Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Thurs 11.20.2008
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered." --- Thomas Jefferson 1802
DOES GOLD HAVE REAL VALUE? Where are gold prices headed? So what has Thomas Jefferson got to do with the price of gold? ..... read on...... Gold stirs a great debate in the investment world: At one end are those who believe it is a useless relic with no investment value. At the other end are those who "religiously" believe it is the only real money. Warren Buffet has an amazing way with words: "Gold gets dug out of the ground in Africa, or some place. Then we melt it down dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."1 The insanity of gold's role as money probably can't be articulated any better than that. On the other hand, J.P. Morgan simply stated "Gold is money and nothing else."2 Both speakers understand the nature of money....one is alive today, one is an historical figure. Will modern advancements make gold useless or will history return gold to its historic role as money?
Banker Manipulation Of Gold And Silver Prices Further Exposed Commodities experts are in agreement that the price of gold and silver is being manipulated by bankers and government officials in order to halt a mass abandonment of paper currencies and the debt based economy. The New York Post today carries a column by John Crudele declaring that there is a global run on gold coins and that demand is not being met by government mints.
Reflation Challenge & Gold A major challenge looms large on the immediate horizon. The USEconomy must be reflated in order to avoid collapse. Debts have become a crippling factor. Liquidation of speculative trades coincides with economic retreat, and hedge funds are under attack by their creditors (largely Wall Street firms) while major companies shed workers by the tens of thousands. When asked about economic prospects, a standard answer lately of mine has been to observe important signals not of recession but of potential disintegration. Almost all of the economic data, almost all of the Fed regional reports, almost all of the consumer sentiment indexes, almost all of the jobs data, almost all of the housing foreclosure data, is negative. The most dangerous and disgusting aspect of the current rescue initiatives is that almost all Dept Treasury and USFed actions are not revealed via any disclosure at all, nothing. Despite demands for transparency, nothing is shared on detail. Corruption and fraud usually thrive in such an environment.
Jim Rogers has gold coins in his pocket
The Six Biggest Myths about Gold Gold. People either love it or hate it. There aren’t many who feel ambivalent toward it. Unfortunately, gold is deeply misunderstood by investors, and that misunderstanding is hurting their portfolio returns. Many in the investment community trot out the old myths about gold: that it is a bad investment; that it is very risky; that it is not a good inflation hedge. But is there anything behind these assertions? If investors take the time to examine the facts, these commonly held beliefs simply do not stand up to scrutiny. It is precisely because these myths have become so prevalent that gold is still undervalued. Once the general public realizes these beliefs are not valid, the price of gold will be much higher.
Jim Rogers 2
The Great Deception As Gold Hit All Time Highs Amazingly, while gold and other commodity related stocks continued to be sold off to levels that are at deep discounts to their intrinsic value in October, gold continued to break to new all time highs in most major currencies. On October 9th and 10th gold recorded new all time highs in many currencies including the Euro, the Australian Dollar, British Sterling, the Indian Rupee, the Russian Ruble, the South African Rand and many others. The Dow Jones Industrial Average Stock also recorded a multi decade low in terms of gold. Investors are getting a very much skewed view of gold’s performance if they are viewing it in terms of the US Dollar or Yen.
The Dollar Trap Part II: Mutually Assured Financial Destruction The current structure of the Bretton Woods agreement with the US dollar as the dominant reserve currency is not sustainable unless the rest of the world is willing to accept a form of neo-colonialism. The developed nations are holding approximately 70% of their reserves in US dollars. The rest of the world knows it must find an acceptable substitute for the dollar as the reserve currency. The US does not wish to change the status quo for several reasons. First, it provides an automatic funding mechanism for incredibly large budget deficits that would collapse without this mechanism as they are now unsustainable. Additionally, the US economy has become badly distorted with an outsized financial sector as a percent of GDP created to manage this artificial reserve construct. Change will be painful for all. Yet change must and will come, even as the US resists that change and uses a type of Mutually Assured Financial Destruction policy to maintain its hegemony.
