Sunday, March 28, 2010

APS: 700 jobs may be cut

Albuquerque Public Schools Superintendent Winston Brooks says the district could eliminate 700 jobs as part of his plan to close a larger than expected budget gap.

APS officials say that cuts in funding from the legislature will contribute to a $43 million shortfall – more than double what the district had expected.

State budget cuts will account for $24 million of the shortfall. The district has $15 million in its cash reserves. An additional $4 million will go to salary and benefits adjustments.

Brooks says there will most likely be layoffs of about 700 employees, an estimated 500 retirements and resignations will not be filled and a hiring freeze may have to be implemented.

Overtime and non-payroll spending could also be reduced and non-school departments will have to cut about 5% of their budgets and 40% of their discretionary spending.

And, Brooks cautioned, federal stimulus money isn't expected for the 2011-2012 school year, which could cause the budget gap to balloon to $100 million.

APS currently employees 14,000 people including teachers, administrators and custodians and has 139 campuses, according to the district’s Website.

Based on last year’s budget, roughly 85% of the district’s operating budget goes toward paying salaries and benefits.

The APS Board of Education will meet on April 1.

UAE: head of largest sovereign wealth fund missing

RABAT, Morocco — Rescue workers were scouring an artificial Moroccan lake Saturday in search of the head of Abu Dhabi's sovereign wealth fund — the world's largest — who went missing after his glider crashed.

Morocco's official MAP news agency said that Ahmed bin Zayed Al Nahyan's glider went down in the lake Friday. The pilot of the aircraft was rescued in good condition, but authorities continued the search for Al Nahyan.

Al Nahyan is the managing director of the Abu Dhabi Investment Authority. He is also the younger brother of Sheik Khalifa bin Zayed Al Nahyan, the leader of the United Arab Emirates.

The Abu Dhabi Investment Authority could not be immediately reached for comment.

The glider went down near the Sidi Mohammed Ben Abdallah Dam, which forms the lake. It is located near the Atlantic coastal town of Skhirat, some 35 kilometers south of the capital city Rabat and site of one of Morocco's royal palaces.

The search could be particularly arduous because of recent heavy rains that have pushed up water levels.

The family of Ahmed bin Zayed Al Nahyan is known to have numerous properties around this North African kingdom, which offers up ocean, mountains and desert.

The bulk of the Abu Dhabi Investment Authority holdings are in the United States and Europe. Al Nahyan said earlier this year the Abu Dhabi fund sees "significant, long-term investment potential" in both regions despite the global downturn.

The fund broke with its customary privacy by issuing its first yearly statement last week — one of the biggest steps yet by the world's largest sovereign wealth fund to increase transparency. However, the report did not contain information on its balance sheet or the overall size of the fund's holdings.

Analysts believe ADIA is the world's largest sovereign wealth fund, with estimates of its size having ranged from less than $400 billion to $875 billion and beyond.

Its investments include a $7.5 billion cash injection into Citigroup Inc. in 2007. Stocks and other equities in the developed world make up the largest class of the fund's assets, ranging from 35 to 45 percent of its holdings.

Between 35 and 50 percent of ADIA's investments are typically in North America, and another 25 to 35 percent are in Europe.

The fund, like other investors, is believed to have lost considerable value during the market downturn before bouncing back somewhat over the past year.

FBI Conducts Raids

(WXYZ) - The FBI was conducting raids Saturday night at multiple locations in southeast Michigan.

Action News has learned Homeland Security and the Joint Anti-terrorism Task Force is also involved in a major operation.

Federal officials would not say who they were targeting or where, but the FBI has set up a command center at the Washtenaw County Sheriff's Department in Ann Arbor, where they have brought in two satellite trucks and a radio tower.

Agents have also obtained search warrants and multiple arrests have been made.

Arlie plan to log for dollars no sure bet

The Eugene developer owns thousands of acres of coveted koa trees in Hawaii, but getting permission to harvest them is a difficult task

Eugene resident Jim Hanks has developed a sudden and keen interest in the unlikely subject of Hawaii’s native koa tree.

It’s not the sultry grain of the wood that attracts Hanks, or its historical relationship with Hawaii’s succession of King Kamehamehas.

Rather, it’s his pocketbook.

His JRH Engineering is owed money by Arlie & Co., a major local real estate company that has filed for the protection of bankruptcy court while it reorganizes its finances. And harvesting koa on land that Arlie owns in Hawaii has been batted about in bankruptcy hearings as one way for the company to repay the $873,734 it owes unsecured creditors — including $8,930 that belongs to Hanks’ company.

Money owed to unsecured creditors isn’t backed up by any collateral that the creditors could seize.

In a three-hour meeting with the unsecured creditors committee earlier this week, Arlie’s forester touted the value of koa timber that covers much of 5,600 acres of land Arlie owns in Hawaii, Hanks said.

Arlie executive vice president John Musumeci said during a recent bankruptcy hearing that harvesting the rare timber, which only grows on Hawaii, could produce a couple of million dollars a month.

“My preference, right now, given everything I know — and we want to be open with everybody about this asset to the extent it makes business sense — now is the time to harvest it,” he said, later adding, “Let’s just go ahead and harvest it.”

Musumeci declined to speak to a reporter on the record for this story, but company officials said in court that their goal is to do sustainable harvesting.

Arlie owns about 5,600 acres in long narrow parcels that cross the hills above Hilo on Hawaii’s Big Island. Musumeci said there is valuable timber on about 3,800 of those acres.

But Hawaii state officials say getting approvals to harvest koa on the islands is a long and arduous, if not impossible, process, especially when the land is designated for conservation — as is 95 percent of Arlie’s Hawaii holdings.

“The point is: It’s not guaranteed,” said Sam Lemmo, the state official who oversees Hawaii’s conservation lands.

The restrictions on private lands — when they’re designated for conservation under state land use law — are mind-boggling for developers from around the world who’ve purchased land in Hawaii, Lemmo said.

“They’re floored when they hear ‘I can’t do this and I can’t do that.’ It’s different here,” he said.

State would like to buy the land

Musumeci bought the Hawaii land, with what he called its “extremely rare and highly valuable timber,” in 2002 from C. Brewer & Co., a crumbling sugar empire, which had owned the land for as long as 140 years — since the time of King Kamehameha IV.

Koa has become the subject of speculation among Big Island land buyers in recent years, said John Henshaw, a retired, Oregon State University-trained federal forester who recently started a second career with The Nature Conservancy in Hawaii.

The rare and highly figured red flame koa wood sells for upwards of $150 per board foot, and some dealers claim sales as high as $500 per board foot.

The finest woodworkers sell the wavy grained “curly” koa tables, beds and other furniture pieces for a jaw dropping $10,000 to $20,000 each.

High-end veneer mills, auto manufacturers, jet plane companies, instrument makers and conference table builders all vie for a steady supply of koa, Musumeci said.

