Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Wed 06.24.2009
Six Minutes with the Renegade Economist - Michael Hudson
Not paying mortgage, yet stuck with keys Foreclosure backlog imperils recovery A growing number of American homeowners are falling into financial limbo: They're badly behind on payments, but their banks have not yet foreclosed. The backlog of seriously delinquent mortgages, which so far affects about 1 million borrowers, is a shadow over hopes for a rebound in the nation's housing markets. It masks the full extent of the foreclosure crisis and threatens to depress prices even further just as some parts of the country are hinting at recovery. For lenders, it could portend even more financial losses tied to the mortgage meltdown. "It just means foreclosure rates are going to keep rising," said Patrick Newport, an economist for IHS Global Insight.
Dollar Near 3-Week Low Versus Yen Before Fed Policy Statement The dollar traded near a three-week low against the yen on speculation the Federal Reserve will today signal it intends to refrain from raising interest rates this year as policy makers attempt to revive economic growth. The greenback fell the most in six weeks against the euro yesterday as traders added to bets the Federal Open Market Committee will keep the benchmark rate unchanged at 0.25 percent at the end of its policy meeting today. The yen weakened against 13 of the 16 major currencies after a Japanese report showed exports declined at a faster pace in May, damping the appeal of the currency as a refuge from the global recession.
Bernanke Set to Defend Record Amid Debate on New Term Federal Reserve Chairman Ben S. Bernanke will defend his unprecedented actions to prevent a financial collapse as debate on whether he should be reappointed begins. Bernanke, whose term expires Jan. 31, faces lawmakers at a hearing this week on steps to aid Bank of America Corp.'s takeover of Merrill Lynch & Co. as Congress increasingly questions the Fed's interventions. The session comes after a two-day meeting on monetary policy that began today.
Obama on Bernanke and the Fed $$ President Barack Obama has been dodging questions recently about whether he'll reappoint Ben Bernanke as Federal Reserve chairman in January. At a press conference today, he offered the same prepackaged response we've heard from someone who's probably aware of market risks in addition to wider policy implications: "I'm not going to make news about Ben Bernanke, although I think he has done a fine job under very difficult circumstances."
Gold Bounces Off 5-Week Low Bernanke Accused of Stoking Mortgage Bubble, as Late Monsoon Threatens Indian Demand THE PRICE OF WHOLESALE GOLD BULLION bounced off a new 5-week low at $914 per ounce early Tuesday in London after the US Dollar rose on the currency markets but the Japanese Yen rose faster still. Tokyo Gold Futures closed the day 2.8% lower, and the Nikkei stock index dropped to its worst level so far this month. Spot Gold recovered to $924 per ounce, down 1.1% from last week's finish in Dollars, as the Yen - a key funding currency for "carry trade" investors - eased back. The fear of higher interest rates triggered adjustments in the markets overnight. This week the Treasury will auction a record $104 billion in notes. This huge amount of supply hitting the market is expected to help push yields higher.
On Gold and Silver Coin Shortages What is price? Sure it is the 'amount of money expected, required, or given in payment for something.' But even that definition is too broad as it begs the question of expected or required by whom? Value, utility and price are all subject to individual human action and therefore the price of something is primordially chaotic. Yet an underlying assumption pervades Western financial thinking: the Efficient Market Hypothesis. For example, often the price of gold is quoted or found in various places and this single price, usually called the spot price of gold, is supposed to represent the value billions of humans have for the ancient metal of kings. But really this pricing mechanism is only an illusion of solidarity.
Will Gold Bounce Back to All-Time Highs in July? Gold: The continued pressure of a strong dollar saw gold fall yesterday as it technically broke through the trend-line of $934. Despite equity weakness, gold remains heavy. A move lower in the short term would seem likely. However, with the gold/silver ratio of 68.7, a 1st quarter low, this downward trend may soon be capped and a bounce back to all time highs in July may be possible. It has gained slightly this morning and is currently trading at $920.34.
