Month: March 2009

NATO will never defeat Taliban, Canadian PM says

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WASHINGTON — Canadian and other foreign armies can’t defeat the Taliban, Prime Minister Stephen Harper said in an interview broadcast Sunday.

“Frankly, we are not going to ever defeat the insurgency,” Mr. Harper said, more than seven years after the U.S.-led invasion of Afghanistan toppled the Taliban regime. Canadian troops have been fighting and dying in Afghanistan since 2002, but this is the first time the Prime Minister has explicitly said defeating the Islamic extremists can’t be done.

Mr. Harper, in an interview with CNN’s Fareed Zakaria, said that despite sending thousands of soldiers to Afghanistan and suffering more than 100 troop deaths, the “success has been modest” and any gains made could be lost.

Read moreNATO will never defeat Taliban, Canadian PM says

China’s Tycoons Tumble

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How the dream has gone sour for those who got rich on the back of political patronage – then lost it


A potential customer looks at a Rolls Royce

THE richest man in China has ended up in police custody and other “red billionaires” have plunged into debt or political disgrace as the communist nation’s flirtation with capitalism turns sour.

Meanwhile, millions of ordinary Chinese have lost their shirts in the stock market after share prices collapsed, and at least 20 million workers have lost their jobs due to the recession.

In this atmosphere, the plight of Huang Guangyu, 39, has won little public sympathy. He is still languishing in detention after three months, while investigators probe allegations of bribery and irregular share trading.

Huang was a peasant’s son who built up a successful electrical appliance chain until it had 800 stores and he had shares worth £2 billion.

Read moreChina’s Tycoons Tumble

The 1.3 trillion pound bank job

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The furore over Sir Fred Goodwin’s massive pension worked as an effective smokescreen for far worse financial news that the Government was happy to keep out of the public eye.


Lord Mandelson, asked Sir Fred Goodwin (pictured), to give back some of his pension

As scapegoats go, Sir Fred Goodwin is straight out of Central Casting. He’s a banker; he’s mucked up big time, cost the taxpayer sums still too large to calculate properly, and he’s walked away from the mess with riches beyond the avarice of a Premiership footballer. All he lacks, as a media villain, is a pair of staring eyes and record of cruelty to animals.

If Alastair Campbell were still around, Sir Fred might have been saddled with even that. But this week, as loomed the handing to banks of further barrels of public cash on what the furniture stores used to call easy terms, the Government had no need for nudge-nudge rumours of scuttlebutt to create a diversion. It had information even more incriminating and instantly unpopular: the size of Sir Fred’s pension pot.

It was huge; it was blood-pressure raisingly indefensible; and, above all, it seemed politically useful. Ministers had known the scale of it for months; something pretty close to its size had been reported on City pages as far back as 14 October last year. But it had never become An Issue. Now the time for it to do so had arrived. And so, on Wednesday evening, the exact magnitude of it was leaked to Robert Peston of the BBC. He went on air and could barely get the numbers out for hyperventilating: Sir Fred’s pot of gold was worth £16.9m; the man – so the story went – whose megalomaniac regime of compulsive acquisitions had brought down the Royal Bank of Scotland was now retired, at the age of 50, with a pension worth £13,000 a week for the rest of his life.

The ploy worked. By the following day, Fred’s Pension was dominating the news and provoking all the anti-banker indignation that a government spin-doctor hoped it might: “These fat cats must have their fortunes neutered” (Daily Mail), “Obscene: I won’t give up a penny” (Daily Express), and “No shred of shame; RBS boss Fred” (Daily Mirror). Yet all the while, behind this smokescreen, hundreds of billions of taxpayers’ cash was being committed to the banks on terms that seemed bewildering. This – the biggest leap in the dark in British economic history – is what the row over Fred’s pension concealed. It is a story that should now be told.

For a long time, it has been known that the big scheduled domestic event of last week would be RBS’s results. Their gargantuan size was widely expected, and the final figures didn’t disappoint: £24.1bn in the red – bigger than any American bank could manage, vastly outscoring some of the week’s other losses (such as housebuilder Barratt’s £592m), and relegating to barely visible footnotes the other depressing statistics of the week, such as household spending declining at its fastest rate since 1991; house prices down 15 per cent in a year; and service sector job losses at a 10-year high.