“The nature of this (Big Island) property,” Musumeci said in a recent bankruptcy hearing, “is that it is extremely unique in the world in that it’s the largest privately held forest — or maybe I should say one of the largest privately held forests — of a commodity in which there’s great worldwide demand.”

A lot of people see the potential, Henshaw said.

“They see a gold mine. They see the trees there,” he said, “but they don’t understand they’re in conservation areas and — even though they’re buying land — they can’t just cut the trees down.”

Hawaii resident Kyle Dong was the last to attempt large-scale koa logging on conservation land. A decade ago, he borrowed $10.3 million to buy 13,000 acres on the Big Island, within 10 miles of Arlie’s land, Henshaw said.

He figured his company could produce koa at the rate of 50,000 to 100,000 board feet per month.

But the lion’s share of the land that Dong bought was zoned “conservation.”

Hawaii’s 1961 land use laws divide the land on each of the islands — across private and public ownership — into four classifications: Conservation, which includes about 51 percent of the land; agriculture, about 46 percent; rural, less than 1 percent; and urban, about 2.5 percent.

The broad conservation zone was born out of worries that clearing land for growing sugar cane and pineapple — and grazing cattle — threatened to hamper the land’s ability to recharge underground water supplies.

Much of Arlie’s forests, like Dong’s forests, are “very much the intact upland forests that act like a sponge and collect water and produce water in the low land areas where most of the people and the agricultural endeavors are at,” said Sheri Mann, a state forester who surveyed the Arlie land by air last week. “They’re also where our threatened and endangered species rest. They’re like a haven for them.”

Hawaii, in fact, would like to buy Arlie’s land, if it could afford to, Mann said. “The state owns land right above it and on either side — and literally all around it,” she said.

No permits issued since early 70s

Dong began seeking a permit to log on his own land — as Arlie would have to — from the Board of Land and Natural Resources in 2000. The requirements include an environmental impact statement, public hearings and close state scrutiny.

Theoretically, it takes a minimum of six months or a year to get through the process — although the exact length of time is unknown because no applicant has gotten a permit to log on conservation land since the early 1970s, state officials said.

All who tried were either rejected or they withdrew their applications.

Dong quit trying after seven years.

“Environmentalists and native Hawaiian groups blew the whistle and said, ‘No you can’t allow this.’ They in effect stopped him from logging,” said Diane Ware, conservation chair with the Big Island’s chapter of the Sierra Club.

Dong, meanwhile, was fined $141,000 for illegally logging 135 koa trees. The developer and his lenders have been mired in a foreclosure procedure for years. This February, a bankruptcy court judge ordered the sale of the land.

“It was really agonizing for them,” Henshaw said.

So how would Arlie fare in an effort to raise cash through harvesting koa?

The company owns 289 acres zoned for agriculture and logging there would be comparatively easy. Arlie officials said in court they are doing a timber cruise to estimate the timber there.

With regard to the vast holdings of conservation land, the company has conducted preliminary talks with Mann, the state forester, who oversees the Hawaii Forest Stewardship program, which helps landowners set up forest management plans, which can include timber production.

So far, the program has been used mostly for restoration projects and seldom participates in logging proposals, Mann said. And the company still would have to obtain a permit to log on conservation land.

Arlie could face additional obstacles.

A Hong Kong-based group, Pioneer Asset Investment, holds a $1.5 million security interest on a large share of Arlie’s Hawaii land. Under Oregon law, Pioneer Asset Investment can try to stop the company from doing anything that it feels would diminish the value of the land — which could include cutting trees.

The Hawaii Sierra Club has already issued an e-mail alert to members about Arlie’s potential logging plans, Ware said.

Native Hawaiians value koa wood, Lemmo said. Koa is the traditional material of canoes, bowls, containers and tools. The Hawaiian royal families lived surrounded by furnishings made of koa.

“Native Hawaiians have certain rights to gather resources and worship and do certain things on private land,” Lemmo said. “I wouldn’t be surprised if the native Hawaiian groups came in and said, ‘No you can’t give (Arlie) a permit because those trees don’t belong to them.’ People can make those claims.”

Arlie officials told the unsecured creditors Thursday that they would first log small pieces to build confidence with regulators and Hawaii residents that the company would act sustainably and with respect, Hanks said.

“They understand it’s a difficult process, but it’s not an impossible process. And the economics for Arlie would make sense,” he said.

On the other hand, Hanks said, it’s premature to say what Arlie will do until it files its actual reorganization plan in May.

Complex tax codes confuse lawmakers too

Feeling overwhelmed by the tax code? Don't feel bad, most lawmakers and IRS officials don't understand it well enough to do their own taxes either.

From the Daily Caller:

IRS Commissioner Doug Shulman practically ran away when The Daily Caller asked him whether he prepares his own taxes. Millions of Americans struggling through complicated IRS forms in the weeks leading up to tax day - April 15 - might like to know.

"I don't have time for this ... If you want an interview, you can call my office," he said, speed-walking down an ornate hallway in the Longworth House Office Building. Shulman's spokesman later said he employs an accountant to prepare his tax filings, as does about 60 percent of the country who shell out hundreds or even thousands of dollars each for such services.

What about Rep. Xavier Becerra, a top Democrat on the House Ways & Means Committee?

"No. I have a tax preparer back home who's been doing it for me for many years," he told The Daily Caller. Becerra explains that his finances are more complex - and his tax filings fall under far greater scrutiny - than ordinary Americans who could figure out the forms if they tried.

Perhaps the chairman of that committee, Rep. John Lewis, surely he does his own taxes right?

"Oh no, no, no, no, no. I have an accountant that I've been using for years," Rep. John Lewis said. He said he needs to head home this weekend to fill out paperwork for his accountant.

So did the Daily Caller find anyone on the Hill who prepares their own taxes?

We asked people whether they knew of any lawmakers who do prepare their own taxes. One suggestion was Wyoming Sen. Mike Ezni, a certified accountant. Enzi's spokeswoman confirmed that yes, Enzi is one of the (very) few. [emphasis added]

"Senator Enzi does prepare his own taxes. He believes the federal tax code, which is more than 17,000 pages long and counting, is too complex. He has sponsored several bills to simplify the tax code so taxpayers aren't forced to spend additional money on taxpayer professionals to prepare their taxes," she said.

Obama Democrats VS Tea Party Republicans: A Fake Fight Over Fake Health Care Reform

which stakeholders?by BAR managing editor Bruce A. Dixon

There are real fights and there are fake fights, engineered to distract attention away from the real deal. The shouting match between Obama's Dems and the Tea party Repubs is one of those fake fights. The health care legislation passed by the Obama Democrats is incomparably worse than anything they could have passed right after the presidential election, and significantly worse than anything Democrats could have passed at midyear 2009. The president and his minions have delayed as long as possible to guarantee the worst, not the best bill for patients, and the best deal possible for Big Insurance, Big Pharma and Big Medicine.

