The Voice of the White House

Washington, D.C.,  April 10, 2008: “The CIA has never done anything right and its blunders have been very costly in human life and destructive to anything or anyone who gets in the way of what their idiotic leaders believe is in their own, not the nation’s, interest.

As a case in point, here is an overview (if I printed this verbatim, they would turn this place upside down to find and prosecute me) of the CIA’s meddling in Chinese affairs, both actual and projected.

Know that no one controls the CIA. For many years, they controlled us in that they had strong connections with corporate media and the top levels of the government. They could do as they liked.

A friend of some deputy director was having his overseas properties grabbed by some local dictator so the CIA wrote a fake position paper that “proved” the evil Communists were taking over the government in that country and Something Had To Be Done! And it was.

The students rebelled, (the CIA is big on infiltrating and supporting the volatile student population of target countries) dissidents in exile were given money and guns and guess what, the evil dictator was replaced with someone the CIA hand-picked.

Here we have Guatemala but now they are aiming at total disruption of the PRC.

The Company is behind the uproar in Tibet and is fomenting rebellious thoughts in the China ’s muslim population. They feel that Taiwan is now a lost cause so the Station in Islamabad is leading the fight to cause so much internal trouble in China that it starts to fall apart from within.

Under discussion has been the possible introduction of a laboratory-concocted blight aimed at the Asian rice crop. Since all of Asia depends on rice as a staple diet item, the sudden (and unexplained) spread of a blight that ruins the crop would do terrible damage all over Asia but especially in China .

One of the Islamabad reports, a copy of which is circulating here, explains that China is ripe for internal collapse. She has a huge population which she is having problems feeding and she has no oil for her burgeoning industry and has to import all of it. China is also now a meat-eating country and they need American corn to feed their cattle.

The CIA has worked it so that American farmers are growing corn for Ethanol and not for export. Oh, there is enough corn  for domestic consumption but interestingly enough, not enough for export except at a very high price.

They are taking a leaf from Vladimir Putin’s book. He took Russian oil away from the pro-US Jewish oligarchs and nationalized it. Now, he controls the oil and the U.S. is getting squeezed. The CIA is doing the same thing to the Chinese and they reason that if the food supplies start to dry up there and by some means their oil imports can be cut back, China will implode and cease to be a potential threat to the U.S. And if the potentially rebellious Chinese minorities can be roused up, like their past actions in arming the Taliban against Russia in Afghanistan , they have a winner.

With the CIA’s connections with corporate media, look for more sad horror stories about Tibet . Tibet resonates far better than Dafur does with the American people. They, and Bush, are very upset about the shift in political winds in Pakistan . It looks like assonating Bhutto did not work they way they wanted it to because all it did was to guarantee that the wrong people came into power and now our wings have been clipped there. It is not too difficult to off one woman but to take out all of the Pakistan judicial system and their legislators is too much even for the CIA. The Ukraine operation (taking the Ukraine out of Putin’s orbit) was typical of their style but they waited too long and mis-stepped in Islamabad

At any rate, look for more fireworks about the Olympics and know the whys and wherefores of that situation.”.

Tibet : Will the USA Launch a New Secret War “Under the Roof of the World”?

March 18, 2008

by Andrei Areshev

iraq-war.ru

The current unrest in the Tibetan autonomy of the Chinese People’s Republic (seemingly unexpected) has continued for over a week. Manifestations organised by Buddhist monks on the occasion of an anniversary of Tibet’s annexation by China led to mass clashes with police, violence, fires and robbery. The tragic events coincided with the regular session of the All-China Assembly of People’s Representatives, acquiring a dramatic scale and have already led to deaths, forcing Beijing to use active army to crack down on the riots.

Western sources report the spread of unrest in the provinces neighbouring with Tibet (in particular Sichuan ) and mass repressions by the Chinese authorities, holding them up in an utterly negative aspect. And here we have an evident parallel with the way western media covered the activities of the Yugoslav army and police in Kosovo in 1998, immediately before the NATO aggression. Primary sources of information whose precision is hard to verify, are chiefly Tibetan émigrés in the neighbouring countries and western human rights NGOs. For example, according to Thubten Sampkhel, a representative of the Tibetan “government–in-exile” 80 protestors were killed and 72 wounded. He says eyewitnesses in Tibet who did the actual counting verified the figures. Official Chinese sources say that 10 people died. Some pro-Tibetan reports are deliberately over dramatising the situation. For example there are reports about the involvement of Chinese troops in mass killings of Tibetans; others say the “Tibetans in Amdo province have no intention of surrendering and are resolute to continues protests till the start of this year’s Olympic Games in Beijing”1.

The current developments can indeed do great harm to China taking place shortly before the 2008 Summer Olympic Games. Demonstrators in Lhasa have become the gravest challenge to the Chinese rule in Tibet over the past two decades, raising a worldwide wave of protests, and holding China up in an unfavourable light on the eve of the Olympics,” – the Associated Press puts it flatly. However the current events in that mountainous district have also an even greater geopolitical significance.

Experts on events in different continents and nations including Africa , Latin America , Myanmar , the Central Asia , the Middle East or Pakistan constantly stress the presence of elements of Chinese and American confrontation that is not always evident but nevertheless not less tense. In particular, one of the causes of the intervention in Iraq and the incessant threats to Iran can be accounted for by the striving to give China very poor energy rationing2.

