FDA: Glaxo, Merck vaccines OK despite pig virus

(Reuters) - Rotavirus vaccines made by GlaxoSmithKline Plc and Merck & Co Inc are safe to use despite being contaminated with a pig virus, U.S. health regulators ruled on Friday.

Health

The Food and Drug administration, in a statement, said it was safe for doctors to resume giving patients Glaxo's Rotarix and continue using Merck's Rotateq. The agency said there was no evidence the contamination caused any harm and the vaccines were important in preventing hospitalizations and death.

Rotavirus can cause fatal diarrhea. Both vaccines target the virus, but pieces of DNA from porcine circovirus (PCV) have been found in both companies' products.

The FDA's decision follows a May 7 recommendation by its advisory panel, which ruled that the risk to humans from the pig virus was theoretical at best. It called for continued use of the vaccines, saying their benefits outweighed any potential risk.

Some strains of the pig virus are believed to cause a wasting syndrome in young piglets, marked by diarrhea and an inability to gain weight, but they are not known to injure humans. Tests found DNA from the virus in master cells used to make the Glaxo's product.

Glaxo officials have said the DNA may have come from a pig-derived enzyme called trypsin used early in development. The company has said there is no manufacturing or safety issue with its vaccine. Merck has also said its product is safe.

Neither vaccine is a blockbuster product.

Sales of Merck's vaccine totaled $522 million in 2009, including $468 million in the United States. Glaxo's rotavirus vaccine sales in 2009 were $440 million globally, including $118 million in the United States.

Worldwide, rotavirus kills more than 500,000 infants each year, mostly in low- and middle-income countries. Deaths are rare in the United States, but severe illness that requires a hospital stay is possible.

Glaxo's vaccine won U.S. approval in 2008.

Buffalo billboard petitions president for "a freakin' job"

"I need a freakin' job." That's the message President Obama saw as he arrived in Buffalo, N.Y., this afternoon for an event talking up the administration's success in creating new jobs. He also pitched Congress on approving a $30 billion credit for small-business growth.

Yet critics say Obama has been focusing his recovery efforts too narrowly and hasn't done enough to help people find work. After all, the latest job figures show 9.9 percent of the country still out of work. That inspired a group of unemployed Buffalo residents — who also have a website called INAFJ.org — to appeal to the president in the form of a billboard along the route his motorcade took into town. Here is a photo of the billboard:

The group has also produced a video, which can be viewed here:

I Need A Freakin Job @ Yahoo! Video

Yet jobs aren't a huge priority for either party heading into the midterm campaigns, as Politics Daily's Jill Lawrence notes. That might be because other issues have taken precedence. A new Gallup poll finds that for the first time in two months, the issue of "jobs" has fallen to No. 2 on the list of issues Americans are most concerned about. The new No. 1 issue: The economy in general. White House officials defend their efforts on jobs, saying the president has been focused as much on creating new jobs as on "saving" current positions.

[Lost jobs that won’t come back]

But here's a sign the job seekers' message to the administration may be getting through: The White House just announced Obama will travel next Tuesday to Youngstown, Ohio — where unemployment hit 15.1 percent last month, the city's highest jobless rate in more than 15 years. The focus of Obama's visit: "jobs and the economy," according to the White House.

And a more direct sign still: Obama press aide Bill Burton was asked about the billboard in today's press gaggle. His reply was, "The President is here to talk about jobs, what his administration has done to create jobs, what we need to do in order to create an environment where small businesses can create jobs. So the answer is, we're on the path to creating more jobs, and we've got a lot more work to do."

—Holly Bailey is the senior politics writer for Yahoo! News.

Giant Plumes of Oil Found Forming Under Gulf of Mexico

Scientists are finding enormous oil plumes in the deep waters of the Gulf of Mexico, including one as large as 10 miles long, 3 miles wide and 300 feet thick in spots. The discovery is fresh evidence that the leak from the broken undersea well could be substantially worse than estimates that the government and BP have given.

“There’s a shocking amount of oil in the deep water, relative to what you see in the surface water,” said Samantha Joye, a researcher at the University of Georgia who is involved in one of the first scientific missions to gather details about what is happening in the gulf. “There’s a tremendous amount of oil in multiple layers, three or four or five layers deep in the water column.”

The plumes are depleting the oxygen dissolved in the gulf, worrying scientists, who fear that the oxygen level could eventually fall so low as to kill off much of the sea life near the plumes.

Dr. Joye said the oxygen had already dropped 30 percent near some of the plumes in the month that the broken oil well had been flowing. “If you keep those kinds of rates up, you could draw the oxygen down to very low levels that are dangerous to animals in a couple of months,” she said Saturday. “That is alarming.”

The plumes were discovered by scientists from several universities working aboard the research vessel Pelican, which sailed from Cocodrie, La., on May 3 and has gathered extensive samples and information about the disaster in the gulf.

Scientists studying video of the gushing oil well have tentatively calculated that it could be flowing at a rate of 25,000 to 80,000 barrels of oil a day. The latter figure would be 3.4 million gallons a day. But the government, working from satellite images of the ocean surface, has calculated a flow rate of only 5,000 barrels a day.

BP has resisted entreaties from scientists that they be allowed to use sophisticated instruments at the ocean floor that would give a far more accurate picture of how much oil is really gushing from the well.

“The answer is no to that,” a BP spokesman, Tom Mueller, said on Saturday. “We’re not going to take any extra efforts now to calculate flow there at this point. It’s not relevant to the response effort, and it might even detract from the response effort.”

The undersea plumes may go a long way toward explaining the discrepancy between the flow estimates, suggesting that much of the oil emerging from the well could be lingering far below the sea surface.

The scientists on the Pelican mission, which is backed by the National Oceanic and Atmospheric Administration, the federal agency that monitors the health of the oceans, are not certain why that would be. They say they suspect the heavy use of chemical dispersants, which BP has injected into the stream of oil emerging from the well, may have broken the oil up into droplets too small to rise rapidly.

BP said Saturday at a briefing in Robert, La., that it had resumed undersea application of dispersants, after winning Environmental Protection Agency approval the day before.

“It appears that the application of the subsea dispersant is actually working,” Doug Suttles, BP’s chief operating officer for exploration and production, said Saturday. “The oil in the immediate vicinity of the well and the ships and rigs working in the area is diminished from previous observations.”

Many scientists had hoped the dispersants would cause oil droplets to spread so widely that they would be less of a problem in any one place. If it turns out that is not happening, the strategy could come under greater scrutiny. Dispersants have never been used in an oil leak of this size a mile under the ocean, and their effects at such depth are largely unknown.

Much about the situation below the water is unclear, and the scientists stressed that their results were preliminary. After the April 20 explosion of the Deepwater Horizon, they altered a previously scheduled research mission to focus on the effects of the leak.

Interviewed on Saturday by satellite phone, one researcher aboard the Pelican, Vernon Asper of the University of Southern Mississippi, said the shallowest oil plume the group had detected was at about 2,300 feet, while the deepest was near the seafloor at about 4,200 feet.

“We’re trying to map them, but it’s a tedious process,” Dr. Asper said. “Right now it looks like the oil is moving southwest, not all that rapidly.”

He said they had taken water samples from areas that oil had not yet reached, and would compare those with later samples to judge the impact on the chemistry and biology of the ocean.

While they have detected the plumes and their effects with several types of instruments, the researchers are still not sure about their density, nor do they have a very good fix on the dimensions.

Given their size, the plumes cannot possibly be made of pure oil, but more likely consist of fine droplets of oil suspended in a far greater quantity of water, Dr. Joye said. She added that in places, at least, the plumes might be the consistency of a thin salad dressing.