Obama Democrats VS Tea Party Republicans: A Fake Fight Over Fake Health Care Reform

by BAR managing editor Bruce A. Dixon

The fifteen month running battle between Obama Democrats and tea party Republicans was never much more real than televised professional wrestling. Like the opposing wrestlers, both sides work for the same bosses, for Big Pharma, Big Insurance, and the biggest medical providers. The real health care fight waged by the Obama administration has not been against Republicans, who never had the votes to stop, let alone dictate or pass anything.

The administration's effort all along has been to pass the worst bill possible, with the greatest amounts of corporate welfare and loopholes, and the fewest protections for patients, while silencing, neutering and coercing the voices of most Democrats, who have favored some form of single payer, or Medicare For All from the beginning.

The Fake Reform

On the whole, the Obama health care legislation is just plain bad. It's fake reform. Most of the people getting medical coverage for the first time under its provisions will get through an expansion of Medicaid. The Medicaid expansion and inclusion of children in their parents' policies till the age of 24 are perhaps the only unambiguously positive aspects of the bill, and both these could have been passed through the House and Senate at any time since the end of 2006.

Supposedly, insurers can't refuse to insure anybody, or jack prices on the basis of pre-existing conditions, and can't revoke policies when people get sick enough to actually use them. But so many loopholes and end runs have been written into the legislation that these and other widely ballyhooed provisions to safeguard the interests of patients are in fact meaningless. The ban on pre-existing conditions for example is negated by allowing insurers to offer “wellness” discounts. The older, the fatter, the less physically fit and the already sick need not apply for these discounts, and the fit will lose them when they gain a few pounds.

Insurance policies will continue to cherry pick their customers in the marketing, and like the credit card industry, insurers will now be able to evade already weak state regulators by selling policies across state lines. This will undoubtedly lead to concentrations of insurance companies in the least regulated states, and a race to the bottom. Health coverage that many working Americans now get will be steeply taxed, and to evade this tax employers will simply offer policies worth less, provoking yet another downward stampede.

Big pharmaceutical companies are assured exclusive rights for even longer periods than before to new classes of drugs, and insurance companies are prohibited from paying for the re-importation of drugs originally manufactured here from Canada, or combining to negotiate drug prices downward.

The ban on selling low-cost health insurance to the nation's twelve or fifteen million undocumented means the border will now extend to every doctor's office and emergency room in the land. And insurance policies offered through “the exchange” are prohibited from covering abortions or a list of reproductive health services.

Private insurance companies will use their all-too-real death panels to continue to decide which procedures they will cover, and which ones they won't, and how much they will pay for them. Health insurance premiums will be capped at just under ten percent of a family's income, but this will not include already high co-payments, or deductibles. In Massachusetts, where a version of the president's plan has been law since 2006, sick people are forgoing treatment because they cannot afford the high co-payments and deductibles, and the flood of bankruptcies from unpayable medical bills is continuing.

The legislation is not a step toward single payer, as it removes none of the legal obstacles facing states which choose that path on their own. It's almost a good thing that most of the bill's provisions don't take effect till 2014.

And of course the too big to fail private health insurers get a stream of compulsory customers, some of them paid for in part with government money.

The Fake Fight

The legislation just passed is a million miles away from anything Democrats campaigned on in the 2006-2008 run for the White House, and incomparably worse than anything House Democrats would have passed in the first months of the Obama administration. The 2007-2008 class of House Democrats included 99 co-sponsors of HR 676, the Single Payer Medicare For All. All but one or two of these were sworn in for the current Congress.

What happened? Persistent and single-minded interventions of the White House and its minions in the Senate and House Democratic leadership have relentlessly censored and excluded single payer viewpoints from the public conversation and pushed the actual legislation further and further in the directions the insurance companies, the drug companies, and the biggest medical providers desired.

The White House met continuously in early 2009 with representatives of pharmaceutical companies, and insisted that their super-profits be protected. A former VP of WellPoint, one of the nation's top insurers was allowed to write large portions of the Senate version of the Obama bill. Senate Democratic leader Harry Reid handed the writing of its legislation over to a committee of senators who had more money from private insurers and Big Pharma than any of their fellows, and which gave its Republican members veto power over its final product.

To cover their own impotence, Democrats who had once supported single payer became outspoken advocates of a phantom policy called “the public option,” which polled well because it sounded something like universal health care or single payer, but never in fact existed. The president definitively stomped on their fake public option back in September 2009, when he said his version of it would only apply to fiver percent of the market at most, and was not essential to his proposal anyhow. House leaders balked a little, and corralled their members behind whatever the president wanted, and whatever the pea party fanatics declared they didn't want.

A much better health care bill could have been passed at mid-year 2009, and a less good, but still somewhat better one was possible at year's end. But the Obama administration was convinced that still more could be given to Big Insurance and Big Pharma, and so delayed the bill into 2010. Even as late as December a majority of Democratic senators were willing to pay lip service to the public option. For the Obama administration, that meant it was still too soon to pass its version of heath care.

The Real Fight

The margin and distribution of votes last weekend reveals White House effort to blame Republican obstruction and Democratic progressives for the delay in passing health care to have been utter scams. Not one Republican voted for the bill, and no Republican votes were ever needed. While the White House allowed 26 of 58 Democratic Blue Dogs to vote against the bill, including Art Davis of Alabama and John Marshall and John Barrow of Georgia, it applied incredible pressure against Dennis Kucinch and other advocates of single payer to line up behind the pro-corporate, anti health care bill. They, and the movement for real universal health care, for single payer, were the White House's real foes.

It's Not Over. For the next several years 18 or 20 thousand people will sicken and die each year who don't have to, thanks now to Barack Obama and his hand picked Democratic leaders in the House and Senate. The most awful failures of this legislation will not be obvious for several years, as most of it does not even take effect till 2014. More than six hundred thousand bankruptcies truggered by unpayable medical expenses will continue to happen yearly at least till then, with their numbers not greatly reduced on the other side.

The Single Payer Movement, among whose leading organizations are the National Nurses Union, HealthCare NOW, and Physicians For a National Health Care Plan are preparing for a long struggle. Not this year or the next, but in a decade or less, many predict, single payer will be enacted. California has passed single payer three times now, but has never had a governor with the guts to sign it. Pennsylvania and a few other states are thought to be close to passing single payer on their own. That's how it happened in Canada. One province did it, everybody saw how it worked, and it became national policy.

In health care, as in war and peace, as in the environment and education, as in the rights of women and immigrants, the First Black President's historic role is clear. His job is to smile and speechify and neutralize the left on every front, while taking the country further to the right than his white Republican predecessor would ever have been able.

China: Closing for Business?