It can be confidently argued that the present-day troubles faced by Washington ’s chief geopolitical rival would be completely taken advantage of with an eye to pushing their development in a favourable direction. U.S. State Secretary Condoleezza Rice has already called on China to exert “moderation” in order to overcome the current political crisis in the Tibetan autonomy. Having said she was sad over the unrest in the Tibetan administrative centre, Lhasa that followed protests and caused deaths, Condozleezza Rice said she was worried over reports about the growing police and army presence in Lhasa, calling on both sides to refrain from violence. Mrs. State Secretary preferred not to say that setting shops and buildings on fire and robbery did not fit well in the picture of peaceful protesting. She rather recalled that president Gorge W.Bush “has consistently called on China ’s government to have a constructive dialogue” with the Dalai Lama, the spiritual leader of Tibetan Buddhists both directly or negotiating with his representatives…” On behalf of the U.S. administration Mrs. Rice called on Beijing to modify those aspects of its Tibetan policies that “have led to tension caused by their impact on the local religion, culture and sources of subsistence.”

It can be assumed that over the past several years the Tibetan national movement has become significantly more radical, so Beijing would find it hard to see eye to eye with it. In the oblique way this is evidenced by the scope and the skill of organisation of protests, as well as the wave of anti-China manifestations simultaneously sweeping over many countries from the United States and France to Nepal and Australia . The Kosovo independence issue could not fail to inspire supporters of complete Tibet ’s independence from China either. Washington realises this and for the time being continues to make a stake of the Dalai Lama, the champion of “peaceful non-violent forms of protest”, some sort of the “Tibetan Ibrahim Rugova.” The Tibetan spiritual leader enjoys a wide public support in the West, suffice it to recall his meeting with G.Bush, Sr. at the ceremony of awarding the Dalai Lama with the Gold Medal of U.S. Congress in October of 2007.

The spiritual leader of Tibetan Buddhists has already called for an international inquiry into China ’s crackdown. His statement in Dharamsala3 says: ”The relevant international organisations should look into the Tibetan situation to clarify its causes.” The Dalai Lama has called the activities of Chinese authorities as “cultural genocide.”4

The Dalai Lama – willingly or not – is effectively preparing starting grounds for more radical forces that are about to launch an attack, enjoying political, propaganda and other sorts of support primarily from forces across the Atlantic .

The U.S. involvement in the internal affairs of Tibet and its relations with China have developed for several decades. After China annexed Tibet in 1949 and after the annexation of Hamand and Amdo provinces in 1956, on the initiative of the U.S. government the CIA started its “secret war” in the mountains of Tibet . In October of 1957, an aeroplane with no identification marks took off from a field aerodrome near Dakka carrying the first two Tibetans the CIA had trained for a month. Landing in the designated location close to Lhasa they soon established contacts with the leader of local insurgents. The Lhasa uprising started soon after, and the Dalai Lama fled. In 1958, in total secrecy, over 30 Tibetans began their training at the Camp Hale base in Colorado . Overall, more than 300 Tibetans were trained there. Starting from July, 1958 the CIA began flying C-130 aircraft from its secret base in Thailand , delivering weapons, ordnance and trained militants. More than 400 tonnes of cargo were delivered in 1957 through 1960. In one of the sabotage operations by Tibetans Chief of the Western Tibetan military district was killed, having on him vitally important documents of the Chinese Communist party. Langley obtained priceless information about China ’s domestic situation, the state of its army, the PRC nuclear programmes and the rifts between Peking and Moscow that began to take place. By the early 1960s U.S. secret services spent an annual $1.7 million a year in Tibet with about $500,000 allocated for the support of 2,100 guerrillas (including 800 armed militants), mainly based in Nepal , and some $180,000 for the Dalai Lama’s personal needs. When later relations between Washington and Beijing improved, the activities of Tibetan agents were temporarily suspended. Tibetans paid a death toll of 87,000 in crackdowns of uprisings and armed clashes only…

It is to be noted that the then role of China and its economy in world affairs was not very big, but Washington was adamantly pursuing its policies of interference in Chinese internal affairs in one of its “problem outskirts.” This has become even more evident in modern times when the global struggle for influence and resources has become fiercer than ever. With the Dalai Lama completing his mission one day, he will be replaced by other people who, with the support of external forces would attempt to challenge China ’s national unity as a state. There will also appear other points of “application of force” aside from Tibet , for example Xiangyang-Uigur autonomy and Inner Mongolia … External policy complications would not take long to arrive. It can be assumed that the current situation would dramatically affect relations between China and India , whom Washington is aggressively trying to draw into its orbit, and more than that.

Unrest in Tibet can unforeseeably echo in Russia , especially in the territories with a sizeable number of Buddhist population. Shows of support of Tibetan manifestators can happen in Kalmykia, Buriatia and Tuva. Ch. Budaev, Chairman of “Lamrim” Buddhist community and the Central Spiritual Buddhist Authority has already expressed hope that the developments in Tibet would lead the way for democratic changes in the Chinese society. According to him, democracy in Russia was consolidated after the well-known events of the 1990s that were given broad international coverage.

