Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Tues 02.17.2009
Federal obligations exceed world GDP Does $65.5 trillion terrify anyone yet? As the Obama administration pushes through Congress its $800 billion deficit-spending economic stimulus plan, the American public is largely unaware that the true deficit of the federal government already is measured in trillions of dollars, and in fact its $65.5 trillion in total obligations exceeds the gross domestic product of the world. The total U.S. obligations, including Social Security and Medicare benefits to be paid in the future, effectively have placed the U.S. government in bankruptcy, even before new continuing social welfare obligation embedded in the massive spending plan are taken into account. The real 2008 federal budget deficit was $5.1 trillion, not the $455 billion previously reported by the Congressional Budget Office, according to the "2008 Financial Report of the United States Government" as released by the U.S. Department of Treasury. The difference between the $455 billion "official" budget deficit numbers and the $5.1 trillion budget deficit cited by "2008 Financial Report of the United States Government" is that the official budget deficit is calculated on a cash basis, where all tax receipts, including Social Security tax receipts, are used to pay government liabilities as they occur.
Gold is Starting to Believe the Obama Administration Despite making loud headlines about stimulating the economy, the US government has been unable to raise the level of optimism among the general public, while the stock market seemed to drop into a deep state of apathy. Last week we received the long-awaited economic stimulus packet as well as the so-called plan for the rescue of the US financial system. We have already voiced our skepticism regarding the structure of the stimulus and its potential effect on the economy in a prior article. As far as the size of the $787 billion package, it is clear that it is too small and too spread out into 2010 and beyond to be called a stimulus. $787 billion is just 5.6% of the GDP and when spread over two years will account for just 2.8% at a time when many industrial economies around the world are contracting by 5-10% per year. It can only be called a life support package, not a stimulus.
Platinum Declines in Asia on Auto Industry Woes; Gold Advances Platinum dropped in Asia as a slumping automotive industry may curb demand as carmakers slash profit forecasts, output and jobs. Gold gained. Nissan Motor Co., Japan's third-largest automaker, today said it will stop output at three plants for as much as 13 days after demand plunged. General Motors Corp., racing to complete a report asking the U.S. to increase a $13.4 billion aid package, may close or sell as many as four plants under a spending-reduction drive in Europe.
Obama's Opening Salvo There is nearly universal agreement that the opening salvo of the Obama Administration's campaign to restore health to the financial system, delivered this week by new Treasury Secretary Geithner, fell with a loud and ugly thud. The most common criticism is that the announcement was short on detail. What is abundantly clear, however, is that the new Administration intends to push spending back up to pre-crash levels and to fill the entire credit void that has disappeared into the black hole of the American financial system. Whether or not the prior levels of spending and lending were justified by market conditions then, or now, appears to be largely unexamined.
Ron Paul Discusses Stimulus on CNN American Morning 02/16/2009
How the stimulus bill affects you The $787 billion package might cut your taxes, make your health insurance cheaper, fix the roads you drive on and keep the best teachers in your children's schools. And that's just for starters. Here's an examination of how the economic stimulus plan will affect Americans. Taxes. The recovery package has tax breaks for families that send a child to college, purchase a new car, buy a first home or make the one they own more energy efficient. Millions of workers can expect to see about $13 extra in their weekly paychecks, starting around June, from a new $400 tax credit to be doled out through the rest of the year. Couples would get up to $800. In 2010, the credit would be about $7.70 a week, if it is spread over the entire year. A $1,000 child tax credit would be extended to more low-income families that don't make enough money to pay income taxes, and poor families with three or more children will get an expanded earned income tax credit. Middle-income and wealthy taxpayers will be spared from paying the alternative minimum tax, which was designed 40 years ago to make sure wealthy taxpayers paid at least some tax but was never indexed for inflation. Congress fixes it each year, usually in the fall.
Big-City Leaders Call Stimulus a Fine Start But Advocates Hope Funding Measure Is Just Down Payment on Broader Plan New York City Mayor Michael R. Bloomberg (I) has said the federal money from the economic stimulus plan could save 14,000 teacher jobs and 1,000 police officer positions he had planned to cut. The money could expand the subway system, avert hospital closures and create a new urban economy surrounding energy retrofitting, according to other officials. Across the country, urban leaders and advocates say the stimulus plan that President Obama is to sign Tuesday will create jobs in cities and blunt the impact of the economic crash. But they hope the funding package only begins to hint at the ambitious urban policy agenda Obama has articulated. "It's a down payment," said Trenton Mayor Douglas H. Palmer (D), the past president of the U.S. Conference of Mayors. "But we're certainly on the right track."