Western companies are finding themselves shut out as Beijing promotes homegrown rivals

Not so long ago in China, Western business executives traveling to the provinces could expect a hearty welcome and a banquet with endless toasts of maotai liquor. In February, however, representatives of General Electric (GE) and a dozen other U.S. companies got a taste of the way commercial relations have been changing. They were in Wuhan, a city of 9 million on the Yangtze River, for a seminar on water-treatment technology organized by the U.S. embassy. At a dinner after the meeting they were supposed to have a chance to mingle with top local officials. But at the last minute, Wuhan's mayor canceled his keynote speech and backed out of the gathering. That same day the provincial party secretary and governor begged off a separate event for American Ambassador Jon M. Huntsman Jr. One attendee, who won't be quoted by name, speculates that the Wuhan officials were responding to direct orders from the central government in Beijing not to meet the Americans. The provincial government acknowledges that the original lineup was changed but notes other officials attended the events.

Nearly a decade after China's entry into the World Trade Organization, many foreign companies say the warm reception they once received has turned frosty. While China can still be highly profitable, some question how long that will last as Beijing changes the rules to give a lift to its domestic companies, especially state-owned enterprises. A new government procurement program known as "indigenous innovation" features rules favoring local firms: It could block sales worth billions of dollars a year, says Joerg Wuttke, director of the European Union Chamber of Commerce in China. Beijing has written strict standards for everything from cell phones to cars, often couching them in a way that gives an advantage to domestic producers. A recently revised patent law could force foreign companies to hand over key technologies to Chinese bureaucrats. And anti-monopoly regulations have been used to limit foreign access to sectors such as construction machinery and energy. "They have moved away from a level playing field to benefit their own companies," says Wuttke. Multinationals "are seeing the golden China opportunity become a mirage," says the China government relations chief of a major tech supplier, who would not be named for fear of reprisals.

Trade associations can speak more openly. A Jan. 26 letter to the White House from the U.S. Chamber of Commerce, the Business Software Alliance, and more than a dozen other groups representing hundreds of multinationals such as Microsoft (MSFT), Boeing (BA), Motorola (MOT), Caterpillar (CAT), and United Technologies (UTX), warned of "systematic efforts by China to develop policies that build their domestic enterprises at the expense of U.S. firms." The signatories asked the Administration for its "urgent attention to policy developments in China that pose an immediate danger to U.S. companies."

Why a chill now? Chinese look across the landscape of their economy today and see much that could be improved. After 30 years serving as the workshop of the world, mainly producing low-value goods for foreign brands and distant markets, they want to move up the value chain. To date they have only been able to capture a fraction of the value of a Nike (NKE) shoe or Apple (AAPL) iPhone. And they know they have a poor record in creating global brands. Apart from telecom equipment maker Huawei, notebook giant Lenovo, appliance marketer Haier, and perhaps consumer electronics maker TCL and car companies Geely and Chery, they have few champions. Even at home, General Motors (GM) and Volkswagen vie for the top spot, while Nokia sells the most handsets of any company in China, with a 32.9% share. "People feel that foreign brands have taken too much market share," says Wang Yong, director of the Center for International Political Economy at Peking University.

Gerald Celente : The Global Financial system is Collapsing

Click this link ......

Alex Jones on Greece: Battle against oligarchs

Click this link ......

Analyst Discusses Hyperinflation

Click this link .......

Lawmakers Cast Multiple Votes on Same Bill!!

Click this link .......

The Wile E Coyote Government

Click this link ......

health reform american style

Click this link .....

Very Good Reason to Believe Home Prices Will Collapse

The latest housing initiative announced today by the Obama Administration draws the U.S. government and, by proxy, all taxpaying Americans, further into the inescapable quagmire of a devastated real estate market.

By transferring more underwater mortgage balances onto the public books, the plan puts taxpayers on the hook for further losses if housing prices continue to fall. Given the massive support for real estate already afforded by record-low interest rates and massive federal tax and policy incentives, there are very good reasons to believe that home prices will indeed collapse when these crutches are removed. Recent spikes in long-term interest rates warn of this prospect.

If the Administration had allowed losses to fall where they rightfully belong, namely on those who foolishly loaded up on toxic mortgage bonds, then the housing market would have already found its true clearing level. Instead, every measure is working to prolong and delay the ultimate reckoning, while setting up taxpayers as the patsy. Given the horrendous government deficit projections for the next several years, any losses incurred by the government mortgage portfolio may add a critical stress on America's fiscal viability.

In addition, the moves add even more incentives detrimental to economic growth. By targeting benefits toward unemployed homeowners, or those who are delinquent in mortgage payments, the program will encourage some mortgage holders to defer job-hunting and miss payments. Also, in offering loan-balance reductions, the program makes no distinction between homeowners who naïvely overpaid during the speculative peak and those who willfully put themselves underwater by taking advantage of home equity loans on existing mortgages. In short, these policies reward profligacy and penalize prudence.

The longer the government continues to distort the underlying economics of the real estate market, the longer it will take for the sector to heal itself – and the longer the sickness will infect the broader economy.

Reprinted from Investment News.

by Peter Schiff

Peter Schiff is president of Euro Pacific Capital and author of The Little Book of Bull Moves in Bear Markets and Crash Proof: How to Profit from the Coming Economic Collapse.

Copyright © 2010 Peter Schiff

The 2nd Bubble

Someone in the real estate industry is whispering in my ear to say........... that not only are banks going to write down the principal on home mortgages (hey, act like you can't make your next payment, and you might get a write down), but the federal government is soon to begin making the down payment for new home buyers (likely to be limited to FHA loans – 3.5% down payment requirement – but who knows, might be expanded), essentially spoon feeding the real estate industry back to pretend vigor.

Bank of America is writing down the principal on selected home loans by 30%. Once again, government is rewarding the irresponsible (half of the home mortgages written during the real estate bubble of 2003–08 took out 2nd mortgages to live like fat cats, and many of these new homeowners put little or nothing down on the mortgage to begin with), and is again encouraging a whole class of people to be duped homeowners as they will face a 30% drop in the value of the home they buy (this will really impoverish them) and certainly have no where-with-all to shoulder the burden of paying property taxes (which is why this is now included in the mortgage payment).

Hey, maybe I can buy a $500,000 home after its value is written down by 30% ($350,000) and the federales will make my down-payment for me and we can throw the centuries-old Judeo-Christian work ethic out the door. My umbilical cord just needeth to be reattached to the God of government.

Of course, usury abounds here, the arrogant bankers still make a killing and now the government underwrites them. But the write down in the value of real estate assets by banks is not only troubling for their financial future, but what about comparables? Real estate appraisers are really going to scratch their heads. Are all homes now overvalued by 30%? Homes certainly shouldn't sell at the bubble value. If so, American homeowners should demand en masse a reassessment to reduce their property taxes, and then State governments get tanked all at once.

If you think all this is unsettling, Federal Reserve chairman Ben Bernanke now suggests banks keep little or no reserves. Read, in the 8th paragraph of his "exit strategy" speech before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C., where he says the objective now is "to build the capability to drain large quantities of reserves."

Now that means banks can just make all the money they want out of thin air to produce loans? At least a 10% reserve requirement made them restrict their loan pool via fractional banking into something that slightly resembled conservative banking. Is Bernanke sane? The banks wouldn't need the Federal Reserve at all!

