Banks are living in a fairyland of magic money

HOW?WOULD?YOU?FEEL, RUNNING?A?MODEST business, if the money fairy came along and promised you would never, ever go bust? How much of a spring would it put in your step if the nice imp then said she had cast a spell guaranteeing all your lending, all your borrowing, and 98% of your customers’ cash? “Yes,” you might just say, clapping your sticky little hands, “I do believe in fairies!”

This hard-to-swallow tale has more than one happy ending. While your godmother hopes you will become a good little banker one day, she doesn’t want to be too stern. It’s not her place. So if she sprinkles some of her magic dust and shrinks the cost of money, she won’t force you to share your good luck with anyone. She’ll “urge” you instead. But only a very naughty banker would ignore that, surely?

After all, you owe the good fairy something. In fact, you owe her billions of things. They are the reasons why you are still able to frolic as a happy little banker. They also explain why you are still looking forward to big Christmas presents and the chance, some time very soon, to tell fairy godmother where to stick her advice and all those tiresome homilies on the need to be nice to poor folk.

Whatever Alistair Darling was waving at the bankers during a breakfast meeting on Friday morning, it was not a magic wand. He can urge to his heart’s content, but they intend to go on treating the Bank of England, its base rate and its monetary policy committee (MPC) as fictions only children would believe. Most may have buckled, belatedly, under an avalanche of bad publicity, but the chancellor doesn’t frighten them.

Read moreBanks are living in a fairyland of magic money

Mini nuclear plants to power 20,000 homes

£13m shed-size reactors will be delivered by lorry

Nuclear power plants smaller than a garden shed and able to power 20,000 homes will be on sale within five years, say scientists at Los Alamos, the US government laboratory which developed the first atomic bomb.

The miniature reactors will be factory-sealed, contain no weapons-grade material, have no moving parts and will be nearly impossible to steal because they will be encased in concrete and buried underground.

The US government has licensed the technology to Hyperion, a New Mexico-based company which said last week that it has taken its first firm orders and plans to start mass production within five years. ‘Our goal is to generate electricity for 10 cents a watt anywhere in the world,’ said John Deal, chief executive of Hyperion. ‘They will cost approximately $25m [£13m] each. For a community with 10,000 households, that is a very affordable $250 per home.’

Read moreMini nuclear plants to power 20,000 homes

U.S. Is Funding Iranian Nuclear Program

The U.S. is literally funding Iranian nuclear capabilities.

As CNN reports, the U.S. state department has given millions of dollars to two Russian institutes which, in turn, are directly helping to ramp up Iran’s nuke capacity at Bushehr and other facilities.

This is especially ironic given that the U.S. has accused Iran of producing fuel for nuclear weapons at Bushehr.

Here’s the CNN report:

Sunday, November 2, 2008

Source: George Washington’s Blog

UK Monitors: Georgia fired first shot

Two former British military officers are expected to give crucial evidence against Georgia when an international inquiry is convened to establish who started the country’s bloody five-day war with Russia in August.

Ryan Grist, a former British Army captain, and Stephen Young, a former RAF wing commander, are said to have concluded that, before the Russian bombardment began, Georgian rockets and artillery were hitting civilian areas in the breakaway region of South Ossetia every 15 or 20 seconds.

Their accounts seem likely to undermine the American-backed claims of President Mikhail Saakashvili of Georgia that his little country was the innocent victim of Russian aggression and acted solely in self-defence.

During the war both Grist and Young were senior figures in the Organisation for Security and Cooperation in Europe (OSCE). The organisation had deployed teams of unarmed monitors to try to reduce tension over South Ossetia, which had split from Georgia in a separatist struggle in the early 1990s with Russia’s support.

On the night war broke out, Grist was the senior OSCE official in Georgia. He was in charge of unarmed monitors who became trapped by the fighting. Based on their observations, Grist briefed European Union diplomats in Tbilisi, the Georgian capital, with his assessment of the conflict.

Grist, who resigned from the OSCE shortly afterwards, has told The New York Times it was Georgia that launched the first military strikes against Tskhinvali, the South Ossetian capital.

