current Fed chairman, Ben
Bernanke, voiced concern as housing data deteriorated at
an accelerating pace and hopes for modest employment
growth were being dashed, it was not wise for the Treasury
to remind investors that all was not well with bank
balance sheets.
Housing Bust Still Means Recession
The bottom line on the housing and mortgage crisis has
not changed since housing prices started to soften in 2006
and have since started to fall nationally on a year-overyear
basis for the first time since the Great Depression.
The late stages of the housing boom were fueled by financial
innovations that required the securitization of mortgages
into financial instruments whose value depended on
the continued rise in house prices. The futility of pretending
that this problem has been alleviated by a 50
basis-point rate reduction from the Fed was underscored
by the Treasury’s ill-timed attempt to address ongoing
bank balance sheet problems. For optimists, the Treasury’s
effort was a jarring reminder that the problem was not
over, as they had assumed it was. For the pessimists, the
Treasury’s initiative was an occasion to reiterate how
intractable the problem of valuing derivative mortgage
securities has become. How, they asked, can a group of
banks put together a fund among themselves to purchase
mortgage assets whose value remains indeterminate?
The SIVs are items that the banks placed off their balance
sheets in order to avoid regulatory restrictions on
bank investments in risky assets. The
problem is that the banks will be obliged
to further tighten credit when they take
those risky assets back on to their balance
sheets unless they can arrange financing
for them in the commercial paper market.
But participants in the commercial paper
market, aware of the extreme difficulty of
evaluating the assets in the SIVs, are
unwilling to roll over the financing for
those vehicles. The Treasury’s plan essentially
suggests that the banks should put
together a fund to purchase only the best
of the assets in the SIVs in order to somehow
restore confidence. But the best of
the SIV assets are not the problem.
Beyond that, why should the banks need
the help of the Treasury to construct a
fund to purchase attractive assets?
The basic problem is much simpler to understand than
the esoterica attached to the valuation of SIVs or Treasury
intervention in facilitating their financing by banks
that already own them. The housing bubble has collapsed
and will continue to deflate. Even without the existence
of exotic and hard-to-value mortgage derivative securities,
every housing downturn since World War II has
resulted in a U.S. recession. Given that this housing
downturn is more intense than most and has involved
greater compromise of the balance sheets of major banks,
there is no reason to suppose that a U.S. recession in
2008 is not at hand. The only way to avoid it would be a
massive easing stimulus by the Fed that resulted in a
reversal of the drop in house prices—a virtually impossible
undertaking—which would surely entail the return of
the serious inflation that the Fed is pledged to avoid.
The rest of what has unfolded since the financial market
panic in August has been an exercise in concerted
denial. The arguments have taken various forms: There
will not be a recession because employment growth will
hold up and households will continue to boost consumption.
Corporate earnings will hold up well and thereby
support the stock market. The drop in the dollar will
stimulate exports enough to cause the economy to avoid
- 2 -
Every housing downturn
since World War II
has resulted in a U.S.
recession. Given that
this housing downturn
is more intense than
most, there is no reason
to suppose that a U.S.
recession in 2008
is not at hand.
recession. In the week leading up to the twentieth
anniversary of the 1987 stock market crash, these hopes
were undercut and fears of a recession returned with a
vengeance. As I have already noted, stock prices fell, but
the dollar and interest rates also fell—all in anticipation
of weaker earnings and more aggressive Fed rate cuts to
try to cushion the onset of a recession. Through the rest
of 2007, stock prices and the outlook for the economy
will, no doubt, continue to oscillate, but they will do so
around a declining trend line.
