How the US forgot how to make Trident missiles

Inquiry cites loss of files and key staff as reason for $69m repair delay

PLANS TO refurbish Trident nuclear weapons had to be put on hold because US scientists forgot how to manufacture a component of the warhead, a US congressional investigation has revealed.

The US National Nuclear Security Administration (NNSA) “lost knowledge” of how to make a mysterious but very hazardous material codenamed Fogbank. As a result, the warhead refurbishment programme was put back by at least a year, and racked up an extra $69 million.

According to some critics, the delay could cause major problems for the UK Trident programme, which is very closely tied to the US programme and uses much of the same technology. The US and the UK are trying to refurbish the ageing W76 warheads that tip Trident missiles in order to prolong their life, and ensure they are safe and reliable. This apparently requires that the Fogbank in the warheads is replaced.

Read moreHow the US forgot how to make Trident missiles

Japan leads the world into depression

IF THE world’s biggest economies were competing in a race towards total financial collapse, Japan would now be in the lead. Having triggered this crisis and effectively set the pace, the United States is falling behind a nation that has already passed the point of recession, and is well on its way to a potentially great depression.

The Japanese economy contracted by 3.3% in the last quarter of 2008, a rate unheard of since the oil shock of the mid-1970s. Exports fell by 45% this past January alone, to the lowest level ever recorded. Unemployment is quickly rising up and over 5%, with some of the country’s most renowned and reliable companies – Nissan, Sony, Panasonic – predicting tens of thousands of job losses by the end of this year.

Read moreJapan leads the world into depression

Why are we fingerprinting children?

“It’s odd that this drive towards fingerprinting children coincides with the government’s keenness to expand the national DNA database – we already have one of the largest in the world – with more than four million people on file, including nearly 1.1 million children.”

“Odd too that VeriCool is reported to be part of Anteon, an American company that is responsible for the training of interrogators at Guantánamo and Abu Ghraib.”

Schools claim it cuts costs and time – but the civil liberties implications are vast

As voters express concern about surveillance technology, is it becoming second nature to the Facebook generation – used to publishing intimate details of their private lives on the worldwide web – who, in later life, may be less vociferous in their opposition to such schemes?

An increasing number of today’s schoolchildren are forgoing the humiliating daily name call of registration, and are instead having to “fingerswipe” in and out of class, or to give it its proper name: biometric registration. According to campaign group LeaveThemKidsAlone, schools have fingerprinted more than two million children this way, sometimes even without their parents’ consent. A statement on its website claims: “It’s part of an enormous softening-up exercise, targeting society’s most impressionable, so they’ll accept cradle-to-grave state snooping and control.”

Read moreWhy are we fingerprinting children?

Police store photos of peaceful protesters on criminal database

Police are storing details of innocent people who attend political demonstrations for more than seven years, it has emerged.

The ­Metropolitan Police last night confirmed it uses a criminal database to hold private information about protesters, including those who have not been convicted or accused of any crime.

The records are said to contain photos obtained by video surveillance of rallies and meetings as well as details of the demonstrators’ political affiliations.

Activists who attended anti-war marches, climate change campaigns and protests against the proposed third Heathrow runway are among those whose personal data is stored on the Crimint database, which also contains intelligence on suspected criminals.

Last night civil liberty campaigners said that the police could be breaking the law by keeping information on innocent people. The Met Police’s video surveillance techniques are well known but it was previously unclear whether and for how long they kept the data.

Corinna Ferguson, Liberty’s legal officer, said: “A searchable database containing photographs of people who are not even suspected of criminal activity may well violate privacy rights under Article 8 of the Human Rights Act. It is particularly worrying if peaceful protesters are being singled out for surveillance.”

Read morePolice store photos of peaceful protesters on criminal database

Three more Obama nominees withdraw from running

Three of Barack Obama’s nominations for key government positions have withdrawn from the running on a single day in another blow to his faltering attempts to fill his administration.

They are the latest in a string a appointments to back out of senior jobs since he came to power just six weeks ago.