Dr. Joye is serving as a coordinator of the mission from her laboratory in Athens, Ga. Researchers from the University of Mississippi and the University of Southern Mississippi are aboard the boat taking samples and running instruments.

Dr. Joye said the findings about declining oxygen levels were especially worrisome, since oxygen is so slow to move from the surface of the ocean to the bottom. She suspects that oil-eating bacteria are consuming the oxygen at a feverish clip as they work to break down the plumes.

While the oxygen depletion so far is not enough to kill off sea life, the possibility looms that oxygen levels could fall so low as to create large dead zones, especially at the seafloor. “That’s the big worry,” said Ray Highsmith, head of the Mississippi center that sponsored the mission, known as the National Institute for Undersea Science and Technology.

The Pelican mission is due to end Sunday, but the scientists are seeking federal support to resume it soon.

“This is a new type of event, and it’s critically important that we really understand it, because of the incredible number of oil platforms not only in the Gulf of Mexico but all over the world now,” Dr. Highsmith said. “We need to know what these events are like, and what their outcomes can be, and what can be done to deal with the next one.”

Shaila Dewan contributed reporting from Robert, La.

The Census Bureau has failed to pay thousands of employees!

SHOW ME THE MONEY! It’s simple. When you’ve got hundreds of thousands of employees working for you, pay them on time. MyTwoCensus.com has received more than a dozen complaints within the past 12 hours from Census Bureau employees, at offices throughout the nation, who have not been paid on time. It is unknown whether this inexcusable error by the Census Bureau is a result of computer system failures (a problem that has plagued the Census Bureau for months if not years — even though Census Bureau Director Robert M. Groves said two days ago that the problems were fixed). Even though most of the 500,000+ Census Bureau employees who are out in the field this week are temporary employees, they still depend on this income from the federal government. A great number of these temporary employees were unemployed before their Census Bureau work came about, and thus are now living paycheck to paycheck. Unfortunately, when those paychecks don’t come, everyone is hurt. This is particularly damning because many employees lost their unemployment benefits to take Census Bureau jobs, and will have an extremely hard time getting these payments again once the work is finished.

(Interestingly, a marketing firm called GA1 that had a contract with the Census Bureau publicly accused the government of not paying them on time back in March, but it’s unknown to me at this time whether the situation was resolved.)

One disgruntled employee wrote me the following about her experience, which sounds more like a Kafka novel than an account of living and working in the world’s greatest democracy:

I started working for the census on April 12, 2010. My first paycheck was supposed to be deposited on April 28 but it wasn’t. I called my LCO that day and was informed they entered the wrong account number into their system. They asked me for the correct account number and told me that they updated the system. Next they told me that I had to call the hotline to start the re-issuance process for the missing check. I did as instructed and was told it would take 5-7 business days to be deposited into my acct. The next payday was May 5 and check #2 isn’t there and #1 is still “missing”. I again call the hotline (got the answering machine the first 20+ times) when I finally found a human they wanted to take a message, I refused because I had left countless messages with no return call. So I waited on hold for over 25 minutes. I was told again that the check would be reissued in 5-7 days. Week 3 pay date May 12, finally a paycheck! However it was only for the last pay period. #1 and #2 still missing. I called the hotline today and I’m getting the run-around. They won’t tell me anything! I called DOL and was told they can’t help because technically I’m a federal employee and they gave me another number to call. I called this number and was told they couldn’t help because I was a temporary employee. What can I do? I need my money, I am a single mom with kids to feed. Right now I’m wishing I would have just stayed on unemployment. To top it all off, the uncaring attitude of my LCO doesn’t help… they just say don’t worry. You’ll be paid eventually, we don’t know when but eventually.

To the hundreds of thousands people who are victims of this lax payment plan by the government, know that I am here to fight for you. Please submit your stories in the comments section below. This behavior by the Census Bureau is unacceptable. Today, I am calling Dr. Groves (the Census Bureau Director), Steve Jost (the Census Bureau’s Communications Director), the Public Information Office, and officials who are responsible for the payroll to get to the bottom of this mess.

For now, MyTwoCensus.com urges ALL EMPLOYEES who have not been paid to contact your Member of Congress and your Senators. Go to their offices if you can, but if not, lodge complaints by phone and e-mail. If you wish, please send me your complaints privately as well. MyTwoCensus is in contact with both Democrat and Republican Members of Congress who will hopefully be able to have some clout to get this problem resolved immediately.

UPDATE: Here’s another update from an anonymous Census Bureau employee Asheville, North Carolina, which to my knowledge is the only place where the media has actually reported these problems:

No one out of the Asheville office was paid properly today. I received 0. Three of my crew also received 0. two got 1 days pay/ 5 got 2 Days pay.
When manager raised cain was threatened with firing.
One enumerator had to borrow 8 dollars for gas to get home. One is threatened with eviction from her trailer.
Asheville LCO told another enumerator to expect to be paid on the 26th.
Asheville LCO said not to worry it was a nationwide computer glitch.
Asheville did not care that these folks had been out of work and need the money…especially the gas they have been buying to do the job.
Please do not use my name or email or I will get fired too.
We heard from other census workers in different cld that they also had widespread pay issues.
No one we heard from in Asheville district got the correct pay.
What can we do? If we raise a stink they will fire us.
The Census is now hiring at $9.00 per hour. we were hired at $11.50/ Are they trying to force us out to hire cheaper workers?

A Factual Appraisal Of The 'Holocaust'

A Factual Appraisal Of The 'Holocaust' By The Red Cross

The Jews And The Concentration Camps:

No Evidence Of Genocide

There is one survey of the Jewish question in Europe during World War Two and the conditions of Germany's concentration camps which is almost unique in its honesty and objectivity, the three-volume Report of the International Committee of the Red Cross on its Activities during the Second World War, Geneva, 1948.

This comprehensive account from an entirely neutral source incorporated and expanded the findings of two previous works: Documents sur l'activité du CICR en faveur des civils détenus dans les camps de concentration en Allemagne 1939-1945 (Geneva, 1946), and Inter Arma Caritas: the Work of the ICRC during the Second World War (Geneva, 1947). The team of authors, headed by Frédéric Siordet, explained in the opening pages of the Report that their object, in the tradition of the Red Cross, had been strict political neutrality, and herein lies its great value.

The ICRC successfully applied the 1929 Geneva military convention in order to gain access to civilian internees held in Central and Western Europe by the Germany authorities. By contrast, the ICRC was unable to gain any access to the Soviet Union, which had failed to ratify the Convention. The millions of civilian and military internees held in the USSR, whose conditions were known to be by far the worst, were completely cut off from any international contact or supervision.

The Red Cross Report is of value in that it first clarifies the legitimate circumstances under which Jews were detained in concentration camps, i.e. as enemy aliens. In describing the two categories of civilian internees, the Report distinguishes the second type as "Civilians deported on administrative grounds (in German, "Schutzhäftlinge"), who were arrested for political or racial motives because their presence was considered a danger to the State or the occupation forces" (Vol. 111, p. 73). These persons, it continues, "were placed on the same footing as persons arrested or imprisoned under common law for security reasons." (P.74).

The Report admits that the Germans were at first reluctant to permit supervision by the Red Cross of people detained on grounds relating to security, but by the latter part of 1942, the ICRC obtained important concessions from Germany. They were permitted to distribute food parcels to major concentration camps in Germany from August 1942, and "from February 1943 onwards this concession was extended to all other camps and prisons" (Vol. 111, p. 78). The ICRC soon established contact with camp commandants and launched a food relief programme which continued to function until the last months of 1945, letters of thanks for which came pouring in from Jewish internees.