Marc Faber: 10-20% Inflation Coming to the U.S The latest short snippet of Marc Faber - He calls 10-20% price increases Hyperinflation which is interesting, because most associate that term with Zimbabwe or the Weimar Republic. But he makes a good point; if you annualize 10-20% purchasing power losses over half a decade, it wipes out much of your buying power very quickly. On the plus side the US deficits will be paid back to our creditors in increasingly worthless dollars and all the problems I raise about our massive debts will become inconsequential. It also means you can go out and spend like mad, and build up your own debts because by 2019, the dollar you pay them back with will be akin to toilet paper. Green shoots... green shoots.
Will economy's 'green shoots' wither? Though sprigs of optimism permeate Wall Street, a bellwether business says it doesn't know when things will get better. Meanwhile, mortgage rates are up, and boomers can't even think about retiring. FedEx last Wednesday tempered the enthusiasm of folks on "green shoot" watch. While stating its belief that the economy had hit bottom, the company also said it had no "visibility" to predict future earnings or any expectations of a real uptick in business. Much of this economic green shoot talk has centered on slight improvements in still-weak/sloppy business conditions. But a lot of that has been a function of companies restocking inventory after the collapse in business at the end of last year and the start of this one.
Ron Paul 6/22/2009 "Obama Funds War/Taxpayers Are Buying Global Oppression Through IMF"
Bankster “Holiday” Planned for September? Bob Chapman’s influential International Forecaster is reporting on the possibility of a so-called “bank holiday” planned for late August or early September. According to Chapman’s sources, U.S. embassies around the world are selling dollars and stockpiling money from respective countries where they operate. “Some US embassies worldwide are being advised to purchase massive amounts of local currencies,” writes Harry Schultz, “enough to last them a year.” Schultz publishes the Harry Schultz Letter, an international investment, financial, economic, and geopolitical newsletter named as “Newsletter of the Year” by Peter Brimelow of Market Watch in 2005 and 2008. Schultz believes the global elite are in the process of engineering an FDR-style “bank holiday” of undetermined length in order to “sort-out the bank mess” and impose new bank rules.
What Exit Strategy? The Drama Isn't Over Although many spectators like to leave sporting events early to avoid traffic on the way home, the Federal Reserve plans to sit in its seat -- and keep its options open -- until it is certain that the economy is out of the woods. New York University economics professor Mark Gertler, a close colleague of Ben Bernanke before the Fed chairman came to Washington, says the U.S. central bank is unlikely to rush into any "exit strategy" from current policy just yet.
The Depression Case Reiterated In a semi-free country such as the US there are two prerequisites for a peace-time economic depression, where a depression is defined as a period of 5-10 years or longer of economic stagnation or outright contraction. The first is a massive expansion of credit based on fractional reserve banking (supported, nowadays, by a powerful central bank), and the second is a far-reaching attempt by the government to prevent the corrective process from running its natural course after the credit bubble has burst.
Fed Chief Works to Secure More Power for Agency During the debate over financial regulation, the Federal Reserve chairman, Ben S. Bernanke, has been surprisingly quiet. But behind the scenes, he has been a forceful proponent of giving the Fed more power, both defending his management of the economic crisis and arguing that more authority would help the agency act more decisively to reduce the chances of a recurrence, according to interviews with lawmakers and officials from the Fed, the Treasury and the White House. Despite criticism by some lawmakers that the Fed failed to anticipate the problems that led to the crisis, Mr. Bernanke has told associates that such critics fail to recognize the extraordinary actions taken by the central bank over the last year.
POTENTIALLY IT IS SCARY While reading the report on the Obama administration's proposed new financial regulations, we were concerned to see the following. "In order to improve accountability in the use of other crisis tools, we also propose that the Federal Reserve Board receive prior written approval from the Secretary of the Treasury for emergency lending under its 'unusual and exigent circumstances' authority."
