The Subprime Crisis is Just Starting

(Excerpt: “For these reasons, there is a powerful, powerful case for moving a substantial portion of your assets into tangible assets. Good examples of tangible assets include gold, silver, commodities, real estate, farmland and energy.”)

Financial Sense

by Daniel R. Amerman, CFA | March 20, 2008

Print

Overview

As the author of three books on mortgage finance and related derivative securities, and speaking as someone who first turned mortgages into rated securities in 1983, I’m going to let you in on an unfortunate little secret – the real subprime mortgage securitization crisis may not have even started yet. But, there is a good chance the real crisis will arrive soon.

This assertion that the crisis could just be getting started may seem absurd and extraordinarily out of touch. What about the approximately 45,000 homeowners losing their homes to foreclosure in the United States every month? What about the 8.9% plunge in nominal housing prices in 2007, the largest decline in over 20 years? What about Bear Stearns losing 94% of the value of its stock in 2 days, with even the remaining 6% in value being based on an unprecedented loan from the Fed before JP Morgan would agree to the acquisition? How much worse could it get?

Read moreThe Subprime Crisis is Just Starting

NASA data shows thickest and oldest Arctic ice is melting

WASHINGTON (Reuters) – The thickest, oldest and toughest sea ice around the North Pole is melting, a bad sign for the future of the Arctic ice cap, NASA satellite data showed on Tuesday.

“Thickness is an indicator of long-term health of sea ice, and that’s not looking good at the moment,” Walt Meier of the National Snow and Ice Data Center told reporters in a telephone briefing.

This adds to the litany of disturbing news about Arctic sea ice, which has been retreating over the last three decades, especially last year, when it ebbed to its lowest level.

Read moreNASA data shows thickest and oldest Arctic ice is melting

Ice shelf on verge of collapse

Latest sign of global warming’s impact shocks scientists

A vast ice shelf hanging on by a thin strip looks to be the next chunk to break off from the Antarctic Peninsula, the latest sign of global warming’s impact on Earth’s southernmost continent.

Scientists are shocked by the rapid change of events.


An image of the Wilkins Ice Shelf disintegration taken from the
British Antarctic Survey’s Twin Otter aircraft reconnaissance flight.

Read moreIce shelf on verge of collapse

Hayden: White Boy al-Qaeda on the Rise

“Al-Qaeda, in its haven in western Pakistan, is training operatives who are ‘western’ in appearance, making it easier for them to get past U.S. airport security, Central Intelligence Director Michael Hayden said,” reports Bloomberg.

Does anybody who looks “western” have an easy time getting past airport security? Mr. Hayden needs to visit an airport and see for himself — just about everybody, from grandmothers to toddlers, are under suspicion, even if they look Scandinavian. It has nothing to do with actual suspicion. It has to do with sending a message: you live in a police state now, get used to it, and if you don’t want to end up dead in a holding cell like Carol Ann Gotbaum, you’ll submit and not complain.

Of course, Mr. Hayden, as the head honcho of the CIA, is “catapulting the propaganda,” as Bush might call it. Now that al-Qaeda operatives look like stock brokers and cashiers at the local Stop ‘n Gas, we need to push ahead with the control grid, now only partially in place. Our rulers think we need to hear this kind of nonsense every few weeks, just to remind us and get us accustomed to those CCTV cameras everywhere and the NSA vacuuming up our telephone conversations and emails. It’s all to protect us from the white boy al-Qaeda.

Read moreHayden: White Boy al-Qaeda on the Rise

Chaos on Wall Street


THE BAILOUT BOYS: S.E.C. Chairman Christopher Cox (left) with Paulson, President Bush and Bernanke.

The big banks’ fear of big losses is threatening to bring down the entire system, with dire consequences for all of us. Here’s what’s going on, and what we can do about it.

(Fortune Magazine) — What in the world is going on here? Why is Washington spending billions to bail out Wall Street titans while leaving struggling homeowners to fend for themselves? Why are the Federal Reserve and the Treasury acting as if they’re afraid the world may come to an end, while the stock market seems much less concerned? And finally, what does all this mean to those of us who aren’t financial professionals?