RBS’s losses, and those of Lloyds HBOS the following day, meant a further extension to the Government’s bailout, and taxpayers’ exposure. The size of the potential commitment to the banks is estimated at £1.3 trillion, equivalent to the value of the British economy for a whole year, and a burden equal to possibly as much as £36,000 for every man, woman and child in the country. And there could yet be more unpleasant discoveries. Looming rather less large in the public consciousness than Sir Fred’s pot was the appearance before the Treasury Select Committee of Mervyn King, Governor of the Bank of England. Fully five months after the present crisis began with the collapse of Lehman Brothers in September, he told MPs that it is still not known just how big the liabilities of British banks are. In his evidence to the Treasury Select Committee last week, he said it would take “many months” to establish the scale of toxic assets held by banks, requiring a detailed assessment contract by contract.

Also overshadowed by Sir Fred’s pot was the size of the latest government support for the banks. For a fee of £6.5bn, RBS will place £325bn worth of toxic assets in the Government’s newly created Asset Protection Scheme. The bank will then be liable for only the first £19.5bn of these dodgy assets, with the taxpayer accepting the risk of the rest. The shadow chancellor, George Osborne, said: “The British taxpayer is insuring the car after it has crashed.” Lloyds Banking Group’s participation is not yet finalised, but is expected to involve about £250bn worth of toxic assets.

Read moreThe 1.3 trillion pound bank job

Liberty groups unite to defend UK rights

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“There has been a tide of government actions which have put expediency over justice time and time again. The British people wear their liberty like an old comfy suit, they are careless about it, but the mood is changing. Last year 80 per cent of people were in favour of ID cards, now 80 per cent are against. There’s a point of reflection that we are reaching, the communications database which is planned to collect every private text and phone call and petrol station receipt will create uproar.” – David Davis

Writers, pop stars, lawyers and politicians from across the party spectrum yesterday issued a call to arms. They joined the largest ever campaign across Britain to warn of the erosion of freedoms and the emergence of surveillance techniques

Police outside Parliament
A police cordon outside the Houses of Parliament in 2006. Liberty campaigners warn of a growing police state. Photograph: Adam Butler/AP

The government and the courts are collaborating in slicing away freedoms and pushing Britain to the brink of becoming a “database” police state, a series of sold-out conferences in eight British cities heard yesterday.

In a day of speeches and discussions, academics, politicians, lawyers, writers, journalists and pop stars joined civil liberty campaigners yesterday to issue a call to arms for Britons to defend their democratic rights.

More than 1,500 people, paying £35 a ticket, attended the Convention on Modern Liberty in Bloomsbury, central London, which was linked by video to parallel events in Glasgow, Birmingham, Belfast, Bristol, Manchester, Cardiff and Cambridge. They heard from more than 80 speakers, including author Philip Pullman; musicians Brian Eno and Feargal Sharkey; journalists Fatima Bhutto, Andrew Gilligan, Nick Cohen and Guardian editor-in-chief Alan Rusbridger; politicians Lord Bingham and Dominic Grieve; a former director of public prosecutions, Ken Macdonald; and human rights lawyer Helena Kennedy.

In her speech Kennedy said she felt that fear was being used as a weapon to break down civil liberties. “There is a general feeling that in creating a climate of fear people have been writing a blank cheque to government. People feel the fear of terrorism is being used to take away a lot of rights.”

Read moreLiberty groups unite to defend UK rights

UN attacks Britain over torture claims

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Investigator raises ‘very clear allegations’ that MI5 broke international law

Britain may have broken international law on torture, ministers have been warned by the United Nations. Professor Manfred Nowak, the UN’s special rapporteur on torture, has alerted ministers to a range of concerns, including claims that MI5 officers were complicit in the maltreatment of suspects.

The Austrian law professor warned that Britain has breached the UN convention on torture, and he revealed that he was organising a fact-finding mission to Pakistan, whose security services allegedly tortured terror suspects before the captives were questioned by British intelligence.

It is the first time the UN’s senior torture investigator has directly criticised a British government. Human rights groups said it was highly significant. Clare Algar, executive director of legal charity Reprieve, said: “This is a further significant embarrassment for the British government and reinforces the fact that we really need an independent review into what has been going on.”

Related article: Ministers refuse to answer torture questions (Guardian)

Nowak appeared to criticise the foreign secretary, David Miliband, for blocking the release of US files allegedly confirming MI5 involvement in the torture of British resident Binyam Mohamed. Miliband said releasing the documents could do “real and significant damage” to British national security.

Read moreUN attacks Britain over torture claims

Pension bombs going off

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Exploding pension fund shortfalls are blowing billion-dollar holes in the balance sheets of some of the Chicago area’s biggest companies, forcing them to make huge contributions to retirement plans at a time when cash flow and credit are already under stress.