Three TARP Banks Already Classified as Deadbeats? Uh-Oh The Wall Street Journal reports that three banks that received TARP funds have stopped paying the required dividends to the Treasury. The Treasury says a "number" of banks have not been making their payments. Pacific Capital Bancorp, a Santa Barbara, Calif., lender that got $180.6 million from the Treasury Department in November, has since posted net losses of $49.7 million. Seacoast Banking Corp. of Florida, of Stuart, Fla., and Midwest Banc Holdings Inc., of Melrose Park, Ill., have also halted their TARP-related dividends, citing the banking industry's turmoil and a desire to fortify their balance sheets.
we have no economic model in place in the U.S. to provide the jobs to pay off this debt (our GDP is 30% based on a financial sector, which was built on a house of derivative cards) and fully two thirds of our GDP is based on consumer spending, which is a bit circular in terms of helping to support further consumer spending;
we have an aging population of baby boomers that just lost 40-50% of their retirement and significant home value but they are going to be retiring beginning in a year or two, with increasing percentages over the next 10-15 years;
our government cannot fund its upcoming Medicare or Social Security obligations, much less fund the current multi-trillion dollar bailout - which in time could/should lead to a severe weakening of the dollar; and
we have more than twice the retail footage per person here than in nearly any other country and there is no way for us to support this much retail.
Obama Says Second Fiscal Stimulus Bill Not Yet Needed President Barack Obama said a second stimulus package isn't needed yet, though he expects the U.S. unemployment rate will exceed 10 percent this year. "I think its important to see how the economy evolves and how effective the first stimulus is," Obama said at a White House news conference. He said it is "pretty clear" that unemployment will continue rising before the recovery takes hold and said it isn't surprising that initial forecasts from his administration missed the mark.
Deflation: It's Back At some point in the last month, everyone came to the conclusion that Ben Bernanke had whipped deflation ("it"), and that the only question left was how to avoid inflation once the economy rebounded. The talk was all about rising yields, soaring commodities, a weakening dollar, and how to drain liquidity when the time came. Would the Fed be able to stick the landing? Could we tolerate a little bit of inflation if it meant not cutting the recovery short? What a difference a week makes. Here comes the D-word again. With the rally sputtering, and the economy showing few meaningful signs of recovery, suddenly the market is back to its old fears.
Black Swan Trader Bets Reputation on Inflation $$ Mark Spitznagel made a fortune predicting the "black swan" that hit markets last year. Now the relatively unknown hedge-fund manager is emerging from the shadow of his collaborator, Nassim Nicholas Taleb, with a big bet inflation will soar. The 38-year old Mr. Spitznagel managed the Black Swan funds to triple digit returns last year with a bet on volatility. The returns have brought a flood of cash, sending assets for his firm, Universa Investments LP, rising to $6 billion from $300 million.
Inflation: As Inevitable as Death and Taxes We've been arguing for some time that the Federal Reserve and others who influence the economy must choose between two great evils - inflation and deflation. No middle ground remains open. What's more, inflation remains the more palatable of the two. A nation can endure high inflation for a time without destroying its long-term economic prospects. For example, after World War II, Japan experienced inflation on the order of 40% annually for several years. Yet it segued from that ordeal to become an economic juggernaut for much of the seceding decades. Similarly, high inflation plagued Brazil during the early 1990s. Yet today Brazil is one of the strongest emerging economies. The U.S. can only envy its growth rate. Warren Buffett, moreover, has singled out Brazil's currency as one he would like to invest in.
Question Authority: Always and Forever Hereafter For some time, I have been trying to figure out why the nation and we as individuals are in the fix we are in now. Many reasons manifest themselves. We labor under a government of such monstrous reach and epic incompetence that it makes the Soviets now look like a paragon of efficiency and probity. We suffer under a ruling class that has not simply been a gangster government under Obamunism but has been this way since the defeat of the original Constitution in 1865. With each illegitimate war since 1898, the power of the Federal government has increased exponentially. With each manufactured crisis, liberties and freedoms have withered and died. This is simply the latest and greatest improvement in the ongoing process of our overseers to find emerging ways to increase the output of our slavery.