Late Change in Course Hobbled Rollout of Geithner's Bank Plan Just days before Treasury Secretary Timothy F. Geithner was scheduled to lay out his much-anticipated plan to deal with the toxic assets imperiling the financial system, he and his team made a sudden about-face. According to several sources involved in the deliberations, Geithner had come to the conclusion that the strategies he and his team had spent weeks working on were too expensive, too complex and too risky for taxpayers. They needed an alternative and found it in a previously considered initiative to pair private investments and public loans to try to buy the risky assets and take them off the books of banks. There was one problem: They didn't have enough time to work out many details or consult with others before the plan was supposed to be unveiled.
Money As Debt (1 of 5)
No excuses if Obama can't fix 'his' recession If, like John Maynard Keynes, you believe that spending, any spending, will revive a flagging economy, the freshly minted, 1,000-page American Recovery and Reinvestment Act of 2009, calling for $504 billion in deficit-financed spending, is for you. Well, not quite. It seems that most of the money will not be spent very soon. About 30% won't hit the economy until 2011, and the balance is likely to be tied up in the procurement processes of the federal and state governments until well into 2010, and beyond. Besides, much of the spending will end up boosting other economies - subsidies for wind machines will benefit workers in the other countries in which such machines are manufactured, not our very own horny-handed toilers. And much of the spending will not create jobs for the unemployed: laid-off car workers do not have the skills to design the software to manage the "smart grid" that is the apple of the greens' eye.
Mirror, Mirror on the Wall... We have been fortunate enough to make some important calls over the past ten years. The top of the stock market in early April of 2000; the beginning of the gold bull market in June 2000; 9/11 in November ten months before it happened; the Iraq and Afghanistan Wars; the beginning of the real estate bubble; the top of that market in June of 2005; the beginning of the subprime fiasco in 2006 and the beginning of the commercial real estate freeze. We also forecast the terrible financial conditions facing states and the freezing up of insurance and the municipal bond market. We called the recession in February 2007 and told readers to get out of the market at 14,000. That's with the exception of gold and silver and oil shares. The recession was right on schedule. The depression that began two weeks ago happened quicker than we had anticipated, but it is here and now.
Money As Debt (2 of 5)
Obama May Press Banks to Cut Mortgage Payments President Obama's plan to reduce the flood of home foreclosures will include a mix of government inducements and new pressure on lenders to reduce monthly payments for borrowers at risk of losing their houses, according to people knowledgeable about the administration's thinking. The plan, to be announced Wednesday, is expected to include government subsidies for reducing a borrower's interest rate, which a lender would have to match with its own money. But officials cautioned that subsidies for lower interest rates would not in themselves help many troubled homeowners, because lenders were still likely to view many of those borrowers as bad risks and refuse to restructure their loans. As a result, they have been casting about for sticks as well as carrots to persuade the lenders to take part.
Diluted to Oblivion, Dead Banks A hard time came when deciding upon a title today. "Dead Banks Walking" or "Insolvent & Motionless Yet Standing" or "Much Ado About No Credit" or "The Bank Vampires" or "The Primary Dark Syndicates" made sense. But what came to mind when a comment made by the Jackass in June 2008 on the Vancouver stage at a Cambridge House Metals & Mining Conference. My words to close a panel discussion on the banks were "Just wait, in several months you will see the entire US banking system go insolvent, its stock prices dwindle to nothing, as it will be diluted into oblivion!" It happened. The response by the USGovt, the USFed, Wall Street banks, and the USCongress will result in very little remedy since their first objective is to keep in place the cover-up to their gigantic fraud, much of which still eludes the financial press. By the time conditions worsen, rescues will not be the primary objective any longer. Rather, prevention of collapse will become the urgent priority. Desperate official actions will result in turning the corner on inflation, from the so-called deflation toward hyper-inflation. The gold & silver price will find release. Already, their prices are disconnected from the USDollar.
Money As Debt (3 of 5)
President's day A creepy feeling ushers in President's Day this year as the suspicion grows that nobody in charge of anything knows what what to do next. The usual yin-yang consensus has solidified in congress along party lines, both equally idiotic. In the White House, Mr. Obama is under excruciating pressure to "do something" as systems unravel and economies augur into darkness. Amid all the anxiety and raging cluelessness, one thing is clear: we're doing everything possible to evade reality.