“I’d like to believe,” – Ch.Budaev said, “that the alarming developments in Tibet we are now witnessing would in the long run lead to democratisation of the Chinese society.”5

Thus, attempts of the external forces to propose a Gorbachev-Yeltsin scenario of China ’s “democratisation” directly bring the developments in Tibet into the realm of Russia ’s foreign and domestic policies.

The Coming Storm

When Malthus wrote his essay on population, his second chapter stated that while the population increased geometrically, food supply only increased arithmetically. Malthus was right but at the time he wrote, no one actually believed him. Now, we are experiencing the truth of his wordy thesis. The following articles deals with the rapidly accelerating worldwide shortage of food. Countries producing rice are now keeping as much of it as necessary to feed their own populations. A hungry people can make revolutions. We have seen food riots recently in Haiti , Cairo and Italy but the real proof of the Malthusian theory is yet to come. Wheat-growing countries like the United States , Canada and the Argentine are facing the question of continuing exporting of the crop or keeping it to feed its own people. There is no question what their decisions will be or of what will happen around the world. Australia , once a large wheat grower, has had almost a decade of terrible drought and is no longer considered a reliable source of supply. China has an enormous population, almost no natural resources, especially  oil, and suffers from uncontrolled grown coupled with an equally uncontrolled capitalism, wedded to a thoroughly corrupt Marxist government. They must export goods for capital and import food for political stability. At one point, the ascending graph lines of population increases intersect with the descending ones of food production and the results are entirely predictable. BH

Editorial

The World Food Crisis

April 10, 2008

New York Times

Most Americans take food for granted. Even the poorest fifth of households in the United States spend only 16 percent of their budget on food. In many other countries, it is less of a given. Nigerian families spend 73 percent of their budgets to eat, Vietnamese 65 percent, Indonesians half. They are in trouble.

Last year, the food import bill of developing countries rose by 25 percent as food prices rose to levels not seen in a generation. Corn doubled in price over the last two years. Wheat reached its highest price in 28 years. The increases are already sparking unrest from Haiti to Egypt . Many countries have imposed price controls on food or taxes on agricultural exports.

Last week, the president of the World Bank, Robert Zoellick, warned that 33 nations are at risk of social unrest because of the rising prices of food. “For countries where food comprises from half to three-quarters of consumption, there is no margin for survival,” he said.

Prices are unlikely to drop soon. The United Nations Food and Agriculture Organization says world cereal stocks this year will be the lowest since 1982.

The United States and other developed countries need to step up to the plate. The rise in food prices is partly because of uncontrollable forces — including rising energy costs and the growth of the middle class in China and India . This has increased demand for animal protein, which requires large amounts of grain.

But the rich world is exacerbating these effects by supporting the production of biofuels. The International Monetary Fund estimates that corn ethanol production in the United States accounted for at least half the rise in world corn demand in each of the past three years. This elevated corn prices. Feed prices rose. So did prices of other crops — mainly soybeans — as farmers switched their fields to corn, according to the Agriculture Department.

Washington provides a subsidy of 51 cents a gallon to ethanol blenders and slaps a tariff of 54 cents a gallon on imports. In the European Union, most countries exempt biofuels from some gas taxes and slap an average tariff equal to more than 70 cents a gallon of imported ethanol. There are several reasons to put an end to these interventions. At best, corn ethanol delivers only a small reduction in greenhouse gases compared with gasoline. And it could make things far worse if it leads to more farming in forests and grasslands. Rising food prices provide an urgent argument to nix ethanol’s supports.

Over the long term, agricultural productivity must increase in the developing world. Mr. Zoellick suggested rich countries could help finance a “green revolution” to increase farm productivity and raise crop yields in Africa . But the rise in food prices calls for developed nations to provide more immediate assistance. Last month, the World Food Program said rising grain costs blew a hole of more than $500 million in its budget for helping millions of victims of hunger around the world.

Industrial nations are not generous, unfortunately. Overseas aid by rich countries fell 8.4 percent last year from 2006. Developed nations would have to increase their aid budgets by 35 percent over the next three years just to meet the commitments they made in 2005.

They must not let this target slip. Continued growth of the middle class in China and India , the push for renewable fuels and anticipated damage to agricultural production caused by global warming mean that food prices are likely to stay high. Millions of people, mainly in developing countries, could need aid to avoid malnutrition. Rich countries’ energy policies helped create the problem. Now those countries should help solve it.

World food shortages to stay, riots a risk: FAO

April 9, 2008

by Mayank Bhardwaj

Reuters

NEW DELHI (Reuters) - Food riots which have struck several impoverished countries could spread with shortages and high prices set to continue for some time, the head of the United Nation's Food and Agriculture Organization (FAO) said.

A combination of high oil and fuel prices, rising demand for food in a wealthier Asia, the use of farmland and crops for biofuels, bad weather and speculation on futures markets have pushed up food prices, prompting violent protests in a handful of poor states.

Jacques Diouf, director general of the Rome-based FAO, said on Wednesday during a trip to India that there was a growing risk of social instability in countries where families spent more than half their income on food.

"The problem is very serious around the world due to severe price rises and we have seen riots in Egypt , Cameroon , Haiti and Burkina Faso ," he told reporters in New Delhi .

Five people have been killed in a week of demonstrations in Haiti over high food prices in the poorest country in the Americas , while unions in the West African nation of Burkina Faso called a general strike over soaring food and fuel costs.