'Pretty Boy' Paulson and the Goldman Gang 'Public Enemies' run, not rob, our banks today Yes, two Great Depressions linked in a mysterious time-warp: Bank robbers and robber banks. Back in the dark days of the first Great Depression John Dillinger was admired, a dapper Robin Hood. Banks were the real villains. Dillinger, Bonnie and Clyde, "Pretty Boy" Floyd, and "Machine Gun" Kelly were the "American Idols" of their day -- "Public Enemies" to the FBI. But folk heroes to an angry public who cheered when Dillinger destroyed bank records during holdups. . . . . . . . Today it's far worse. Back in the 1930s we got a flood of new laws and regulations protecting small investors and consumers. Today we just got Obama's proposed new legislation that's already being watered down by Wall Street lobbyists. How? Easy.
Mortgage bankers cut U.S. loan origination forecast Mortgage originations in the U.S. may total $2.03 trillion this year, 27 percent less than earlier forecast, as rising interest rates reduce home refinancings, the Mortgage Bankers Association said. Today's forecast cuts $700 billion from the Washington- based group's March estimate, a change MBA Chief Economist Jay Brinkmann said came because the Federal Reserve's pledge to buy as much as $300 billion in U.S. Treasuries hasn't been enough to keep Treasury yields and mortgage rates down.
Confidence in Obama's stimulus plan falling Americans' confidence in President Barack Obama's $787 billion economic stimulus plan is waning, a new Washington Post-ABC News poll found, even as his overall approval rating remains high. Fifty-two percent of respondents said that the stimulus package has succeeded or will succeed in restoring the economy, down from 59% two months ago, the poll found. The poll was taken June 18-21 and has a margin of error of plus or minus three percentage points.
As the US Goes Broke... Who's Laughing at Peter Schiff Now? When Peter Schiff was making the rounds on U.S. cable news shows in 2007, warning about the collapse of the housing market, anchors and fellow guests literally laughed in his face when he launched into his gloomy predictions. That kind of meltdown could never happen, they said. The economy was on rock-solid ground. In those rosier economic days, Schiff, the president of Darien, Conn.'s Euro Pacific Capital, was repeatedly cast as a successful broker who'd gone off the deep end.
'Government-Run' Health Care is 'Buzz Word,' Says Dodd On the Scene Sen. Christopher Dodd (D-Conn.) said that describing President Obama's "public option" health care proposal as "government-run" is a "buzz word"...
Tightening credit puts a squeeze on business owners Businesses that depended on credit cards to make purchases and manage monthly cash flow are paying higher interest, having trouble opening new lines or seeing existing ones canceled. For small-business owners who rely on business credit cards, the recessionary landscape looks extra bleak these days. OfficeMax Inc. is no longer accepting its own credit cards after the financial company that ran its program and made the loans terminated the arrangement last month. About 100,000 small businesses were affected by the move, the national office supply retailer said.
Red Roof Inn Defaults $$ Hotel Chain Fails to Meet $367 Million Debt Obligations Red Roof Inn Inc., a hotel chain popular with business travelers on a budget, defaulted on $367 million face amount of mortgage debt, the latest hotel casualty in an industry that has been hard hit by the recession. The defaults were reported by credit-rating company Realpoint LLC based on reports by the mortgages' servicing company. Red Roof confirmed the defaults Tuesday. In 2007, Red Roof was acquired from Accor SA for $1.3 billion by a group led by Citigroup Inc.'s Global Special Situations Unit and including hotel manager Westmont Hospitality Group. The deal left Citigroup with a 79% stake in Red Roof. This month, Red Roof's owners missed scheduled payments on four mortgages with 131 Red Roof Inns pledged as collateral. All told, Red Roof's properties carry nearly $1.2 billion in debt, including mortgages, mezzanine loans and other notes.
U.S. House Leaders Schedule Climate-Change Bill Vote The U.S. House of Representatives plans to vote on a proposed "cap-and-trade" law to cut greenhouse gas emissions by the end of this week, a spokesman for Speaker Nancy Pelosi said. "There are some issues still under discussion, but we are confident we can resolve them by the time the bill goes to the floor on Friday," Pelosi spokesman Drew Hammill said by e-mail. Democrats have been negotiating the details of the climate- change measure, which would cut U.S. greenhouse gas emissions 17 percent below 2005 levels by 2020, since it passed the House Energy and Commerce Committee on May 21.