Okay, take a few breaths, pour yourself a beverage of your choice, and I’ll tell you what’s happening – and what I think is going to happen. Although I expect these problems will resolve themselves without a catastrophic meltdown, I’ll also tell you why I’m more nervous about the world financial system now than I’ve ever been in my 40 years of covering business and markets.

Read moreChaos on Wall Street

On the brink of disaster

The three newbies – the term auction lending facility, the primary-dealer credit facility, and the term securities lending facility – total more than half-a-trillion dollars, with more if needed. Much of this money is available not only to commercial banks but also to investment banks, which normally aren’t allowed to borrow from the Fed.

How can the Fed afford this largesse? Easy. Unlike a normal lender, the Fed can’t run out of money – at least, I don’t think it can. It can manage monetary policy while in effect creating banking reserves out of thin air and lending them out at interest.

That’s how the Fed reported a $34 billion profit in 2006, the last available year, of which $29 billion was sent to the Treasury. The Fed can even add to its $800 billion stash of Treasury securities by borrowing more of them from other big players.

Then there’s the Treasury. In March the Treasury – which failed this past winter to get private firms to establish a $100 billion “superfund” (please, no giggles from people who equate the term with Love Canal) to keep things called “structured investment vehicles” from having to sell their holdings in a bad market – unleashed Fannie Mae (FNM) and Freddie Mac (FRE, Fortune 500) and the Federal Home Loan Banks to buy hundreds of billions of dollars of mortgage-backed securities.

Read moreOn the brink of disaster

GAO Blasts Weapons Budget

Cost Overruns Hit $295 Billion
Government auditors issued a scathing review yesterday of dozens of the Pentagon’s biggest weapons systems, saying ships, aircraft and satellites are billions of dollars over budget and years behind schedule.

The Government Accountability Office found that 95 major systems have exceeded their original budgets by a total of $295 billion, bringing their total cost to $1.6 trillion, and are delivered almost two years late on average. In addition, none of the systems that the GAO looked at had met all of the standards for best management practices during their development stages.


The Navy expects the costs of its first two Littoral Combat Ships to exceed their combined budget of $472 million by more than 100 percent. (Lockheed Martin Via Associated Press)

Auditors said the Defense Department showed few signs of improvement since the GAO began issuing its annual assessments of selected weapons systems six years ago. “It’s not getting any better by any means,” said Michael Sullivan, director of the GAO’s acquisition and sourcing team. “It’s taking longer and costing more.”

Read moreGAO Blasts Weapons Budget

The Kingdom ‘braces for nuclear war’

Saudi Arabia is reportedly preparing to counter any ‘radioactive hazards’ which may result from a US strike on Iran’s nuclear plants.

Popular government-guided Saudi newspaper Okaz recently reported that the Saudi Shura Council approved of nuclear fallout preparation plans only a day after US Vice President Dick Cheney met with the Kingdom’s high ranking officials, including King Abdullah.

As a result of the Shura ruling, the Saudi government will start the implementation of ‘national plans to deal with any sudden nuclear and radioactive hazards that may affect the Kingdom following expert warnings of possible attacks on Iran’s Bushehr nuclear reactors’.

Read moreThe Kingdom ‘braces for nuclear war’

Brace for $1 Trillion Writedown of `Yertle the Turtle’ Debt

Be it ever so devalued, $1 trillion is a lot of dough.

That’s roughly on a par with the Russian economy. More than double the market value of Exxon Mobil Corp. About nine times the combined wealth of Warren Buffett and Bill Gates.

Yet $1 trillion is the amount of defaults and writedowns Americans will likely witness before they emerge at the far side of the bursting credit bubble, estimates Charles R. Morris in his shrewd primer, “The Trillion Dollar Meltdown.” That calculation assumes an orderly unwinding, which he doesn’t expect.

“The sad truth,” he writes, “is that subprime is just the first big boulder in an avalanche of asset writedowns that will rattle on through much of 2008.”

Expect the landslide to cascade through high-yield bonds, commercial mortgages, leveraged loans, credit cards and — the big unknown — credit-default swaps, Morris says. The notional value for those swaps, which are meant to insure bondholders against default, covered about $45 trillion in portfolios as of mid-2007, up from some $1 trillion in 2001, he writes.