"There is a risk that this unrest will spread in countries where 50 to 60 percent of income goes to food," Diouf added.

He said world cereal stocks were enough to meet demand for eight to 12 weeks, while grain supplies were at their lowest since the 1980s.

"This is due to higher demand from countries like India , China , where GDP grows at 8-10 percent and the increase in income is going to food," Diouf said after meeting India 's farm minister, Sharad PawarHe said he was advising governments to invest in irrigation, storage facilities and rural infrastructure and increase productivity to meet the challenge of food scarcity.

PRICE SPIRAL

Global food prices, based on United Nations records, rose 35 percent in the year to the end of January, markedly accelerating an upturn that began, gently at first, in 2002.

Since then, prices have risen 65 percent. In 2007 alone, according to the FAO's world food index, dairy prices rose nearly 80 percent and grain 42 percent.

Some of the world's most populous countries have felt the impact of higher prices after rice joined a wider rally that has buoyed other grains like wheat and corn.

Rice prices in Thailand , the world's biggest rice exporter, have doubled since the start of this year after India heavily restricted and then banned the export of non-basmati rice to ensure it had enough to feed its people.

In Manila , President Gloria Macapagal Arroyo unveiled a series of measures to boost rice production as troops armed with M-16 rifles supervised the sale of subsidized grain and the government threatened to jail hoarders for life.

Pakistan recently deployed security personnel to guard its warehouses.

The FAO in a recent report said Burkina Faso , Cameroon , Egypt , Indonesia , Ivory Coast , Mauritania , Mozambique and Senegal have seen unrest in the last several weeks related to food and fuel prices

In India , wholesale price inflation hit its highest in more than three years in March at 7 percent, posing a headache for the ruling coalition in Asia 's third-largest economy with elections for local and national assemblies creeping up.

Price pressures had been building for several weeks, in large part driven by foodstuffs, and the government has stepped in with a string of duty cuts and export restrictions.

Analysts say fiscal steps were unlikely to roll back prices, and Indian leaders have said ensuring food security by boosting domestic production was a priority.

"I welcome economic growth in India and China , but I also hope they will invest in agriculture because these two countries account for 2.2 billion people out of 6 billion," Diouf said.

(Writing by Himangshu Watts; Editing by Mark Williams and Jerry Norton)

Bush, Thine Eye is Everywhere!

Google has lots to do with intelligence

March 30, 2008

by Verne Kopytoff

San Francisco Chronicle

When the nation's intelligence agencies wanted a computer network to better share information about everything from al Qaeda to North Korea , they turned to a big name in the technology industry to supply some of the equipment: Google Inc.

The Mountain View company sold the agencies servers for searching documents, marking a small victory for the company and its little-known effort to do business with the government.

"We are a very small group, and even a lot of people in the federal government don't know that we exist," said Mike Bradshaw, who leads Google's federal government sales team and its 18 employees.

The strategy is part of a broader plan at Google to expand beyond its consumer roots. Federal, state and local agencies, along with corporations and schools, are increasingly seen by the company as lucrative sources of extra revenue.

In addition to the intelligence agencies, Google's government customers include the National Oceanographic and Atmospheric Administration, the U.S. Coast Guard, the National Highway Traffic Safety Administration, the state of Alabama and Washington , D.C.

Many of the contracts are for search appliances - servers for storing and searching internal documents. Agencies can use the devices to create their own mini-Googles on intranets made up entirely of government data.

Additionally, Google has had success licensing a souped-up version of its aerial mapping service, Google Earth. Agencies can use it to plot scientific data and chart the U.S. coastline, for example, giving ships another tool to navigate safely.

Spy agencies are using Google equipment as the backbone of Intellipedia, a network aimed at helping agents share intelligence. Rather than hoarding information, spies and analysts are being encouraged to post what they learn on a secure online forum where colleagues can read it and add comments.

"Each analyst, for lack of a better term, has a shoe box with their knowledge," said Sean Dennehy, chief of Intellipedia development for the CIA. "They maintained it in a shared drive or a Word document, but we're encouraging them to move those platforms so that everyone can benefit."

Like Wikipedia

The system is modeled after Wikipedia, the public online, group-edited encyclopedia. However, the cloak-and-dagger version is maintained by the director of national intelligence and is accessible only to the CIA, FBI, National Security Agency and an alphabet soup of other intelligence agencies and offices.

Agents can log in, depending on their clearance, to Intellipedia's three tiers of service: top secret, secret and sensitive but unclassified. So far, 37,000 users have established accounts on the network, which contain 35,000 articles encompassing 200,000 pages, according to Dennehy.

Google supplies the computer servers that support the network, as well as the search software that allows users to sift through messages and data.

Dennehy declined to asses the quality of Google's products, but he applauded the contribution that Intellipedia can make to the government's work. Whether the network actually leads to better intelligence will largely depend on agents sharing some of their most important files and then their colleagues chiming in with incisive commentary - issues that are out of Google's hands.

Normally, Google ranks results on its consumer site by using the number of links to a Web page as a barometer of its importance. Doing so on Intellipedia isn't as effective because the service lies behind a firewall and is used by a limited number of people.

Instead, material gets more prominent placement if it is tagged, or appended by the network's users, with descriptive keywords.