Red Cross Recipients Were Jews

The Report states that "As many as 9,000 parcels were packed daily. >From the autumn of 1943 until May 1945, about 1,112,000 parcels with a total weight of 4,500 tons were sent off to the concentration camps" (Vol. III, p. 80). In addition to food, these contained clothing and pharmaceutical supplies. "Parcels were sent to Dachau, Buchenwald, Sangerhausen, Sachsenhausen, Oranienburg, Flossenburg, Landsberg-am-Lech, Flöha, Ravensbrück, Hamburg-Neuengamme, Mauthausen, Theresienstadt, Auschwitz, Bergen-Belsen, to camps near Vienna and in Central and Southern Germany. The principal recipients were Belgians, Dutch, French, Greeks, Italians, Norwegians, Poles and stateless Jews" (Vol. III, p. 83).

In the course of the war, "The Committee was in a position to transfer and distribute in the form of relief supplies over twenty million Swiss francs collected by Jewish welfare organisations throughout the world, in particular by the American Joint Distribution Committee of New York" (Vol. I, p. 644). This latter organisation was permitted by the German Government to maintain offices in Berlin until the American entry into the war. The ICRC complained that obstruction of their vast relief operation for Jewish internees came not from the Germans but from the tight Allied blockade of Europe. Most of their purchases of relief food were made in Rumania, Hungary and Slovakia.

The ICRC had special praise for the liberal conditions which prevailed at Theresienstadt up to the time of their last visits there in April 1945. This camp, "where there were about 40,000 Jews deported from various countries was a relatively privileged ghetto" (Vol. III, p. 75). According to the Report, "'The Committee's delegates were able to visit the camp at Theresienstadt (Terezin) which was used exclusively for Jews and was governed by special conditions. From information gathered by the Committee, this camp had been started as an experiment by certain leaders of the Reich ... These men wished to give the Jews the means of setting up a communal life in a town under their own administration and possessing almost complete autonomy. . . two delegates were able to visit the camp on April 6th, 1945. They confirmed the favourable impression gained on the first visit" (Vol. I, p . 642).

The ICRC also had praise for the regime of Ion Antonescu of Fascist Rumania where the Committee was able to extend special relief to 183,000 Rumanian Jews until the time of the Soviet occupation. The aid then ceased, and the ICRC complained bitterly that it never succeeded "in sending anything whatsoever to Russia" (Vol. II, p. 62). The same situation applied to many of the German camps after their "liberation" by the Russians. The ICRC received a voluminous flow of mail from Auschwitz until the period of the Soviet occupation, when many of the internees were evacuated westward. But the efforts of the Red Cross to send relief to internees remaining at Auschwitz under Soviet control were futile. However, food parcels continued to be sent to former Auschwitz inmates transferred west to such camps as Buchenwald and Oranienburg.

No Evidence Of Genocide

One of the most important aspects of the Red Cross Report is that it clarifies the true cause of those deaths that undoubtedly occurred in the camps toward the end of the war. Says the Report: "In the chaotic condition of Germany after the invasion during the final months of the war, the camps received no food supplies at all and starvation claimed an increasing number of victims. Itself alarmed by this situation, the German Government at last informed the ICRC on February 1st, 1945 ... In March 1945, discussions between the President of the ICRC and General of the S.S. Kaltenbrunner gave even more decisive results. Relief could henceforth be distributed by the ICRC, and one delegate was authorised to stay in each camp ..." (Vol. III, p. 83).

Clearly, the German authorities were at pains to relieve the dire situation as far as they were able. The Red Cross are quite explicit in stating that food supplies ceased at this time due to the Allied bombing of German transportation, and in the interests of interned Jews they had protested on March 15th, 1944 against "the barbarous aerial warfare of the Allies" (Inter Arma Caritas, p. 78). By October 2nd, 1944, the ICRC warned the German Foreign Office of the impending collapse of the German transportation system, declaring that starvation conditions for people throughout Germany were becoming inevitable.

In dealing with this comprehensive, three-volume Report, it is important to stress that the delegates of the International Red Cross found no evidence whatever at the camps in Axis occupied Europe of a deliberate policy to exterminate the Jews. In all its 1,600 pages the Report does not even mention such a thing as a gas chamber. It admits that Jews, like many other wartime nationalities, suffered rigours and privations, but its complete silence on the subject of planned extermination is ample refutation of the Six Million legend. Like the Vatican representatives with whom they worked, the Red Cross found itself unable to indulge in the irresponsible charges of genocide which had become the order of the day. So far as the genuine mortality rate is concerned, the Report points out that most of the Jewish doctors from the camps were being used to combat typhus on the eastern front, so that they were unavailable when the typhus epidemics of 1945 broke out in the camps (Vol. I, p. 204 ff) - Incidentally, it is frequently claimed that mass executions were carried out in gas chambers cunningly disguised as shower facilities. Again the Report makes nonsense of this allegation. "Not only the washing places, but installations for baths, showers and laundry were inspected by the delegates. They had often to take action to have fixtures made less primitive, and to get them repaired or enlarged" (Vol. III, p. 594).

Not All Were Interned

Volume III of the Red Cross Report, Chapter 3 (I. Jewish Civilian Population) deals with the "aid given to the Jewish section of the free population," and this chapter makes it quite plain that by no means all of the European Jews were placed in internment camps, but remained, subject to certain restrictions, as part of the free civilian population. This conflicts directly with the "thoroughness" of the supposed "extermination programme", and with the claim in the forged Höss memoirs that Eichmann was obsessed with seizing "every single Jew he could lay his hands on."

In Slovakia, for example, where Eichmann's assistant Dieter Wisliceny was in charge, the Report states that "A large proportion of the Jewish minority had permission to stay in the country, and at certain periods Slovakia was looked upon as a comparative haven of refuge for Jews, especially for those coming from Poland. Those who remained in Slovakia seem to have been in comparative safety until the end of August 1944, when a rising against the German forces took place. While it is true that the law of May 15th, 1942 had brought about the internment of several thousand Jews, these people were held in camps where the conditions of food and lodging were tolerable, and where the internees were allowed to do paid work on terms almost equal to those of the free labour market" (Vol. I, p. 646).

Not only did large numbers of the three million or so European Jews avoid internment altogether, but the emigration of Jews continued throughout the war, generally by way of Hungary, Rumania and Turkey. Ironically, post-war Jewish emigration from German-occupied territories was also facilitated by the Reich, as in the case of the Polish Jews who had escaped to France before its occupation. "The Jews from Poland who, whilst in France, had obtained entrance permits to the United States were held to be American citizens by the German occupying authorities, who further agreed to recognize the validity of about three thousand passports issued to Jews by the consulates of South American countries" (Vol. I, p. 645).

As future U.S. citizens, these Jews were held at the Vittel camp in southern France for American aliens. The emigration of European Jews from Hungary in particular proceeded during the war unhindered by the German authorities. "Until March 1944," says the. Red Cross Report, "Jews who had the privilege of visas for Palestine were free to leave Hungary" (Vol. I, p. 648). Even after the replacement of the Horthy Government in 1944 (following its attempted armistice with the Soviet Union) with a government more dependent on German authority, the emigration of Jews continued.

The Committee secured the pledges of both Britain and the United States "to give support by every means to the emigration of Jews from Hungary," and from the U.S. Government the ICRC received a message stating that "The Government of the United States ... now specifically repeats its assurance that arrangements will be made by it for the care of all Jews who in the present circumstances are allowed to leave" (Vol. I, p . 649).