“It was clear to me that the [Georgian] attack was completely indiscriminate and disproportionate to any, if indeed there had been any, provocation,” he said. “The attack was clearly, in my mind, an indiscriminate attack on the town, as a town.”

Read moreUK Monitors: Georgia fired first shot

City of London recession to trigger £11bn tax revenue black hole

The financial crisis will result in tax revenues from City bonuses alone falling by as much as £4bn next year, according to one of Britain’s most influential economic forecasting firms.


Restrictions on bonuses at the banks which the Government is helping to rescue will also have the unintended consequence of lowering tax revenues Photo: MICHAEL WALTER

As investment banks, hedge funds and private equity firms – three of the principal drivers of the Square Mile’s explosive growth of recent years – cut tens of thousands of jobs, the Centre for Economics and Business Research (CEBR) expects the Treasury to face an overall City-generated taxation “black hole” of more than £10bn.

The CEBR believes the Government will collect around £5bn less than previously-estimated in corporation tax, while tax generated by bonuses, National Insurance contributions and base salaries is likely to fall by around £6bn.

The bleak forecasts underline the many ways in which cutbacks in the City, which has become a crucial engine of national economic growth, will contribute to an expected recession in Britain.

Restrictions on bonuses at the banks which the Government is helping to rescue will also have the unintended consequence of lowering tax revenues from City firms.

The deficit means Alistair Darling, the Chancellor, may need to borrow up to £110bn in the next financial year to plug the hole in the national balance sheet – almost three times the estimate of the £38bn forecast in his Budget statement last March.

Read moreCity of London recession to trigger £11bn tax revenue black hole

Tyson Foods Injects Chickens with Antibiotics Before They Hatch to Claim “Raised without Antibiotics”

(NaturalNews) Tyson Foods, the world’s largest meat processor and the second largest chicken producer in the United States, has admitted that it injects its chickens with antibiotics before they hatch, but labels them as raised without antibiotics anyway. In response, the U.S. Department of Agriculture’s (USDA) told Tyson to stop using the antibiotic-free label. The company has sued over its right to keep using it.

The controversy over Tyson’s antibiotic-free label began in summer 2007, when the company began a massive advertising campaign to tout its chicken as “raised without antibiotics.” Already, Tyson has spent tens of millions of dollars this year to date in continuing this campaign.

Poultry farmers regularly treat chickens and other birds with antibiotics to prevent the development of intestinal infections that might reduce the weight (and profitability) of the birds. Yet scientists have become increasingly concerned that the routine use of antibiotics in animal agriculture may accelerate the development of antibiotic-resistant bacteria that could lead to a pandemic or other health crisis.

After Tyson began labeling its chicken antibiotic-free, the USDA warned the company that such labels were not truthful, because Tyson regularly treats its birds’ feed with bacteria-killing ionophores. Tyson argued that ionophores are antimicrobials rather than antibiotics, but the USDA reiterated its policy that “ionophores are antibiotics.”

Read moreTyson Foods Injects Chickens with Antibiotics Before They Hatch to Claim “Raised without Antibiotics”

Tesla CEO: GM couldn’t afford us now

The Roadster goes 0 to 60 mph in 3.9 seconds. Image: Yi-Wyn Yen

SAN FRANCISCO – How much is Tesla Motors worth?

Tesla CEO Elon Musk won’t say, but it’s at least too expensive for General Motors to buy. “I’m not sure they can afford Tesla right now,” he said during a 30-minute talk Friday at the Web 2.0 Summit.

The South African-born entrepreneur talked candidly with host John Battelle about the failures of the auto industry and Tesla’s own troubles. Battelle had asked why GM (GM) doesn’t buy the electric car startup.

GM reported a $2.5 billion loss in the third quarter Friday and also warned that it could run out of cash soon. Said Musk, “There’s an issue with organized labor and trade and management still acts like it’s 1955. There are too many country club memberships, and [GM] management has focused on the wrong thing. ”

Tesla has been plagued with its own problems. In mid-October Musk, who has helped bankroll Tesla, became its third CEO in less than a year, announced layoffs and delayed the debut of its forthcoming electric sedan, the Model S.