Because of the complexities of doing business with the government, Google uses resellers to process orders on its behalf. Google takes care of the sales, marketing and management of the accounts.

Conspiracy theories

Google is one of many technology vendors vying for government contracts.

A single deal can be sizable, such as the one Google made with the National Security Agency, which paid more than $2 million for four search appliances plus a support agreement, according to a contract obtained through a Freedom of Information Act request.

However, the amount is insignificant when measured against Google's overall revenue of $16.6 billion last year, virtually all of which came from online advertising.

On occasion, Google is the target of conspiracy theories from bloggers who say it is working with spy agencies more closely than simply selling search equipment.

The buzz got so loud two years ago that Matt Cutts, who leads Google's fight against spam Web sites, responded by ridiculing the idea in his personal blog.

Google's Bradshaw emphasized that the company sells virtually the same products to companies as it does to government agencies. Google can make minor tweaks to comply with government rules about equipment security, for example, while major customization is handled by others.

"There were some wild accusations," Bradshaw said. "But everything we do with the government is the same as what we do with our corporate customers."

Former Bush Administration Lawyer Asked to Testify Before Congress

April 9, 2008

by Elana Schor

The Guardian/UK

The Bush administration lawyer who provided a legal basis for the brutal interrogation tactics used by the US military and CIA was called to account today by congressional Democrats.

John Yoo, now a law professor at the University of California , was asked to appear before the judiciary committee in the House of Representatives on May 6 to discuss the legal grounds for the harsh treatment of al-Qaida suspects.

“The judiciary committee will look at the legal basis for actions taken before and during the war and whether we need to write stronger laws to prevent a future imperial presidency from steamrolling Congress and the American people,” the Democratic congressman who chairs the panel, John Conyers, said.

Yoo previously told Conyers’ aides he was reluctant to testify publicly about the legal briefs he wrote for the Bush administration, the congressman said in a letter to his prospective witness.

But Conyers reminded Yoo that he has already given an extensive on-record interview to Esquire magazine for a profile to be published next month.

“Overall you have made such extensive public comments on these and related matters, it is difficult to understand why you would continue to decline to present your views to the committee,” Conyers wrote to Yoo.

Yoo left the office of legal counsel, where he gave legal advice to the Bush administration, in 2003. Earlier that year, he drafted an 81-page memo giving the Pentagon extensive leeway to harm detainees during interrogations without fear of legal consequences.

That memo, which the administration later revoked, was made public for the first time last week and caused a stir among liberals in Congress.

In one section, for example, Yoo said US interrogators could maim detainees without fear of prosecution, depending on the body part that was injured and whether intent to harm existed.

“Just because the statute says — that doesn’t mean you have to do it,” Yoo told Esquire last week. “You’re right, there’s still the moral question — after you’ve answered the legal question — whether you should do it at all.”

SECRECY NEWS

from the FAS Project on Government Secrecy

Volume 2008, Issue No. 36

April 10, 2008

U.S. INTELLIGENCE AGENCIES RETHINK CLASSIFICATION POLICY

U.S. intelligence agencies have embarked upon a process to develop a uniform classification policy and a single classification guide that could be used by the entire U.S. intelligence community, according to a newly obtained report from the Office of the Director of National Intelligence.

The way that intelligence agencies classify information is not only frustrating to outsiders, as it is intended to be, but it has also impeded interagency cooperation and degraded agency performance.

In order to promote improved information sharing and intelligence community integration, the ODNI undertook a review of classification policies as a prelude towards establishing a new Intelligence Community Classification Guide that would replace numerous individual agency classification policy guides.

The initial ODNI review, completed in January 2008, identified fundamental defects in current intelligence classification policy.

"The definitions of 'national security' and what constitutes 'intelligence' -- and thus what must be classified -- are unclear," the review team found.

"Many interpretations exist concerning what constitutes harm or the degree of harm that might result from improper disclosure of the information, often leading to inconsistent or contradictory guidelines from different agencies."

"There appears to be no common understanding of classification levels among the classification guides reviewed by the team, nor any consistent guidance as to what constitutes 'damage,' 'serious damage,'

or 'exceptionally grave damage' to national security... There is wide variance in application of classification levels."

Among the recommendations presented in the initial review were that original classification authorities should specify clearly the basis for classifying information, e.g. whether the sensitivity derives from

the content of the information, or the source of the information, or the method by which it is analyzed, the date or location it was acquired, etc. Current policy requires that the classifier be "able" to describe the basis for classification but not that he or she in fact do so.

A copy of the unreleased ODNI report on classification policy was obtained by Secrecy News.

See "Intelligence Community Classification Guidance: Findings and Recommendations Report," January 2008:

http://www.fas.org/sgp/othergov/intel/class.pdf

From Secrecy News' perspective, the initial ODNI review falls short in two respects.

First, it assumes that consistency in classification is intrinsically desirable and should therefore be imposed by a community-wide classification guide. But consistency is at most a secondary virtue. When a classification policy is poorly justified, it is preferable for it to be inconsistently applied, as in the case of intelligence budget secrecy (see below).

Second, the review does not touch upon what is probably the single most necessary change in intelligence classification policy, namely the need to narrow the definition of intelligence sources and methods that require protection. Almost anything can serve as an intelligence source or method, including a subscription to the daily newspaper. But not every intelligence source or method requires or deserves classification or other protection from disclosure.