Morris can’t be dismissed as a crank. A lawyer, former banker and author of 10 other books, he knows a thing or two about the complex instruments that have spread toxic debt throughout the credit system. He once ran a company that made software for creating and analyzing securitized asset pools. Yet he writes with tight clarity and blistering pace.

Read moreBrace for $1 Trillion Writedown of `Yertle the Turtle’ Debt

CIA enlists Google’s help for spy work

US intelligence agencies are using Google’s technology to help its agents share information about their suspects

Google has been recruited by US intelligence agencies to help them better process and share information they gather about suspects.

Agencies such as the National Security Agency have bought servers on which Google-supplied search technology is used to process information gathered by networks of spies around the world.

Read moreCIA enlists Google’s help for spy work

Forest Service buys UAVs to spy on public

U.S. FOREST SERVICE FIELDING FLEET OF DRONES – Law Enforcement Wants “Unmanned Aerial Vehicles” Hovering Above Forests

Washington, DC – The U.S. Forest Service has purchased pilot-less aircraft to provide day and night photo reconnaissance for its law enforcement program, according to agency records released today by Public Employees for Environmental Responsibility (PEER). The two “unmanned aerial vehicles,” or drones, may represent the beginnings of wider conversion of military robotic technology for civilian uses.

The two “Sky Seers” were obtained by the Forest Service on December 10, 2007 at a cost of $100,000 from Chang Industries, Inc. of La Verne, California. The package includes one “day version” and one “night version” of the drone, together with a “Pan/tilt thermal camera” to record heat signatures at night.

A March 12, 2007 purchase request from the Forest Service Law Enforcement & Investigations (LE&I) program states it “has been monitoring and evaluating UAVs [unmanned aerial vehicles] intermittently since 1997, when their use was considered in support of Operation Linebacker, a border enforcement initiative.” While this “Sole Source Request” details desired equipment specifications, the Forest Service could produce no documents spelling out what they want to use drones for or why pilot-less craft are preferred, in response to a Freedom of Information Act request from PEER.

The drones purchase took place shortly after Forest Service LE&I spent $600,000 buying tasers for its entire enforcement staff, without any guidelines or training program. The tasers are still sitting in storage cartons. After PEER revealed the taser fiasco, LE&I staff told PEER about the drones and suggested a records request in order to validate staff concerns that the purchase –

Read moreForest Service buys UAVs to spy on public

Europe poised to bolster Web shield

A NATO cyberdefense center is to be housed in this former military barracks in Tallinn, Estonia.
(Foreign Ministry of Estonia)

PARIS: Nearly a year after Estonia weathered an onslaught of cyberattacks, its name has become a rallying cry for countries pressing to streangthen global cooperation between governments and private Internet service providers to combat computer crime. But some privacy advocates and computer experts remain wary of such efforts.

On Tuesday, the Council of Europe plans to introduce guidelines to aid computer crime investigators, building on a cybercrime treaty that has been signed by 43 nations, including the United States. A controversial proposal would require service providers to give the authorities a list of the types of information that they could offer.

On Wednesday, NATO will present a strategy for countering computer attacks at a meeting for heads of state in Bucharest, with a proposal to create a central cyberdefense authority.

“The attacks on Estonia – directed at services on which Estonian citizens rely – could happen anywhere,” said James Appathurai, a NATO spokesman. “The only way to defend against them is through multinational, multilateral cooperation.”

That kind of military talk concerns privacy advocates and computer experts, who fear that private companies will be pressed into service to police users as part of these strategies.

“One of the great consequences of all of this is that an agenda is created for a society that is under surveillance,” said Peter Sommers, a senior research fellow at the London School of Economics and author of “The Hacker’s Handbook,” written under the pseudonym Hugo Cornwall. “And in the panic, we lose the quality of control.”

Read moreEurope poised to bolster Web shield

IMF: U.S. Economy Will Go Into Recession In 2008

The International Monetary Fund will next week forecast that the US economy will go into recession this year, a German newspaper reported Tuesday, citing an upcoming report.

The IMF believes the US will experience at least two successive quarters of negative growth — the technical definition of a recession — and will grow only half a percent over the whole of 2008, weekly Die Zeit reported.