Musk explained why Tesla had to let go 10% of his employees last month. “Before market Armageddon occurred, the point was to raise $100 million. And we intended to get going with that in full force before the market collapsed,” he said.

The company settled for cutting costs and raising $40 million from its existing investors. Musk says he’s backing half of the $40 million round. He has already poured $55 million of his own money into the company.

Read moreTesla CEO: GM couldn’t afford us now

Harvard Psychiatrists Hide Millions of Dollars Received from Drug Companies

(NaturalNews) A congressional investigation has revealed that a group of Harvard psychiatrists, instrumental in pushing the diagnosis of bipolar disorder in children and its off-label treatment with antipsychotics, concealed from university officials the millions of dollars they earned in consulting fees for the companies that make those drugs.

Iowa Sen. Charles E. Grassley requested the financial disclosure reports that Drs. Joseph Biederman, Timothy E. Wilens and Thomas Spencer had filed with Harvard University between 2000 and 2007. He then asked a handful of pharmaceutical companies for their own records on how much had been paid to the researchers in that time.

The numbers reported by the drug companies were much higher than those on the researchers’ forms.

“Basically, these forms were a mess,” Grassley said. “Over the last seven years, it looked like they had taken a couple hundred thousand dollars.”

Upon being confronted with the discrepancies, the researchers admitted to having concealed certain consulting fees and upped their estimates. These new numbers still fell short of those reported by the drug companies.

Biederman, for example, originally told Harvard that he had received no money from Johnson & Johnson in 2001. When Grassley asked him to double check, Biederman admitted to receiving $3,500. The drug company’s records, however, recorded payments of $58,169 to Biederman in that year alone.

A more thorough investigation revealed that Biederman and Wilens had received at least $1.6 million from the pharmaceutical industry between 2000 and 2007, while Spencer had received at least $1 million.

Read moreHarvard Psychiatrists Hide Millions of Dollars Received from Drug Companies

Jobless ranks hit 10 million, most in 25 years; unemployment hits 14-year high


Sunny Yang, left, a masters degree student from Shanghai and employed banker in New York City, speaks with World Bank representative Roberto Amorosino about opportunities for unemployed friends of his during a career fair at Columbia Univeristy Friday, Nov. 7, 2008 in New York. The U.S. unemployment rate bolted to a 14-year high of 6.5 percent in October as another 240,000 jobs were cut, far worse than economists expected and stark proof the economy is deteriorating at an alarmingly rapid pace. (AP Photo/Julie Jacobson)

WASHINGTON (AP) — The nation’s jobless ranks zoomed past 10 million last month, the most in a quarter-century, as piles of pink slips shut factory gates and office doors to 240,000 more Americans with the holidays nearing. Politicians and economists agreed on a painful bottom line: It’s only going to get worse.

The unemployment rate soared to a 14-year high of 6.5 percent, the government said Friday, up from 6.1 percent just a month earlier. And there was more grim news from U.S. automakers: Ford Motor Co. and General Motors Corp., American giants struggling to survive, each reported big losses and figured to be announcing even more job cuts before long.

Regulators, meanwhile, shut down Houston-based Franklin Bank and Security Pacific Bank in Los Angeles on Friday, bringing the number of failures of federally insured banks this year to 19.

The Federal Deposit Insurance Corp. was appointed receiver of Franklin Bank, which had $5.1 billion in assets and $3.7 billion in deposits as of Sept. 30, and of Security Pacific Bank, with $561.1 million in assets and $450.1 million in deposits as of Oct. 17.

Read moreJobless ranks hit 10 million, most in 25 years; unemployment hits 14-year high

Stunned Icelanders Struggle After Economy’s Fall

A woman waited last month for a bank to open in Reykjavik, where everyone has been affected by the financial failure.

