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Date Posted: 18:12:21 10/31/07 Wed
Author: part 2
Subject: Re: October 31, 2007
In reply to: part 1 's message, "October 31, 2007" on 18:10:55 10/31/07 Wed

ECONOMICS AND FINANCE

Bubble Collapsing, Drop in American Home Prices Is Accelerating

Oct. 30, 2007 (LPAC)--The national drop in American home
prices--popping a $20 trillion 2000-2007 housing bubble, and
constituting the main driving force behind the mass foreclosure
wave--is accelerating, reports out today show.
The Case-Shiller Home Price Index for August, released by
Standard and Poor's, shows that average home prices had fallen 5%
from August 2006 to August 2007, in the 10 major metropolitan
areas which that Index has been surveying for 20 years. The drop
from June to July was 0.5%, and from July to August, 0.8%,
indicating a faster rate of fall, in the range of 7-9% per year.
"The fall in home prices is showing no real signs of a slowdown
or turnaround," said Robert Shiller, co-manager of the index.
This index compares resales of the same home within a
two-year period. Its worst previous drop was 6.3%, from April
1990 to April 1991.
The broader, 20-metro-area Case Shiller index was down 4.4%
this year to August, with an 0.7% drop from July to August.
Goldman Sachs Analytics forecasts that average home prices
will be down an unprecedented 7% from December 2006 to December
2007. But this is not making homes any more "affordable," to
households, it says, because of effective rises in mortgage
interest rates.
Tampa average prices were down 10.1% in a year; Detroit,
9.3% in a year. Those two and Miami, Las Vegas, San Diego, and
Washington D.C., are recording their worst price drops in the
20-year history of this index--and undoubtedly, since the
Depression. The CEO of one of the country's biggest
homebuilders, Jeffrey Mezger of KB Home, based in Los Angeles,
forecasts that housing prices in California could fall a further
10-15% in the next 18 months.
This price collapse makes any policy of "refinancing"
mortgages to stop foreclosures, completely unworkable. [pbg]

Bankrupt Lenders Tapped Federal Home Loan Banks

Oct 30, 2007 (LPAC)-- As credit markets froze in August, failing
lenders found a way to tap $163 billion from 12 Federal Home Loan
Banks, a program which was set up during the depression, and
designed to save homeowners, not speculative lenders. Mortgage
companies Countrywide Financial, Washington Mutual, Hudson City
Bancorp and "hundreds of others" borrowed a record $163 billion
from the 12 Federal Home Loan Banks during August and September.
These government institutions were making loans for 4.9%, when
the market rate had jumped to 5.63%. Bloomberg estimates that,
with this ruse, the lenders were able to save about $1 billion in
interest, and in the process, stuck the federal government with
the worthless paper. This is in addition to the billions they
got from Citigroup and others.
The land banks sold $143 billion of short-term debt in those
two months, according to the FHLBs' Office of Finance. The sales
"pushed outstanding debt up 21%" to a record $1.15 trillion, a
debt which now rests on the backs of U.S. taxpayers, and which,
Bloomberg news quips, "may become a burden," since, "almost half
comes due before 2009." Sales of mortgage-backed bonds dropped
from a monthly average of $115 billion in 2006, to $39 billion in
August, a collapse of 66%, forcing speculators to desperation,
and to the safety of Fannie Mae and Freddie Mac. As a result,
the FHLB's indebtedness rose to a record $311 billion in the
first three quarters of this year, the most since 2001, according
to data compiled by Zurich-based Credit Suisse Group.
It is just this kind of ill-advised government-backed
bail-out of speculators that LPAC's Homeowners and Bank
Protection Act is designed to prevent. The system is collapsing,
and it is necessary to prevent the inevitable financial collapse
from destroying what is left of the physical economy, as well.
[mpb]