Greatest Wealth Transfer since Joseph was in Egypt We are on the threshold of a major move in gold equities, which would probably lead the Gold index on the JSE (Johannesburg Stock Exchange) to all time highs of 7000 plus within the next 2 to three years. With GOLD on 2732 on 12 Feb 2009, this is where I want to invest my savings when I am not putting it in real money (by now most readers should know what is real money). GOLD has just broken out of a down trend that started in 2006, and this breakout also, just about, almost signals a full recovery of gold equities from their fall that started in March 2008. I hope you know by now that gold is in a bull market that could still run many years; therefore the 7000 estimate could be too low. It therefore follows naturally that your successful gold miners will follow the success of gold.
Money As Debt (4 of 5)
2009 Outlook, Part 3 Currencies: Policies of INSOLVENCY, aka Dominoes! In 2008, the currency markets offered some of the greatest opportunities of all markets. Every currency had substantial moves 'up and down' and many times BOTH ways, as deleveraging and stampedes of panic swept through the markets at different times. 2009 will be no different, only now we are going to look for sharp differences in two in particular. Those that exist in REAL MONEY will skyrocket and pretenders to that moniker will decline regardless of the country that issues them.
Still Looking for Rock Bottom in Markets Hong Kong container traffic slumped 28 per cent in January, car sales across Europe fell by 27 per cent, these are critical trade depression indicators. Equity markets have weakened but not retested the lows of late last year, while gold is on the way up yet not above $1,000 an ounce. Oil prices touched the low 30s last week. Talk of US house prices bottoming out by the end of the year excited some comment. But really the problem is that we can not see light at the end of this tunnel. That is what you might expect to see, or not to see, at the moment of maximum pessimism - the proverbial dark before the dawn. And yet the spark of optimism about the future is still missing.
Money As Debt (5 of 5)
Ratio Reversal: Re-thinking Fractional Banking Bill Gross of PIMCO makes the argument in his most recent "Investment Outlook" that the government needs to support asset prices to stop the hemorrhaging of the global economy. He argues that the TARP funds, while successfully instigating lending among large financial institutions on a limited basis, have not slowed the continued deleveraging by what he calls the "Shadow Banking System" continues to drag asset prices down. The reason, he says, is because government assistance cannot be diverted to the institutions in this class (hedge funds, investment banks and structured financial conduits) because they are invisible, and therefore such rescues would not pass public scrutiny.
How the Crash Will Reshape America MY FATHER WAS a child of the Great Depression. Born in Newark, New Jersey, in 1921 to Italian immigrant parents, he experienced the economic crisis head-on. He took a job working in an eyeglass factory in the city's Ironbound section in 1934, at age 13, combining his wages with those of his father, mother, and six siblings to make a single-family income. When I was growing up, he spoke often of his memories of bread lines, tent cities, and government-issued clothing. At Christmas, he would tell my brother and me how his parents, unable to afford new toys, had wrapped the same toy steam shovel, year after year, and placed it for him under the tree. In my extended family, my uncles occupied a pecking order based on who had grown up in the roughest economic circumstances. My Uncle Walter, who went on to earn a master's degree in chemical engineering and eventually became a senior executive at Colgate-Palmolive, came out on top-not because of his academic or career achievements, but because he grew up with the hardest lot.
Wall Street Execs Knew Madoff Was a Fraud Years Ago But Kept Silent There is no way that the top execs on Wall Street did not know Bernie Madoff was running a scam. No way. Why? Because once they heard he was pulling down those kinds of returns in all types of markets they would have had their own whiz kids climbing up his company's investment portfolio looking to see how he did it. They would want to do it too. It took Markopolos how many minutes to figure out it wasn't legitimate? But now you know why so few Wall Street firms lost any money with Madoff despite his 'superior returns.' Why did they keep quiet? Professional courtesy amongst scumbags is not likely, because there isn't any. More likely Bernie knew about some of their frauds, and that made him untouchable.
Madoff Wall of Silence KEPT MUM ON FEARS Senior executives at some of Wall Street's biggest firms were convinced Bernard Madoff was a fraud as early as 2005 - yet none alerted authorities, documents filed with the Securities and Exchange Commission reveal. Leon Gross, the former managing director in charge of worldwide equity derivatives research for Citigroup, told friends and colleagues on Wall Street in 2005 that he thought Madoff was being less than honest about the returns he could make for investors but did nothing to prevent the fraud. Likewise, Joanne Hill, Goldman Sachs' global head of equity derivatives research, believed there was something wrong with Madoff's investment scheme because the returns he boasted in marketing materials seemed too good to be true.