Read moreThree more Obama nominees withdraw from running

Global News (03/07/09)

Jailed for a MySpace parody, the student who exposed America’s cash for kids scandal (Guardian):
Less than a minute into the hearing the gavel came down. “Adjudicated delinquent!” the judge proclaimed, and sentenced her to three months in a juvenile detention centre. Hillary, who hadn’t even presented her side of the story, was handcuffed and led away. But her mother, Laurene, protested to the local law centre, setting in train a process that would uncover one of the most egregious violations of children’s rights in US legal history.

Army captain charged with stealing $690000 (AP):
PORTLAND, Oregon – An Army captain accused of stealing nearly $700,000 from the U.S. government while serving in Iraq pleaded not guilty Thursday to charges including theft of government property and money laundering.

IMF: Fifth of Britain’s GDP spent so far on bailouts (Guardian):
Alistair Darling has already spent almost a fifth of Britain’s GDP on bailing out its shattered banking system – more than any other major economy, according to a grave assessment of the world financial crisis published today by the International Monetary Fund.

G7 outlook worsens, OECD says (Telegraph):
The outlook for all the world’s major economies worsened in January, and all four BRIC countries – Brazil, Russia, India and China – are now experiencing a “strong slowdown”, the Organisation for Economic Co-operation and Development said on Friday.

The US Financial System Is Effectively Insolvent (Forbes):
For those who argue that the rate of growth of economic activity is turning positive–that economies are contracting but at a slower rate than in the fourth quarter of 2008–the latest data don’t confirm this relative optimism. In 2008’s fourth quarter, gross domestic product fell by about 6% in the U.S., 6% in the euro zone, 8% in Germany, 12% in Japan, 16% in Singapore and 20% in South Korea. So things are even more awful in Europe and Asia than in the U.S. There is, in fact, a rising risk of a global L-shaped depression that would be even worse than the current, painful U-shaped global recession.

Bernanke Says Fed to `Forcefully’ Deploy All Tools to Revive U.S. Economy (Bloomberg):
“Mr. Bernanke has never been right. He has been in the government for six or seven years, he has never been right.” Jim Rogers (“We are going to have another Depression in the U.S.”)

Minnesota Bank Asks Why It Pays for Wall Street Greed (Bloomberg):
Every taxpayer should ask that question too. – March 6 (Bloomberg) – TCF Financial Corp., the Wayzata, Minnesota-based bank that never made a subprime loan and hasn’t lost money since 1995, is asking why it should help clean up the mess made by Wall Street. “I’m kind of bitter,” said William Cooper, chief executive officer of the 448-branch bank, adding that over the years TCF has invested about $1 billion in the Federal Deposit Insurance Corp.’s fund that guarantees bank deposits. “We pay for the excesses of our competitor over and over again.”

Job Losses Hint at Vast Remaking of Economy (New York Times):
“The current pace of decline is breathtaking,” said Robert Barbera, chief economist at the research and trading firm ITG. “We are now falling at a near record rate in the postwar period and there’s been no change in the violent downward trajectory.”

America loses 23,000 jobs every day and output suffers biggest slump in 25 years (Times Online)

Palestinian PM Salam Fayyad submits resignation (AP)

Obama’s backsliding on torture (Guardian)

Lloyds to Cede Up to 75% Stake to U.K. for Insuring $367 Billion of Assets (Bloomberg)

US judge sets bail conditions for fund manager Nadel (Reuters):
NEW YORK, Feb 25 (Reuters) – A U.S. judge set a $5 million bond, house detention and other conditions of bail on Wednesday for accused Florida hedge fund manager Arthur Nadel, who authorities say was on the run for two weeks in January before the FBI arrested him.

Fatal Tsvangirai crash ‘was not accident’, says MDC (Telegraph):
The wife of Zimbabwean leader Morgan Tsvangirai has been killed in a car crash in what his party claims may have been an assassination attempt.