Macroeconomic Laissez-Faire
The rush back into risky trades after the Fed’s policy
moves in August and September, coupled with the Treasury’s
proposed super-SIV intervention in the credit markets,
has brought us to a moment of truth concerning the
outlook for the U.S. economy. At issue is a cost-benefit
analysis of government intervention to avoid recessions.
The extreme degree of risk-taking behavior after 2003
that resulted in a widely noted underpricing of risk created
a housing bubble in the United States. The housing
bubble raises questions: Should the economy be allowed
to operate in an environment in which
lenders make undocumented loans to
borrowers on the basis of virtually no
information regarding the borrowers’
ability to repay the loans? Is it adequate
for the orderly operation of credit markets
for lenders to make undocumented loans
only because they merely originate the
loans and then resell them into packages
of securities, many of which have been
labeled triple-A or low-risk by credit rating
agencies compensated by those packaging
the securities in the first place?
To put it more bluntly, we have discovered that
widespread underpricing of risk has resulted in a housing
bubble the unwinding of which will cause a U.S.
recession. In the name of avoiding a recession, should
the financial decision-makers involved in creating the
bubble be protected?
Ben Stein, an optimistic economist with an admirably
broad view of the world, which has included regular
appearances on TV quiz shows and hilarious displays
of droll humor in movies, said it well. While suggesting
that the U.S. economy probably is not in serious trouble,
he notes that “some extremely worrisome things have
happened and are now being revealed and worse are yet
to come.” These are the problems that I have discussed
over the past several months that likely will lead to a
U.S. recession.
What I suggest here is that a U.S. recession may be
necessary to push financial decision-makers back toward
the appropriate valuation of risk. Stein is more direct:
The vicious, cruel truth is that some very greedy,
selfish, and yes, stupid men made fortunes on deals
that were economically and/or ethically wrong.
(Why else hide them off balance sheets or abroad?)
They got immense fees, stunning paychecks, and
the inheritance of maharajahs. . . . The ones at the
top aren’t fired, or if they are fired are fired very
rich. (Never mind that silly mouth music from
Citigroup about “the year of no excuses.”) . . .
Despite what looks to me like a breathless lack of
disclosure, I have not seen any lawsuits by the
Securities and Exchange Commission against any
of these big money center princes or principalities—
not to mention criminal investigations from other
law enforcement authorities.
Instead of the investigations that Stein
suggests, we have seen an effort by the
treasury secretary and the under secretary
for domestic finance to bail out the banks
as a response to the bursting of the housing
bubble. In so doing, they have cynically
suggested that they are really just
thinking about the unfortunate American
homeowners, especially those victimized
by subprime lenders who might lose their
homes. Many subprime borrowers are
already in bankruptcy proceedings, as a
glance at any newspaper will show.
The issue of a post-bubble American recession attributable
to inadequate risk analysis by private-sector
decision-makers is really an issue of macroeconomic
laissez-faire. Economists are quick to argue that government
intervention on a micro basis can distort resource
allocation. So too can excessive government intervention
on a macro basis. If decision-makers conclude that
when excessive risks are undertaken, either the Fed or
the Treasury will step in if necessary to keep the economy
on an even keel, then such intervention will lead to too
much risk-taking. Excessive risk-taking will result in
more volatile growth and inflation, which, as we have
learned over the past twenty-five years, is to be avoided
- 3 -
A U.S. recession may
be necessary to push
financial decisionmakers
back toward
the appropriate
valuation of risk.
if long-run stable growth of output and productivity is to
be encouraged.
I am suggesting here that the cost of avoiding recession
after the biggest housing bubble in American history