That Perk in the Sky Has Defenders on Land THERE are bad economic times. Then there are bad economic times made even worse by a furious public and political fallout against high-end spending. The luxury hotel industry, as I've said, was the first to feel this effect. It started with understandable public outrage last fall when the insurer American International Group ran up a hotel bill of $443,343.71 for an incentive junket for its salespeople at a fancy Southern California resort five days after accepting a big emergency federal bailout loan. The ensuing furor caused many corporate travel managers across the country to abandon the use of luxury hotels, partly for the sake of appearances.
Economy Strains Under Weight of Unsold Items The unsold cars and trucks piling up at dealerships and assembly lines as consumers cut back and auto companies scramble for federal aid are just one sign of a major problem hurting the economy and only likely to get worse. The world is suddenly awash in almost everything: flat-panel televisions, bulldozers, Barbie dolls, strip malls, Burberry stores. Japan yesterday said its economy shrank at an 12.7 percent annual pace in the last three months of 2008 as global demand evaporated for Japanese cars and electronics. Business everywhere are scrambling to bring supply in line with demand.
Fed's Duke: housing woes show tough rules needed PHOENIX (Reuters) - Federal Reserve Governor Elizabeth Duke said on Monday the crisis in housing highlights the need for vigorous enforcement of bank rules and questioned the wisdom of letting banks affiliate with commercial firms. In a speech to the American Bankers Association (ABA), Duke said bankers "have a responsibility to act in a safe and sound manner" and urged them to do more to help slow the pace of home foreclosures. She said that letting banks and commercial firms affiliate "threatens the ability of banks to continue to serve as effective and objective intermediaries of credit" by exposing them to risks that commercial affiliates take.
Why your home's value will keep falling The market is forecasting a further 14.5% drop in home values, and so far the feds haven't helped. Investors can dabble, but home sellers and potential buyers still have it rough. The housing collapse led the stock market and the economy into the cellar. And this crucial sector is headed deeper still, along with the value of your home. How low? One measure suggests a further 14.5% drop. "The problem we have right now is that our animal spirits are beaten down, and this is a fundamental problem," says economist Robert Shiller, the foremost expert on the U.S. housing market. And, he adds, the feds aren't helping. "The (Obama stimulus plan) has a good chance of not fixing that," he says. Though it's the largest such government initiative since the Great Depression, the announced stimulus certainly hasn't changed the psychological tone on Wall Street. Confidence in the Troubled Asset Relief Program and its ability to save banks from bad mortgage assets may be even lower.News circulated last week of proposed relief for some homeowners in default, but it would have little benefit for the majority of creditworthy Americans. And psychology is going to play the determining role in ending the housing crisis, as well as everything that has flowed from it.
California, Almost Broke, Nears Brink LOS ANGELES — The state of California — its deficits ballooning, its lawmakers intransigent and its governor apparently bereft of allies or influence — appears headed off the fiscal rails. Since the fall, when lawmakers began trying to attack the gaps in the $143 billion budget that their earlier plan had not addressed, the state has fallen into deeper financial straits, with more bad news coming daily from Sacramento. The state, nearly out of cash, has laid off scores of workers and put hundreds more on unpaid furloughs. It has stopped paying counties and issuing income tax refunds and halted thousands of infrastructure projects. Twenty-thousand layoff notices will go out on Tuesday morning, Matt David, the communications director for Gov. Arnold Schwarzenegger, said Monday night. “In the absence of a budget we need to realize this savings and the process takes six months,” Mr. David said.
The Next Slum? The subprime crisis is just the tip of the iceberg. Fundamental changes in American life may turn today's McMansions into tomorrow's tenements. Strange days are upon the residents of many a suburban cul-de-sac. Once-tidy yards have become overgrown, as the houses they front have gone vacant. Signs of physical and social disorder are spreading. At Windy Ridge, a recently built starter-home development seven miles northwest of Charlotte, North Carolina, 81 of the community's 132 small, vinyl-sided houses were in foreclosure as of late last year. Vandals have kicked in doors and stripped the copper wire from vacant houses; drug users and homeless people have furtively moved in. In December, after a stray bullet blasted through her son's bedroom and into her own, Laurie Talbot, who'd moved to Windy Ridge from New York in 2005, told The Charlotte Observer, "I thought I'd bought a home in Pleasantville. I never imagined in my wildest dreams that stuff like this would happen."