Read moreIMF: U.S. Economy Will Go Into Recession In 2008

Machine makes water good enough to drink

Victoria Fray with a glass of drinking water made with her new desalination machine. Photo / Greg Bowker

Auckland engineer Victoria Fray has come up with a new variation on the age-old theme of teaching someone to fish so they can feed themselves forever.

She has designed a mini-desalination plant that is small and robust enough to be sent to remote Pacific islands to provide water for up to 900 people in an emergency – then be hauled back to Auckland and used again in the next disaster elsewhere.

Read moreMachine makes water good enough to drink

Pilots Yanked Out of Planes for Drone Duty


How bad do they need drones in Iraq and Afghanistan? So bad, the Air Force is yanking pilots out of old-school planes, and sticking them on drone duty, instead.

For the past several years, there’s been a “300% annual increase” in battlefield commanders’ request in video from robot aircraft. Drone-makers – and military paper-pushers – are struggling to keep up with the demand. Defense Secretary Gates has ordered that the Air Force send all available Predator unmanned aerial vehicles into action. Air Force officials whined about the non-stop 13-hour days their pilots were clocking (in Nevada, not Iraq). But ultimately, the number of Predator flights was doubled.

Read morePilots Yanked Out of Planes for Drone Duty

Analyst Predicts Corn Rationing in 2008

NEW YORK – A BB&T Capital Markets analyst said Monday corn rationing may be necessary this year, following a U.S. Department of Agriculture report predicting farmers would plant far fewer acres of corn in 2008.

According to the March Prospective Plantings Report, farmers intend to plant about 86 million acres of corn this year, down 8 percent from 2007, when the amount of corn planted was the highest since World War II.

Analyst Heather L. Jones said in a note to investors if the USDA estimate proves accurate, the year may produce just 200 million bushels of corn. That, she said, wouldn’t be enough to meet demand, given current export and feed demand trends and higher ethanol demand. Both ethanol and animal feed are made with corn.

“That is an untenable inventory demand, in our opinion,” she said. “Consequently, we believe demand must be rationed or there needs to be a big supply response from other growing regions of the world.”

Read moreAnalyst Predicts Corn Rationing in 2008

Cheney Moves Forward with Plans to Nuke Iran

While everyone is focused on celebretard drivel, the failing economy, the outrageous price of oil (after Iraq goes down in flame with 4,000-plus Americans who lost their lives for what exactly?), and the slimy campaign shenanigans, the Bushbots are quietly ramping up plans to bomb Iranian nuclear facilities.

exxxxallent.jpgUnreported in corporate media:burnsapproves.jpg Cheney is currently running around the Middle East drumming up war on Iran. (Lots more on this here, here, here, and here). But this hellacious old man hasn’t even finished his other two wars yet: Is the “surge” in Iraq about to unravel?

Good lord. McCain has a 67-percent approval rating as Democrats squabble. If he’s elected, that means eight more years of genocidal horrors. But the complicit corporate media will never tell you what’s really going on while we sleep.

Journalists have been writing about the effects of a nuclear attack on Iran for years. It’s in the interest of every human being on earth to read Nuclear Bunker Buster Bombs against Iran: This Way Lies Madness

An estimated 16-20 million Iranians would die in a nuclear war with Israel, according to a report issued by a respected Washington think tank.

The Center for Strategic and International Studies (CSIS) also estimates that between 200,000 and 800,000 Israelis would be killed, the Jerusalem Post reported.

The report, which is theoretical and based on limited verified knowledge of Israel’s and Iran’s nuclear capability, paints a bleak picture for both nations.
On March 22 Chris Floyd wrote a frightening piece, One Foot in the Grave, Iran Attack Nearer, More Likely Than Most Suspect.

Then on March 23 he wrote Saudis Prepare for “Sudden Nuclear Hazards” After Cheney Visit.

Read it and freak:

I. One Tick Closer to Midnight

Last Friday, Dick Cheney was in Saudi Arabia for high-level meetings with the Saudi king and his ministers. On Saturday, it was revealed that the Saudi Shura Council — the elite group that implements the decisions of the autocratic inner circle — is preparing “national plans to deal with any sudden nuclear and radioactive hazards that may affect the kingdom following experts’ warnings of possible attacks on Iran’s Bushehr nuclear reactors,” one of the kingdom’s leading newspapers, Okaz, reports. The German-based dpa news service relayed the paper’s story.