REYKJAVIK, Iceland – The collapse came so fast it seemed unreal, impossible. One woman here compared it to being hit by a train. Another said she felt as if she were watching it through a window. Another said, “It feels like you’ve been put in a prison, and you don’t know what you did wrong.”

This country, as modern and sophisticated as it is geographically isolated, still seems to be in shock. But if the events of last month – the failure of Iceland’s banks; the plummeting of its currency; the first wave of layoffs; the loss of reputation abroad – felt like a bad dream, Iceland has now awakened to find that it is all coming true.

It is not as if Reykjavik, where about two-thirds of the country’s 300,000 people live, is filled with bread lines or homeless shanties or looters smashing store windows. But this city, until recently the center of one of the world’s fastest economic booms, is now the unhappy site of one of its great crashes. It is impossible to meet anyone here who has not been profoundly affected by the financial crisis.

Overnight, people lost their savings. Prices are soaring. Once-crowded restaurants are almost empty. Banks are rationing foreign currency, and companies are finding it dauntingly difficult to do business abroad. Inflation is at 16 percent and rising. People have stopped traveling overseas. The local currency, the krona, was 65 to the dollar a year ago; now it is 130. Companies are slashing salaries, reducing workers’ hours and, in some instances, embarking on mass layoffs.

“No country has ever crashed as quickly and as badly in peacetime,” said Jon Danielsson, an economist with the London School of Economics.

Read moreStunned Icelanders Struggle After Economy’s Fall

GMAC Leaves Individuals Holding Car Lender’s Junk


A GMAC Real Estate sign, attached to a sign advertising 0% down financing, is posted in the front yard of a home in Norcross, Georgia, on Sept. 12, 2007. Photographer: Chris Rank/ Bloomberg News

Nov. 7 (Bloomberg) — GMAC LLC may leave thousands of individuals on the hook for about $15 billion of junk-rated debt unless the auto and home lender finds a way to pay its bills.

GMAC, the largest lender to car dealers of General Motors Corp., issued more than $25 billion of debt called SmartNotes over the past decade to retail investors. While GMAC has paid off the debts as they matured, five straight unprofitable quarters raised doubt about GMAC’s survival, and SmartNotes due in July 2020 have lost about three-quarters of their value.

“An investment like this is totally unsuitable for the retail investor,” said Sean Egan, president of Egan-Jones Ratings Co. in Haverford, Pennsylvania, who rates GMAC bonds junk, or below investment grade. “You’re selling it to the widows and orphans who think of GMAC as being this strong, long- standing corporation when the reality is far from that.”

GMAC’s losses since mid-2007 total $7.9 billion, driven by record home foreclosures and auto sales that GM has called the worst since 1945. Stomaching some of Detroit-based GMAC’s deficit are individuals who purchased SmartNotes through brokers at firms including Merrill Lynch & Co., Fidelity Investments and Citigroup Inc.’s Smith Barney unit.

Read moreGMAC Leaves Individuals Holding Car Lender’s Junk

Obama’s choice draws anti-Arab taunt

Obama’s choice of White House chief of staff, Rahm Emanuel

In strikingly racist remarks, the father of Rahm Emanuel has said Israel will benefit from Obama’s choice of White House chief of staff.

“Obviously he will influence the president to be pro-Israel. Why wouldn’t he be? What is he, an Arab? He’s not going to clean the floors of the White House,” Benjamin Emanuel, father of Rahm Emanuel, told the Israeli Ma’ariv daily.

In a Thursday statement, US president-elect Barack Obama announced that Rahm Emanuel had accepted his offer to serve as the next White House chief of staff, the highest-ranking member of the Executive Office of the President of the United States.

News of Benjamin Emanuel’s comments came as Israeli newspapers rejoiced over Obama’s choice of the Illinois Congressman to become ‘the second-most powerful man in Washington’.

According to the Israeli Ha’aretz paper, Benjamin Emanuel ‘is a Jerusalem-born pediatrician who was a member of the Irgun (Etzel or IZL), a militant Zionist group that operated in Palestine between 1931 and 1948.’