Dead End in Detroit For all the ups and downs, and more downs, that white-collar workers here have lived through, they have always managed to put on a brave face, assuring one another that the American auto industry will come back stronger than ever. But now that resolve has given way to grim resignation, as General Motors, Ford Motor and Chrysler have announced wave upon wave of job cuts. After closing plants and shrinking their blue-collar work force, Detroit's troubled Big Three are cutting white-collar jobs in their hometown at an unprecedented pace - more than 15,000 in the last year, with more to come.
Circuit City gets OK to auction off or break leases At a hearing in Richmond, Va., U.S. Bankruptcy Judge Kevin Huennekens gave Circuit City permission to begin the auction process for its 567 U.S. stores. Circuit City Stores Inc. received approval Friday to auction leases or break them for its remaining properties, including 567 U.S. stores, its corporate headquarters and various distribution centers. At a hearing in Richmond, Va., U.S. Bankruptcy Judge Kevin Huennekens gave Circuit City permission to begin the auction process. The retailer is shuttering eight stores in New York state, including its Gunhill Road location in the Bronx, Flatbush location in Brooklyn and 86th Street store in Manhattan. Circuit City also announced plans ot close two stores in New Jersey and one in Connecticut.
GM to get $4 billion aide tranche Tuesday The U.S. government will release $4 billion in additional aid to General Motors Corp (GM.N) on Tuesday as planned, a White House aide said on Monday, ahead of the deadline for the automaker to submit a new survival plan. The aide said GM's smaller rival Chrysler LLC's request for additional aid would be treated as a new request and dealt with separately. GM is seeking concessions from the United Auto Workers union and creditors under the terms of its $13.4 billion federal bailout. It must submit a restructuring plan to U.S. officials on Tuesday showing how it can cut costs and pay back the loans.
GM Said to Be Considering Sale, Closure of Four European Plants General Motors Corp. is considering shutting or selling as many as four European plants as it tries to meet the terms of a U.S. government bailout, a person familiar with the plans said. Factories run by GM's Opel division in Antwerp, Belgium, and Bochum, Germany, could be closed and an Eisenach, Germany, factory may be sold, as GM seeks about $1.5 billion of savings, said the person, who requested anonymity because the plans aren't public. The sale or closure of GM's Trollhaettan, Sweden-based Saab division would also eliminate a plant, the person added.
G.M. Presses Union for Cuts in Health Care With its access to a government lifeline possibly at risk, General Motors executives were locked in intense negotiations Monday with leaders of the United Automobile Workers over ways to cut its vast bills for retiree health care. G.M. will file what is expected to be the largest restructuring plan of its 100-year history on Tuesday, a step it must take to justify its use of a $13.4 billion loan package from the federal government. The plan will outline in considerable detail, over as many as 900 pages, how G.M. will further cut its work force, shutter more factories in North America and reduce its lineup of brands to just four, from eight, according to executives knowledgeable about its contents. The remaining core brands will be Chevrolet, Cadillac, GMC and Buick.
Plea for aid as BMW gives 850 workers one hour's notice and puts the Mini in mothballs The Bank of England will come under pressure today to help the ailing car industry after BMW's decision to cut 850 jobs at its Mini plant near Oxford. Lord Davies of Abersoch, the new Trade Minister and former banker, will try to broker a deal to allow the car makers' finance arms to access the Bank's £50 billion liquidity scheme. Mervyn King, the Governor of the Bank of England, is opposed to the idea of finance companies getting credit direct from the Bank. His argument is that the companies are not banks because they do not take deposits from savers and therefore cannot be treated in the same way. Ministers are sympathetic to his views but do not want them to stand in the way of a viable scheme. The industry is desperate for car finance deals because showrooms and factories are full of unsold vehicles, crushing the need for fresh production.
Crude Oil Falls Below $37 on Slowing Global Demand for Fuels Crude oil fell below $37 a barrel in New York on speculation a deepening recession in Europe and Asia will stifle demand for fuels. Brent crude, a benchmark for European, Africa and Russian grades, slumped to a three-week low yesterday after U.K. bank stocks dropped and the Bank of England said the economy's first quarter contraction may match last quarter's 1.5 percent decline. Japan, the world's third-largest oil consumer, yesterday said its economy shrank the most since 1974 in the fourth quarter. "The market data from the U.S. and the other major economies is not painting a picture of an imminent recovery," said Toby Hassall, research analyst at Commodity Warrants Australia Pty in Sydney. "The Japanese data was pretty bad."