Jim Rogers 3
GOLD IN THE LOW $600s? Of late, I have read a number of analysts, Jim Rogers even, who have expressed the view that gold could dip to the mid- to low $600 level. Could happen, but I think not. Already, buyers of physical gold are finding anything near $700 to be cheap and so are helping to build a floor under the monetary metal. On that topic, a friend sent this item along last week…
Panicked investors send gold demand up 56% Demand for gold smashed the previous record in the three months between July and September as fearful investors switched funds from the stock market and savings into ingots and coins, often storing them at home as their trust in banks fell. New figures from the World Gold Council (WGC) show that investment demand for gold rose 56 per cent to 382.1 tonnes for the third quarter as investors sought safe havens away from the stock market turbulence.
1800-Point Plunge Coming for Dow? If the Dow Industrials fail to hold above 7995, we’re projecting a whopping 1800 points more downside over the near term, to at least 6195. The target comes from a forecast that went out to subscribers on October 22, when the blue chip average was trading above 8500. At the time, we projected downside to at least 7995, a Hidden Pivot “midpoint” associated with the lower target at 6195. According to the Hidden Pivot Method, a decisive breach of the midpoint implies that the target itself will be reached, as it was yesterday. Moreover, if support comes precisely at the midpoint, its subsequent breach would imply that the lower target is likely to be reached with equal precision.
Jim Rogers 4
China Tops Japan in U.S. Debt Holdings Beijing Gains Sway Over U.S. Economy China passed Japan to become the U.S. government's largest foreign creditor in September, the Treasury Department announced yesterday, reflecting the dramatic expansion of Beijing's economic influence over the American economy. China's new status -- it now owns nearly $1 out of every $10 in U.S. public debt -- means Washington will be increasingly forced to rely on Beijing as it seeks to raise money to cover the cost of a $700 billion bailout. China, in fact, may be the government's largest creditor, period. The Treasury does not keep records on domestic bond holders. But analysts said China's holdings are so vast that the existence of a larger stakeholder in the United States now seems unlikely.
China Plays a Better Long Term Hand As Peter Schiff and I have long warned, America's reliance on borrowing and consumption to fuel economic activity would result in the wholesale destruction of national wealth. Until recently, the dissipation was largely invisible to most consumers. However, the ongoing plunge in real estate and equity prices and newly released statistics concerning retail sales, consumer confidence and employment have now made it plain to most Americans that their own wealth has been seriously, and perhaps permanently, degraded. In response, they are now hoarding cash and reevaluating their spending habits.
In times of crisis, new global giants still look to US America still dominates the business of managing the world's finances despite the wealth accumulation of emerging markets The cataclysmic events on Wall Street have shelved, probably for some time to come, two fashionable topics of macroeconomic debate. The first has been over not merely whether, but how fast, economic power would shift from the United States to the “new wealth-creators” - China and, down the line, India, Brazil and even resource-rich Russia and aspiring financial market newcomers, such as Dubai.
The Art of Deception – Hank Paulson Speaks The key problems that we face are all expressions of the fact that our monetary system is based on debt, and this enforces an exceptionally short-term investing and planning horizon, along with the need for continuous exponential expansion. Thus our primary ailment today is a failure of our money system. Practically everything else that we read about today – bank failures, foreclosures, rapidly depleting resources, etc – are merely symptoms of this failure.
The Never-Ending Bailout and the End of American Economic Dominance Our political leadership—folks like President George W. Bush, Treasury Secretary Henry Paulson, Rep. Barney Frank, D-Mass., Sen. John McCain, R-Ariz., and President-elect Barack Obama—told us that the government would save us. They said that the economic crisis was so dire, so grim, that we needed to allow the government to spend our money to bail out Wall Street. They stated that Paulson, with full authority and no oversight, would be able to right the ship.
America’s Future Foreign Policy Is Already Here What not to expect with the change in the United States' presidential administration. Barack Obama said on the campaign trail that he wasn’t afraid to talk with America’s enemies. Now those enemies want to hold him to his word. Shortly after Mr. Obama was elected, Mahmoud Ahmadinejad offered congratulations. The Iranian president said he hoped for the beginning of a new, more open relationship between the two countries—one predicated, of course, on the acknowledgment and acceptance of Iranian power.