Obama ends Bush ban on embryo stem cell research (Guardian)

Health Canada finds bisphenol A in soft drinks (CBC):
A Health Canada study of canned pop has found the vast majority of the drinks contain the chemical bisphenol A, a substance that imitates the female hormone estrogen and is banned in baby bottles. Out of 72 drinks tested, 69 were found to contain BPA at levels below what Health Canada says is the safe upper limit.

Bird flu spreading afresh (The Daily Star):
Avian influenza has started spreading in different poultry farms across the country again as department of fisheries and livestock detected the bird flu virus and culled birds at different places.

Israel annexing East Jerusalem, says EU

  • Confidential report attacks ‘illegal’ house demolitions
  • Government accused of damaging peace prospects

House Demolitions in East Jerusalem
40-year-old Palestinian Mahmoud al-Abbasi stands amid the rubble of his home after it was demolished by the Jerusalem municipality in the East Jerusalem neighborhood of Silwan. Photograph: Gali Tibbon

March 7 (The Guardian) – A confidential EU report accuses the Israeli government of using settlement expansion, house demolitions, discriminatory housing policies and the West Bank barrier as a way of “actively pursuing the illegal annexation” of East Jerusalem.

The document says Israel has accelerated its plans for East Jerusalem, and is undermining the Palestinian Authority’s credibility and weakening support for peace talks. “Israel’s actions in and around Jerusalem constitute one of the most acute challenges to Israeli-Palestinian peace-making,” says the document, EU Heads of Mission Report on East Jerusalem.

The report, obtained by the Guardian, is dated 15 December 2008. It acknowledges Israel’s legitimate security concerns in Jerusalem, but adds: “Many of its current illegal actions in and around the city have limited security justifications.”

“Israeli ‘facts on the ground’ – including new settlements, construction of the barrier, discriminatory housing policies, house demolitions, restrictive permit regime and continued closure of Palestinian institutions – increase Jewish Israeli presence in East Jerusalem, weaken the Palestinian community in the city, impede Palestinian urban development and separate East Jerusalem from the rest of the West Bank,” the report says.

The document has emerged at a time of mounting concern over Israeli policies in East Jerusalem. Two houses were demolished on Monday just before the arrival of the US secretary of state, Hillary Clinton, and a further 88 are scheduled for demolition, all for lack of permits. Clinton described the demolitions as “unhelpful”, noting that they violated Israel’s obligations under the US “road map” for peace.

The EU report goes further, saying that the demolitions are “illegal under international law, serve no obvious purpose, have severe humanitarian effects, and fuel bitterness and extremism.” The EU raised its concern in a formal diplomatic representation on December 1, it says.

Read moreIsrael annexing East Jerusalem, says EU

Businesses in Shanghai are pawning their factories to keep going

Shanghai Oriental is so vast it is known locally as the “aircraft carrier” of pawn shops.

And it is thriving as the Chinese economy sinks into the mire. “We’ve had a 30 per cent rise in the number of customers and a 70 per cent rise in the number of inquiries,” said Wang Fuming, its founder.

The flashy Shanghainese, who would have thought nothing last year of buying designer trinkets, are now pawning their Gucci bags and Rolex watches in desperation. “There’s has been a big increase in white collar workers who are mortgaging their luxury goods for emergency cash. That’s been quite apparent,” said Mr Wang.

Display cases inside the store offer Patek Philippe men’s watches for a relatively reasonable 78,000 yuan (Pounds7,800) and diamond engagement rings (the shame!) starting at a modest 1,500 yuan or so.

Interestingly though, the pawn shop is being increasingly used by small businesses, who find it difficult to get loans from the bank.

Read moreBusinesses in Shanghai are pawning their factories to keep going

Top U.S., European Banks Got $50 Billion in AIG Aid

The beneficiaries of the government’s bailout of American International Group Inc. include at least two dozen U.S. and foreign financial institutions that have been paid roughly $50 billion since the Federal Reserve first extended aid to the insurance giant.

Among those institutions are Goldman Sachs Group Inc. and Germany’s Deutsche Bank AG, each of which received roughly $6 billion in payments between mid-September and December 2008, according to a confidential document and people familiar with the matter.