Biedermann agreed that in the nineteen instances that "Did Six Million Really Die?" quoted from the Report of the International Committee of the Red Cross on its Activities during the Second World War and Inter Arma Caritas (this includes the above material), it did so accurately.

A quote from Charles Biedermann (a delegate of the International Committee of the Red Cross and Director of the Red Cross' International Tracing Service) under oath at the Zündel Trial (February 9, 10, 11 and 12, 1988).

The above is chapter nine from the book "Did Six Million Really Die?"

Shops press ahead with VAT rise

High Street bosses are so convinced the new Government will increase VAT to 20pc that one of the UK's largest chains is already altering its prices in anticipation.

One of the UK's best-known retailers, with sales of well over £10bn, is telling its overseas suppliers to start adjusting its price tags on clothing and other products to assume a VAT level of 20pc. The goods in question will hit the shops in February of next year.

Meanwhile the impact of a VAT increase on UK households is revealed in new research by The Sunday Telegraph showing that day-to-day living costs in the average home would rise by at least £216 a year if the rate was raised from 17.5pc to 20pc.

This figure is based on the basic spending patterns of Britons' everyday lives, and would be significantly higher if one-off 'big ticket' items, such as cars, furniture or electrical items, are taken into account.

The potential impact of a VAT rise comes as experts have warned that financial plans by the coalition Government could leave some ordinary families £3,000 a year worse off.

Stephen Herring, tax partner at accountants BDO, said that a couple with two children, where one parent earned £50,000 a year and made a modest gain of £6,000 on the sale of shares or other assets, could be more than £2,000 worse off a year under expected new measures including changes to the capital gains tax (CGT) regime.

Meanwhile, Patricia Mock, tax partner at Deloitte, said that the well-trailed axing of tax credits for families earning £50,000 or above would slice a further £1,000 off the family's annual income.

The calculations have been made after careful study of the coalition agreement announced last week, which heralded a package of tax measures including the phased raising of the threshold at which income tax kicks in to £10,000.

The amount by which families will be out of pocket is bigger than previously-published estimates which did not take CGT into account.

VAT is currently at 17.5pc but economists widely assume that George Osborne, the Chancellor, will soon increase this by 2.5pc as a means of tackling the country's £167 billion deficit. The increase, which would raise £1 billion a month for the Treasury, will have an impact on the price of every product sold in shops, except for groceries, children's clothing, newspapers and books.

Last week 24 out of 28 leading economists said that they expect VAT to increase to 20pc by the end of 2011. Many believe it could be sooner, perhaps as part of the coalition government's emergency budget in the coming weeks.

Karen Robb, VAT partner at Grant Thornton, which carried out the cost-of-living research for this newspaper, described the rise as "likely".

The £216 increase predicted by Grant Thornton is based on annual spending on transport, recreation activities, petrol, restaurants, clothing, footwear, food, drink, tobacco and household bills.

Mike Warburton, a director at Grant Thornton, said that a VAT increase would be a "logical" way to help plug the deficit.

The high street retailer that is already altering its prices in anticipation of the rise asked not to be named.

Robert Fisk: Silenced for speaking the truth about Guantanamo

I began my column last week with the words "We know all about Guantanamo". I was wrong. Courtesy of the Toronto press – until a few days ago, when half of them were censored out of the drumhead courts martial that pass for "justice" in this execrable place – I have been learning a lot more.

Because the case involves a Canadian citizen – and because the Canadian government is doing sod-all for its passport-carrying prisoner – it hasn't been getting a lot of publicity on this side of the Atlantic. It should.

Omar Khadr was 15 when he allegedly – the word "'allegedly" is going to have to be used for ever, since this is not a fair trial – shot and killed a US Special Forces soldier in eastern Afghanistan in July 2002. Last week, a former US serviceman called Damien Corsetti, nicknamed "The Monster" at the Bagram jailhouse where torture and murder were widespread, agreed via a video link to the Guantanamo "court" that Khadr was trussed up in a cage "in one of the worst places on earth". "We could do basically anything to scare the prisoners," Corsetti announced.

Beating was forbidden, "The Monster" acknowledged, but prisoners could be threatened with "nightmarish scenarios" like rendition to Egypt or Israel where, according to Canada's Globe and Mail, "they would disappear". Which tells you a lot about Israel. Or what the Americans think of Israel. Quite a lot about Egypt, too, come to think of it.

I should add that Mr Khadr, who is now 23, was gravely wounded when he was brought to Bagram. As Mr Corsetti said, "He was a 15-year old kid with three holes in his body, a bunch of shrapnel in his face." The lads at Bagram – the guards and interrogators, that is – dubbed him "Buckshot Bob". Clever, huh?

Mr Corsetti, I should also add, was kind to Mr Khadr. He was earlier acquitted of charges of detainee abuse – not involving Khadr – and now says he is a disabled veteran being treated for "post-traumatic stress disorder". In other words, quite a find for Khadr's defence lawyers. Not for the Canadian government, however, which asked the Obama administration to suppress the fact that in 2003 and 2004, Khadr had given information to officials of the Ottawa department of foreign affairs and to agents of the Canadian Security and Intelligence Service (CSIS, for those who care).

The Canadian Supreme Court (for which I care a lot, because it appears to be fair) has already ruled that the conditions of Khadr's imprisonment at Guantanamo when interrogated by CSIS "constituted a clear violation of Canada's international human rights obligations".

Another American interrogator at Bagram, a sergeant, it turned out at the Guantanamo hearings, had questioned Khadr about his role in the Taliban. This interrogator, named Joshua Claus, was later convicted of detainee abuse – though not against Khadr. Claus also pleaded guilty to assaulting an innocent Afghan taxi driver named Dilawar who died in custody at Bagram.

We know Claus's identity because he gave press interviews to, among others, The Toronto Star, in 2008, when he claimed that his former employers were "trying to imply I'm beating or torturing everybody I ever talked to". Claus said, "Omar was pretty much my first big case. With Omar, I spent a lot of time trying to understand who he was and what I could say to him or do for him, whether it be to bring him extra food or get a letter out to his family." There was a lot more stuff at these hearings, admission of a "fear up" and "fear down" technique, for example – "fear up" apparently involved the threat of rape "by four big black guys".

In other words, another horrible, obscene story from Guantanamo. But wait. We can't have this kind of publicity show in the Canadian press, can we? Not least when Khadr's own government will do nothing for him. So get this. The Pentagon has announced that more than half of the Canadian press – including The Globe and Mail and the Star – will no longer be able to report the Guantanamo "proceedings" because they named Mr Claus as one of the interrogators – even though Mr Claus had himself given interviews to the press two years ago. But he wasn't named at Guantanamo. Get it?

Information already in the public domain is no longer in the public domain when it isn't mentioned at a drumhead trial in Cuba. (Yes, let's just remember that Guantanamo is actually in bloody Cuba!) The Pentagon didn't even call the reporters concerned – they used email, of course, because there might have been an argument, mightn't there?

Fairness in court? Not that we are going to find out. Khadr's father was an al-Qa'ida official. His life was almost certainly saved by US medics – there are some good guys in these wars – but he was most definitely tortured; and Canada (here I quote the Globe and Mail's excellent editorial) "in a sneaky and illegal fashion, participated in the abuse. It turned the fruits of its own interrogations of Mr Khadr to the prosecution, at a time when the military commissions had no explicit bar against evidence obtained coercively".

Too bad we won't have to hear much more about this trial, not in Canada, at least. The Star and The Globe and Mail have since made no reference to Claus's identity. Not surprising, I suppose. But remember, you read it here.