STATE DEPARTMENT REVEALS 2009 INTELLIGENCE BUDGET REQUEST

The U.S. State Department's Bureau of Intelligence and Research (INR) is among the most highly regarded members of the U.S. Intelligence Community. Not coincidentally, it is also among the most open and accessible.

In particular, it is one of the only Intelligence Community organizations that regularly publishes its budget. (The FBI also discloses much of its intelligence spending.)

Thus, the recent 2009 State Department budget justification book projects a 2009 INR budget of $59.8 million for a staff of 313 persons. The ten-page 2009 budget justification for INR may be found here:

http://www.fas.org/irp/agency/inr/fy2009just.pdf

This would be unremarkable except for the fact that INR's budget disclosure policy deviates from the norm of U.S. intelligence classification policy, in which most budget information is automatically classified. Even some intelligence organizations that are smaller and less influential than INR insist on classifying their budgets.

For more than a decade, the Department of Energy Office of Intelligence published its detailed budget each year. But under pressure from CIA (so I was told), DOE began withholding its intelligence budget information in 2004. The last reported figure for DOE intelligence was $39.8 million in FY 2004 (Secrecy News, 02/07/05 ).

If consistency in classification policy were to prevail throughout the U.S. intelligence community, as the Director of National Intelligence has recommended, then State Department intelligence might be expected to follow DOE intelligence into pointless, unnecessary secrecy.

CORRECTION ON COLLAPSE OF BEE COLONIES

A Science Daily story on the causes of the declining honey bee population that was cited yesterday in Secrecy News was from April 2007, not April 2008. Though interesting, it was not news.

The Coming Death of the Hedge Funds

March 31, 2008

by- Joseph Checkler

The Wall Street Journal(:

" New York activist hedge fund Pardus Capital Management LP is halting investor redemptions indefinitely at a time when many of its holdings are plummeting in value… Pardus, which doesn’t use leverage, is down 40% from its high-water mark in early 2007, said a person with knowledge… ‘The actions we have taken will allow us to protect the funds and their investors from the external short-term pressure of the broader financial markets and focus on realizing value on our portfolio companies for investors over an extended period of time,’ Pardus said."

April 1, 2008

by Tom Cahill and Katherine Burton

Bloomberg

"Stock hedge funds, unsure about which direction the markets would move, sat on a record amount of cash as the industry headed for its biggest quarterly decline in almost six years. Equity managers, who oversee about one-third of the $1.9 trillion in hedge funds, held an estimated $90 billion of cash in January, a hoard that dropped to $64.8 billion the next month, according to data compiled by Merrill Lynch analyst Mary Ann Bartels."

April 3, 2008

by James Mackintosh

Financial Times

“Hedge funds are still reeling after banks unexpectedly pulled credit lines and demanded more security against loans, forcing firesales and heavy losses. Now they face a new threat: investors are abandoning them, raising the risk that the funds will have to sell assets at any price to raise the cash to meet withdrawals. So far redemptions are mainly in out-of-favour sectors such as credit funds, small-cap specialists and event-driven funds, which include activists, along with poor performers unexpectedly hurt by the credit squeeze. But a series of big funds have already been forced to react, restricting withdrawals or restructuring, and more are thought to be considering changes. ‘There are two ways you get squeezed running a hedge fund,’ says one large investor in the industry. ‘One is that you can’t get finance from your prime broker. The other is that the clients take their money away and you can’t get enough liquidity [cash] to meet the redemptions.’"

Comment: Most hedge funds are Ponze schemes. If an investor reads this and doubts it, try and get your money out. If the fund agrees at once, don’t worry but probably (and this is more prevalent now) the investor will get all kinds of weasel-worded paper which will boil down to a refusal. They can’t give back what isn’t there, can they? BH

In U.S. , Metal Theft Plagues Troubled Neighborhoods

April 8, 2008

by Christopher Maag

New York Times

CLEVELAND — Metal scrappers have attacked churches and ransacked homes in this Midwestern city, leaving entire neighborhoods uninhabitable.

Saint Theodosius Orthodox Cathedral here lost its insurance after a thief stole copper panels from the roof years ago. Three churches in Cleveland Heights have been stripped of copper gutters. And in the last few months, three churches in the North Collinwood neighborhood were stripped of copper downspouts.

“Our neighborhoods are being pillaged, not by Vikings or Goths, but by modern-day barbarians,” said Mike Polensek, North Collinwood ’s City Council member. Even manhole covers and sewer drains are being stolen out of streets to be sold as scrap metal, Mr. Polensek said.

Houses, however, are the greatest targets of commodity scavengers in the United States . Neighborhoods depopulated by the rising tide of foreclosures make easy targets.

So many houses have been stripped of siding and copper pipes that neighborhoods must be abandoned and turned into green spaces, said Jim Rokakis, treasurer for Cuyahoga County , which includes Cleveland . “We have to pull out,” he said. “There’s nothing left.”

It is common for home builders and remodelers here to erect signs on plywood that read “All PVC pipes, no copper,” indicating a house has less expensive plastic piping.

In the last six months, the police in the city of Cleveland Heights have arrested two groups of scrappers who used government foreclosure lists to plot which houses to sack.