Treasury Secretary Can’t Really Define ‘Financial Institution’ What is the definition of a financial institution under the Troubled Assets Relief Program (TARP), Treasury Secretary Henry Paulson was asked on Tuesday. He couldn’t give a specific answer. Rep. Jeb Hensarling (R-Tex.), a member of the House Financial Services Committee, told Paulson he recently read about a group of plumbing contractors who were applying for TARP funds. They wanted to use the money to refurbish foreclosed properties, and they made the case that doing so qualified them as a financial institution.
Jobless claims jump unexpectedly to 16-year high Jobless claims jump unexpectedly to 16-year high as labor market weakens rapidly New claims for unemployment benefits jumped last week to a 16-year high, the Labor Department said Thursday, providing more evidence of a rapidly weakening job market expected to get even worse next year. The government said new applications for jobless benefits rose to a seasonally adjusted 542,000 from a downwardly revised figure of 515,000 in the previous week. That's much higher than Wall Street economists' expectations of 505,000, according to a survey by Thomson Reuters. That is also the highest level of claims since July 1992, the department said, when the U.S. economy was coming out of a recession.
Bank fears over home loan aid Government-backed efforts to make it easier for homeowners to avoid foreclosure by modifying their mortgages could further depress the value of mortgage-backed securities and force banks to take more writedowns, industry executives say. Prices for securities in the $11,000bn market for residential mortgage debt had already taken a big hit last week when the US Treasury decided against using its $700bn troubled asset relief programme (Tarp) to buy toxic assets.
Saudi prince increasing stake in Citigroup Saudi Prince Alwaleed, who currently holds less than a 4% stake in Citi, has been buying shares of the company, believing they are undervalued. Saudi Prince Alwaleed bin Talal says he plans to increase his stake in Citigroup to 5%. Prince Alwaleed, who currently holds less than a 4% stake, has been buying shares of Citi believing they are undervalued and that the Manhattan-based bank has been taking necessary steps to improve its operations amid the ongoing credit crisis.
GMAC files for bank status The money-losing finance company GMAC said on Thursday it has filed to become a bank, and its bonds surged as it joined the growing list of lenders making such a move in a bid to secure U.S. Treasury funds. Detroit-based GMAC said its application for funds from the government's $700 billion Troubled Asset Relief Program is conditional on it changing its status to a bank holding company. The company, which had previously said it was contemplating becoming a bank, did not disclose how much it might seek from the government.
Dow Closes Below 8000, Hits 5-Year Low Stocks plummeted yesterday, sending the Dow Jones industrial average to a five-year low after poor economic data was compounded by gloomy pronouncements by the Federal Reserve. The Dow fell 427.47 points, or 5.07 percent, to finish the session at 7997.28, closing below 8000 for the first time since 2003, a technical barrier that dashed investors' hopes that the worst of the market sell-offs were finished. The Standard & Poor's 500-stock index also hit a five-year low, falling 52.54 points, or 6.12 percent, to 806.58.
HDFC Avoids Subprime Folly With $30,000 Mortgages, Strict Rules Housing Development Finance Corp., India's biggest mortgage provider, has dodged the bad loans that plagued banks in the U.S. and Europe and plans to increase lending more than 20 percent this fiscal year, said Managing Director Keki Mistry. Tighter guidelines than at U.S. lenders means Indian mortgage companies aren't as vulnerable in a slowing economy, Mistry said in an interview in Mumbai yesterday.
Stocks Slump As Signs Point To Harder Times Key Indicators Suggest Deep Recession Businesses cut prices at a record rate and builders started fewer new homes last month than anytime on record, according to new government data, as the outlook for the economy continues to dim. The data helped spur another terrible day for the stock market, as did a projection of more hard times ahead by leaders of the Federal Reserve. A serious recession now appears all but assured.
Credit Markets Fall to Records as Confidence in Economy Wanes Credit markets from commercial mortgages to junk bonds fell to record lows as concerns grew that the slowing economy would overwhelm government efforts to stem the worst financial crisis since the Great Depression. The average yield on high-yield, high-risk debt rose beyond 20 percent for the first time in two decades. Top-rated securities backed by subprime and commercial mortgages fell and loan prices declined as U.S. automakers lobbied Congress for government aid to stave off bankruptcy.