A123 Systems (AONE): What Happened to that ‘Hot IPO?’

Touted by Cramer and other mainstream media pundits as the “Hottest IPO of the Year,” A123 systems made its public debut in September 2009. We, at ChartingStocks didn’t share in the hyped up optimism and suggested that our readers steer clear from this issue for reasons you can read about here.

GE subsidiary CNBC, tried awful hard to prop up A123 Systems, which was also owned by GE. The stock began to collapse once the 30-day short sale restriction was lifted (IPO’s can’t be sold short during the first 30 trading days). The stock plunged from $28 to $8.10 last week (As the S&P 500 rose 8% in that same time frame). The stock currently trades roughly 30% below the initial offering price and appears to be rising from oversold conditions. If I were interested in the A123 story, which I’m not, I’d consider entering at this level rather than being suckered into media hype. Bottom Line: Be cautious of “Hot IPO’s.”

The Bailout of Big American Banks Has Cost Trillions More Than We've Been Told

Granted, the $700 billion dollar TARP bailout was a massive bait-and-switch. The government said it was doing it to soak up toxic assets, and then switched to saying it was needed to free up lending. It didn't do that either. Indeed, the Fed doesn't want the banks to lend.

True, as I wrote in March 2009:

The bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:

Bailout money is being used to subsidize companies run by horrible business men, allowing the bankers to receive fat bonuses, toredecorate their offices, and to buy gold toilets and prostitutes

A lot of the bailout money is going to the failing companies'shareholders

Indeed, a leading progressive economist says that the true purpose of the bank rescue plans is "a massive redistribution of wealth to the bank shareholders and their top executives"

The Treasury Department encouraged banks to use the bailout money to buy their competitors, and pushed through an amendment to the tax laws which rewards mergers in the banking industry (this has caused a lot of companies to bite off more than they can chew, destabilizing the acquiring companies)

And as the New York Times notes, "Tens of billions of [bailout] dollars have merely passed through A.I.G. to its derivatives trading partners".

***

In other words, through a little game-playing by the Fed, taxpayer money is going straight into the pockets of investors in AIG's credit default swaps and is not even really stabilizing AIG.

But the TARP bailout is peanuts compared to the numerous other bailouts the government has given to the giant banks.

And I'm not referring to the $23 trillion in bailouts, loans, guarantees and other known shenanigans that the special inspector general for the TARP program mentions. I'm talking about more covert types of bailouts.

Like what?

Guaranteeing a Fat Spread on Interest Rates

Well, as Bloomberg notes:

“The trading profits of the Street is just another way of measuring the subsidy the Fed is giving to the banks,” said Christopher Whalen, managing director of Torrance, California-based Institutional Risk Analytics. “It’s a transfer from savers to banks.”

The trading results, which helped the banks report higher quarterly profit than analysts estimated even as unemployment stagnated at a 27-year high, came with a big assist from the Federal Reserve. The U.S. central bank helped lenders by holding short-term borrowing costs near zero, giving them a chance to profit by carrying even 10-year government notes that yielded an average of 3.70 percent last quarter.

The gap between short-term interest rates, such as what banks may pay to borrow in interbank markets or on savings accounts, and longer-term rates, known as the yield curve, has been at record levels. The difference between yields on 2- and 10-year Treasuries yesterday touched 2.71 percentage points, near the all-time high of 2.94 percentage points set Feb. 18.

Harry Blodget explains:

The latest quarterly reports from the big Wall Street banks revealed a startling fact: None of the big four banks had a single day in the quarter in which they lost money trading.

For the 63 straight trading days in Q1, in other words, Goldman Sachs (GS), JP Morgan (JPM), Bank of America (BAC), and Citigroup (C) made money trading for their own accounts.

Trading, of course, is supposed to be a risky business: You win some, you lose some. That's how traders justify their gargantuan bonuses--their jobs are so risky that they deserve to be paid millions for protecting their firms' precious capital. (Of course, the only thing that happens if traders fail to protect that capital is that taxpayers bail out the bank and the traders are paid huge "retention" bonuses to prevent them from leaving to trade somewhere else, but that's a different story).

But these days, trading isn't risky at all. In fact, it's safer than walking down the street.

Why?

Because the US government is lending money to the big banks at near-zero interest rates. And the banks are then turning around and lending that money back to the US government at 3%-4% interest rates, making 3%+ on the spread. What's more, the banks are leveraging this trade, borrowing at least $10 for every $1 of equity capital they have, to increase the size of their bets. Which means the banks can turn relatively small amounts of equity into huge profits--by borrowing from the taxpayer and then lending back to the taxpayer.

***

The government's zero-interest-rate policy, in other words, is the biggest Wall Street subsidy yet. So far, it has done little to increase the supply of credit in the real economy. But it has hosed responsible people who lived within their means and are now earning next-to-nothing on their savings. It has also allowed the big Wall Street banks to print money to offset all the dumb bets that brought the financial system to the brink of collapse two years ago. And it has fattened Wall Street bonus pools to record levels again.

Paul Abrams chimes in:

To get a clear picture of what is going on here, ignore the intermediate steps (borrowing money from the fed, investing in Treasuries), as they are riskless, and it immediately becomes clear that this is merely a direct payment from the Fed to the banking executives...for nothing. No nifty new tech product has been created. No illness has been treated. No teacher has figured out how to get a third-grader to understand fractions. No singer's voice has entertained a packed stadium. No batter has hit a walk-off double. No "risk"has even been "managed", the current mantra for what big banks do that is so goddamned important that it is doing "god's work".

Nor has any credit been extended to allow the real value-producers to meet payroll, to reserve a stadium, to purchase capital equipment, to hire employees. Nothing.

Congress should put an immediate halt to this practice. Banks should have to show that the money they are borrowing from the Fed is to provide credit to businesses, or consumers, or homeowners. Not a penny should be allowed to be used to purchase Treasuries. Otherwise, the Fed window should be slammed shut on their manicured fingers.

And, stiff criminal penalties should be enacted for those banks that mislead the Fed about the destination of the money they are borrowing. Bernie Madoff needs company.

There is another type of guaranteed spread that allows the giant banks to make money hand over fist. Specifically, the Fed pays the big banks interest to borrow money at no interest and then keep money parked at the Fed itself. (The Fed is intentionally doing this for the express purpose of preventing too much money from being lent out to Main Street. That's just dandy.)

The giant banks are receiving many other covert bailouts and subsidies as well.

Too Big As Subsidy

Initially, the fact that the giant banks are "too big to fail" encourages them to take huge, risky gambles that they would not otherwise take. If they win, they make bigbucks. If they lose, they know the government will just bail them out. This is a gambling subsidy.

The very size of the too big to fails also decreases the ability of the smaller banks to compete. And - since the government itself helped make the giants even bigger - that is also a subsidy to the big boys (see this).

The monopoly power given to the big banks (technically an "oligopoly") is a subsidy in other ways as well. For example, Nobel prize winning economist Joseph Stiglitzsaid in September that giants like Goldman are using their size to manipulate the market:

"The main problem that Goldman raises is a question of size: 'too big to fail.' In some markets, they have a significant fraction of trades. Why is that important? They trade both on their proprietary desk and on behalf of customers. When you do that and you have a significant fraction of all trades, you have a lot of information."

Further, he says, "That raises the potential of conflicts of interest, problems of front-running, using that inside information for your proprietary desk. And that's why the Volcker report came out and said that we need to restrict the kinds of activity that these large institutions have. If you're going to trade on behalf of others, if you're going to be a commercial bank, you can't engage in certain kinds of risk-taking behavior."