Of course, almost all banks ignored the 10% reserve requirement and stretched credit so far (liars loans) that the only reserves on their accounting books now are provided by no-interest loans from the Federal Reserve, and the Federal Reserve took all the non-performing home loans at Fannie Mae and Freddie Mac and put them on their ledger. If this isn't cooking the books I don't know what is.

It’s obvious the $1.5 trillion of real estate loans the Federal Reserve now has on its books is going to be devalued by 40% or more and sold off to hedge funds (every American takes the loss here while friends of the elites in power will pluck and plunder these real estate assets).

If you think about this carefully, the guy who lost his job, couldn’t make his mortgage payment, and lost his home to foreclosure, is now going to pay twice as the losses at Fannie Mae and Freddie Mac kick him in the butt on the way out the door.

Now interest rates on savings accounts at banks have always been keyed to the interest rate on loaned money. But if there is no reserve requirement (the banks wouldn't need to rely upon your savings account to create a reserve), then what will banks pay citizens to park their money in the bank?

America got into this financial mess with falsely created demand for homes created by cheap money, irresponsible loan qualification, introductory low teaser interest rates, and an unquenching desire for home ownership by consumers. If this isn’t an attempt to create a second real estate bubble, then what is it?

I’ve heard of guys attempting to commit suicide by jumping off a bridge, but I have never heard of that same guy attempting to stab himself on the way down.

I tell you, I don't know which planet I'm standing on at times.

by Bill Sardi

[send him mail] is a frequent writer on health and political topics. His health writings can be found at He is the author of You Don’t Have To Be Afraid Of Cancer Anymore. His latest book is Downsizing Your Body.

CBO report: Debt will rise to 90% of GDP

President Obama's fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation's economic output by 2020, the Congressional Budget Office reported Thursday.

In its 2011 budget, which the White House Office of Management and Budget (OMB) released Feb. 1, the administration projected a 10-year deficit total of $8.53 trillion. After looking it over, CBO said in its final analysis, released Thursday, that the president's budget would generate a combined $9.75 trillion in deficits over the next decade.

"An additional $1.2 trillion in debt dumped on [GDP] to our children makes a huge difference," said Brian Riedl, a budget analyst at the conservative Heritage Foundation. "That represents an additional debt of $10,000 per household above and beyond the federal debt they are already carrying."

The federal public debt, which was $6.3 trillion ($56,000 per household) when Mr. Obama entered office amid an economic crisis, totals $8.2 trillion ($72,000 per household) today, and it's headed toward $20.3 trillion (more than $170,000 per household) in 2020, according to CBO's deficit estimates.

That figure would equal 90 percent of the estimated gross domestic product in 2020, up from 40 percent at the end of fiscal 2008. By comparison, America's debt-to-GDP ratio peaked at 109 percent at the end of World War II, while the ratio for economically troubled Greece hit 115 percent last year.

"That level of debt is extremely problematic, particularly given the upward debt path beyond the 10-year budget window," said Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget.

For countries with debt-to-GDP ratios "above 90 percent, median growth rates fall by 1 percent, and average growth falls considerably more," according to a recent research paper by economists Kenneth S. Rogoff of Harvard and Carmen M. Reinhart of the University of Maryland.

CBO projected the 2011 deficit will be $1.34 trillion, not much different from the administration's estimate of $1.27 trillion. However, CBO's estimate of the 2020 deficit at $1.25 trillion significantly exceeds the administration's $1 trillion estimate.

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Personal Income Drops Across the Country

Personal income in 42 states fell in 2009, the Commerce Department said Thursday.

Nevada's 4.8% plunge was the steepest, as construction and tourism industries took a beating. Also hit hard: Wyoming, where incomes fell 3.9%.

Incomes stayed flat in two states and rose in six and the District of Columbia. West Virginia had the best showing with a 2.1% increase. In Maine, Kentucky and Hawaii, increased government benefits, such as unemployment insurance and Social Security, offset drops in earnings and property values.

Nationally, personal income from wages, dividends, rent, retirement plans and government benefits declined 1.7% last year, unadjusted for inflation. One bright spot: As the economy recovered, personal income was up in all 50 states in the fourth quarter compared with the third. Connecticut, again, had the highest per capita income of the 50 states at $54,397 in 2009. Mississippi ranked lowest at $30,103.

‘We’ll Leave the Lights on For Ya!’ - “Earth Hour?” Forget it!

Supposedly, “millions of people” around the world are shutting off their lights at 8:30 pm tonight as part of an “Earth Hour” to draw attention to so-called “Global Warming.”

Apparently, there are lots of people in the world that, due to their liberal and/or state run media, still haven’t gotten the message that much of the “green house gas” garbage was made up.

So, doing my sacrificial part for the good of our world, I will enlighten them.

No Global Warming in 15 Years

Archaic Network Provided Data behind Global Warming ‘Theory’

Climate Researchers Manipulated and Hid Data

Lawrence Solomon, Vindicated: Dutch Global Warming ‘Denier’ “Was Right After All”

Alaskan Congressman Announces Global Warming is a “scam”

Top Climate Official Resigns

Oklahoma Senator Calls for Criminal Investigation

Dutch Point out New Mistakes in UN Climate Report

Climate Chief knew of False Glacier Claims before Copenhagen

Even: Climate History erased in 5000 Wikipedia Articles

So, with all that in mind, some on Twitter have decided to relax about Earth Hour:

RT @JOZETTE1972: #EarthHour Mar 27 8:30p: OK! - Let’s Rock! Turn ON Basement lights, Closet lights, bathroom lights -even FLASH lghts-YAY!! #tcot

RT @TCOT_Talk @JOZETTE1972 just saw a commrcl 4 EarthHour Mar 27…going 2leave my lights on that whole hour!…// ME TOO! ALL lights #tcot

RT @boxxers06 / just saw a commrcl 4 EarthHour Mar 27…going 2leave lights on whole hour!…// ME TOO! ALL lights / 24 hr light party!!!!

RT @littlebytesnews:@boxxers06 /just saw commrcl 4 EarthHr Mar27…going 2leave lightson whole hour!// ME 2!ALL lights/24 hr lght party!|LOL

RT @boxxers06 @Dataaide @littlebytesnews: I installed a search light on my roof, like Gotham City…

RT @TheNoblePatriot #EarthHour -what a joke! More LIBERAL symbolism over substance! I plan to turn on EVERY LIGHT for hour in protest! #tcot

@ByeByeDems @Dataaide @Jozette1972 I’ll be joining you! // YEAH! All Lights ON tonight for #EarthHour! #tcot

by Lisa in All News, Environmental News, Op-ed, Science News, Society and Culture, The United Nations, US News, Weather, World Politics

Obamacare and the Politics of Revenge

President Obama got his training with ACORN. Where the ACORN falls, so grows the tree.

ACORN has fallen.