Mercenary Business Thrives on Economic Collapse

Oct 20, (LPAC)-- The trade in human mercenaries has now reached
$100 billion annually. Since the 1970s, the "impoverished and
remote remnant of the British Empire," known to the world as
Fiji, has positioned itself as one of the world's major
suppliers. In addition to South American soldiers of fortune
hired by Blackstone in the wake of the Pinochet-sponsored
Operation Condor, the private armies of Fiji became, "a viable
commercial enterprise the moment America invaded Iraq," Sakiusa
Raivoce told Bloomberg News. Raivoce is a retired Fijian colonel
and director of Security Support Ltd., the biggest of six
mercenary employment agencies in the country. "The time is right
and our price is right," he said.
Since 1978, Fiji has outsourced more than 25,000 troops to
the "blue helmets" of the UN, the British army and "independent
mercenary contractors," such as Blackwater. The army will allow a
soldier, even an officer, to leave the service, if he is hired
(or is it bought?) by a mercenary outfit. In 2003, Fijian
mercenaries brought home some $9 million in wages. At a recent
patriotic celebration, recruiters were posted on street corners,
offering security contracts on the spot. Such firms have
mushroomed in recent years, with such provocative names as
"Killology Research Group" from Jonesboro, Arkansas, or
"Instinctive Shooting International" from Israel, along with
Global Strategies Group, Triple Canopy Inc., ArmorGroup
International Plc, DynCorp International Inc., Control Solutions
and Sandline International, to name just a few. The British Army
alone employs over 3,000 Fijian mercenaries.
A report by the United Nations Working Group on Mercenaries
put most of the blame on the poor economy. The unemployment rate
in Fiji, for example, is about 8%, and its GDP is $6 billion.
Fiji, which has the biggest military force among Pacific island
nations, "made a conscious decision to create an army bigger than
we need to generate foreign currency," says Lt. Col. Mosese
Tikoitoga. "Our economy has no choice but to build armies and
it's a good business. There are few other foreign investments."
[mpb]

Federal Reserve Promotes Video Games

Oct. 30 (LPAC)--In case you're wondering why Federal Reserve
Chairman Bernanke is acting like the "Sorcerer's Apprentice,"
issuing waves of money to solve the banking crisis, he probably
went mad playing fantasy video games like "Second Life." Now he
wants to be certain that young adults join the him in the insane
asylum. The Federal Reserve of Boston issued this press release
yesterday:

"BOSTON, Mass. - October 29, 2007 - The Federal Reserve Bank of
Boston's Economic Adventure Gallery is hosting an engaging,
interactive exhibit on the history of video games this fall.
"Video Games Evolve: A Brief History from Spacewar! to MMORPG's"
examines the video-game industry's roots, which are firmly
planted in New England. The exhibit, which is free, runs though
January.... In addition to examining the past, the exhibit also
offers an enticing look at modern-day games, including Star Wars
Galaxies, the Immune Attack educational game, the virtual reality
of Second Life, and massive, multi-player online role-playing
games (MMORPGs) like World of Warcraft....
"The exhibit is part of the Federal Reserve Bank of Boston's
Economic Adventure, an interactive educational designed to teach
middle- and high-school students how New England's improved
living standards are reliant upon innovation, which leads to
advances in productivity."

The release further notes: "The gaming revolution began across
the Charles River at MIT, where the first non-commercial
interactive video game, Spacewar!, was born in 1962." [ddp]