has burst is too high. It will involve rewards to those who
took excessive risks that will only result in more underpricing
of risk in the future, and therefore larger bubbles
and, ultimately, a more unstable economy that underperforms
expectations.
I am not suggesting that the Fed should
stand idly by as economic growth slows
while inflation remains stable or falls
further. The Fed’s decision to reduce the
fed funds rate by 50 basis points on September
18 was tied to an observation that
the economy was slowing rapidly and
that the disruptions in financial markets
would exacerbate that slowdown. An
aggressive move was necessary to initiate
preemption of a self-reinforcing, dangerous,
and dynamically unstable downturn
whereby a housing mortgage crisis slows
the economy; a slower economy intensifies
the housing mortgage crisis; and the
economy, in turn, slows still further. To
avoid that outcome, the Federal Reserve
will undoubtedly be reducing interest
rates more rapidly in coming months,
probably down to 3 percent by the middle
of next year.
The Federal Reserve should continue
to keep its distance from Secretary Paulson’s super-SIV
proposal. Citibank, the major beneficiary of a superfund
bailout, is a depository institution and therefore the direct
responsibility of the Federal Reserve and not the Treasury.
The super-SIV proposal, as already noted, appeared on
the very day that Citibank announced a sharp 57 percent
drop in its third-quarter earnings and during a week when
Bank of America and Wachovia also reported very weak
earnings. Clearly, the Fed shares former chairman
Greenspan’s view that the SIV problem is not akin to the
Long-Term Capital Management meltdown in which it
intervened in October 1998. Perhaps the criticism at the
time regarding the moral hazard problem entailed by the
Fed’s intervention, even at that point, has left a mark on
the Fed’s thinking.
Recession Beats Alternatives
At the end of the day, the problem facing the U.S.
economy—a collapse of a housing bubble with attendant
damage to overall growth—is acute but not chronic. The
way to avoid a recession—having the Fed print money
and push house prices back up—is not a viable option.
The Treasury plan is inappropriate because it rewards
problematic undervaluation of risk by the heads of major
banks, and it is unworkable because any
sale of assets to a superfund will involve
pricing them at realistic (much lower
than par value) levels. The holders of
derivative securities are anxious to avoid
that outcome and so, ultimately, will not
move forward with the superfund plan.
The positive economic aspect of the
U.S. housing bubble collapse is that it will
lead to a recession. As I have stressed,
every housing sector downturn since
World War II, most of which have been
less intense than the current downturn,
has done just that. The normative aspect
of the analysis is that given the circumstances,
a recession is the most desirable
outcome. To repeat, avoiding it would
involve so much government intervention
and so much reinflation by the Fed that
risk-taking would be encouraged even further,
resulting in an even larger bubble and
a larger subsequent recession.
The route to sustainable growth is not continued
bailouts for bankers and financial innovators who have
contrived ways to undervalue risk. Japanese bank regulators
demonstrated that by allowing banks to hide toxic
waste on their balance sheets during Japan’s “lost decade”
of the 1990s. If discouraging such behavior entails a recession,
then it is clear that risk underpricing has become all
too widespread. The same is true if avoiding a recession
means still more risk-taking, higher inflation, or both. If
the Federal Reserve continues to moderate the economic
slowdown tied to credit problems with appropriate—
non-inflationary—interest rate cuts, the economy will
return to a viable, stable, long-run growth path like the
one that has generated an unprecedented period of
prosperity during the last twenty-five years.
- 4 -
#22364
The cost of avoiding
recession after the
biggest housing bubble
in American history has
burst is too high. It will
involve rewards to those
who took excessive risks
that will only result in
more underpricing of
risk in the future, and
therefore larger bubbles
and, ultimately, a more
unstable economy.