ACORN got caught by a pair of creative actors, both conservatives. They went to ACORN posing as a pimp and his woman. How could they get government aid? ACORN had suggestions. They videotaped the exchange. Then they took a modified video – yes, faked – to Andrew Breitbart, the Web site master. The fake was this: in the video, the young man appears in a pimp’s outfit. In fact, he did not wear it in the room. This is being made into a big deal by the liberal media. "Why, it’s all a fake!" Look, the whole stunt was fake. What was not fake was the response from ACORN’s employees: the offer to help them get the money and break the law.

Breitbart tried to get the networks to run the video. He was turned down. So, he took it to Mr. Video Clip, Glenn Beck. Beck ran it. That was how ACORN got on the Web. The story is here.

The publicity has ruined ACORN. It lost a fortune in contracts from the Federal government. It is close to bankruptcy, laments this Leftist site.

It has local chapters. Its agenda will survive. But the tree got knocked down.


I am of course both amused and delighted. Mostly amused. This was the perfect response to ACORN. That is because ACORN had long employed the tactics of a master organizer, Saul Alinsky. He wrote a book on his tactics, Rules for Radicals. It was published in 1971, the year before he died.

Alinsky was a radical, not a revolutionary. His strategy was to study an organization carefully. Understand how it works, he said. Then identify a weakness that is inherent in its rules or practices. He was amazingly successful at challenging organizations and forcing them to change their policies.

The two actors may not have understood that they were using a tactic devised by Alinsky. They spotted a weakness in ACORN’s practices: its commitment to getting government money for small businesses. They staged a charade. ACORN’s employees fell for it. It did not seem remarkable to them that a white teenage hooker and her white pimp wanted money from the government to set up a prostitution house for teenage girls who were in the clutches of a "bad" pimp. Government-subsidized entrepreneurship was right up ACORN’s alley. That was the end of ACORN. The charade was legal. There is no law against impersonating a hooker and her pimp.

Let me describe a classic Alinsky tactic. I wrote about it in 1983. A Christian college’s administration had allowed the students to invite Alinsky to speak. This was stupid. They soon learned just how stupid it was. Students came up to him after the lecture. They complained that nothing was allowed on campus. "What is allowed?" he asked. "We can chew gum." "That’s it," he said. He told them to buy lots of gum. "Keep chewing it. Spit it out the school sidewalks. Keep doing it, day after day. Tell the administration you will quit when it relaxes the other rules." It took one week. You can read my column on Alinsky here.

ACORN got gummed by a pair of actors.

Now it is Obama’s turn to get gummed.


National health care is the second most important of all government welfare programs. The first is funding education and making it compulsory. But this is generally enforced at the state level in the United States.

Why is government-funded medical care so important? Because it is the symbol of a state that has the power to extend life. It is the supreme agency of healing. Any government that does not pass laws funding and controlling the health care delivery system is seen by the apologists of state power as being inconsistent. A state that cannot heal is not a true god. The modern humanist state presents itself as the final court of appeal. It supposedly possesses final sovereignty.

Four centuries ago, this was called the divine right of kings. That meant that the king was the final court of appeal. There was no one or nothing higher, other than God. Today, the government’s position is that there is no God. Therefore, the state is the final sovereign. It is God by default.

A final sovereign must possess the power of life and death. So, we live under the jurisdiction of a welfare-warfare state.

The United States has had Medicare ever since 1965. The state has proclaimed itself as a healer of the old. This expense will bankrupt the Federal government unless the law is modified to allow cost-cutting. Politically, this is not yet possible. The oldsters want the money: over to $11,000 a year in subsidies.

This was not enough, according to Democrats. Another 30 million Americans need health insurance coverage. Now they are going to get it. Voters are going to pay.

Why isn’t this good politics? Because the Federal government waited too long. It is now running annual deficits over $1.5 trillion. This does not count the extra two trillion or so that accrue to the unfunded Medicare program each year. That is part of the off-budget budget.

At some point, all those oldsters who are dependent on the off-budget budget will be placed on the off-life support system. They will have their life support unplugged, at least figuratively and in some cases literally.

The motivation to get those 30 million people inside the health insurance system is a deeply religious motivation. The Democrats were upset that the United States government was not doing enough. What kind of healer is that?

The total expenditure for health care in the United States is about 15% of gross domestic product – higher than any other nation. This was not enough. There had to be more, the Democrats said. So, there will be. Costs will rise. Politicians are now on the hook. Who will pay these costs? It’s a government program now. There is no escape for the politicians. They must make some voting bloc angry. But which? What a dilemma!

The anger is enormous. It will increase. As of March 20, 59% of voters were opposed.

They see themselves as being ignored, which is in fact the case. This has created an opportunity for Republicans. They voted no unanimously.

This is pure politics. How often does a party vote 100% opposed? Almost never. They smell blood, and they reacted as sharks do. They voted for Bush’s bankrupting prescription drug subsidy program. Now they are all opposed. It’s politics.

Fifty years ago, I was talking with my liberal Democrat friend Joel Blain. Both of us knew how the subsidy ratchet works. It just keeps going up. So, he said to me, knowing full well I understood the game, "Just let us pass a health care bill. We’ll try it for a couple of years. If it doesn’t work, you can repeal it." That was Eisenhower’s last year in office. There was no way that the Federal government would pass a socialized medicine program. We both knew that. But if it ever did, it would be forever. It would create voting constituents.

Half a century later, the Democrats have gotten their way. The leadership recognizes that it will not be repealed. The leadership is serious about this law. These people know that the fall elections will result in Democrat losses. Harry Reid is way behind in Nevada. Yet they voted for the bill. They understand the religious implications of such sacrifice. They did it for the cause. The Federal government has extended its authority as a healer. With this authority will come lots of additional power.

They have sent a message to voters: "We have sacrificed the principle of majority rule for the sake of a higher cause." In principle, this is correct. If the voters want something evil, politicians should not vote for it. In early America, this was understood. Democracy meant the right of a majority to vote out of office anyone who opposed its will. It did not mean that a politician had a moral obligation to do what the majority wanted done every time. He was allowed to commit political suicide.

The Democrats face this problem: this view of democracy has not been widely preached or believed since 1913: the direct election of Senators. The push toward mass democracy has been constant. The older view has been abandoned. But now the Democrats have reverted to the older view. They will pay for this next November.


There is nothing morally wrong with the politics of revenge. Getting back at a politician for voting the wrong way was basic to early American politics. The Jeffersonians in 1800 got back at John Adams and the Federalists for the Alien and Sedition Acts. That ended Federalism as a national force. No one mourns their passing today. Few did in1801.

This time, there is enormous anger among hard-core Republicans and independents. They will not forget. Usually, voters do forget, but not this time. The law back-loads the financing. The burden will hit in full force in 2014. This is standard politics, but this time, it will backfire. Why? Because of the size of the Federal deficit.

The welfare states of Western Europe swallowed the pill of socialized medicine after World War II. The voters have gotten used to the cost. It is part of the social background. To single out medical costs as uniquely bankrupting is unthinkable, even though true.