Rahm Emanuel, who is named after a Zionist combatant, also served for the Israeli military during the 1991 Persian Gulf War.

Read moreObama’s choice draws anti-Arab taunt

Bank Failure: Security Pacific Bank seized by FDIC

SAN FRANCISCO (MarketWatch) — The Federal Deposit Insurance Corp. and state regulators seized Los Angeles-based Security Pacific Bank late Friday — one of two banks to fail that day and the 19th to fail so far this year.

Pacific Western Bank, also based in Los Angeles, will assume all of the deposits of Security Pacific, the FDIC said in a statement. Also on Friday, Houston-based Franklin Bank SSB (FBTX:Franklin Bank Corporation was closed by regulators. See full story.

The four branches of Security Pacific will reopen on Monday as branches of Pacific Western. Depositors of the failed bank will automatically become depositors of Pacific Western.

Deposits will continue to be insured by the FDIC. As of Oct. 17, Security Pacific had total assets of $561.1 million and total deposits of $450.1 million.

Read moreBank Failure: Security Pacific Bank seized by FDIC

Allianz Posts 2 Billion Euro Loss, May Miss Forecast

Nov. 8 (Bloomberg) — Allianz SE, Europe’s second-biggest insurer by market-value, posted a 2 billion-euro ($2.6 billion) loss and said it may miss operating profit forecasts for this year and next because of the turmoil in financial markets.

Allianz had a net loss including discontinued operations in the third quarter, compared with net income of 1.9 billion euros a year earlier, the Munich-based insurer said in a statement today. That was less than the 3.85 billion-euro estimate of 14 analysts surveyed by Bloomberg. Net income from continuing operations, which reflects the sale of Dresdner, was 545 million euros, the company said, missing analysts’ estimates of 782 million euros.

“Without a major equity market recovery, the operating profit outlook of 9 billion euros before banking for this year and next year cannot be reached,” Allianz Chief Financial Officer Helmut Perlet said in the statement.

Allianz, led by Chief Executive Officer Michael Diekmann, agreed on Aug. 31 to sell Dresdner Bank to Frankfurt-based Commerzbank AG for cash and stock. Commerzbank shares lost about 40 percent of their value in the month ended Sept. 30. Discontinued operations, which reflect the sale of Dresdner effective from Sept. 1, accounted for “transaction-based impairments according to IFRS 5” of 1.4 billion euros as well as for a net loss of 1.2 billion euros from Dresdner’s operations, Allianz said.

Read moreAllianz Posts 2 Billion Euro Loss, May Miss Forecast

Blizzard pummels South Dakota, stranding motorists and knocking out power

SIOUX FALLS, S.D. – A major blizzard is continuing to pound South Dakota.

Officials say snow over a metre deep has fallen since Wednesday in the Black Hills area amid reports of howling winds gusting to more than 80 kilometres an hour. The storm has stranded an unknown number of motorists and knocked out power to thousands in the western part of the state.

Officials say they expect little improvement Friday as the storm moves east.

A lengthy stretch of Interstate 90 has been closed.

Dozens of vehicles are reported trapped, but rescue teams cannot reach the stranded motorists because of zero visibility.

“This is a dangerous storm,” Gov. Mike Rounds told reporters in a telephone conference call Thursday evening. “Western South Dakota is basically under a no-travel advisory.”

Read moreBlizzard pummels South Dakota, stranding motorists and knocking out power

Down and Out in Beverly Hills: Rolexes, Picassos Hit Pawnshops

Nov. 7 (Bloomberg) — The worse the economy gets, the better it is for Jordan Tabach-Bank.

“Business is booming,” said Tabach-Bank, the chief executive officer of Beverly Loan Co. in Beverly Hills, California.

Beverly Loan is a pawnshop. Not just any pawnshop, but the kind that caters to people who hock Cartiers, Harley- Davidsons and Oscar statuettes when they need cash. They really need it now, Tabach-Bank said from a third-floor office, protected by bulletproof glass, off his showroom in the Bank of America building near Rodeo Drive.