Boeing Co.’s shareholder equity is now $1.2 billion in the hole thanks to an $8.4-billion gap between its pension assets and the projected cost of its obligations for 2008. At the end of 2007, Boeing had a $4.7-billion pension surplus. If its investments don’t turn around, the Chicago-based aerospace giant will have to quadruple annual contributions to its plan to about $2 billion by 2011.

Stock market losses also pounded pension funds at Abbott Laboratories Inc., Caterpillar Inc. and Exelon Corp., with others sure to emerge as companies file their annual financial reports with the Securities and Exchange Commission in coming weeks.

The pension gaps underscore a growing conundrum. Unfunded pension liabilities have to be subtracted from shareholder equity, weakening balance sheets at a time when it’s already tough to borrow money. Barring a reprieve from Congress, companies may be forced to make more layoffs or curb capital investments to divert cash to shore up pensions.

“There are companies out there faced with paying their pension plan or staying in business,” says Mark Ugoretz, president and CEO of the ERISA Industry Committee, a Washington, D.C., lobbying group. ERISA refers to the Employee Retirement Income Security Act of 1974, which sets standards to ensure pension plans are sufficiently funded.

The Chicago companies are symptomatic of nationwide woes. Last year, the 100 largest corporate pension funds in the U.S. saw their net assets decline by 21%, while liabilities increased 1.2%. Applying those averages to any of the region’s top funds puts almost all of them into the red by at least $1 billion.

PRESSURE MOUNTS

Read morePension bombs going off

Global News (03/01/09)

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– The Emerging Sunspot Cycle 24 and a Weakening Magnetic Field (Outside the Box):
What does this mean for our planet and species?

Introduction:
If you were thinking that the only things we have to be concerned about include wars, famines, and economic crashes, think again.

– Mexican drug wars create demand for hitman and acid baths (Telegraph):
Criminal psychiatrists said dozens of killings linked to drug cartels every day have led to a boom in the number of bodies dissolved in acid.

– Israel’s death squads: A soldier’s story (Independent):
A former member of an Israeli assassination squad has broken his silence for the first time. He spoke to Donald Macintyre

– Police ‘over the top’ at climate camp (Guardian):
Police have been accused of setting a “dangerous precedent” when they confiscated hundreds of items of property – including children’s crayons, a clown’s outfit and a pensioner’s walking stick – from people attending an environmental protest camp at Kingsnorth power station.

– Is Ireland fated to be another Iceland? (Guardian):
“That is the optimistic scenario,” Kelly said, arguing that his worst fear is a collective economic failure of several countries in eastern Europe, along with Ireland and those on the southern periphery of the eurozone – Greece, Italy, Spain and Portugal – that would be beyond the capacity of any government or group of governments to stem.

– TMZ Story Forces Bank to Return $1.6 Billion!!!! (TMZ):
How’s this for action. Northern Trust — the bank TMZ exposed this week for throwing a series of lavish parties and concerts in L.A, is giving back the $1.6 billion in federal bailout money!

– Warren Buffett loses billions (Telegraph)

– Bank of England poised for rate cut (Telegraph):
“The move is the latest stage in the Bank’s efforts to prevent the economy from sliding towards deflation.”
(The move is the latest stage in the Bank’s efforts to destroy the pound.)

– MI5 ALERT ON BANK RIOTS (UK Express):
TOP secret contingency plans have been drawn up to counter the threat posed by a “summer of discontent” in Britain.

– HSBC takes £17bn hit on bad loans (Times Online):
HSBC is to own up to the full horror of its American sub-prime business, Household, when it unveils a £7 billion goodwill write-off in addition to a £17 billion provision against rising bad loans.

– Lloyds heading for 75% state ownership (Guardian):
The taxpayer could end up with a near 75% stake in Lloyds Banking Group it emerged today after the UK’s biggest high street bank admitted the HBOS mortgage lender it rescued had incurred £10.8bn of losses last year.

– These bankers are lucky that they are not going to jail (Guardian):
Assuming it is out of the question to hang, draw and quarter Sir Fred Goodwin, pluck out his intestines while they are still warm and wriggling, stuff them into his greedy mouth and then display his severed head on a spike at the Tower of London, could we settle for shooting him instead? Yes, I know, I’m going soft.

– AIG May Get $30 Billion in Additional US Capital (Bloomberg)

– EU rejects eastern Europe rescue plan (Financial Times):

– Bush a four-letter word at CPAC (Politico):
Conservative icon Newt Gingrich, the former House Speaker, railed against the “Bush-Obama continuity in economic policy” and the “Bush-Obama big spending program” in a speech Friday.
“We had big spending under Bush and now we have big spending under Obama,” Gingrich said. “And so now we have two failures.”