SCIENCE AND TECHOLOGY

IAEA High on Nuclear Power, Higher on India

Oct.30 LPAC--In its annual report released last week, the
International Atomic Energy Agency (IAEA) said that it sees its
low estimate of 370 gigawatts (GW) (1 GW = 1,000 MW) installed
nuclear-based power generation capacity at the end of 2006,
growing to 447 GW in 2030. On the high side, considering
additional reasonable and promising projects and plans, the
global nuclear capacity is estimated to rise to 679 GW in 2030,
representing an annual growth rate of 2.5%.
Predicting a sharp growth in nuclear power generation in
Asia, the IAEA report pointed out that 15 of the 29 units under
construction at the end of 2006 were in Asia. And 26 of the last
36 reactors to have been connected to the grid were in Asia.
India currently gets less than 3% of its electricity from
nuclear, but at the end of 2006 it had one-quarter of the nuclear
construction -- 7 of the world's 29 reactors that were under
construction. India's plans are even more impressive: an 8-fold
increase by 2022 to 10 percent of the electricity supply, and a
75-fold increase by 2052 to reach 26 percent of the electricity
supply. A 75-fold increase works out to an average of 9.4
percent/yr.
India's nuclear reprocessing capability has to be augmented
within the shortest possible time in order to supply fuel for the
first commercial 500-MW prototype fast breeder reactor (PFBR),
said S Banerjee, Director, Bhabha Atomic Research Centre (BARC).
BARC is committed to supply the plutonium-uranium oxide fuel for
the country's first PFBR at Kalpakkam, Tamil Nadu, which is
presently under construction. It involves reprocessing large
quantities of spent fuel and converting recovered plutonium into
fast reactor fuel of exact specification. [RMA]

Mubarak Announces Nuclear Energy plans

Oct. 30 (EIRS)--Egyptian President Hosni Mubarak has announced
that Egypt plans on building several nuclear power stations.
b~~~We believe that energy security is a major part of building
the future for this country and an integral part of Egypt's
national security system." He said Egypt would seek international
partners to implement these plans.
According to the report in today's Financial Times, Mubarak
purposely made the statement ahead of the conference of the
National Democratic Party. While other international media claim
that this announcement comes in reaction to Iran's nuclear
ambitions, Abdel Monem Said, director of the Al Ahram Centrer for
Political and Strategic Studies, denied this saying. "We are
concerned about that [Iran], but this is not the response, the
response is global abd bit Egyptian. We want to have more energy
in the country and the talk stated last year." [dea]

UNITED STATES

Blackwater, Given Immunity in US, May Lose It in Iraq

Oct. 30, 2007 (LPAC)--Federal law enforcement officials said on
Monday that the State Department's Bureau of Diplomatic Security
offered Blackwater security guards, who are being investigated
for the murder of 17 Iraqi civilians in Baghdad, limited-use
immunity last month, even though the Bureau did not have the
authority to do so. The prosecutors of the Department of
Justice, who do have such authority, reportedly had no advance
knowledge of the arrangement. The action on the part of the
State Department may have irreparably damaged any potential case
in the U.S. against the Blackwater guards, the New York Times
reports.
The Blackwater guards are immune from Iraqi law under an
order promulgated by L. Paul Bremer, who ran the U.S. occupation
government until June, 2004. However, Associated Press reports
today that in response to the news of the State Department
actions, the Iraqi parliament approved a draft law on Tuesday
that would overturn the immunity order, known as Decree 17, which
Bremer promulgated. (wfw)

Bush Enforcer Joe Allbaugh Joins Giuliani Campaign

Oct. 30, 2007 (LPAC)--Rudy Giuliani announced today that Joe
Allbaugh is joining his campaign as a senior adviser on general
strategy and homeland security. Allbaugh was formerly one-third
of the "Iron Triangle," with Karl Rove and Karen Hughes, who were
the powers-in-charge in Bush's original Austin-based Presidential
campaign. Allbaugh began to work for Bush in 1994 during his
gubernatorial campaign. He then served as Governor Bush's chief
of staff, as national campaign manager in charge of finances for
the Bush-Cheney 2000 Presidential campaign, and as Bush's
Director of FEMA, before resigning in March 2003. Since then he
has been the president and CEO of the Allbaugh Company, LLC, and
serves on the board of the National Rifle Association. The move
is seen as giving Giuliani access to the Bush-Cheney
organization. (wfw)

US Ambassador to India has been Deployed to Coax Opponents of
US-India Nuclear Deal