Simple prudence — or ominous timing? We noted here last week that an American attack on Iran was far more likely — and more imminent — than most people suspect. We pointed to the mountain of evidence for this case gathered by scholar William R. Polk, one of the top aides to John Kennedy during the Cuban Missile Crisis, and to other indicators of impending war. The story by Okaz — which would not have appeared in the tightly controlled dictatorship without approval from the top — is yet another, very weighty piece of evidence laid in the scales toward a new, horrendous conflict. We don’t know what the Saudis told Cheney in private — or even more to the point, what he told. But the release of this story now, just after his departure, would seem to be a clear indication that the Saudis have good reason to fear a looming attack on Iran’s nuclear sites and are actively preparing for it. And they certainly should be bracing themselves. A U.S. attack on Iran will come suddenly, and if it is indeed aimed at destroying Iran’s nuclear capabilities — a “threat” being talked up again with new urgency by both Cheney and Bush lately — it has the potential for unimaginable consequences. As we noted here in a previous piece:

Twelve hours. One circuit of the sun from horizon to horizon, one course of the moon from dusk to dawn. What was once a natural measurement for the daily round of human life is now a doom-laden interval between the voicing of an autocrat’s brutal whim and the infliction of mass annihilation halfway around the world. Twelve hours is the maximum time necessary for American bombers to gear up and launch an unprovoked sneak attack – a Pearl Harbor in reverse – against Iran, the Washington Post reports. The plan for this “global strike,” which includes a very viable “nuclear option,” was approved months ago, and is now in operation. The planes are already on continuous alert, making “nuclear delivery” practice runs along the Iranian border, as Sy Hersh reports in the New Yorker, and waiting only for the signal from President George W. Bush to drop their payloads of conventional and nuclear weapons on some 400 targets spread throughout the condemned land. And when this attack comes – either as a stand-alone “knock-out blow” or else as the precusor to a full-scale, regime-changing invasion, like the earlier aggression in Iraq – there will be no warning, no declaration of war, no hearings, no public debate. The already issued orders governing the operation put the decision solely in the hands of the president: he picks up the phone, he says, “Go” – and in twelve hours’ time, up to a million Iranians could be dead.

This potential death toll is not pacificist hyperbole; it comes from a National Academy of Sciences study sponsored by the Pentagon itself, as The Progressive reports. (Although Bush’s military brass like to peddle the public lie that “we don’t do body counts” of the enemy, in reality, like all good businessmen they keep precise accounts of their production outputs: i.e., corpses.) The Pentagon’s NAS study calibrated the kill-rate from “bunker-busting” tactical nukes used to take out underground facilities – such as those which house much of Iran’s nuclear power program. Another simulation by scientists, using Pentagon-devised software, was even more specific, measuring the aftermath of a “limited” nuclear attack on the main Iranian underground site in Esfahan, the magazine reports. This small expansion of the Pentagon franchise would result in stellar production figures: three million people killed by radiation in just two weeks, and 35 million people exposed to dangerous levels of cancer-causing radiation in Afghanistan, Pakistan and India. Bush has about 50 nuclear “earth-penetrating weapons” at his disposal, according to the Union of Concerned Scientists.Nor is the idea of a nuclear strike on Iran mere “liberal paranoia.” Bush himself pointedly refused to take the nuclear option “off the table” this week. But what’s more, Bush has made the use of nuclear weapons a centerpiece of his “National Security Strategy of the United States,” issued last month, The Progressive notes. While reaffirming the criminal principle of “pre-emptive” attacks on perceived enemies which may or may not be threatening America with weapons they may or may not possess, Bush declared that “safe, credible and reliable nuclear forces continue to play a critical role” in the “offensive strike systems” that are now a key part of America’s “deterrence.” In the depraved jargon of atomic warmongering, a “credible” nuclear force is one that can and will be used in the course of ordinary military operations. It is no longer to be regarded as a sacred taboo. This has long been the dream of the Pentagon’s “nuclear priesthood” and its acolytes, going back to the days of Hiroshima and Nagasaki. For decades, a strong faction within the American power structure has been afflicted with a perverted craving to unleash these weapons once more. An almost sexual frustration can be discerned in their laments as time and again, in crisis after crisis, their counsels for “going nuclear” were rejected – often at the very last moment. To justify their abberant desire, they have relentlessly demonized an ever-changing array of “enemies,” painting each one as an imminent, overwhelming threat, led by “madmen” in thrall to pure evil, impervious to reason, fit only for destruction. Evidence for the “threat” is invariably exaggerated, manipulated, even manufactured; this ritual cycle has been enacted over and over, leading to many wars – but never to that ultimate, orgasmic release.