Covered Counterparties

Some banks that were paid by AIG after it was bailed out by the government

  • Goldman Sachs
  • Deutsche Bank
  • Merrill Lynch
  • Société Générale
  • Calyon
  • Barclays
  • Rabobank
  • Danske
  • HSBC
  • Royal Bank of Scotland
  • Banco Santander
  • Morgan Stanley
  • Wachovia
  • Bank of America
  • Lloyds Banking Group

Source: WSJ research

Other banks that received large payouts from AIG late last year include Merrill Lynch, now part of Bank of America Corp., and French bank Société Générale SA.

Read moreTop U.S., European Banks Got $50 Billion in AIG Aid

Run on UK sees foreign investors pull $1 trillion out of the City

Banking crisis undermines Britain’s reputation as a safe place to hold funds

A silent $1 trillion “Run on Britain” by foreign investors was revealed yesterday in the latest statistical releases from the Bank of England. The external liabilities of banks operating in the UK – that is monies held in the UK on behalf of foreign investors – fell by $1 trillion (£700bn) between the spring and the end of 2008, representing a huge loss of funds and of confidence in the City of London.

Some $597.5bn was lost to the banks in the last quarter of last year alone, after a modest positive inflow in the summer, but a massive $682.5bn haemorrhaged in the second quarter of 2008 – a record. About 15 per cent of the monies held by foreigners in the UK were withdrawn over the period, leaving about $6 trillion. This is by far the largest withdrawal of foreign funds from the UK in recent decades – about 10 times what might flow out during a “normal” quarter.

Read moreRun on UK sees foreign investors pull $1 trillion out of the City

Former SAS Comander: Afghan operation is ‘worthless’

Sarah Bryant was the first female British soldier killed in Afghanistan

The UK’s operation in Afghanistan is “worthless” and akin to the start of the Vietnam war, former SAS commander Maj Sebastian Morley has said.

Speaking to the Daily Telegraph, he said the government had “blood on its hands” over the “unnecessary” deaths of four soldiers.

BBC defence correspondent Caroline Wyatt said many on the ground felt the campaign has been “under-resourced”.

But the MoD insisted the security challenge was “manageable”.

The former SAS commander resigned after Cpl Sarah Bryant and three of her colleagues died when their Snatch Land Rover hit an anti-tank mine in Helmand province in June 2008.

Cpl Bryant was the first female soldier to die in Afghanistan.

We go out on operations, have a punch-up with the Taleban and then go back to camp for tea. We are not holding the ground
Maj Sebastian Morley

Maj Morley, 40, said he was compelled to stand down after Quentin Davies, the Minister for Defence Equipment and Support, told an “unacceptable lie” in the wake of the deaths.

Mr Davies had said commanders had a choice of vehicles, although he has subsequently said he had not meant to cause any offence.

Speaking for the first time since his resignation, Maj Morley launched a scathing attack on the state of the military campaign as a whole.

“This is the equivalent to the start of the Vietnam conflict, there is much more to come.

“We hold tiny areas of ground in Helmand and we are kidding ourselves if we think our influence goes beyond 500 metres of our security bases.

“We go out on operations, have a punch-up with the Taleban and then go back to camp for tea. We are not holding the ground.”

The security challenge is manageable by the available forces and the overriding mood of the local population is one of optimism and hope.
MoD spokesman
Q&A: Snatch Land Rovers SAS commander quits ‘over kit’

And, addressing the use of Snatch Land Rovers, which he deemed to be unsafe and prompted his decision to stand down, he said: “I had to resign.

“I had warned (the MoD) time and time again that there were going to be needless deaths if we were not given the right equipment, and they ignored this advice. There is blood on their hands.

“There was no other vehicle to use. The simple truth is that the protection on these vehicles is inadequate and this led to the unnecessary deaths.”

Read moreFormer SAS Comander: Afghan operation is ‘worthless’

Morgan Stanley: Downturn will be worse than the Great Depression

We are slowly getting closer to the truth: The ‘Greatest Depression’ is here.