Oct. 30 (LPAC)--During the Cold War days, whenever the US
Ambassador in Delhi was meeting an opposition figure, it was
taken for granted that Washington was pushing something not
desired by New Delhi. How things have changed since! Now,
Washington has deployed the US Ambassador to India, David
Mulford, a banker, at the behest of India's Manmohan Singh-led
government, to woo the opposition that is trying to stall the
US-India nuclear deal endorsed both by Washington and New Delhi.
Almost simultaneous with a call from US Secretary of State
Condoleezza Rice to the Indian External Affairs Minister Pranab
Mukherjee, demanding that India to tie up its end of the deal
before Jan. 2008, US Ambassador David Mulford met with the lead
opposition group Bharatiya Janata Party (BJP) leaders to explain
the importance of the deal in the context of US-India relations.
Although BJP president Rajnath Singh told Ambassador Mulford that
"it would not be possible for the Bharatiya Janata Party to
accept the 123 agreement on the India-United States nuclear deal
in its present form," on the very same day, former US Secretary
of State Henry Kissinger met with the BJP's top political leader,
L.K.Advani, at the latter's residence.
Also active in the fray is the US Secretary of the Treasury,
Henry Paulson, who is visiting India. He had promised the media
that he would not talk about the nuclear deal during the trip.
And, yet, on Oct. 29, Paulson was in Kolkata, the bastion of
India's communists, who happen to be the most vocal opponents of
the deal, explaining to them the "finer points of benefits" that
the deal would usher in. [RMA]

Cities Now Struggle for Survival as Population Disappears

Oct 20 (LPAC)--NPR ran a feature Tuesday morning, on how the city
of Flint, Michigan is coping with what is a growing problem for
cities nationwide--dealing with expanding urban blight spawned by
the continuing collapse of the real estate bubble. Flint is
taking on an "oddly rural" quality, says reporter Tracis
Hamilton, with vegetable gardens sprouting on vacant lots where
homes once stood. This is a result of a novel program in Genesee
County, where a land bank has been set up which takes control of
the city's tax-foreclosed properties, selling plots to neighbors
for a dollar or paying nearby churches to maintain them, instead
of auctioning them on the courthouse steps. Dan Kildee, county
treasurer and chairman of the land bank, says the auctions didn't
raise much money, and generally led to a "bad spiral," in which
properties would go "through the system" several times, first
being sold to absentee landlords, then downgrading to a
"sporadically leased" property, and finally becoming an
"abandoned, burned-out shell."
Although run by the county, the Genesee land bank is being
allowed to concentrate all of its foreclosure proceeds on saving
Flint, with the understanding that, if Flint dies, the county as
a whole will suffer. While developers are not frozen out of the
deals, they must first prove they have something positive to
offer the city. Kildee says this has driven speculators crazy,
people who, in his words "stay up too late at night, and watch
these goofy infomercials." These people convince themselves that
they have absolute rights to buy or build, above any moral or
local zoning codes. Flint is now offering its lessons to other
embattled communities, such as Youngstown, Ohio; Little Rock,
Arkansas; and New Orleans, Louisiana, a place which, Kildee says,
experienced in one weekend, what in Flint has taken place over
the last 35 years.
Leaders are trying to salvage the city, and hope to one day
re-emerge with a population of 100,000, about half of what it was
just five years ago. [pds/mpb]