Wee the people: Port-a-potty named for Pelosi Tea partiers dedicate new thrones to Washington's 'imperial' leaders Enthusiastic tea partiers in Virginia have decided to give "imperial leaders" in Washington a seat of power they believe they truly deserve - a portable toilet throne. Tea party organizer Karen Miner Hurd told WND her group is expecting between 3,000 and 5,000 people at the upcoming June 26 protest at Chesapeake City Park in Chesapeake, Va. While she is excited about the turnout, Hurd has a predicament: She must raise funds for 30 portable toilets on a shoe-string budget. "How do you tell people you need money for bathrooms?" she asked. "Does that excite or inspire anybody? Not very much." So Hurd asked taxpayers to sponsor commodes and name them with their least favorite politicians.
Trucking firms edgy over rising diesel prices Last summer, as Americans strained to pay $4 for gasoline, truck drivers and other users of diesel fuel were paying nearly $5 per gallon to fill their tanks, and the price gap between the two fuels appeared to be widening. Not so anymore. Recently, the nationwide average diesel price fell below that of gasoline for the first time in nearly two years as global economic headwinds gutted demand for goods moved by diesel-powered trucks, ships and trains and manufacturing activity declined.
No one home: 1 in 9 housing units vacant A record 1 in 9 U.S. homes are vacant, a glut created by the housing boom and subsequent collapse. "The numbers are further documentation of the gravity of the housing problem," says Nicolas Retsinas, head of Harvard University's Joint Center for Housing Studies. "This inventory is delaying any kind of housing recovery." . . .
More than 14 million housing units are vacant. That number does not include an estimated 4.8 million seasonal or vacation homes, most of which are occupied part of the year. The combined vacancy rate of almost 15% is higher than during previous recessions: 11% in 1991 and 9.4% in 1984.
About 3% of owned homes are vacant. In normal times, "maybe 1% should be vacant," Myers says.
More than 9% of homes built since 2000 are vacant compared with about 2% for older homes.
Homes priced at $500,000 or more are just as likely to be empty as homes that cost less than $100,000.
Million-dollar homes hard to move in down economy From a bunkhouse-turned-sales office on the shores of Lake Thonotosassa, Steve Powell manages home sales at the millionaire enclave of Stonelake Ranch. It's 98 rural home sites set serenely in rolling horse country 30 minutes east of downtown Tampa. Despite the 13,000- and 20,000-square-foot mansions taking shape at Stonelake, real estate isn't exactly rocking on Lake Thonotosassa. Developers have trimmed prices as much as 30 percent, and sales have crumbled by about two-thirds the past couple of years. Powell spots fewer Mercedes and Lexuses rolling up the wooded, winding lanes of Stonelake.
Home Sales Keep Rising, Prices Keep Falling Sales of existing homes were up again in May, the second month of increasing sales. The rise was 2.4%, pushing sales up to an annual rate of 4.77 million from 4.66 million in April. What seems to be driving the sales is cheaper prices. The median price for an existing home was $173,000, down 16.8% from $207,900 in May 2008. Don't get too excited about the numbers, however. Home sales always increase as we move into the summer months. Families want to move between school years, driving up sales from March through the summer months. Sales tend to decline in the fall and winter. Still, we suppose you can take some comfort that sales are following the usual seasonal rising pattern rather than continuing to fall.
U.S. May mass layoffs jump tie record: Labor Dept The number of mass layoffs by U.S. employers rose last month to tie a record set in March, according to government data released on Tuesday that suggested the labor market has yet to stabilize. The Labor Department said the number of mass layoff actions -- defined as job cuts involving at least 50 people from a single employer -- increased to 2,933 in May from 2,712 in April, resulting in the loss of 312,880 jobs. It was the largest loss of jobs connected to mass layoffs on records dating to 1995.