– Obama Will Seek Another $750 Billion for Banks if Necessary, Orszag Says (Bloomberg):
March 1 (Bloomberg) — President Barack Obama’s administration will seek congressional approval for as much as $750 billion in new aid to bolster U.S. financial institutions if it is needed, White House budget director Peter Orszag said. (Another $750 Billion for the banksters? Yes, we can give more money than Bush to the crooks who caused this crisis.)

– Obama buries Reaganomics under $3.6 trillion mountain (Times Online)
(“Deficit spending is simply a scheme for the confiscation of wealth.” – Alan Greenspan
In the end the taxpayers’ will have to pay for all this government spending with their wealth. In this case the deficit will have to be financed through Treasuries. The bond bubble will burst, the dollar will be destroyed and the U.S. will default on its debt. Game over. “Reckless spending” (Ron Paul) and “horrible economics” (Jim Rogers) will turn the U.S. into a Third World Country very soon.)

– Gordon Brown aims for ‘global new deal’ with Barack Obama (Telegraph)

– Big Dividends, in a Dangerous Terrain (New York Times)

– UK given approval for £2.3bn auto bail-out (Telegraph)

– Motorway cameras let police and MI5 track all car trips across the country (Daily Mail):
The police and MI5 have been given access to a network of infrared cameras that can track millions of car journeys across Britain.The 1,090 cameras read numberplates of cars on all motorways and major trunk roads, recording the time, date and location of the vehicle and storing the data for five years.

– Delphi Allowed to Cancel Benefits for 15000 Workers (Bloomberg)

– Missile threat to British troops (Times Online):
(And the U.S. supplied Afghanistan with weapons to fight the Russians. This war makes no sense at all, unless you belong to the very few people benefiting from it.)

– Harvard’s masters of the apocalypse (Times Online):
I write as the holder of an MBA from Harvard Business School – once regarded as a golden ticket to riches, but these days more like scarlet letters of shame. We MBAs are haunted by the thought that the tag really stands for Mediocre But Arrogant, Mighty Big Attitude, Me Before Anyone and Management By Accident. For today’s purposes, perhaps it should be Masters of the Business Apocalypse.

– Mom: Deployment leaves no one to care for kids (AP):
DAVIDSON, N.C. (AP) — When Lisa Pagan reports for duty Sunday, four long years after she was honorably discharged from the Army, she’ll arrive with more than her old uniform. She’s bringing her kids, too.

– Indian Pt. Nuclear Power Plant Broken Pipe Spurs Safety Worries (New York Times):
The broken pipe was found Feb. 16, isolated by the middle of that week and dug up and replaced last Saturday. But in the meantime, about 100,000 gallons of water, or 10 percent of the water in the secondary cooling system storage tank, had escaped.

– JP Morgan Chase Continues Foreclosure Proceedings Despite Promised Freeze (AlterNet)

– Chomsky: Humanity’s survival ‘by no means a sure thing’ (Raw Story)

– Mortgage Delinquencies Jump 50 Percent (Money News)

– We need shock and awe policies to halt depression (Telegraph):
Taiwan’s exports to China fell 55pc in January, Japan’s fell 45pc. These exports are links in the supply chain for China’s industry. Manufacturing output in the Shanghai region fell 12pc in January.

– Minority groups to get extra Government help to protect them from the recession (Daily Mail)

– Higher tax for all until 2013, Taoiseach warns (Guardian):
Every Irish citizen will have to pay more tax in order to rescue the country from the deepening recession, the Taoiseach warned last night.

– Quarter of water coolers may have ‘dangerous’ bacteria (Sunday Herald):
Water from bottle-supplied coolers was the most contaminated, with 14 out of 35 samples containing bacteria. Eight samples showed the presence of coliform bacteria, usually associated with faeces, and three contained staphylococcus aureus, which can cause serious illnesses.

– Parents told not to give cough mixes to under-6s (Daily Mail):
The MHRA added that the possible side effects – although not dangerous – could include sleep disturbance, allergic reactions and hallucinations. In the face of the lack of evidence that the medicines do any good they have decided that many can no longer be sold for use on children under six.

– Yeti Could Exist, says Sir David Attenborough (AOL News):
In a BBC TV interview, Britain’s Sir David Attenborough said he is “absolutely baffled” by footprints that may have been left by such a creature. “Very, very convincing footprints have been found,” at 19,000-foot elevations, he said. “Nobody goes up to 19,000 feet just to make a joke.”