EUROPE

Liberal Dems Boycott Saudi Royal Visit Over BAE Scandal

Oct. 30, 2007 (LPAC)--The first visit of a Saudi monarch to the
United Kingdom in 20 years, has been met with a boycott by the
leader of the Liberal Democrats, Vince Cable, and by protests
outside the London Saudi embassy over the BAE-Saudi Al Yamamah
arms deal and the Saudi human rights record. The visit occurs
about ten months after the Serious Fraud Office was forced by
Tony Blair's government to drop -- on "national security grounds"
-- an investigation into corruption tied to BAE arms sales to
Saudi Arabia during 1985-2007. At the time, Blair claimed that
if the probe went ahead, cooperation between the two countries on
counterterrorism would cease.
In a letter to the Saudi Ambassador, Cable said: "I have
introduced three debates in Parliament this year expressing
serious concerns over the Al Yamamah contract. I have also been
very critical of members of the Saudi royal family and the Saudi
record on human rights, including its maltreatment of British
citizens. In my opinion, it is quite wrong for the British
government to have proposed a state visit at this time.
Therefore, it would, I believe, be inappropriate for me to
participate in a ceremonial state visit against this background."
The Campaign Against the Arms Trade said: "It is not in the
British public interest for our government to be subservient to
BAE and the Saudi regime. Gordon Brown has a chance to
demonstrate his independence from both by reopening the BAE-Saudi
corruption inquiry."
It is also reported that Foreign Minister David Miliband
cancelled his meeting with the Saudi Foreign Minister Prince
Faisal, on the grounds that his newly adopted infant son had just
arrived.
Before his four-day visit to the UK, King Abdullah of Saudi
Arabia attacked Britain for not making sufficient efforts in
fighting international terrorism. In an interview with the BBC,
the King said Britain failed to act on information passed by the
Saudi authorities, which might have averted terrorist attacks,
including the 2005 London bombings.
As Lyndon LaRouche and LPAC have documented, the Al Yamamah
deal was not a simple case of bribes paid to Prince Bandar, the
Saudi ambassador to the U.S., but rather involves the creation of
a gigantic pool of funds, for special operations in behalf of the
British Empire.
Despite the boycott, the Saudi monarch and his ministers
will be guests of the Queen at Buckingham Palace during a visit
which will include a ceremonial welcome, two banquets, and
meetings with Gordon Brown, David Cameron and Prince Charles.
Prince Bandar, King Abdullah's national security adviser, will
also be staying at Buckingham Palace. (wfw)

Sarkozy Attempts Damage Control of French Subprime Crisis

PARIS, Oct. 30 -- French President Nicolas Sarkozy and Finance
Minister Christine Lagarde huddled last night at the Elysee with
major banks and insurance companies over the state of the French
economy respecting growth and consumption. According to Le
Figaro, the meeting centered on the crisis around France's
version of subprime mortgages, that is, adjustable-rate lending
for real estate purchases. Serge Maitre, the secretary general of
the French Association of Bank Users (AFUB), figures that between
35,000 and 50,000 holders of home loans are already in trouble.
Sarkozy, always brilliant in damage control, "warned financial
establishments and particularly the Crédit Foncier de France
(CCF) and UCB [a subsidiary of BNP Paribas], against certain
practices" in their lending. The banks were accused of not
always informing their clients about the conditions and
consequences of adjustable-rate loans (10% of real estate loans),
especially loans whose interest rates are not "capped." AFUB is
very worried about "negative amortizations" created by uncapped
adjustable-rate loans. Increases show up in the payments and
duration of the loan, and, if the interest rates rise, then in
the rising amount of outstanding principal at the end of the
loan's term. "A loan with a 4.8% adjustable rate can lead to
negative amortization, which means that the outstanding principal
to be repaid increases, if the interest rate goes over 7%,"
explained an expert in real estate lending whom Figaro quotes.
Banks and insurers say they will handle the crisis on a
case-by-case basis. (kav)

Russia Plans Two 1,000 MW Reactors for Aluminum Smelter

Oct. 30, 2007 (LPAC)--Two 1,000-megawatt nuclear reactors will be
built near the 3,600-MW Balakovo nuclear power plant in Russia,
to provide power for a $7 billion, 1.05-million-ton aluminum
smelter, one of the world's largest. United Company Russian
Aluminum (UC Rusal) already has aluminum production plants in
Bratsk and Krasnoyarsk, with a joint capacity of nearly one
million tons per annum. Rusal will finance the power plants and
smelter to achieve self-sufficiency, freeing it from dependency
on power supply from the monolithic national power utility,
Unified Energy Systems (UES).
Meanwhile, India's news daily, The Tribune, reported that
Russia and India were working on a nuclear cooperation deal,
which could be implemented in the place of the stalled Indo-US
plan. A spokesman for Russia's Federal Agency for Nuclear Power
said that there are wide prospects for cooperation. He said that
India has been building heavy water reactors up to 600 MW, but
that it was not yet building pressurized water reactors, similar
to the Russian VVER reactors. [RMA]