The giants (especially Goldman Sachs) have also used high-frequency program trading which not only distorted the markets - making up more than 70% of stock trades - but which also let the program trading giants take a sneak peak at what the real (aka “human”) traders are buying and selling, and then trade on the insider information. See this, this, this, this and this. (This is frontrunning, which is illegal; but it is a lot bigger than garden variety frontrunning, because the program traders are not only trading based on inside knowledge of what their own clients are doing, they are also trading based on knowledge of what all other traders are doing).

Goldman also admitted that its proprietary trading program can "manipulate the markets in unfair ways". The giant banks have also allegedly used their Counterparty Risk Management Policy Group (CRMPG) to exchange secret information and formulate coordinated mutually beneficial actions, all with the government's blessings.

In addition, the giants receive many billions in subsidies by receiving government guarantees that they are "too big to fail", ensuring that they have to pay lower interest rates to attract depositors.

Derivatives

And the government's failure to rein in derivatives or break up the giant banks also constitute enormous subsidies, as it allows the giants to make huge sums by keeping the true price points of their derivatives secret. See this and this.

Toxic Assets

And the PPIP program - which was supposed to reduce the toxic assets held by banks - actually increased them, and just let the banks make a quick buck.

Mortgages and Housing

PhD economists John Hussman and Dean Baker (and fund manager and financial writer Barry Ritholtz) say that the only reason the government keeps giving billions to Fannie and Freddie is that it is really a huge, ongoing, back-door bailout of the big banks.

Many also accuse Obama's foreclosure relief programs as being backdoor bailouts for the banks. (See this, this and this).

Foreign Bailouts

The big banks - such as JP Morgan - also benefit from foreign bailouts, such as the European bailout, as they are some of the largest creditors of the bailed out countries, and the bailouts allow them to get paid in full, instead of having to write down their foreign losses.

These are just a few of the secret bailouts programs the government is giving to the giant banks. There are many other bailout programs as well. If these bailouts and subsidies are added up, they amount to many tens - or perhaps even hundreds - of trillions of dollars.

And then there is the cost of debasing the currency in order to print money to fund these bailouts. The cost to the American citizen in less valuable dollars will be truly staggering.

US bankruptcies resume upward path in 1st quarter

* Consumer filings up 18 pct, business filings up 2 pct

NEW YORK, May 14 (Reuters) - U.S. bankruptcy filings resumed their upward climb in the first quarter, nearly equaling their highest level since 2005, as high unemployment and a still-strained housing market squeezed consumers.

There were 388,148 filings between January and September, up 17 percent from 330,394 a year earlier, according to data released Friday by the Administrative Office of the U.S. Courts. Consumer filings rose 18 percent to 373,541, while business filings edged up 2 percent to 14,607.

Filings also rose 4 percent from last year's fourth quarter, the government data show. That had been the first period with a quarter-to-quarter drop in filings since 2006.

For the 12 months ended March 31, there were 1.53 million filings, up 27 percent from a year earlier and the most since 2006. Some experts expect the number to stay above 1.5 million in future periods.

"We're not anyway near through our housing situation, and are going to see more foreclosures, perhaps for another three years," said David Jones, president of the Association of Independent Consumer Credit Counseling Agencies in Fairfax, Virginia. "The job situation is also serious. It's not just that people cannot find jobs, but many who have found jobs are finding them at lower wages."

First-quarter filings were the second-most since the fourth quarter of 2005, when Congress overhauled federal bankruptcy laws to make it tougher for people to file. They nearly equaled the 388,485 filings in the third quarter of 2009.

According to the American Bankruptcy Institute, Arizona had a 69 percent rise in total filings over the last year, the biggest increase in any federal district.

On a per capita basis, Nevada had the most filings, with 11.7 per 1,000 people.

Both states have been among the hardest hit by the nation's housing and commercial real estate problems.

Tennessee ranked second per capita, followed by Georgia, Indiana and Alabama. Among the most populous states, California was 8th per capita, Texas 48th, New York 41st and Florida 15th. Alaska had the fewest filings per capita, with 1.54 per 1,000 people.

In the quarter, about 73 percent of bankruptcy filings came under Chapter 7 of the U.S. bankruptcy code, 26 percent under Chapter 13, and most of the rest under Chapter 11.

Consumers use Chapter 7 to get a fresh financial start. Chapter 13 lets people discharge some debts. Businesses often use Chapters 7 and 11. Farmers use Chapter 12 of the code. (Reporting by Jonathan Stempel, editing by Gerald E. McCormick)

Schwarzenegger’s solution to California’s budget woes: End welfare

Governor Arnold Schwarzenegger on Friday unveiled plans to plug California's budget deficit by slashing billions of dollars worth of funding for services designed to help the state's poor.

Schwarzenegger's budget proposals would see spending cuts of 12.4 billion dollars and include the elimination of California's welfare-to-work program and virtually all child care for low income families.

"California no longer has low-hanging fruits," Schwarzenegger said in Sacramento. "We have to take the ladder away from the tree and shake the whole tree. We must make very difficult decisions."

Schwarzenegger said his spending cuts would eliminate 60 percent of funding for community mental health. Low income families would also lose access to state-subsidized day care for children, the governor added.

"The list goes on and on. We're left with nothing but tough choices," Schwarzenegger said.

Schwarzenegger said the cuts were necessary to close a projected 19.1 billion dollar deficit for the fiscal year starting July 1.

Schwarzenegger has refused to raise taxes to narrow the shortfall and described the proposed cuts to spending as "painful" but essential.

"Everyone across the board has been hit in these last three years," Schwarzenegger said. "It is painful to make these cuts, it is painful for me and our entire team that we have to create elimination of certain programs.

"But we are forced to do it. And I see very clearly the faces behind those numbers. I know how many people are suffering out there and how painful this is going to be."

Schwarzenegger compared the problems faced by California -- which had an unemployment rate of 12.6 percent in March, well above the national figure -- to current fiscal crises embroiling countries in Europe.

"You see what's happening in Greece, you see what's happening in Ireland, Spain -- everyone comes to the realization that you can't go spending money and promising things that you can't keep," he said.

A budget crisis last year pushed California, which would have the world's eighth largest economy if it were a country, to the brink of bankruptcy, sending the state's credit-rating plunging and forcing it to start paying bills with IOUs.

Analysts and legislators say California's seemingly eternal fiscal gridlock is a consequence of the state's constitution, which requires a two-thirds majority to pass a budget or raise taxes.

California is only one of three states to require such a margin in its legislature to pass a budget.

Ex-Director of the WHO's Global Influenza Programme, suggests developing a vaccine including a "cocktail" of flu strains ... together with an adjuvant

An influenza specialist who previously led the World Health Organization's (WHO's) flu program and now works for Novartis, has recommended that developing a prepandemic vaccination to get a grip on the next flu endemic, a thought that other experts are welcoming with concern or cynicism.

Dr. Klaus Stohr, ex-Director of the WHO's Global Influenza Programme, suggests developing a vaccine including a "cocktail" of flu strains considered apt to cause the next epidemic, together with an adjuvant (immune-system stimulant). He proposes the plan in an opinion article released yesterday online by Nature.

The proposal of prepandemic vaccine has been around for years, stimulated by some researches implying that adjuvants can make flu vaccines defensive against more than just the particular viral damage they are based on.

But since of a lot of doubts like an approach, together with security questions and the volatile timing of epidemics, it has never got much footing.

Stohr says that prepandemic vaccination would help deal with the problem when an epidemic virus surfaces. It takes around 6 months to develop and generate a well-suited vaccination for it, as was exhibited last year with the epidemic H1N1 virus.