“I’ve never seen so many bankers, lawyers, doctors and actors” with valuable things to pawn, he said. He pointed to an 18-carat white gold bracelet with 69 diamonds ($2,900) and an 18-carat yellow gold Rolex Yachtmaster II (“a steal” at $18,500).

With credit drying up at regular lenders, “in many cases now, we’re not just the bank of last resort,” Tabach-Bank said. “We’re the bank of only resort.”

High-end pawnshops aren’t like most of the 10,000 dealers affiliated with the National Pawnbrokers Association, a Keller, Texas-based trade group. The average U.S. pawn transaction is $75, according to the association’s Web site.

$2.7 Million Necklace

At Tabach-Bank’s shop, “confidential collateral loans,” as they’re called, have been made on art works by Pablo Picasso, Andy Warhol and Jean-Michel Basquiat. Amounts loaned range from several thousand dollars to “six- and seven-figure deals,” he said, with clients using the money to cover the mortgage, make alimony payments or finance cosmetic surgery.

South Beverly Jewelry and Loan, also in Beverly Hills, has seen business triple in the past six months, said owner Yossi Dina. Some of the collateral is in a parking lot: About 60 cars, including Ferraris, Porsches and a Bentley.

“We’re making loans today we never used to,” Dina, 54, said. “Millions — never used to have that. We’re selling a necklace now, the client wants $2.7 million.”

Read moreDown and Out in Beverly Hills: Rolexes, Picassos Hit Pawnshops

UK: Perilous state of economy revealed by MPC’s shock move

The perilous state of the UK economy was exposed as the Bank of England’s Monetary Policy Committee made an unprecedented 1.5 percentage point cut in interest rates.


Winston Churchill meets the Queen in 1955. Photo: PA

The shock vote brought interest rates down to 3pc for the first time since January 1955, when Winston Churchill was prime minister. Economists forecast that the cut could pave the way for further reductions – with some claiming that rates could hit a historic low of 1pc.

Thursday’s move was interpreted as a desperate attempt to protect the UK economy from a severe recession.

“There has been a very marked deterioration in the outlook for economic activity at home and abroad,” said the MPC in an explanatory statement, adding that the threat of inflation was now receding.

It warned that after the most serious crisis in the global banking sector for almost a century, households and businesses were likely to find it difficult to obtain credit “for some time.” The MPC counted falling share prices, a sharp reduction in UK output, and a squeeze on household budgets among a nasty cocktail of circumstances that have combined to hit both businesses and consumers hard.

The MPC’s decision came amid a raft of gloomy news and data emerged. Figures from Halifax, the UK’s biggest mortgage lender, showed that house prices have fallen by 15pc over the past 12 months.

It was the sharpest drop since the survey began in 1983 and brought the average house price down to £168,176 in October, compared with almost £200,000 in the same month last year.

Read moreUK: Perilous state of economy revealed by MPC’s shock move

IMF urges radical action to fight global recession

The International Monetary Fund has slashed its forecast for the world economy next year, predicting outright contraction for the rich economies of North America, Europe, and Japan for the first time since the Second World War.


Taxi driving through Tokyo at night. Photo: GETTY

“Prospects for global growth have deteriorated over the past month. The financial crisis remains virulent. Markets have entered a vicious cycle of asset deleveraging,” said the fund yesterday.

Britain’s economy will suffer and will see the steepest decline in G7 club of leading powers, shrinking 1.3pc as the crunch in the City of London leads to more job losses. Germany will decline by 0.8pc, The US and Spain by 0.7pc.

Sending shivers through stockmarkets everwhere, the Fund cut its world outlook next year to just 2.2pc, down from 3pc just a month ago. This is a global recession under the IMF’s 3pc rule-of-thumb.

“Financial stress is likely to be deeper and more protracted than envisaged in October. Markets are pricing in expectations of much higher corporate default rates, as well as higher losses on securities and loans,” it said.