Some bleak predictions from Morgan Stanley this morning including the forecast that UK profits could fall by 60% in the current downturn – a worse performance than the great depression of the 1930s.

UK equity strategist Graham Secker said this 60% decline assumes a £20bn loss from the banks. The performance would have been even worse if not for a £10bn boost to profits from foreign exchange movements. Secker is also now assuming no growth in 2010, and has also cut his forecast for the year end FTSE 100 level from 4300 to around the current level of around 3500. He writes:

Read moreMorgan Stanley: Downturn will be worse than the Great Depression

Record rise in gilts as Bank of England ‘starts printing presses’

Gilts saw their biggest one-day jump in memory after the Bank of England signalled it was embarking on a policy of money creation for the first time.

The Bank cut interest rates by half a percentage point and committed to spending £150bn of newly created central bank money on corporate and government bonds. The news sent shockwaves through Britain’s capital markets.

Although most economists had expected the rate cut, which leaves borrowing costs at an effective zero of 0.5pc, the scale and speed of the plan to pump extra cash into the economy took traders by surprise. The Bank plans to spend £50bn of the money it creates on corporate debt and the remaining sum on government bonds.

The sheer scale of the operation is illustrated by the fact that the entire corporate bond and commercial paper market in the UK is worth only £57.5bn, while the amount of gilt-edged government debt eligible for the Bank’s auctions totals £250bn.

The Bank’s £200bn gamble (Independent):
“The Bank of England will this week announce its intention to flood the economy with ‘helicopter money’, its latest attempt to tackle the recession. Won’t quantitative easing cause inflation? Yes – and that is the general idea. Warren Buffett, the world’s most successful investor, has warned of “an onslaught of inflation” as a result of current policies.”

Destroying the value of your money through inflation is the general idea?(!!!)

Quantitative easing = Increasing the money supply (by creating money out of thin air) = Inflation

Inflation is a hidden tax:
“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

– John Maynard Keynes

Quantitative easing = The Zimbabwe school of economics (Stealing)

The Bank initially intends to spend £75bn on the operation, with the remaining amount likely to be committed as and when the Monetary Policy Committee judges necessary.

Read moreRecord rise in gilts as Bank of England ‘starts printing presses’

The dangers of printing money: four lessons from history

The Bank of England voted today to begin quantitative easing –  printing money to you and me – in a last ditch attempt to save the UK from the twin threats of depression and deflation.

It is a decision that is fraught with risks.

The hope is that the money pumped into the economy will encourage banks to become more relaxed about lending to individuals and businesses.

Flush with extra cash we will all rush out to spend it, kickstarting the economy and dragging it out of recession. Governor of the Bank of England, Mervyn King, will get a well deserved knighthood, and the rest of us will all breathe a sigh of relief and carry on as before, a little poorer, a little wiser, but generally OK.

But, none of the above is certain.

Banks might prefer to sit on the cash resulting in continued gridlock in the borrowing market. Impact: a big fat zero.

If too much money is pumped into the economy inflation or even hyper-inflation becomes a real threat. Impact: an unwelcome return to the 1970s.

Read moreThe dangers of printing money: four lessons from history

Baxter: Product contaminated with live H5N1 avian flu virus

The company that released contaminated flu virus material from a plant in Austria confirmed Friday that the experimental product contained live H5N1 avian flu viruses.

And an official of the World Health Organization’s European operation said the body is closely monitoring the investigation into the events that took place at Baxter International’s research facility in Orth-Donau, Austria.

“At this juncture we are confident in saying that public health and occupational risk is minimal at present,” medical officer Roberta Andraghetti said from Copenhagen, Denmark.

“But what remains unanswered are the circumstances surrounding the incident in the Baxter facility in Orth-Donau.”

The contaminated product, a mix of H3N2 seasonal flu viruses and unlabelled H5N1 viruses, was supplied to an Austrian research company. The Austrian firm, Avir Green Hills Biotechnology, then sent portions of it to sub-contractors in the Czech Republic, Slovenia and Germany.