Scrap metal thefts began to soar 12 to 18 months ago. “There’s a direct correlation between the price of commodities and the number of metal thefts,” said Bruce Savage, spokesman for the Institute of Scrap Recycling Industries .

The institute received 174 reports from the police around the country regarding metal thefts from Jan. 1 to March 28 of this year, a sharp increase over the period in 2007, and the actual number of thefts is much higher, Mr. Savage said.

Copper pipes, among the most commonly stolen items, are selling for just over $3 a pound. The local police report bronze urns taken from gravestones and long sections of aluminum bleachers stolen from high school stadiums.

Catalytic converters in vehicles are also popular targets because they contain platinum, which this month sold for an average of $1,900 an ounce.

US mortgage crisis to cost  $945 billion worldwide: IMF

April 8, 2008

AFP

WASHINGTON (AFP) - - The International Monetary Fund said Tuesday the worldwide losses stemming from the US subprime mortgage crisis could hit 945 billion dollars as the impact spreads in the global economy.

The IMF, in a particularly stark report, said that falling US housing prices and rising delinquencies on the residential mortgage market could lead to losses of 565 billion dollars.

That, combined with other categories of loans originated and securities issued in the United States related to commercial real estate, the consumer credit market and corporations "increases aggregate potential losses to about 945 billion dollars," it said.

"The crisis is spreading beyond the US subprime market -- namely to the prime residential and commercial real estate markets, consumer credit, and the low- to high-grade corporate credit markets," the IMF said in releasing its semiannual Global Financial Stability Report.

While the US remains the epicenter, "financial institutions in other countries have also been affected, reflecting the same overly benign global financial conditions and to varying degrees -- weaknesses in risk management systems and prudential supervision."

It was the first time the multilateral institution has made an official estimate of the global losses suffered by banks and other financial institutions in the credit squeeze that began eight months ago in the United States , amid rising defaults on subprime, or high-risk, home loans.

The staggering 945 billion dollar estimate of losses, made in March, represents roughly 142 dollars per person worldwide and represents four percent of the 23.21-trillion-dollar credit market.

The IMF said that global banks likely will shoulder about half of the losses -- at 440 billion to 510 billion dollars.

Last month, ratings agency Standard & Poor's estimated global banking firms would likely write off 285 billion dollars in various securities linked to US subprime real estate, with more than half the losses already recognized. Some analysts have put the figure higher for the subprime market and related losses.

"Leading indicators point to a tightening of credit conditions across many economic activities," Jaime Caruana, head of the IMF's Monetary and Capital Markets Department, said at a news conference.

Caruana said the losses "suggest a potentially large impact on US economic growth," and that Europe may also see tightening conditions and slowing credit growth under the global financial strain.

The IMF releases its biannual World Economic Outlook on Wednesday and already has said it would slash a half percentage point off its forecast of 2008 global economic growth, to 3.7 percent.

The Global Financial Stability Report cautioned that loss estimates were imperfect and could go higher.

The unusually precise and harsh report comes ahead of the IMF and the World Bank spring meetings Saturday and Sunday in Washington .

The IMF, whose core mission is to promote global financial stability, said there was "a collective failure to appreciate the extent of leverage taken on by a wide range of institutions -- banks, monoline insurers, government-sponsored entities, hedge funds -- and the associated risks of a disorderly unwinding.

"It is now clear that the current turmoil is more than simply a liquidity event, reflecting deep-seated balance sheet fragilities and weak capital bases, which means its effects are likely to be broader, deeper, and more protracted," it said.

The report criticizes the "excessive risk-taking" and "weak underwriting" undertaken by under-capitalized institutions.

The IMF recommended a range of measures to address issues raised by the crisis, including better coordination between central banks, improved transparency from financial institutions and reform of ratings systems.

"Shoring up the confidence in financial institutions should be a priority," it said.

I.M.F. Lowers Its Forecast for the U.S.

April 10, 2008

AP

WASHINGTON (AP) — The United States is headed for a recession, dragging world economic growth down along with it, the International Monetary Fund concluded in a sobering new forecast released Wednesday.

In its World Economic Outlook, the fund cut growth projections for the United States and said that the fragile state of affairs greatly raised the odds that the global economy would fall into a slump.

Financial problems that erupted in August 2007 in the American subprime mortgage market “spread quickly and unpredictably” and caused “extensive damage,” the I.M.F. said. It described the financial shock as the biggest since the Great Depression.

Economic growth in the United States is expected to slow to a crawl of just 0.5 percent this year, which would be the worst pace in 17 years. The United States will not fare much better next year, according to the I.M.F., which said that the American economy would grow by a feeble 0.6 percent in 2009, when measured by an annual average.

David H. McCormick, the Treasury Department’s point person on international affairs, called the I.M.F.’s projections “unduly pessimistic,” but many private economists say they believe that the country has already fallen into its first recession since 2001. Ben S. Bernanke, chairman of the Federal Reserve, acknowledged last week for the first time that a recession was possible.

When the I.M.F. projected the direction of the American economy using another measure — comparing activity in the fourth quarter of one year with the previous year — the reading was that the economy would actually shrink 0.7 percent this year, said the fund’s chief economist, Simon Johnson. By that measure, the economy appears poised to grow 1.6 percent in 2009, he added.