Here, it is different. The law will go into effect at a time when the deficit has become unthinkably high. It finally is getting through to voters that it threatens their lifestyles in the future. They are beginning to get afraid. They should be afraid.

The Democrats waited too long. The deficits are now Obama’s. They must be dealt with on his watch. He refuses to deal with them. In this setting, the Democrats rammed through the bill.

The voters will be reminded, year by year, that this was done against their will. The Democrats will not be able to blame Bush. The burden will aggravate people, because they did not want the program.

Democrats assume that voters will forget. Voters at the margin will not forget. They will be reminded.

To get blamed, the Republicans must have the White House, the House, and 60 votes in the Senate. Until this happens, they can play the role of helpless babes in the woods. That means the Democrats will get blamed. This issue will not go away, because costs will rise.

The tea party movement is at present amateurish. Time will take care of that. If Republicans do not deal with it, they will lose elections. The revolt against waffling is real. These people are dangerous to Republicans who waffle on spending. They will not be able to be elected.

Usually, negative voting blocs get marginalized. The beneficiaries of boondoggles are concentrated. They want the subsidy. The opponents are not well organized. The costs of the boondoggle are shared by too many taxpayers. Resistance is minimal compared to the promotion.

This time it will be different. The politics of vengeance is now in play. The voters will be reminded, year after year, that the program was shoved down their throats.


Alinsky always searched for the weak spot in the opposition’s system. Then he exploited it.

Obama now has a weak point: ObamaCare. This time, the taxpayers and insurance premium payers and patients sitting endlessly in filled doctors’ offices will be reminded about who did it to them. It was Obama and the banshee with the huge Medicare gavel, Nancy Pelosi. They pride themselves on having thwarted the voters. They believe they will get away with it. They think voters will forget. But medical care costs are close to people’s hearts. They will pay attention to their bills, including their tax bills.

The tea party types will make it hot for Republicans who think they can keep spending. The climate of opinion has changed. The deficit has changed it.

The costs of this program will not be ignored. This is not Europe. This is a new program. It was passed by a defiant majority in Congress. That majority will be depleted.

The very phrase, "ObamaCare," will become a liability. It ought to be called PelosiCare, but it isn’t. Obama has defined his administration by this one law. He got it passed. He owns it.

The tea parties have only just begun. The Democrats are not afraid yet. What will make a difference will be Republicans who lose because they refuse to give the tea party voters what they want.

The Christian Right got bought off easily in Reagan’s first year. All they demanded was rhetoric. Reagan was good at this. So, they were eased out by the Bush faction, which ran the White House under Reagan. They were in the Bush family’s hip pocked, so the Bushes sat on them.

The tea party will not get bought off so easily. Their anger is too great.

2010: A Race Odyssey — Disproving a Negative for Cash Prizes or, How the Civil Rights Movement Jumped the Shark

As I have said over and over and over, the left has one trick that it will use again and again when its back is in the corner: shout ‘racist’ in a crowded country.

On Saturday, during the peaceful and patriotic tea party protest at the Capitol, the Democrats staged a series of symbolic acts meant to manipulate the media to do its bidding. The Congressional Black Caucus pulled the Selma card and chose to walk through the crowd in the hopes of creating a YouTube incident. This is what it looked like:

and this:

There is no reason in 21st century America on an issue that is not a black or white or a civil rights issue to have a bloc of black people walk slowly through a mostly white crowd to make a racial point. The walk in and of itself — with two of the participants holding their handheld cameras above their heads hoping to document “proof” — was an act of racism meant to create a contrast between the tea party crowd and themselves.

This is the same failed symbolism that Janeane Garofalo and MSNBC have been trying to implant for the last year. The only supposed evidence of white-on-black racism at a tea party that MSNBC was able to find was a man carrying a gun at an Arizona Obama rally. But, wait, MSNBC cut off the man’s head with a photo editing software. That Second Amendment fan was actually black. Never mind.


Saturday’s “never mind” moment will live in infamy as the Congressional Black Caucus claimed the N-word was hurled 15 times. YouTube video shows that at least two of the men in the procession were carrying video cameras and holding them above the crowd. They have not come forth with evidence to show that even one person hurled the vile racist epithet. The video also shows no head movement one way or another. Wouldn’t the N-word provoke a head turn or two? Is it really possible that in 2010, in a crowd of 30 or 40 thousand people — at the center of a once-in-a-lifetime media circus — not one person’s flipphone, Blackberry, video recorder or a network feed caught a single incident? And if not, then at least someone could have found an honest tea partier to act as an eyewitness — or the Congressional Black Caucus would have confronted the culprit(s). If that had happened, there would be an investigation to see if the perpetrator was a left-wing plant.

Let’s remember that Nancy Pelosi followed this procession with a “perp walk” of her own, as she carried the giant gavel that hammered down the passage of Medicare in 1965 to its rendezvous with destiny. Does any rational person seriously believe that the Capitol Police or her security people would have let the Speaker of the House — second in line of succession to the presidency, right after the Vice President — walk into danger as alleged by the Congressional Black Caucus? Please.

That’s how much the Democrats need a racist Tea Party moment. To stop it in its tracks. That’s why on Saturday they used the Congressional Black Caucus to try to manufacture the false appearance of one. And when they didn’t get it, they did what they always do: they lied.

Alinsky taught them well: the ends justify the means. And that’s how the Democrats play. They love using black people as symbols of oppression. They love to use them for staged rallies, staged walks and staged protests. It’s why they fought so hard to keep the heavily minority ACORN alive. They were the portable army that would cry racism in front of your place of business until the company paid them off to go away.

Haven’t we had enough? Are we going to allow the left to use its despicable acts of lies and intimidation to shut up legitimate dissent on a subject that has nothing to do with race? Are we going to allow the professional race hustlers like Jesse Jackson and Al Sharpton to continue their shakedown rackets — so memorably exposed by Shelby Steele in his book White Guilt: How Blacks and Whites Together Destroyed the Promised of the Civil Rights Era?

If we let them get away with Saturday’s stunt — using the imagery of the Civil Rights era and hurtful lies to cast aspersions upon the tea party whole — then they really will have won the day.

It’s time for the allegedly pristine character of Rep. John Lewis to put up or shut up. Therefore, I am offering $10,000 of my own money to provide hard evidence that the N- word was hurled at him not 15 times, as his colleague reported, but just once. Surely one of those two cameras wielded by members of his entourage will prove his point.

And surely if those cameras did not capture such abhorrence, then someone from the mainstream media — those who printed and broadcast his assertions without any reasonable questioning or investigation — must themselves surely have it on camera. Of course we already know they don’t. If they did, you’d have seen it by now.


Rep. Lewis, if you can’t do that, I’ll give him a backup plan: a lie detector test. If you provide verifiable video evidence showing that a single racist epithet was hurled as you walked among the tea partiers, or you pass a simple lie detector test, I will provide a $10K check to the United Negro College Fund.