May existing home sales rise less than expected Existing home sales rise 2.4 percent in May; prices plunge 16.8 percent Sales of previously occupied homes rose modestly from April to May, the third monthly increase this year, but signs of a housing recovery are fragile at best. The National Association of Realtors said Tuesday that home sales rose 2.4 percent to a seasonally adjusted annual pace of 4.77 million, up from a downwardly revised rate of 4.66 million in April. The results, however, missed analysts' expectations and stock markets edged lower on the news. "While activity has stabilized, a meaningful recovery has yet to begin," wrote Paul Dales, U.S. economist with Capital Economics.
Lost jobs forcing more out of homes The nation's foreclosure crisis — once largely confined to only a few corners of the country — is spreading to new areas as the economy teeters. The foreclosure rates in 40 of the nation's counties that have the most households have already doubled from last year, a USA TODAY analysis of data from the listing firm RealtyTrac shows. Most were in areas far removed from the avalanche of bad mortgages and lost homes that have hammered the U.S. housing market. Among the new areas: Boise and Green Bay, Wis. "The ripple effect is just broadening out to cover a lot more places," says Susan Wachter, who studies real estate and finance at the University of Pennsylvania's Wharton School.
Insurance industry lays down marker on health care Insurers warn government plan would "dismantle" employer coverage The insurance industry Tuesday laid down a marker on health care, warning in stark terms that a proposed government insurance plan would dismantle the employer coverage Americans have relied on for a half century and overtake the system. In a joint letter to senators, the two largest industry groups also said they don't believe it's possible to design a government plan that can compete fairly with private companies in a revamped health care market. That particular statement seemed to be aimed at lawmakers of both parties who are seeking a compromise on the contentious issue.
Can the U.S. Afford to Let California Fail? With his round face and sad eyes, Oracio Sandoval, 33, sits at a Los Angeles County welfare office in Carson, Calif., armed with a thick pile of job-application forms. Out of work since January, Sandoval is struggling to stay afloat financially. Married with two children, he and his wife used to make $3,000 a month. Now they rely on her $800 from Starbucks and their CalWORKs payment of $250. "It's not much, but it helps. We just barely make ends meet for rent and the bills. I am not sure how much longer we can go on like this," he says. Sandoval, like many of California's 39 million residents, is caught up in the pain of the worst recession in 50 years and a state's flailing attempt to balance its books by making brutal cuts in programs long seen as essential. The Sandoval family is but one of more than 154,000 welfare cases in Los Angeles County. Governor Arnold Schwarzenegger says the state should abolish its welfare program. Doing so would save $1.3 billion and rip a large gaping hole in the safety net that now keeps more than 500,000 California families like the Sandovals out of homeless shelters.
AutoNation vs Carmax
Ford Among First to Get Loans for More Efficient Cars Three automakers, including the Ford Motor Company, will get the first $8 billion from a $25 billion loan program intended to accelerate development of more fuel-efficient vehicles, the national energy secretary said Tuesday. Ford, the only Detroit automaker that did not receive emergency government loans this year, will get $5.9 billion to help it retool 11 factories in the Midwest. The money, about half as much as Ford had requested, will help it make 13 of its models more fuel-efficient. Ford plans to start selling four models of electric vehicles by 2012.
GM to cut 4,000 more white-collar jobs by year end General Motors offers retirement incentives to cut 4,000 more white-collar jobs by year's end About 4,000 more salaried workers at General Motors Corp. will lose their jobs by the end of the year as the automaker continues to downsize. The company notified its more than 27,000 U.S. white-collar workers by e-mail Tuesday that that it will offer standard severance packages, and employees near retirement age will have the opportunity to retire early, spokesman Tom Wilkinson said. Some involuntary cuts will be necessary, Wilkinson said, as GM tries to shrink its U.S. salaried work force to around 23,500 by year's end. The automaker is in Chapter 11 bankruptcy protection and has received about $20 billion in loans from the U.S. government. The Treasury Department's auto task force is overseeing its plans to restructure and emerge from bankruptcy as a leaner, more competitive company.