Now this paranoid sect has at last seized the commanding heights of American power…they have found a most eager disciple in the peevish dullard strutting in the Oval Office. Under their sinister tutelage, Bush has eviscerated 40 years’ worth of arms control treaties; officially “normalized” the use of nuclear weapons, even against non-nuclear states; rewarded outlaw proliferators like India, Israel and Pakistan; and is now destroying the last and most effective restraint on the spread of nuclear weapons: the Nuclear Non-Proliferation Treaty (NPT). The treaty guarantees its signatories – such as Iran – the right to establish nuclear power programs in exchange for rigorous international inspections. But Bush has arbitrarily decided that Iran – whose nuclear program undergone perhaps the most extensive inspection process in history – must end its lawful activities. Why? Because the country is led by “madmen” in thrall to pure evil, impervious to reason, who one day may or may not threaten America with weapons they may or may not have…. So the NPT is dead. As with the Geneva Conventions and the U.S. Constitution, it now means only what Bush says it means. Force of arms, not rule of law, is the new world order. The attack on Iran. The obvious, murderous insanity of such a move in no way precludes its implementation by this gang – as their invasion of Iraq clearly shows.

The nuclear sectarians have waited decades for this moment. Such a chance may never come again. Will they let it pass, when with just a word, in just twelve hours, they can see their god rising in a pillar of fire over Persia?

And more evidence on March 22 from Deutsche Presse-Agentur

The Saudi Shura council will secretly discuss national plans to deal with any sudden nuclear and radioactive hazards that may affect the kingdom following experts’ warnings of possible attacks on Iran’s Bushehr nuclear reactors, media reports said Saturday.

The Saudi-based King Abdul-Aziz City for Science and Technology has prepared a proposal that encapsulates the probabilities of leaking nuclear and radiation hazards in case of any unexpected nuclear attacks in Iran, the Okaz Saudi newspaper said.

The Saudi Shura or consultative council plans to debate the proposal on Sunday.

The power plants in the south-western Iranian port of Bushehr were built with German assistance in 1974 and resumed with Russian aid in 1992, after it had been stopped by the Islamic revolution.

And if this attack moves forward this fall, you can forget any elections, now or ever again…and anyway, do you seriously think they’re going to let go of the power they’ve seized over the past several decades? You’re dreaming if you think they’re going to relinquish their power to the likes of Obama.

You know you live in a dictatorship when the pResident commits unending pre-emptive wars at his own whim, without public comment, without Congressional approval, without any discussion whatsoever.

And you thought you wouldn’t have to see that smug expression ever again after 2008…

March 25, 2008

Source: luminaria

As Jobs Vanish, Food Stamp Use Is at Record Pace

Driven by a painful mix of layoffs and rising food and fuel prices, the number of Americans receiving food stamps is projected to reach 28 million in the coming year, the highest level since the aid program began in the 1960s.The number of recipients, who must have near-poverty incomes to qualify for benefits averaging $100 a month per family member, has fluctuated over the years along with economic conditions, eligibility rules, enlistment drives and natural disasters like Hurricane Katrina, which led to a spike in the South.

But recent rises in many states appear to be resulting mainly from the economic slowdown, officials and experts say, as well as inflation in prices of basic goods that leave more families feeling pinched. Citing expected growth in unemployment, the Congressional Budget Office this month projected a continued increase in the monthly number of recipients in the next fiscal year, starting Oct. 1 – to 28 million, up from 27.8 million in 2008, and 26.5 million in 2007.