China Junk?

Where a product is made can be informational, but only if you have the context. Five years ago, I wouldn't have bought a guitar made in China; now I have three. Twelve years ago, I wouldn't have bought one made in Korea; now I have five. The reason? They were bad then, but they're good now.


Labels and Liberals

Liberals should have learned their lesson on government imposed labeling when the USDA defined 'Organic' with less strict criteria than what much of the organic industry already used. Thus allowing many more products to be labeled 'USDA Organic' than was ever allowed under private certification.

Government intervention in labeling is unnecessary and doesn't actually provide any additional useful information.




A New Era

Nicolas Sarkozy has proclaimed a new era in the often troubled relationship between the United States and France, urging Washington to "trust Europe ", and throwing his weight behind tough new sanctions to force Iran to halt its uranium enrichment programme.






Iranagans

The Confrontation With Iran In The Calculations Of Us Presidential Candidates
Raghida Dergham Al-Hayat - 02/11/07//

NEW YORK: Iran has begun to take the place of Iraq as a leading topic of interest in the early stage of the US presidential election campaign. Attention is shifting from the actual war that the US is waging in Iraq to scenarios for war with Iran, most of which involve military strikes at the infrastructure of the Iranian regime and its nuclear facilities.
There is considerable division and confusion among the public and within the Democratic and Republican parties. Although the majority of Americans are angry at the administration of George W. Bush because of its war in Iraq, half of Americans, at the least, support military strikes against Iran to prevent it from acquiring a nuclear military capacity, according to the polls. The other half are made up of a majority that only knows it hates what the US administration is doing in Iraq and blames it for beating the drums for a war with Iran, and a minority that calls for dialogue between the White House and the Iranian government, with no conditions, and bases its expectations on the good intentions of Iran.

Seasoned observers of election campaigns expect the need of the US voter for a president able to protect national security will grow, especially during a period of anxiety about the situation in Iraq and fears about Iran's nuclear aspirations. This means that the candidates who play on hatred of the hawks in Bush's administration and speak critically of extremism might find themselves suddenly confronting a hawkish public opinion, demanding guarantees of national security and sole superpower status. Most Americans do not want to submit to the blackmail of the US predicament in Iraq and do not want the US to be demeaned; they support the country no matter how much they oppose the administration and are upset with the president. Certainly a portion of Americans want to leave Iraq and the Middle East, and support US isolationism instead of waging wars and generating hostility to Americans. There is also a portion of the public that believes it's too late for this option, and that the US cannot submit to intimidation or running away from a threat.

There are many important differences between the situation four years ago, when the administration acted unilaterally to invade and occupy Iraq, and the situation today, with its imminent, studied confrontation with Iran in the person of President Mahmoud Ahmadinejad and the ruling institution, and rhetoric such as that used by Ali Fahdavi, Deputy Commander of IRGC Naval Force, to build up the Bassij religious militia that "martyrdom" militias will be able to block navigation in the Gulf and the strategic Straits of Hormuz. The majority of Americans do not want to see the US gamble by going it alone in its war with Iran. They do not want an invasion or an occupation. They do not want to resort to military action before diplomatic options and negotiations are thoroughly attempted. However, this majority also doesn't want negotiations for the sake of negotiations, as Iran takes steps to acquire military nuclear capability. This majority doesn't want Ahmadinejad to act arrogantly regarding America's national security and don't want the US military to remain quiet and cover up the targeting of US troops in Iraq by the Revolutionary Guard via its octopus-like relations.
The White House has announced sanctions against the Revolutionary Guards and those dealing with them; this is a warning to all that this is the last phase of diplomacy. These sanctions will hurt those states and firms that have assumed that they can continue to trade and be partners with the Islamic Republic, while continuing at the same time their relationship with US financial institutions. It is a warning to China and Russia that the patience of the US is beginning to run out.

These bilateral sanctions are not only in fact a harsh message involving harmful measures to Iran, but also a call to China and Russia to take the matter seriously. If conditions deteriorate and lead to military operations against Iran, the US administration will be able to blame Russia and China for stalling when it came to being firm with Tehran and evade what was previously agreed to by the remaining members of the UN Security Council regarding gradual sanctions if Tehran continues to reject the suspension of uranium enrichment, as stipulated by UN Security Council resolutions.
The positions of Russia and China might mislead Iran more than helping it, if Moscow in particular continues to reject the implementation of its promises and refuses to exercise serious pressure on Iran to halt its maneuvering. Also, the positions taken by the director of the International Atomic Energy Agency, Dr. Mohammed El-Baradei, are as dangerous as they are misleading to the Iranian government; these stances are leading it into thinking that El-Baradei will protect it from being held accountable, and that in the end it will be able to arrive at a "big deal" regarding the relationship of the Islamic Republic with the west in general and the US in particular.