“Activity is increasingly being held back by slumping confidence. As the financial crisis has become more entrenched, households and firms are increasingly anticipating a prolonged period of poor prospects for jobs and profits. As a result, they are cutting back.”

Olivier Blanchard, the IMF’s chief economist, called on authorities around the world to respond rapidly with combined monetary and fiscal stimulus, saying risk on an inflationary surge had subsided as commodities prices slump.

Read moreIMF urges radical action to fight global recession

Darling summons bank chiefs over rate cut failure

Alistair Darling summoned the chief executives of Britain’s biggest banks to Downing Street today to demand that they immediately pass on the Bank of England’s interest rate cut to their customers.

Treasury sources confirmed to The Times that the Chancellor told the heads of all Britain’s big high street lenders – including HSBC, Barclays, Lloyds TSB, HBOS Nationwide and Abbey – to implement rate cuts immediately.

Yesterday, the Bank of England slashed interest rates by 1.5 per cent to 3 per cent, the lowest level in 54 years, and today, the shock reduction helped to ease the strain in nervous money markets.

Libor, which is the rate at which banks lend to each other and is key for pricing mortgages, fell by more than one per cent from 5.561 per cent to 4.496 per cent.

However, the figure remains almost 1.5 per cent higher than the official interest rate.

The spread between the Bank of England’s borrowing cost and the rate that banks charge to borrow money over a three-month period – a key measure in the wholesale money market – is the widest since October 22. The day before, Mervyn King, the Governor of the Bank of England, publicly acknowledged for the first time that a recession in the UK is now likely.

Read moreDarling summons bank chiefs over rate cut failure

Record opium harvest in Afghanistan threatens new heroin crisis in Britain

• EU agency fears glut and reversal of deaths decline
• UK tops cocaine abuse table for fifth year in row


Afghan farmers in a poppy fi eld: Helmand province, centre of British military operations, accounts for over half of the opium crop. Photograph: Ahmad Masood/Reuters

A glut of opium on the world market, fuelled by a record Afghan harvest, threatens a new heroin crisis in Britain, the European Union’s drug agency warned yesterday. The agency’s annual report also confirms that the UK remains at the top of the European league table of 27 countries for cocaine abuse for the fifth year in a row. The UK accounts for 820,000 of the 4 million Europeans who have “recently used” cocaine.

But the agency also reports that there are “stronger signals” of the declining popularity of cannabis across Europe, especially among British school students.

Nevertheless the drug experts say that a quarter of all Europeans – 71 million people – have tried cannabis at some time in their lives.

The heroin warning from the European monitoring centre for drugs and drug abuse follows two record opium harvests in Afghanistan of 8,200 tonnes in 2007 and 7,700 tonnes this year. The harvests represent 90% of the world’s illicit opium production with Helmand province, the centre of British military operations, accounting for over half of the crop.

Read moreRecord opium harvest in Afghanistan threatens new heroin crisis in Britain

US Imposes Banking Sanctions on Iran


A general view shows the reactor building of the Bushehr nuclear power plant in southern Iran (File)

The U.S. Treasury has moved to further restrict Iran’s access to the U.S. financial system, by banning certain money transfers.

The Treasury Department announced on Thursday that it will revoke Iran’s so-called “U-Turn” license, which currently allows transfers to briefly enter the United States before being sent to offshore banks.

Until Thursday, U.S. banks were allowed to process certain money transfers for Iranian banks and other Iranian customers as long as the payments were initiated by and ended up in offshore non-U.S. and non-Iranian banks.

U.S. officials say the ban is aimed at increasing financial pressure on Iran to end alleged support of terrorist groups and nuclear proliferation.

Iran is under three sets of international sanctions. It has been accused by several Western countries of seeking nuclear weapons. Tehran says its nuclear program is solely for peaceful purposes.

Separately on Thursday, Israeli Foreign Minister Tzipi Livni said any U.S. talks with Iran may be seen as a sign of weakness.

The statement was Israel first official note of caution over Barack Obama’s election as U.S. president. Mr. Obama said during the campaign he would be willing to hold talks with Iranian leaders.