The percentage of Americans receiving food stamps was higher after a recession in the 1990s, but actual numbers are expected to be higher this year.

foodstamps.jpg

Read moreAs Jobs Vanish, Food Stamp Use Is at Record Pace

Subprime crisis hits governments

THE SUBPRIME mortgage crisis that pushed homeowners into foreclosure and forced the Federal Reserve to bail out investment banker Bear Stearns has also sent state and local governments across the country scrambling to refinance municipal bonds before they are hit with exorbitant interest rates.At the center of the storm are long-term variable-interest bonds known as “auction-rate securities.” Unlike traditional fixed-rate bonds, the interest rates on these securities are reset every 7, 28 or 35 days through an auction process.

Historically, the rate paid has been less than on traditional bonds, making the national $160-billion auction-rate market a reliable source of cheap financing.

But that market has collapsed in the past two months, sending interest rates climbing. As a result, California, Richmond, the Bay Area Toll Authority, the East Bay Municipal Utility District and Sacramento County are among countless government agencies forced to restructure their bond debts.

Read moreSubprime crisis hits governments

Iran’s Wheat Fungus: Coincidence or Biological Warfare?

 Global Research reports:

A dangerous new fungus with the ability to destroy entire wheat fields has been detected in Iran, the United Nations Food and Agriculture Organization (FAO) reported today.

The wheat stem rust, whose spores are carried by wind across continents, was previously found in East Africa and Yemen and has moved to Iran, which said that laboratory tests have confirmed its presence in some localities in Broujerd and Hamedan in the country’s west.

Up to 80 per cent of all Asian and African wheat varieties are susceptible to the fungus, and major wheat-producing nations to Iran’s east – such as Afghanistan, India, Pakistan, Turkmenistan, Uzbekistan and Kazakhstan – should be on high alert, FAO warned.

“The fungus is spreading rapidly and could seriously lower wheat production in countries at direct risk,” said Shivaji Pandey, Director of FAO’s Plant Production and Protection Division.

He urged the control of the rust’s spread to lower the risk to countries already impacted by high food prices.

Iran has said that it will bolster its research capacity to tackle the new fungus and develop wheat varieties that are rust-resistant.

Called Ug99, the disease first surfaced in Uganda and subsequently spread to Kenya and Ethiopia, with both countries experiencing serious crop yield losses due to a serious rust epidemic last year. Also in 2007, FAO confirmed that a more virulent strain was found in Yemen.

Sure, maybe it was carried by the wind — and maybe the fungus was introduced by man. Not so much a conspiracy theory when history is taken into account. For instance, back in 1977, the San Francisco Chronicle reported the CIA dispatched “anti-Castro terrorists” to introduce “African swine fever virus into Cuba in 1971…. Six weeks later an outbreak of the disease forced the slaughter of 500,000 pigs to prevent a nationwide animal epidemic.” It was so scary that the United Nations Food and Agricultural Organization labeled the outbreak the “most alarming event” of 1971.

Read moreIran’s Wheat Fungus: Coincidence or Biological Warfare?

Israel’s Defense Minister authorizes nationwide emergency drill

Barak authorizes nationwide emergency drill

Defense establishment, government and cabinet all to participate in exercise simulating crisis situation as part of upcoming national emergency drill to be held in April. Drill part of implementation of lessons from Second Lebanon War.

Read moreIsrael’s Defense Minister authorizes nationwide emergency drill

25 Environmental Threats of the Future

 pollution.jpg

Forget genetically modified crops, the great environmental concerns of the future should be nanomaterials, manmade viruses and biomimetic robots.

So say researchers, policymakers and environmental campaigners, who have identified 25 potential future threats to the environment in the UK, which they say researchers should focus on.

In addition to well-publicised risks such as toxic nanomaterials, the acidification of the ocean and increasingly frequent extreme weather events, the list includes some more outlandish possibilities. These include:

” Biomimetic robots that could become new invasive species.

” Experiments involving climate engineering, for instance ocean ‘fertilisation’ and deploying solar shields

” Increased demand for the biomass needed to make biofuel.

” Disruption to marine ecosystems caused by offshore power generation.

” Experiments to control invasive species using genetically engineered viruses.

Read more25 Environmental Threats of the Future