Senator Richard Shelby: Let Big 3 go Chapter 11
Automakers Press High-Stakes Plea for Aid Senators Greet CEOs' Request With Skepticism The chieftains of Detroit's Big Three automakers made a desperate appeal to skeptical lawmakers yesterday for $25 billion in emergency loans to forestall the possible collapse of the domestic auto industry, offering to cut their own salaries in exchange for government aid. But the chances were looking increasingly bleak that Congress would quickly approve a lifeline to help the firms survive some of the most devastating economic conditions since Henry Ford founded the Ford Motor Co. in 1903.
GM shares drop as bailout hopes dim Shares of General Motors Corp fell more than 8 percent to hit a new 66-year low on Thursday as the prospects dimmed that lawmakers would reach a compromise on a proposed $25 billion bailout for U.S. automakers before Congress adjourns this week. Without a deal this week, any bailout is likely to have to wait until the new Obama administration takes over in January, by the time GM has warned it would run desperately short of its minimum cash needs.
Auto Chiefs Fail to Get Bailout Aid The chief executives of Detroit’s Big Three automakers departed Washington empty-handed on Wednesday night after two days of pleading for a financial lifeline on Capitol Hill. As the public hearings and intense behind-the-scenes negotiations appeared to come to naught, the Senate majority leader, Harry Reid of Nevada, went to the floor seeking to bring up the Democrats’ plan to provide $25 billion in aid from the $700 billion financial bailout program. The Republicans objected, effectively killing the plan.
Before the Bust, These CEOs Took Money Off the Table $$ The credit bubble has burst. The economy is tanking. Investors in the U.S. stock market have lost more than $9 trillion since its peak a year ago. But in industries at the center of the crisis, plenty of top officials managed to emerge with substantial fortunes. Fifteen corporate chieftains of large home-building and financial-services firms each reaped more than $100 million in cash compensation and proceeds from stock sales during the past five years, according to a Wall Street Journal analysis. Four of those executives, including the heads of Lehman Brothers Holdings Inc. and Bear Stearns Cos., ran companies that have filed for bankruptcy protection or seen their share prices fall more than 90% from their peak.
U.S. Economy: Consumer Prices Fall, Raising Deflation Danger The cost of living in the U.S. fell by the most on record and construction began on the fewest homes ever last month, evidence the economy is in the worst recession in at least a quarter century. The consumer price index plunged 1 percent last month, the most since records began in 1947, the Labor Department said in Washington. Commerce Department figures showed housing starts tumbled to an annual rate of 791,000, indicating the industry’s contraction may extend into a fourth year.
The Road to Financial Ruin: We Have to Spend Money Now When just about all economists agree, should we rejoice or be scared? During the Weimar Republic, economists at the Reichsbank argued that printing money to finance a war was "exogenous" to the economy and thus not inflationary. Hyperinflation in the ensuing years proved them wrong. We tend to think we are so much smarter today. Economists know how to run regression models; in the absence of a historic precedent, some economists know how to draw shifting supply and demand curves. But common sense seems to be missing in the toolbox of all but a few.
Economic data cast pall over Wall Street More bleak economic data and fears that Washington could reject the car industry’s pleas for a bail-out pushed Wall Street stocks lower on Wednesday, although trading was once again volatile as investors scoured for bargains amid the glut of downbeat news. The cost of living in the US plunged 1 per cent last month, according to the Labor Department, twice as large as forecast and the most since records began in 1947. So-called core prices, which exclude food and energy, unexpectedly fell for the first time in more than 25 years. Investors feared that although they might afford hard-pressed consumers some relief, the falling prices could further dent corporate earnings.
Citi Agrees to Acquire SIV Assets for $17.4 Billion Citigroup Inc., the fifth-biggest U.S. bank by market value, agreed to acquire $17.4 billion of assets held by structured investment vehicles advised by the company. Citigroup said today in a statement that the value fell from $21.5 billion as of Sept. 30, reflecting market declines of $1.1 billion and $3 billion in debt that matured or was sold. SIVs, which Citigroup invented in 1988, emerged 15 months ago as one of the first major strains in credit markets rocked by record high foreclosures on subprime mortgages. Citigroup, the biggest manager of the funds, has reduced the assets of its SIVs from $87 billion in August 2007.