Old Southern Bank fallout: Re-priced CDs shock bank's customers

Judith Wolff felt like the rug had been pulled out from under her by Centennial Bank, the Arkansas-based company that acquired Old Southern Bank of Orlando after its recent failure.

The 80-year-old retiree asked if Centennial was honoring the 4.7 percent interest rate Old Southern had given her on a two-year certificate of deposit she bought in September 2008, when the ill-fated community bank was still in good shape.

The answer: no. Centennial said it couldn't afford to pay such a high interest rate for the six months left on Wolff's CD. She was welcome to buy a new CD — one earning 1.3 percent a year. But, by her count, that would have cost her about $2,000 in lost interest.

"That hurts a lot for someone living on a fixed income. It really shocked me," the longtime Orlando resident said this week. "I mean, I thought when you have a CD, it's just like a contract. And for them to break it, well, that seems to me to be just wrong."

Wolff was particularly incensed because Centennial is sitting on $50 million from the federal government's Troubled Asset Relief Program.

"Here they're getting this government TARP money," she said, "while we're the little people who end up losing out."

The interest-rate controversy is the first disruption in an otherwise smooth transition for Centennial, which made its Central Florida debut about two weeks ago when it acquired the deposits and assets of Old Southern, the first Orlando-based community bank to fail in nearly 20 years.

Centennial officials acknowledge that as many as 10 percent of their new customers are affected by the decision to not honor Old Southern's CD rates. They said the choice was clear for the bank, because Old Southern's savings rates were too high for terms that were too long for too many customers.

"There was a period a couple of years ago when rates in the Orlando market were extremely high, driven by Washington Mutual, Wachovia and others," spokesman Bob Garrison said Wednesday. "Old Southern put some CDs on its books then that were in the 4.5 percent range. But today's market has changed dramatically, and it's just not prudent for Centennial to sustain such rates."

Most banks honor customers' interest rates when they take over a failed institution, said Kenneth H. Thomas, a Miami-based author and banking consultant who was sharply critical of Centennial's action.

Regulators shut 2 Ga. banks, 1 in Fla., 1 in Ariz.

WASHINGTON (AP) - Regulators have shut down two Georgia banks and one each in Florida and Arizona, bringing to 41 the number of bank failures in the U.S. so far this year.

The Federal Deposit Insurance Corp. on Friday took over the banks: McIntosh Commercial Bank, based in Carrollton, Ga.; Unity National Bank of Cartersville, Ga.; Key West Bank of Key West, Fla., and Desert Hills Bank, based in Phoenix.

The four failures are expected cost the federal deposit insurance fund a total of around $320.3 million.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

CIA paper reveals plans to manipulate European opinion on Afghanistan

'Out-of-the-box' CIA think tank proposes concerns over women's rights, fear of terrorism as ways to boost support for Afghan war

Evidently spooked by the collapse of the Dutch government over the country's involvement in Afghanistan, the CIA has put together a strategy proposal to prevent what it fears could be a "precipitous" collapse of support for the war in Afghanistan among European allies.

A document marked "confidential / not for foreign eyes," posted to the Wikileaks Web site, suggests strategies to manipulate European public opinion on the war, particularly in France and Germany.

The document doesn't propose any direct methods by which the CIA could achieve this -- there are no references to planting propaganda in the press, for example -- but it does lay out what it sees as the key talking points to changing hearts and minds on the war. Among its proposals, the policy paper suggests playing up the plight of Afghan women to French audiences, as the French public has shown concern for women's rights in Afghanistan.

For the German audience, the document suggests a measure of fear-mongering about the possible fallout of NATO failure in Afghanistan. "Germany’s exposure to terrorism, opium, and refugees might help to make the war more salient to skeptics," the document asserts.

Read the report here, courtesy of Wikileaks.

The policy paper was prepared by a group called the "CIA Red Cell," which describes itself as having been tasked "with taking a pronounced 'out-of-the-box' approach that will provoke thought and offer an alternative viewpoint on the full range of analytic issues."

"The fall of the Dutch Government over its troop commitment to Afghanistan demonstrates the fragility of European support for the NATO-led ISAF mission," the document states. "Some NATO states, notably France and Germany, have counted on public apathy about Afghanistan to increase their contributions to the mission, but indifference might turn into active hostility if spring and summer fighting results in an upsurge in military or Afghan civilian casualties."

The CIA report notes that 80 percent of the French and German public are opposed to the war, but offers a loophole: Public apathy, which has allowed European leaders to extend and broaden their involvement in Afghanistan despite deep opposition.

But "if some forecasts of a bloody summer in Afghanistan come to pass, passive French and German dislike of their troop presence could turn into active and politically potent hostility," the report states.


The CIA Red Cell points out that President Obama continues to enjoy popular support in Europe at levels he has not seen in the US in months. The report suggests getting the president involved in selling the Afghanistan war to Europeans.

"The confidence of the French and German publics in President Obama’s ability to handle foreign affairs in general and Afghanistan in particular suggest that they would be receptive to his direct affirmation of their importance to the ISAF mission—and sensitive to direct expressions of disappointment in allies who do not help," the report states.

The report notes that "when [opinion poll] respondents were reminded that President Obama himself had asked for increased deployments to Afghanistan, their support for granting this request increased dramatically, from 4 to 15 percent among French respondents and from 7 to 13 percent among Germans."

To change French minds, the CIA Red Cell proposes linking the Afghanistan war to the effort to improve women's rights in Afghanistan. It also proposes pointing out that the Afghanistan mission is more popular in Afghanistan than it is in Europe, at least according to the statistics cited in the report.

"Afghan women could serve as ideal messengers in humanizing the ISAF role in combating the Taliban because of women’s ability to speak personally and credibly about their experiences under the Taliban, their aspirations for the future, and their fears of a Taliban victory," the report asserts.

"Highlighting Afghans’ broad support for ISAF could underscore the mission’s positive impact on civilians. About two-thirds of Afghans support the presence of ISAF forces in Afghanistan, according to a reliable ... poll conducted in December 2009," the report states.

For the German public, the message should be somewhat different, the report states. "Messages that dramatize the consequences of a NATO defeat for specific German interests could counter the widely held perception that Afghanistan is not Germany’s problem. For example, messages that illustrate how a defeat in Afghanistan could heighten Germany’s exposure to terrorism, opium, and refugees might help to make the war more salient to skeptics."

Numerous news reports in recent years have suggested that the CIA is more deeply involved in the Afghanistan war than it has been in previous wars. For instance, when news broke that seven CIA agents had been killed in a suicide bombing at a forward operating base, it highlighted the fact that the CIA has been operating essentially as a branch of the military in Afghanistan, running the unmanned aerial drone strikes against the Taliban.

That suicide bombing also highlighted the difficulties the agency faces in getting a grasp on the situation in the Central Asian country. CIA operatives had believed Humam Khalil Abu-Mulal al-Balawi, the suicide bomber, was willing to work as an informant for them. They were apparently so completely unaware of his status as a double agent that they had prepared a birthday party for him in advance of his arrival, when he proceeded to blow himself up.