SOUTHWEST ASIA

Terrorist PKK Leader is George W. Bush Fan

Oct. 30, 2007 (LPAC)--The fact that the terrorist Kurdistan
Workers Party (PKK) is openly supported by the U.S.-backed
Kurdish regional government in Iraq, is more than an open secret.
Even today's International Herald Tribune (IHT), in a feature
article on the PKK-Iraq-Turkish crisis, reports the blatant
nature of this US support. Reporting from Raniya, a town right
on the edge of the PKK stronghold in northern Iraq, IHT describes
how supplies are freely allowed to cross a government checkpoint.
Former American Ambassador to Turkey Mark Parris, now at the
Brookings Institute, remarks, "That couldn't have happened
without their permitting them to be there. That's their turf.
It's as simple as that."
IHT goes on to report how the PKK-"linked" Kurdistan
Democratic Solution Party (KDSP), operates freely in Raniya and
Sulaimaniya.
A little research on this party reveals that it was
organized in 2002 as the Iraqi branch of the PKK, so as to be
able to run in the Iraqi elections. It ran in both the regional
and national elections. Its leader is Fayik Muhemed Ahmad Golpi,
who, after the U.S. 2004 elections, sent a letter of
congratulations to President George W. Bush, which read in part,
"in the occasion of your reelection for the presidency of USA, I
congratulate you, Republican Party, and American People...."
Golpi went on to urge Bush to complete the neo-conservative grand
design for the Middle East: "I hope you expand your efforts for
changes and democratic transformations in the Middle East and put
more emphasis on implementing the Grand Middle-East project...,"
as reported by the Kurdistan Observer Nov. 10, 2004.
Another article on the KDSP, by Jon Gorvett in the
Washington Report on Middle East Affairs, goes into more detail.
Golpi told an interviewer, that his group are no longer hardline
Marxists, but, "in an era of globalization, you cannot ignore
realities... After the liberation of Iraq and the removal of
Saddam Hussein, so many things changed--especially the issue of
the USA."
Gorvet then reports how the PKK organized the Party for a
Free Life in Kurdistan (PJAK), which is the anti-Iranian branch,
and since then, "the region's newspapers routinely report stories
of meetings between the U.S. and the PKK."
Gorvet reports that when the Turkish government expressed
concern over ethnic Turkomans in Kirkuk, in Kurdish-controlled
northern Iraq, Mesut Barzani, president of Iraqi Kurdistan, said,
"Turkey is not allowed to intervene in the Kirkuk issue. It if
does, we will interfere in Diyarbakir's issues and other cities
in Turkey." [dea]

ASIA

Another Suicide Bomber Targeted Musharraf

Oct. 30 (LPAC)--Despite intense security measures undertaken to
protect Pakistan's President Pervez Musharraf, one suicide bomber
had apparently slipped into Pakistan's garrison town, Rawalpindi,
and blew himself up close to President Musharraf's office and the
senior army officials' residence. Musharraf was believed to have
been in the office at the time of the attack but was not injured.
Private television channels said the attack occurred as Musharraf
was meeting with top officials to discuss the security situation
following a spate of recent attacks.
"It was a suicide attack. The area is sensitive -- we don't
know what the exact target was. Seven people were killed,"
Railways Minister Sheikh Rashid told AFP.
Former prime minister Benazir Bhutto, who herself was a
target of a massive bomb attack in Karachi on the night of Oct.
18, said she would address a public meeting in Rawalpindi next
month. "I will go to Rawalpindi despite the bomb blast that
occurred there today and will hold a public meeting on November
9, as per the party's decision," Bhutto told reporters on Oct.30.
[RMA]

*** END OF BRIEFING ***

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