Disclosure Demands for Credit Swaps Said to Increase U.S. regulators may require banks and insurers to disclose data about all credit-default swap trades to a central registry to boost transparency in the $47 trillion market, a person with knowledge of the talks said. The Federal Reserve Bank of New York and the U.S. Securities and Exchange Commission want information about credit-default swaps that don't meet standard terms to be disclosed to a warehouse that would record all trades, said the person, who declined to be identified because the discussions are private. The rules would offer details about the types of contracts that almost drove American International Group Inc. into bankruptcy
GOP congressman: 'It is not your money' Michigan lawmaker trying to help Detroit makes stunning statement about tax dollars A Republican congressman seeking a $25 billion bailout of the troubled U.S. auto industry made a stunning statement about taxpayer funds to benefit Detroit, claiming, "It is not your money." Rep. Joe Knollenberg, R-Mich., made the remark during a discussion with Fox News anchor Neil Cavuto yesterday as the pair debated sending billions of federal dollars to prop up the Big Three carmakers.
Cavuto: Congressman Joe Knollenberg . . . . its not your money!
Oil prices at near 22-month low Crude and gasoline inventories rise in the latest week, according to government reports. Oil prices fell to a nearly 22-month low Wednesday after a government report showed a bigger-than-expected rise in crude inventories, reinforcing concerns that demand for petroleum products is waning. U.S. crude for December delivery fell 77 cents to $53.62 a barrel. The last time prices were this low was January 2007. Just before the report, the contract - which expires Thursday - was up 63 cents at $55.02.
Oil dives below $50 as investor confidence sinks Oil plunged below $50 a barrel on Thursday, deepening losses over the previous four sessions as battered financial markets reflected ever lower confidence in the world economy and evidence mounted of falling fuel demand. U.S. crude fell $3.71, to $49.91 a barrel by 9:02 a.m. EST, the weakest level since January 2007. London Brent crude shed $3.10 to $48.62 a barrel. As economic slowdown has destroyed fuel demand, oil companies plan to store millions of barrels of oil in the hope economics will improve.
Oil falls below $54 to lowest point since Jan. 2007 Oil prices slipped further Wednesday, dipping below $54 on fears of global economic weakness that have sent crude down more than 60% in four months. But analysts suggested that prices might be bottoming out as they moved closer to the psychologically significant $50 mark. Light, sweet crude for December delivery was down 60 cents at $53.79 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. The contract Tuesday fell 56 cents to settle at $54.39, the lowest since January 2007.
Federal Reserve Cuts Economic Forecast, Hints at Rate Cuts The Federal Reserve is increasingly concerned with stalling economic growth and the prospect of deflation. Minutes from the Fed’s October meetings, at which the central bank lowered interest rates by a half percentage point, reveal Fed Chairman Ben Bernanke and his colleagues don’t expect the economy to recover until mid-2009. The minutes were seen by many economists as a hint of more interest rate cuts or further interventions.
The Ramifications of Bankruptcy at GM, Ford, and Chrysler Much is being made in the press about the financial problems at GM, Ford, and Chrysler. For a number of years, the US automakers were the backbone of the US economy, providing jobs and products that were part of the rise of the middle class not just in this country, but abroad. A car was looked upon as a status symbol and along with the national highway system allowed Americans the freedom to travel and a symbol of wealth and stature.
Boeing cuts 800 Kansas jobs Airplane maker Boeing Co. says it plans to cut about 800 positions at a facility in Wichita, Kan., next year. The Chicago-based company says the reductions are a result of some programs ending and a delay in a U.S. Air Force tanker replacement program. The layoffs will affect managers, as well as salaried and hourly workers. Boeing says it will deliver 60-day layoff notices to about 76 employees on Friday. The rest of the layoffs will continue throughout next year.
Fear and Loathing in La Jolla A FEW days ago, I spoke to a large gathering of investors in the San Diego suburb of La Jolla, and was startled by the audience’s furious anger at the powers that be. The Wall Street-Treasury-Federal Reserve axis is hated, loathed and feared by these people, who were, as far as I could tell, largely Republicans, almost all well to do - or formerly well to do. They are in a state of extreme agitation about how the current mismanagement of our financial system has played havoc with their own personal financial situation. In fact, they are among the angriest upper- and middle-class people I have ever seen. And the most frightened and worried. (In a way, they are now feeling the way ordinary workers have been feeling for years.)