If El-Baradei is able to obtain promises from Iran to halt its use of regional cards, in Iraq, Palestine and Lebanon, at the expense of Iraqis, Palestinians and Lebanese, perhaps he will be able to go to the US and the west with a package of elements of this "big deal." If he is able to extract firm promises that Iran will accept all of the constraints on its nuclear program, and halt the supplying of militias with arms and weapons in Iraq, Palestine and Lebanon, he will then deserve a big Nobel peace prize. But if he acts on the basis that there is no option other than dismantling the Security Council's decision by removing the demand of "suspension" of uranium enrichment, so that the Iranian regime can save face, he will be encouraging this regime toward arrogance and will be misleading it as well. The dangerous thing is the Dr. El-Baradei might be misleading, whether or not on purpose, Arab public opinion with his stances on the Iranian nuclear issue and the tone of confrontation that he adopts with the west in general and the White House in particular. If he believes that he will be an Arab and Muslim hero, why doesn't he use his position to ask for putting the question of Israel's possession of nuclear weapons on the table?

El-Baradei and the Russian leadership can use their influence with Iran to notify Tehran of the seriousness of a countdown to measures being taken against it, if it continues to challenge the west and be obstinate regarding the nuclear issue, and in escalation, providing arms, and incitement on other regional fronts. By doing this they would save the Middle East from a number of wars, not just military strikes against Iran. These strikes, if they come, will not just be American; there are indications of the readiness of a number of European states to support the US' moves. Thus, on the contrary to what took place in the Iraq war, the decision and the US measure will not be unilateral; they will follow the exhaustion of all means of preserving a consensus in the Security Council and all diplomatic attempts, including sanctions, to end the crisis.
Therefore, the Russian and Chinese leaderships should understand the message and head toward a serious and important discussion with the US, France and Britain, as well as Germany, about the necessary qualitative jump in how to deal with Iran. The time of maneuvering, grandstanding and negotiations about trifle issues has ended, and it is now time to talk about big deals.
American candidates in the primaries, despite the grandstanding among them, all hope that the Iran crisis is dealt with in one way or another and that they do not inherit the Iranian issue as it stands today. Some of them, such as Democrat Barack Obama, avoid providing a clear answer about what to do with Iran. Some, like Republican Rudy Giulani, make fiery statements and surround themselves with neo-conservative advisors, including those who have deep hostility to anything that is Arab or Muslim.

If we think about a candidate who would be able to protect American national security, there is talk of Democrat Hillary Clinton and Republican John McCain; both talk about protecting national security, each in his or her way, and both can be classified as quasi-hawks that are necessary and logical at a time when the US needs a strong president, not a dove that doesn't know how to fly.
None of the Democrats has put forward a cohesive and clear program that answers the important question with the necessary frankness and depth: What to do about Iran? McCain has taken positions that angered some of the public, when he supported increasing the number of US troops in Iraq, thus taking a brave stance of leadership and adherence to what he believes in. His biggest enemy is that he hasn't raised enough money to run a campaign that has a year to go. In a time of fear of coming wars, American voters might come up with some non-traditional surprises and select the person who allows them to feel save and a bit secure.
Hillary Clinton is hated to a certain extent, and she is a leading candidate for the position of showing the decisive and required leadership to guarantee US national security, and has enough money for her campaign. However, the Democrats' control of Congress, in addition to a series of mistakes by the Democratic leadership of Congress, might lead to a decision that might appear astonishing, as American voters are afraid of leaving the country in the hands of one party that is making serious mistakes.