He says that this idea can also help lessen the massive scarcity of production capacity to meet worldwide requirements.

Regulators shut 4 banks; 72 have failed this year

WASHINGTON — Regulators on Friday shut down Midwest Bank and Trust Company in Elmwood Park, Ill., as well as three smaller banks in Georgia, Michigan and Missouri to bring the number of U.S. bank failures this year to 72.

The Federal Deposit Insurance Corp. took over Midwest Bank and Trust, which had about $2.4 billion in deposits and $3.2 billion in assets.

FirstMerit Bank, N.A., of Akron, Ohio, agreed to assume all the deposits of Midwest Bank and Trust and essentially all the assets.

Midwest Bank and Trust had 23 branches. FirstMerit is a division of FirstMerit Corp. According to its Web site, FirstMerit Bank has 186 offices in Ohio, Pennsylvania and Illinois.

The FDIC and Firstmerit Bank agreed to share losses on about $2.3 billion of Midwest Bank and Trust assets. The move is expected to cost the deposit insurance fund about $216.4 million.

The other banks the FDIC took over were:

_ New Liberty Bank, based in Plymouth, Mich. The bank had about $101.8 million in deposits and $109.1 million in assets. Bank of Ann Arbor in Ann Arbor, Mich., agreed to acquire the deposits and nearly all of its assets. New Liberty Bank had one branch.

_ Southwest Community Bank, based in Springfield, Mo. It had deposits of about $102.5 million and $96.6 million in assets. Simmons First National Bank of Pine Bluff, Ark., will acquire the deposits of Southwest Community Bank and essentially all of its assets. Southwest Community Bank had one branch.

_ Satilla Community Bank, based in Saint Marys, Ga. It had about $134 million in deposits and $135.7 million in assets. Ameris Bank, based in Moultrie, Ga., agreed to acquire the bank's deposits and nearly all of its assets. Satilla Community Bank had one branch.

Satilla Community Bank was the eighth bank to fail this year in Georgia, one of the states where the meltdown in the real estate market brought an avalanche of soured mortgage loans. There were 25 bank failures in Georgia last year, more than in any other state. Also high on the list are California, Florida and Illinois.

With 72 closures so far this year, the pace of bank failures is more than double that of 2009, already a brisk year for shutdowns. By this time last year, regulators had closed 33 U.S. banks. The pace has accelerated as losses mount on loans made for commercial property and development.

The number of bank failures is expected to peak this year and to be slightly higher than the 140 that fell in 2009. That was the highest annual tally since 1992, at the height of the savings and loan crisis. The 2009 failures cost the insurance fund more than $30 billion. Twenty-five banks failed in 2008, the year the financial crisis struck with force, and only three succumbed in 2007.

As losses have mounted on loans made for commercial property and development, the growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, hitting a $20.9 billion deficit as of Dec. 31.

The number of banks on the FDIC's confidential "problem" list jumped to 702 in the fourth quarter from 552 three months earlier, even as the industry squeezed out a small profit. Still, nearly one in every three banks reported a net loss for the latest quarter.

The FDIC expects the cost of resolving failed banks to grow to about $100 billion over the next four years.

The agency mandated last year that banks prepay about $45 billion in premiums, for 2010 through 2012, to replenish the insurance fund.

Depositors' money — insured up to $250,000 per account — is not at risk, with the FDIC backed by the government. Apart from the fund, the FDIC has about $66 billion in cash and securities available in reserve to cover losses at failed banks.

AP Business Writer Tim Paradis in New York contributed to this report.

Fire Dog Lake Attacks Peter Schiff

Peter Schiff must be making an impact. The big time interventionist-supporting blog site, Fire Dog Lake, has sent a hit man to take care of Schiff. The hit is so far off base that I am waiting for the movie version, The Blog that Couldn't Argue Straight.

One captjjyossarian writes that, get this, Schiff is in favor of a plutocracy because he doesn't want the Federal Reserve to control the money supply. Yes sir, the same Federal Reserve that just announced it is going to engage in billions in "currency swaps" with EU governments to help bailout bankster/plutocrats, Schiff is against. Schiff being against this, somehow in the mental wiring of an FDL blogger, makes him in favor of plutocrats.

What captjjyossarian doesn't get is that in a free market monetary system, we wouldn't be forced to use bankster money. And if you weren't forced to, who would? You would obviously use a money that the banksters couldn't print at will, such as gold and silver. Bankster/plutocrats hate gold and silver because it is a money of the people, not designed or controlled by plutocrats.Gold and silver, for example, developed as money as an unintended consequence of market exchanges (using the term "unintended consequence" in the much more complex and interesting manner that F.A. Hayek intially used the term, than the way it is used by pop commentators, who have no clue who Hayek was or what he meant).

The captain then takes Schiff on in an even more bizzare fashion. He writes:

And on a related note, Damon Vrabel made an important point about Peter Schiff’s politics on Max Keiser’s RT show. Mr. Vrabel pointed out that government is the only avenue of attack which we have for fixing our broken system. By attacking government, Mr Schiff is trying to kill our only hope.

Can the captain really be serious. Has he seen how many times bankster Jamie Dimon has visted the White House? Has he seen who Treasury Secretary Geithner gives a private briefing to?

What I want is less government so these characters don't lord over me, not for them to be replaced by other characters that will lord over me with their pet intrusions into my life. That the Captain thinks government is the solution and gets an audience for his writing is a clear indication of why we need Ron Paul and Peter Schiff explaining the problems with government. And that's why I cheer on what the Captain fears:

Peter Schiff has been given a lot of airtime on mainstream networks over the last couple years and that’s troublesome. Troublesome because he’s been showcased as an "alternative point of view" to most of the expert clowns that mainstream media brings on thier (sic) shows.

Gulf Oil Leaks Could Gush for Years

"We don't have any idea how to stop this," expert says.

Main Content

Seen up close, an iridescent sheen of oil swirls on Gulf of Mexico waters Tuesday.

BP Attitude on Spill Size Called "Scandalous"

(CBS) As efforts continue to stop the mammoth oil leak from the sunken British Petroleum rig in the Gulf of Mexico and contain the potential damage from the resulting spill, question s are being raised about how big the leak really is.

CBS News Correspondent Mark Strassmann reports, "Several scientists believe the actual leak has been grossly under-reported -- not 5,000 barrels a day, but as much as 14 times higher, or 70,000 barrels a day, which BP denies."

And, on "The Early Show on Saturday Morning," Florida State University oceanographer Ian MacDonald said, all else aside, "This is an unprecedented emergency. We've never had a spill of this magnitude at this depth go on for so long. They have to be trying everything they can (to plug it) and they also have to understand that this is beyond their previous experience."

Special Section: Disaster in the Gulf
Oil Spill by the Numbers
Gulf Oil Spill Containment Efforts

In an interview with the British newspaper Guardian Friday, BP CEO Tony Hayward said, "The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume."

MacDonald told co-anchor Chris Wragge, "That is scandalous. We don't need a filthy rich executive in his London penthouse telling the people of Louisiana and Florida that the Gulf of Mexico (spill) is tiny."

What's more, MacDonald continued, "We could be doing much better at estimating these rates both on the sea floor and on the surface. But the point is, what surgeon trying to save the life of a patient on the operating table would say, 'I don't need to know how bad the bleeding is?' Of course we need to know how bad the leak is, because we need to know if these measures are working. So it's essential to know how fast the oil is coming out of this leak, and how much is reaching the surface. That's the only way we'll know if these measures that we're taking are having any positive effect."