GE moves to cut up to $2bn in costs at finance arm General Electric is to shrink GE Capital, its finance arm, in a move that could lead to $2bn in cost cuts, the sale of $90bn in highly leveraged assets and thousands of redundancies among its 75,000 employees. Under plans announced on Tuesday, GE Capital will create a separate US banking unit charged with gathering retail deposits mainly via the internet. GE has more than doubled its deposits from $20bn to $43bn this year in an effort to reduce its funding costs and lessen its reliance on short-term debt. The shake-up at GE Capital, which takes effect next year, comes after the division has been hit by credit-related writedowns and its exposure to the ailing US consumer.
Loan Prices Fall as Funds Forced to Sell, Default Risk Rises Prices of high-risk, high-yield loans fell as funds were forced to sell debt and expectations rose that more companies would default as rising unemployment drags down the economy. The price of the average actively traded leveraged loan fell 2.6 cents to 71.2 cents on the dollar since Nov. 13, according to Standard & Poor's LCD. Prices have slumped 4.4 cents since Nov. 4, reversing a rally of more than 8 cents on the dollar since the all-time low last month.
BASF cutbacks will affect 20,000 staff BASF, the world’s largest chemicals company, on Wednesday said it would reduce the working hours of one-fifth of its workforce, or 20,000 employees, and cut production at 180 plants until January, after carmakers and other customers “significantly” cut orders in past weeks. Jürgen Hambrecht, chief executive, warned the German company was “preparing for tough times” as he gave a profit warning for this year and said it was difficult to foresee how 2009 would develop as customers were hit by economic woes.
Movements to Silence Pastors and Reinstate the Fairness Doctrine Mr. William J. Federer, a Missourian, is one of the most cheerful people I have met. Despite this, Bill Federer’s writing always has a serious message. His latest book is entitled Endangered Speeches. In it he traces the effort during the 20th Century to assure that preachers were not involved in the political process. Federer points out that prior to 1913 preachers never gave the Internal Revenue Service or their 501(c)(3) tax-exempt status a thought because there was no mechanism which applied to them and from 1913 until 1954 most preachers simply ignored IRS, as there was no reason for them to be concerned.
The Legal Responsibility of Adult Children to Care for Indigent Parents Currently, 30 states have filial responsibility statutes that establish a duty for adult children to care for their indigent elderly parents. When enforced, the statutes can require the adult child to reimburse state programs or institutions that have cared for the indigent parent with either a one-time contribution or installment payments. Today, there is no uniform federal filial responsibility statute, and indeed, it may be difficult to enact one; but if even a few states began to more systematically enforce their laws, their action could help reduce the explosive growth of Medicaid’s long-term care benefit.
Western Navies May Get Tougher on Piracy After Tanker Seizure The seizure of a Saudi oil supertanker by Somali pirates may push Western navies to step up their actions against hijackers, military experts said. The North Atlantic Treaty Organization is reassessing its operations in the region and may adopt a tougher stance toward the pirates. The navies of India, Russia, Britain and Germany have all battled pirate vessels in the Gulf of Aden in the last 10 days alone. "This hijacking could really change the picture and we could see much more proactive rules of engagement," said Hans Tino Hansen, managing director of Risk Intelligence, a maritime security consultant based in Vedbaek, Denmark. "The whole focus on the problem has exploded."
Iran Said to Have Nuclear Fuel for One Weapon Iran has now produced roughly enough nuclear material to make, with added purification, a single atom bomb, according to nuclear experts analyzing the latest report from global atomic inspectors. The figures detailing Iran’s progress were contained in a routine update on Wednesday from the International Atomic Energy Agency, which has been conducting inspections of the country’s main nuclear plant at Natanz. The report concluded that as of early this month, Iran had made 630 kilograms, or about 1,390 pounds, of low-enriched uranium.