The contamination incident, which is being investigated by the four European countries, came to light when the subcontractor in the Czech Republic inoculated ferrets with the product and they died. Ferrets shouldn’t die from exposure to human H3N2 flu viruses.

Public health authorities concerned about what has been described as a “serious error” on Baxter’s part have assumed the death of the ferrets meant the H5N1 virus in the product was live. But the company, Baxter International Inc., has been parsimonious about the amount of information it has released about the event.

On Friday, the company’s director of global bioscience communications confirmed what scientists have suspected.

“It was live,” Christopher Bona said in an email.

The contaminated product, which Baxter calls “experimental virus material,” was made at the Orth-Donau research facility. Baxter makes its flu vaccine — including a human H5N1 vaccine for which a licence is expected shortly — at a facility in the Czech Republic.

Read moreBaxter: Product contaminated with live H5N1 avian flu virus

China’s spending spree likely to include Canadian companies

Labourers work at a pump jack in the PetroChina’s Karamay oil field in northwestern China’s Xinjiang Uigur Autonomous Region. Chinese resource spending spree is expected to accelerate throughout the next 12 months, with Canadian mining and energy companies likely on the shopping list. (Reuters)

HONG KONG – Asia’s dealmakers say a Chinese resource spending spree will accelerate throughout the next 12 months, with Canadian mining and energy companies likely on the shopping list.

Chinese buyers have already scooped up US$70-billion worth of global resource assets so far this year, as Beijing looks to secure its energy and resource future by spending some of its US$2-trillion in foreign exchange reserves.

The overseas buying trend will pick up steam in the months ahead, according to China and Hong Kong-based corporate dealmakers, investment bankers and private equity players surveyed by Royal Bank of Scotland and Mergermarket.

Read moreChina’s spending spree likely to include Canadian companies

Bill Seeks to Let FDIC Borrow up to $500 Billion

WASHINGTON — Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department.

The Connecticut Democrat’s effort — which comes in response to urging from FDIC Chairman Sheila Bair, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner — would give the FDIC access to more money to rebuild its fund that insures consumers’ deposits, which have been hard hit by a string of bank failures.

Last week, the FDIC proposed raising fees on banks in order to build up its deposit insurance fund, which had just $19 billion at the end of 2008. That idea provoked protests from banks, which said such a burden would worsen their already shaken condition. The Dodd bill, if it becomes law, would represent an alternative source of funding.

Mr. Dodd’s bill could also give the FDIC more firepower to help address “systemic risks” in the economy, potentially creating another source of bailout funds in addition to the $700 billion already appropriated by Congress.

Read moreBill Seeks to Let FDIC Borrow up to $500 Billion

Britain has the world’s biggest fall in property prices after only Latvia

Britain saw some of the steepest house price falls in the world last year, collapsing by 14.7 per cent, with only Latvia performing worse, research showed yesterday.

More than three-quarters of the 42 countries surveyed recorded falls in the value of property in the final quarter of 2008, compared with just 27 per cent in 2007.

Dubai was the strongest performer, with house prices soaring by nearly 60 per cent in 2008, but much of this gain is expected to be wiped out this year.

Related article: House prices fall, leading to a record annual rate of decline, Halifax reveals (Telegraph)

Latvia saw the steepest slides on an annual and quarterly basis, with prices dropping by 16 per cent in the final quarter of the year and by 33.5 per cent during the whole of 2008.

Iceland also suffered badly, with prices falling by 14 per cent during the year. The US and Ireland were also near the top of the losers’ table with annual price drops of 12.1 per cent and 9.1 per cent respectively.

Read moreBritain has the world’s biggest fall in property prices after only Latvia

Global News (03/06/09)

To my special friend Gordon, 25 DVDs: Obama gives Brown a set of classic movies. Let’s hope he likes the Wizard of Oz (Daily Mail):
Because all he got was a set of DVDs. Barack Obama, the leader of the world’s richest country, gave the Prime Minister a box set of 25 classic American films – a gift about as exciting as a pair of socks.