Read moreUS Imposes Banking Sanctions on Iran

Philadelphia to close libraries, pools, cut jobs

Mayor says city among many facing large budget shortfalls in bad economy

PHILADELPHIA – The city will close libraries and swimming pools, suspend planned tax reductions, cut more than 800 jobs and trim salaries for some administrators in order to weather “an economic storm” that could leave the city with a $1 billion shortfall, Mayor Michael Nutter said Thursday.

Nutter outlined the drastic budget cuts in a live, 10-minute televised address – a rarity that represented an attempt to convey the dire nature of the city’s financial situation.

“The city must prepare for the worst,” Nutter said. “Painful program and service cuts are necessary.”

The city is facing a deficit of $108 million this year, and the shortfall could grow to more than $1 billion by 2013, Nutter said.

Read morePhiladelphia to close libraries, pools, cut jobs

Jobs lost in 2008: 1.2 million

Payrolls shrink by 240,000 in October, 10th straight month of cuts. Unemployment soars to 6.5%

chart_job_losses2.03.jpg

NEW YORK (CNNMoney.com) — The government reported more grim news about the economy Friday, saying employers cut 240,000 jobs in October – bringing the year’s total job losses to nearly 1.2 million.

According to the Labor Department’s monthly jobs report, the unemployment rate rose to 6.5% from 6.1% in September and higher than economists’ forecast of 6.3%. It was the highest unemployment rate since March 1994.

“There is so much bad in this report that it is hard to find any silver lining,” said Morgan Keegan analyst Kevin Giddis.

Economists surveyed by Briefing.com had forecast a loss of 200,000 jobs in the month. October’s monthly job loss total was less than September’s revised loss of 284,000. Payroll cuts in August were revised up to 127,000, which means more than half of this year’s job losses have occurred in the last three months.

September had the largest monthly job loss total since November 2001, the last month of the previous recession and just two months after the Sept. 11 terrorist attacks.

With 1,179,000 cuts, the economy has lost more than a million jobs in a year for the first time since 2001 – the last time the economy was in a recession. With most economic indicators signaling even more difficult times ahead, job losses will likely deepen and continue through at least the first half of 2009.

Read moreJobs lost in 2008: 1.2 million

Ford Has $2.98 Billion Operating Loss as Sales Plunge

Nov. 7 (Bloomberg) — Ford Motor Co., with U.S. sales shredded by the worst financial crisis since the Great Depression, posted a third-quarter operating loss of $2.98 billion and said it used up $7.7 billion in cash.

The per-share operating loss of $1.31 was wider than the 93-cent average of 10 analyst estimates compiled by Bloomberg. Ford said it would trim more salaried jobs by January, deepen its fourth-quarter production cuts and shrink capital spending by as much as 17 percent.

Revenue plunged 22 percent to $32.1 billion, forcing Ford to triple its consumption of cash compared with the second quarter. Cash, cash equivalents and marketable securities for Ford’s automotive business plummeted 29 percent to $18.9 billion on Sept. 30, the Dearborn, Michigan-based company said today.

“Cash burn is the No. 1 issue,” Rebecca Lindland, an IHS Global Insight Inc. analyst, said in a Bloomberg Television interview. “We associate cash burn with General Motors. It has not always been a problem with Ford. That is potentially a new problem.”

Read moreFord Has $2.98 Billion Operating Loss as Sales Plunge

Obama’s Chief of Staff Was Director Of Freddie Mac During Scandal

New Obama Chief of Staff, Others on Board, Missed “Red Flags” of Alleged Fraud Scheme

President-elect Barack Obama’s newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot “red flags,” according to government reports reviewed by ABCNews.com.

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President-elect Barack Obama’s newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot “red flags,” according to government reports reviewed by ABCNews.com.

According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.

Emanuel was not named in the SEC complaint (click here to read) but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) (click here to read) of having “failed in its duty to follow up on matters brought to its attention.”

In a statement to ABCNews.com, a spokesperson said Emanuel served on the board for “13 months-a relatively short period of time.”

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