Barak Urges U.S. to Focus Less on China, Russia, More on Iran Israeli Defense Minister Ehud Barak said the U.S. and Europe should put aside differences with China and Russia over human rights and missile-defense issues to focus on working together to stop Iran from developing nuclear weapons. "The triad of nuclear proliferation, radical Muslim terror, and rogue states, epitomized in the Iran case, can be defeated only through a paradigm shift in international relationships," Barak said in an interview at the Defense Ministry in Tel Aviv late yesterday.
Sarkozy's fiscal meeting raises diplomatic hackles President Nicolas Sarkozy of France left the summit meeting on the financial crisis here last weekend in a triumphal mood, declaring that it had tamed the animal spirits of American capitalism. Then he went home and announced that he would hold his own summit meeting in a few weeks in Paris — on the same topic. That has raised hackles in diplomatic circles, not just because the meeting appears to compete with a planned gathering of 20 world leaders next April. Sarkozy's aggressive statements have put American officials on edge, with some saying that he seemed determined to turn the global crisis into a referendum on the ills of untrammeled capitalism.
Russia Suffers Plunging Reserves as Ruble Struggles Russia's foreign-exchange reserves are draining fast and may take almost a decade of economic stability with them. Russia's international reserves, the third-biggest after China's and Japan's, have fallen $122.7 billion, or 21 percent, since Aug. 8 as the central bank tried to shore up the ruble. At the same time, President Dmitry Medvedev, 43, has pledged more than $200 billion of tax cuts, loans and other measures to maintain economic growth, threatened by plummeting oil prices and investor flight.
Russia's Response to the Economic Crisis The United States of America is headed for a “crisis of its existence.” These were the words of a Soviet diplomat, speaking anonymously to Pravda in late July. A few days prior to this statement, at a meeting of Russian ambassadors convened by President Dmitry Medvedev, Moscow launched a new diplomatic offensive to push the United States out of Europe. A war between Russia and Georgia would provide the catalyst. Europe’s attention would be galvanized. Special negotiations between Moscow and Berlin, Moscow and Paris, Moscow and Rome, could move forward, and new security arrangements announced for the whole of Europe. The United States would be depicted as an irritant in otherwise good relations between Russia and Berlin. In the process, Washington would be gradually isolated.
Talks Continue as Bill Clinton Is Said to Accept Terms of Obama Team Former President Bill Clinton has agreed to all of the conditions sought by President-elect Barack Obama’s transition team to eliminate potential conflicts of interest if Senator Hillary Rodham Clinton becomes secretary of state, people close to the Clintons said Wednesday. Mr. Clinton accepted several restrictions on his business and philanthropic activities to remove any obstacle to his wife’s nomination if the cabinet job is formally offered and accepted, said the associates, who insisted that they not be identified because they were disclosing confidential negotiations. “I’ll do whatever they want,” Mr. Clinton said Wednesday at a public appearance.
Obama picks Daschle, Napolitano for Cabinet posts President-elect Barack Obama's top choice for secretary of homeland security is Arizona Gov. Janet Napolitano, multiple Democratic sources close to the transition told CNN on condition of anonymity. One source said he believed the final decision depends on the vetting of the Democratic governor, much like the selection of Eric Holder for attorney general. Also, multiple Democratic sources say billionaire Chicago businesswoman Penny Pritzker is Obama's choice for commerce secretary.
Obama insulted by al Qaeda leader IntelCenter, a counterterrorism organization, has just released a transcript of the latest message from al Qaeda's number two man, Ayman al-Zawahari, in which Zawahiri cites the words of Malcolm X to insult President-elect Barack Obama as a "house negro." By way of background, Malcolm X, the famous, black nationalist leader of the 1960s, told a parable drawn from American slavery of the "house negro" who "loved the master more than the master loved himself" and the "field negro" who hated the master. You get the picture.
Qaeda greets Obama victory with an insult In Al Qaeda's first response to the American election, Osama bin Laden's top deputy condemned President-elect Barack Obama as a "house Negro" who will continue a campaign against Islam begun by President George W. Bush. Appealing to the "weak and oppressed" around the world, Ayman al Zawahiri sought in a video to dampen enthusiasm for Obama's election around the globe by saying that the "new face" of America only masked a "heart full of hate."
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