Fed’s Kohn Says Risks of Not Rescuing AIG Too Large (Bloomberg):
The bulk of AIG’s losses, which totaled more than $100 billion in the past five quarters, stem from credit-default swaps sold to investors to protect them from the declining value of financial assets.

Dow/Gold Ratio Hits 7; Multi Decade Low (Charting Stocks)

Berlin losing patience over Opel rescue (Financial Times):
“Politically, Berlin will have to do something and Opel and GM know that. They are using the threat of job losses in an election year as a blackmailing device to get our support cheaply,” the insider said.

UK stake in Lloyds set to hit 70pc (Telegraph):
Lloyds Banking Group is close to a deal to insure around £250bn of toxic assets that could see the taxpayers’ stake in the bank rise to 70pc, the Financial Times reported.

Malaysian exports suffer fast fall (Financial Times):
Malaysia reported its sharpest monthly export fall in at least 28 years for January as the government prepares to announce a new stimulus package next week. Exports, focused on electronics and commodities, fell 28 per cent after sliding by 15 per cent in December.

China crisis as economy crumbles (Independent):
An 8 per cent growth rate sounds impressive, but the Beijing leadership fears social unrest in the countryside as it struggles to create jobs

Bailout Money – Instead of Being Used to Stabilize the Economy or Even the Bailed-Out Companies – is Just Going to Line the Pockets of the Wealthy (George Washington’s Blog)

Barack Obama bets the farm in $4 trillion poker game (Times):
The President believes he can change US politics for a generation. If he’s wrong he could bankrupt the whole country. (Can’t blame it only on Obama. Always remember Obama is just a puppet of the elite, as was Bush.)

BUDGET BACKLASH: Thousands Rally At City Hall (WCBS-TV)

ECB cuts rates to record 1.5pc, mulls radical action (Telegraph):
“I don’t exclude anything,” said Jean-Claude Trichet, the ECB’s president. “We did not decide that this is the lowest level. We are studying additional non-standard measures.” Bond yields plummeted across the eurozone as the markets instantly priced in further monetary loosening.

Gaza homes destruction ‘wanton’ (BBC News):
Human rights investigators say Israeli forces engaged in “wanton destruction” of Palestinian homes during the recent conflict in Gaza. Amnesty International has told the BBC News website the methods used raised concerns about war crimes.

U.S. Military Aid to Israel (CounterPunch):
Israel is by far the largest recipient of U.S. foreign aid.  Since 1949, the United States has provided Israel with $101 billion in total aid, of which $53 billion has been military aid.  For the last 20-plus years, Israel has received an average of $3 billion annually in grant aid;, until now the grant has been a mix of economic and military aid.

US offers $0 for Gaza reconstruction (The National):
Although the Obama administration is pledging $900 million (Dh3.3 billion) of aid, none of the money will go to rebuilding Gaza, the Los Angeles Times reported.

Russia building anti-satellite weapons (Independent):
Russia is working on anti-satellite weapons to match technologies developed by other nations and will speed up modernization of its nuclear forces, a deputy defense minister was quoted as saying today.

Russia to outlaw criticism of WWII tactics (Telegraph):
The Russian government is to outlaw criticism of Soviet military tactics during the Second World War in the latest example of its heavy-handed approach to dissent.

U.S. to Invite The Wealthy To Invest in The Bailout (Washington Post):
The initiative to revive the consumer lending business, outlined by officials this week, offers these wealthy investors a new chance to make sizable profits — but, thanks to the government, without the risk of massive losses.

Mauritania expels Israeli diplomats, shuts embassy (Reuters):
NOUAKCHOTT (Reuters) – Mauritania’s military junta expelled Israeli diplomats and shut the embassy on Friday after freezing ties with the Jewish state over its invasion of Gaza.

Mandelson custard attack probed (BBC News)

Revealed: police databank on thousands of protesters (Guardian):
Police are targeting thousands of political campaigners in surveillance operations and storing their details on a database for at least seven years, an investigation by the Guardian can reveal.