Kan. suspends income tax refunds, may miss payroll TOPEKA - Income tax refunds and state employee paychecks could be late after Republican leaders and the Democratic governor clashed Monday over how to solve a cash-flow problem. Payments to Medicaid providers and schools also could be delayed. "We are out of cash, in essence," state budget director Duane Goossen said. The move places state taxpayers, workers and schoolchildren in the middle of a political battle over budget cuts. Republicans, who hold majorities in both chambers, blocked Gov. Kathleen Sebelius' proposal to borrow $225 million from healthy state funds to cover shortages in accounts used to meet the state's payroll and issue tax refunds. GOP leaders said they won't approve the IOUs until Sebelius either cuts the current budget herself or signs the bill they passed last week slashing $326 million - including $32 million for education - to balance the budget.
Officially "Out of Control" Now for some news from Europe The unfolding debt drama in Russia, Ukraine, and the EU states of Eastern Europe has reached an acute danger point. If mishandled by the world policy establishment, this debacle is big enough to shatter the fragile banking systems of Western Europe and set off Round 2 of our financial Gotterdammerung. Austria's finance minister Josef Proll made frantic efforts last week to put together a E150 billion rescue for the ex-Soviet bloc. Well he might. His banks have lent E230 billion to the region, equal to 70 percent of Austria's GDP. "A failure rate of 10 percent would lead to the collapse of the Austrian financial sector," reported Der Standard in Vienna. Unfortunately, that is about to happen.
ARE WE READY FOR THE ONE WORLD ORDER? By Attorney Constance Cumbey The New Agers shifted their focus from 1982 to a 25 year campaign for the Earth that opened in 1987 and they hoped would culminate in 2012. They shifted their expectations for having their "messiah" in the Holy Land for his staged fake second coming from the 1980s to the conclusion of a 42 year period that they claim opened with the end of the Six Day War in 1967 until 2009.[1] Curiously enough, 2009 was also the year that the greatly focused on the Middle East, Javier Solana, the only constant figure in all the various Mitchell Commission and Quartet for Peace in the Middle East configurations, said was IMPERATIVE that the new machinery be in place. Are we there?
Ireland 'could default on debt' FEARS are mounting that Ireland could default on its soaring national debt pile, amid continuing worries about its troubled banking sector. The cost of buying insurance against Irish government bonds rose to record highs on Friday, having almost tripled in a week. Debt-market investors now rank Ireland as the most troubled economy in Europe. Simon Johnson, the former chief economist of the International Monetary Fund, called for this weekend's meeting of G7 finance ministers to put Ireland's troubles at the top of the agenda. Johnson said: "Don't, please, tell me more about the basic principles of financial reform unless and until you have addressed the Irish problem. And don't tell me the Irish have to sort this out for themselves. Eventually, the world always comes to help; check your notes on Iceland.
Israeli election muddies Obama's waters United States President Barack Obama's Middle East project took two impressive steps forward during the week, but eventually got pushed back by almost one. Obama made his most pronounced overture so far to Iran in his press conference on Monday, and Tehran promptly grasped it within hours. But former Iranian president Mohammad Khatami's decision to jump into the fray in the forthcoming presidential election in June introduces complications in the highly accident-prone US-Iranian enterprise.
Israel cautions anew against a nuclear-armed Iran Israeli Defense Minister Ehud Barak told a forum of military chiefs on Monday that Israel would regard a nuclear-armed Iran as an "existential threat" that would speed up a regional arms race. Israel's military spokesman released Barak's comments after the United Nation's nuclear watchdog chief said global nuclear disarmament work was being hampered by Arab perceptions Israel wasn't abiding by a non-proliferation treaty. Barak told a closed forum of military chiefs at a strategy session that if Iran obtained atomic weapons it would pose a "central threat to world order," the statement said.
Obama promises Palestinians he'll protect 'biblical heartland' President pledges to protest Jewish housing developments JERUSALEM - The Obama administration has pledged to the Palestinian Authority it will closely monitor Jewish construction in the West Bank and will protest any new housing developments in the biblical territory, a top PA negotiator told WND. "They told us the White House will watch for any Jewish construction," said the PA negotiator, speaking on condition of anonymity. "Obama knows that if [Likud Chairman Benjamin] Netanyahu is the next prime minister, he will try to expand the settlements. They pledged to us this will be strongly protested," the negotiator said. Although Foreign Minister Tzipi Livni's Kadima party captured one more seat that Likud in last week's elections, Netanyahu is considered most likely to form the next government, since he is reportedly able to forge the most stable coalition with other parties in the 120-seat Knesset.
Dollars and Sense: Fixing Todays Economy With Sound Practices 1 of 5
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