Survivalism grows popular in Valley Valley residents growing food, obtaining guns, sharing ideas As the recession lingers, some Phoenix-area residents are shifting attention from their financial troubles, including falling home values and shrinking retirement savings, to stockpiling food and ammo. They worry the economic turmoil could lead to skyrocketing inflation, food scarcity, even violence. To prepare, they are forming social-networking groups to discuss how to store grains, purify water, plant gardens and, if needed, shoot guns. "Most of us feel that if things do get better, it will be a long way out," said Jeff Rodriguez, a 26-year-old software engineer from Glendale. "I want to have some preparations in place."
Free State Project A New Strategy in our Lifetime What the Free State Project is... The Free State Project is an effort to recruit 20,000 liberty-loving people to move to New Hampshire. We are looking for neighborly, productive, tolerant folks from all walks of life, of all ages, creeds, and colors who agree to the political philosophy expressed in our Statement of Intent, that government exists at most to protect people's rights, and should neither provide for people nor punish them for activities that interfere with no one else.
Free State Project featured on "Chronicle" (1 / 2)
Free State Project featured on "Chronicle" (2 / 2)
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Obama ratchets up language on Iran violence President says he's 'appalled and outraged' by protesters' deaths Dramatically hardening the U.S. reaction to Iran's disputed elections and bloody aftermath, President Barack Obama condemned the violence against protesters Tuesday and lent his strongest support yet to their accusations the hardline victory was a fraud. Obama, who has been accused by some Republicans of being too timid in his response to events in Iran, declared himself "appalled and outraged" by the deaths and intimidation in Tehran's streets - and scoffed at suggestions he was toughening his rhetoric in response to the criticism.
Barack Obama strikes out as Tehran tightens its 'iron fist' President Obama condemned Iran's "iron fist" last night after the regime flooded Tehran with armed security to quash street demonstrations. In his strongest language yet on the post-election crackdown, Mr Obama said that America had been "appalled and outraged by the threats, beatings and imprisonments" of recent days. He also invoked the death of Neda Salehi Agha Soltan, the 26-year-old student shot dead on Saturday, saying: "Those who stand up for justice are always on the right side of history." His comments came on a day when Tehran tightened its grip on power and the West hardened its position.
North Korean ship tests new U.N. sanctions Intelligence officials, diplomats suspect illicit arms heading to Myanmar SEOUL, South Korea - An American destroyer tailed a North Korean ship Tuesday as it sailed along China's coast, U.S. officials said, amid concerns the vessel is carrying illicit arms destined for Myanmar. The sailing sets up the first test of a new U.N. Security Council resolution that authorizes member states to inspect North Korean vessels suspected of carrying banned weapons or materials. The sanctions are punishment for an underground nuclear test the North carried out last month in defiance of past resolutions.
North Korea drops new hints on missile launch Country's weapons slow to develop, but U.S. defense prepares for the worst An impending missile test threatened by North Korea is expected to launch short- to medium-range missiles rather than a long-range missile similar to one tested in April, according to U.S. intelligence reports. North Korea issued a warning over the weekend to mariners of upcoming live-fire missile exercises. The exclusion zone cited in the notice covers a stretch in the Sea of Japan, 279 miles by 68.2 miles off the coast of Wonsan, North Korea. The warning lasts from June 25 to July 10, from approximately 8 a.m. to 8 p.m. local time, a U.S. counterproliferation official said.
As China Stirs Economy, Some See Protectionism China has begun a concerted effort to keep its export economy humming, even as demand for its goods has plummeted with the global downturn. Risking the ire of the United States and other trading partners, the Chinese government has quietly started adopting policies aimed at encouraging exports while curbing imports, even though China, as one of the world's largest exporters, has aggressively criticized protectionism in other countries. The government has sharply expanded three programs to help exporters, giving them larger tax rebates, more generous loans from state-owned banks to finance trade, and more government-paid travel to promote themselves at trade shows around the world.
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