Experts uncover cause of greyness (BBC News):
Experiments found it is caused by a massive build-up of hydrogen peroxide due to wear and tear of hair follicles, which blocks hair’s natural pigment.

Deutsche Bank: Risk of U.S. GDP falling 10 pct in Q1

NEW YORK, March 4 (Reuters) – Deutsche Bank predicted there are risks that the U.S. economy could contract by as much as 10 percent in the first quarter, given the relentless wave of dismal economic data being reported in early 2009.

Deutsche Bank U.S. economists Joseph LaVorgna and Carl Riccadonna expect first-quarter Gross Domestic Products to shrink by 8 percent, steeper than the 6.2 percent fall in the fourth quarter.

“However, the risks are skewed heavily on the downside, so we would not be surprised after revisions, if output end up being down closer to minus 10 percent,” they wrote in a research note released on Wednesday.

Read moreDeutsche Bank: Risk of U.S. GDP falling 10 pct in Q1

Food stamp enrollment jumps to record 31.8 million

WASHINGTON (Reuters) – A record 31.8 million Americans received food stamps at the latest count, an increase of 700,000 people in one month with the United States in recession, government figures showed on Thursday.

Food stamps, which help poor people buy groceries, are the major U.S. anti-hunger program, forecast to cost at least $51 billion in this fiscal year ending September 30, up $10 billion from fiscal 2008.

Read moreFood stamp enrollment jumps to record 31.8 million

GM says it will go bust in days without new US bail-out

General Motors today warned it would go bust within 30 days unless the US treasury gives it a further multi-billion dollar loan.

The dramatic warning from America’s biggest car group came after its auditor, Deloitte, raised substantial doubts about its ability to continue operations as a going concern.

These alarm signals were contained in GM’s 480-page annual report for 2008 to the US Securities and Exchange Commission, America’s financial regulator. They further underline the parlous state of the global car industry.

Related article: GM Europe seeks cash with 300,000 jobs at risk (Times)

GM has so far received $13.4bn (£9.5bn) in treasury loans and a further $1.6bn in other government loans. Today , effectively holding a gun to the government’s head, it said it could default on this $15bn if it did not receive a further cash injection.

It is seeking a total of $30bn from the Obama administration after racking up $82bn of losses in the last three years, including $31bn last year.

The group, once the world’s biggest carmaker, said it needed $3.5bn cash in 2009 and a further $2.3bn to 2014 to stay alive. The plan it has submitted to Tim Geithner, the US treasury secretary, envisages 47,000 job losses – 26,000 outside the US.

Read moreGM says it will go bust in days without new US bail-out

Veterans Affairs Department: A Total Mess

Unopened claims letters hidden at VA offices

A new report about Veterans Affairs Department employees squirreling away tens of thousands of unopened letters related to benefits claims is sparking fresh concerns that veterans and their survivors are being cheated out of money.

VA officials acknowledge further credibility problems based on a new report of a previously undisclosed 2007 incident in which workers at a Detroit regional office turned in 16,000 pieces of unprocessed mail and 717 documents turned up in New York in December during amnesty periods in which workers were promised no one would be penalized.

“Veterans have lost trust in VA,” Michael Walcoff, VA’s under secretary for benefits, said at a hearing Tuesday. “That loss of trust is understandable, and winning back that trust will not be easy.”

Unprocessed and unopened mail was just one problem in VA claims processing mentioned by Belinda Finn, VA’s assistant inspector general for auditing, in testimony before the House Veterans’ Affairs Committee.

Auditors also found that the dates recorded for receiving claims, which in many cases determine the effective date for benefits payments, are wrong in many cases because of intentional and unintentional errors, Finn said.

The worst case uncovered by auditors involved the New York regional office, where employees testified that managers told staff to put later dates on claims to make it appear claims were being processed faster. A review found that 56 percent of claims had incorrect dates, although no evidence was found of incorrect or delayed benefits payments. Finn said workers reported that this practice had been used for years.

Read moreVeterans Affairs Department: A Total Mess