Based on this, the election surprise might see the Republicans retain the White House, despite all of the indications that the majority of Americans have a strong desire to throw them out of the White House in anger and protest over what George W Bush has done in Iraq.
All of the talk about Social Security, the economy, debt, health insurance, and education is certainly important, but the truth is that Iran is appearing on the surface of the US presidential election, not for the first time. However, on this occasion, Iran will be an element that gathers Americans together because of its excessive behavior.
Israel also has a position in these elections, not just in terms of the peace process and negotiations with the Palestinians, but also in terms of the region's war scenarios.
In a report last week to the Security Council on the implementation of Resolution 1701, the UN secretary general reported on positions by Israel vis-à-vis the arming of Hezbullah by Syria and Iran, which was intriguing and frightening. Israel said that "the nature of the weapons that the party has and their scope constitute a strategic threat to its security and the safety of its citizens." An interpretation of the language of "strategic threat" traditionally leads to military measures.
The smell of coming wars is in the air, perhaps, is not a clear indication of the path of the issues guiding this war. There is talk about a third world war, and there is talk of incitement through financial supplies and weapons, for wars that aren't sectarian in the traditional sense, between one sect and another, but sectarian in terms of fighting and killing within the ranks of a single sect.
The White House should be aware of the mistakes of the past, regarding its war against Iraq. It undertook this war by completely ignoring the centrality of treating the Palestinian issue in the minds of Arabs and Muslims. Therefore, it gained hostility to the US, suspicions about its goals, resentment of its adventures, accusations of using double standards, and the lodging of a basic accusation against it: deliberately destroying an Arab state and dismantling it, perhaps dividing the country in order to control oil and guarantee Israel's superiority. Everything said by leading Bush administration figures about the war in order to spread democracy in the Arab world has come across as nonsense in the minds of Arabs. Every time the architects of the war discuss the war against Iraq as being about achieving the goal of a "Shiite power" is interpreted as merely another American investment in inciting sectarian wars and using sectarian division for American ends.
If American voters have the right to affect the administration, or the candidates for president, the first and most important thing they must call for is avoiding the mistakes of provoking Muslims and popular Arab sentiment through determination and showing credible firmness to find a just and permanent solution for the Palestinian issue. Everyone knows that the key to a solution is in the US taking the decision to inform Israel that the time has come to finally agree on what the entire international community supports, the Road Map to establishing a Palestinian state.
There are other, central and fundamental issues for US voters, who must make the effort to understand and absorb their meaning. Lebanon, for example, might appear to be a mere marginal issue in the discussion of American public opinion makers, but in fact it is one of the most important elements of the spider's web, and an arm of the Iran octopus. Perhaps through Lebanon, one of the most important messages can be sent to Iran. Thus, there are those who think that the destination of the necessary US military strike is not necessarily Iran first, but Syria, since it is the vital artery through which Iran's regional aspirations are achieved, and because it is the easiest of targets, as a merely dependent player.








Should the government bail out borrowers in trouble?

More than 2 million borrowers will lose their homes to foreclosure because of subprime mortgage lending in recent years. With the housing market booming, lenders enticed many lower-income people into buying homes they couldn't afford by offering adjustable-rate mortgages (ARMs) with temptingly low initial teaser interest rates. Many loans didn't require down payments or documented proof of income. Moreover, with real-estate prices rising many homeowners used the higher value of their homes to get second mortgages to pay for extras like remodeled kitchens. But this year the housing market crashed and the party ended: The low teaser loans reset at higher interest rates, and many borrowers defaulted on their new, higher mortgage payments. When the dust settles, investors who bought mortgage-based securities stand to lose $160 billion or more. Congress and the Bush administration are debating how to help borrowers keep their homes and whether tough, new lending standards are warranted




November 2, 2007

Fed pumps the US financial system

The Federal Reserve pumped $41 billion into the U.S. financial system Thursday, the largest cash infusion since September 2001, to help companies get through a credit crunch.

The action comes one day after Fed Chairman Ben Bernanke and all but one of his central bank colleagues voted to slice a key interest rate for the second time in six weeks to protect the economy from the ill effects of collapse in the housing market, aggravated by the credit troubles.




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