Making estimating even tougher, MacDonald points out, is that, "They have sprayed coming up on half a million gallons of a dispersant ... a powerful detergent. And what it does is it breaks the oil down into tiny droplets that then stay suspended in the underwater. So, a large fraction of the oil that's been released is actually under the water at this point, and we're not entirely clear where it's going as oceanographers."

The Fed Currency Swaps Begin

That didn't take long.

The Federal Reserve provided $9.205 billion of liquidity to foreign central banks since reopening foreign exchange swap lines this last week, the New York Fed reports.

The European Central Bank was the only institution to draw on the swap lines this week, swapping the full $9.205 billion amount.

The terms for the ECB swap were eight days at 1.22 percent, the New York Fed said.

This number has to be watched closely. If it gets out of control ($100 billion or more), there is no way the Fed will be able to sterilize that kind of money printing and severe inflation will be on the way.

Bank Failures Exceed 2009's Pace

WASHINGTON (TheStreet) - State regulators closed four community banks Friday, bringing the total number of failed banks for 2010 to 72.

Year-to-date bank failures were more than double the pace for the same period in 2009, when there were 33 bank closures.

All four of the banks that failed on Friday had been previously assigned E-minus (Very Weak) financial strength ratings by TheStreet.com Ratings and all four were included in TheStreet's Bank Watch List, which included undercapitalized banks, based on a preliminary set of first quarter regulatory data.

Midwest Bank & Trust

The largest bank failure on Friday was Midwest Bank & Trust of Elmwood Park, Ill, which was the main subsidiary of Midwest Banc Holdings (MBHI). After state regulators took over the institution, the Federal Deposit Insurance Corporation was appointed receiver and sold Midwest to FirstMerit Bank, NA of Akron, Ohio, which is held by FirstMerit Corp (FMER).

While Midwest Bank & Trust faced mounting loan losses, the deterioration of the bank's capital first came to a head when the government-sponsored mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) were placed under government conservatorship in September 2008. On the holding company level, Midwest Banc Holdings reported total 2008 losses and impairment charges of nearly $82 million on the company's investments in preferred shares of Fannie and Freddie.

FirstMerit paid the FDIC a premium of 0.4% for Midwest Bank & Trust's $2.4 billion in deposits, and the FDIC agreed to share in losses on $2.3 billion of the assets First Merit acquired. Midwest's 23 offices were scheduled to reopen Saturday as FirstMerit branches.

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The bank failure was expected to cost the FDIC's deposit insurance fund $216.4 million, although FirstMerit also granted the agency a "value appreciation instrument," which will probably lead to another payment from FirstMerit to the FDIC later on.

COMPANY NEWS; Derivatives Get a Key Supporter

WASHINGTON, May 25— Strongly disagreeing with a new Congressional study, the chairman of the Federal Reserve Board, Alan Greenspan, said today there was "negligible" risk that the rapidly growing market for financial derivatives might someday require a taxpayer bailout.

In testimony before a House subcommittee, Mr. Greenspan and other senior financial regulators said there was no need for new legislation to supervise derivatives.

Derivatives are highly profitable products offered by banks and brokerage firms to corporations and investors. They are contracts with cash values that are tied to, or "derived" from, the price of financial assets like stocks, bonds, commodities or currencies. Variety of Uses

Most often, derivatives are used by companies as a form of financial insurance; they can, for example, help protect against a decline in the dollar's value that would raise the cost of a company's imports. Derivatives can also be used by investors as a substitute for owning securities.

Several large companies recently reported losses from unusual derivative transactions that combined normal hedging of risks with speculative bets on interest rates.

Last week, the General Accounting Office, an arm of Congress, released a study that called for vastly expanded regulation of the dealers and users of derivatives. In particular, the G.A.O. called for much closer supervision of the derivatives activities of brokerage firms and insurance companies, which are not regulated as tightly as federally insured banks. Fears of a Bailout

The G.A.O. said that because derivatives activity was concentrated in a few big banks and brokerage firms, there was an increased possibility of a market crisis leading to a taxpayer-financed bailout that might have to be extended even to uninsured brokerage firms.

Mr. Greenspan challenged the G.A.O.'s assertion that the Government could be at financial risk. He noted that brokerage firms can borrow from the Federal Reserve's discount window in case of emergency but he emphasized that such loans are backed by collateral and, in his view, pose virtually no risk to the Government.

Moreover, Mr. Greenspan played down the risk of derivatives to commercial banks. "There is no presumption that the major thrust of derivatives activities is any riskier, indeed it may very well be less risky, than commercial lending," he said.

Mr. Greenspan argued repeatedly that additional Government regulation was not necessary because of "private regulation" by investors, credit rating agencies and others that insist on financial soundness in those with whom they do business. Safeguards Are Seen

"The G.A.O. report's concern that there are gaps in derivatives regulation is true only in the narrow sense that Government regulations or regulators are not in all cases involved," Mr. Greenspan said. "In a more important sense, today's markets and firms, especially those firms that deal in derivatives, are heavily regulated by private counterparties who, for self-protection, insist that dealers maintain adequate capital and liquidity."

Arthur Levitt Jr., the chairman of the Securities and Exchange Commission, said the agency did not need additional powers to oversee the derivatives activities of affiliates of the brokerage firms it regulated. Still, under intense questioning from Representative Edward J. Markey of Massachusetts, the chairman of the Telecommunications and Finance subcommittee, Mr. Levitt said the S.E.C. did not have the legal authority to compel these derivative dealers to submit to examination by regulators.

"If they wish to deny us information, they could do so," he said, although he noted that the agency had found no evidence of unsafe derivatives activities at brokerage firms.

Mr. Markey said he was worried that the S.E.C. was dependent on voluntary cooperation by the brokers. "Securities and insurance regulators have to rely on the kindness of strangers, like Blanche DuBois," he said, referring to the character in "A Streetcar Named Desire."

The regulators also rejected Mr. Markey's assertion that derivatives regulations should be made consistent for banks and brokerage firms. Variations Are Noted

"The markets are different," Mr. Levitt said. "The banking industry is protected by an insurance fund that guarantees its safety and soundness." Brokerage firms, by contrast, are regulated to prevent fraud and theft of securities from customer accounts, but they are regularly allowed to fail, he said.

Mr. Markey said he hoped to introduce and have passed in this Congressional session legislation that would expand regulation of derivatives. That goal may be made more difficult by the actions of Representative John D. Dingell, the Michigan Democrat who is chairman of the full Energy and Commerce Committee. Mr. Dingell today released letters that he had sent to Mr. Levitt and Treasury Secretary Lloyd Bentsen asking for formal comments on the G.A.O.'s recommendations.

Because Mr. Dingell gave the regulators 45 days for their reports, financial industry lobbyists suggested that the move would delay consideration of a derivatives bill until next year.

Mr. Markey said he would hold more hearings on derivatives, perhaps with testimony from some of the companies that have lost money using them. Learning Lessons

In today's hearing, Mr. Greenspan also argued that legislation was less needed now because in the last few years regulators had learned more about derivatives and how to press dealers to manage their risks better. "As far as the Federal Reserve Board is concerned, we feel we are ahead of the curve on this issue," he said.

Eugene A. Ludwig, the Comptroller of the Currency and the regulator of national banks, said that the 8 to 10 banks with the biggest derivatives activity were complying with new Government standards on risk management of derivatives. Still, there are 362 national banks involved with derivatives, and Mr. Ludwig said examiners had found defects in the procedures of some of the smaller ones.

Photo: For financial institutions, derivatives transactions "may very well be less risky" than commercial lending, Alan Greenspan, the chairman of the Federal Reserve, told a Congressional panel yesterday. (Associated Press) (pg. D6)