One Bubble Pops...Another Inflates

By Bill Bonner

Monday, April 7th, 2008

“ U.S. loses jobs at the fastest rate in five years,” says a headline in the weekend’s Financial Times .

Economists had been expecting a drop of about 50,000 jobs last month. Instead, the non-farm total came to about 80,000 – the highest total since March 2003.

In addition to the bad unemployment news, the weekend brought word that bankruptcies had risen 30% in market. Strip malls’ vacancy rates are the highest in 12 years (there is far too much retail space in the United States ...it will take years to work it off). Gasoline hit a new record in Texas . Even the American Mortgage Bankers Association can’t pay its rent. And when pollsters put the question to them, 81% of Americans thought the country was going to Hell in a handcart.

All over the world, food is causing trouble. Why? Not because there is too much of it or too little, but because it has gone way up in price.

Why has it gone up? Well, for one reason, Ben Bernanke and other monetary authorities are pushing more money into the world financial system. The cash has to go somewhere. Much of it seems to be finding its way into the commodities markets – including soft commodities, notably food. In other words, worldwide inflation of food prices is a monetary phenomenon, as Milton Friedman might have put it, not a feature of the weather. But rather than attack the cause of inflation, the authorities are aiming squarely at its consequences.

Of course, there are other reasons for food price increases. There are a lot more people in the world than there used to be. And the new people have to eat too. Since many of these new people are entering the ‘middle class’ they have more money to spend on food, so they can bid up prices. And, typically, they want more meat. It takes more land to produce meat than it does to produce grains – putting further pressure prices all up and down the food chain.

Here in Argentina , politicians can do the math. There are more urban voters than rural ones. And as elsewhere, government is in the business of providing bread and circuses. Bread is getting expensive; the urban mobs are beginning to grumble. So the government of Senora Fernandez de Kirchner effectively forbade the farmers from selling their grain on the world market, imposing a 49% tax on foreign sales. It seemed like a no-brainer, until the farmers blocked the roads into Buenos Aires .

Meanwhile, beyond the pampas, three billion rely on rice for their daily rations. The price of rice rose 50% in the last two week, causing fear of riots all over the world. Vietnam , India , China and Egypt have all banned foreign sales.

Nations either export rice or import it. The exporters are coming under pressure to export less – in order to lower prices at home. The importers, meanwhile, have no choice but to try to get as much of it as possible, as soon as possible, in order to head off shortages. Result: a run on rice.

And now, we turn to the news from Wall Street. The New York Times :

“At the time of its creation, Citigroup – which combined Citicorp, Mr Reed’s bank, with Mr [Sandy] Weill’s Travelers insurance and brokerage business – was hailed as ushering in a new era in finance by creating a one-stop shop for consumer and corporate customers.

“In a rare interview, Mr Reed said it was unclear whether the company’s model or its management deserved the greater share of blame for its problems. But he said Citigroup turned out to be a “sad story”.

“The specific merger transaction clearly has to be seen to have been a mistake,” Mr Reed said.

“The stockholders have not benefited, the employees certainly have not benefited and I don’t think the customers have benefited because our franchises are weaker than they have been.”

The company’s shares have been cut in half over the last year. And it had to raise another $30 billion of share capital, further diluting existing owners.

Who’s to blame? Everything was fine when Mr. Reed left in 2000, he says. Mr. Weill thinks the deal was a great success...noting that the share rose more than Berkshire Hathaway from ’98 to ’02. The business was in better shape than ever when he left in 2003. What went wrong, then, must have happened after that – when Chuck Prince was running things. Mr. Prince, who no longer holds the post, (but still seems to be holding the bag) was replaced by Vikram Pankit in December.

Normally, these old geezers keep their mouths shut. No one would care what they had to say anyway. But these are not normal times. Something is happening on Wall Street and in the City that hasn’t been seen for a long, long time. The finance sector is being de-leveraged. Soon it will be dismembered too.

Finance, as a percentage of total business earnings, went from 10% at the beginning of the boom in 1980 to 40% last year. Whole legions of bright eyed, bushy tailed young people have entered the trade – usually with spiffy degrees from Wharton or Oxbridge or HEC. They are the cogs of this great, globalized polyglot machine. On a recent tour of private banks, we were greeted by a young man of Indian origin who had trained in Canada and now works for Barclays. Another meeting, at HSBC, featured two young women – one of English, the other of African, origin. Over at Pictet, our interlocutor was a Frenchman who has worked in the City for more than 10 years. They all speak the same language, though – a kind of financial Desperanto. Ask them about the Black Scholes Option Pricing model or about rebalancing portfolios to take more advantage of decoupling...or about alpha; you will get roughly the same answer.

During the boom years, putting together these interchangeable parts must have been too tempting to resist. But it has produced some rather ungainly monsters.

UBS, for example. Former CFO Luqman Arnold was forced out of UBS in 2001. Under Marcel Ospel, the bank became one of the biggest employers in the industry, adding a whole range of products and services. But now, Arnold is on the attack, saying the whole thing needs to be reassembled.

The shareholders are up in arms too. In Basel , 6,000 shareholders got together...mostly to complain about what they see as gross negligence on the part of the people running UBS. News reports say they also had it in for the United States of America , whose loose financial mores they think have infected the Swiss financial industry.

“The American El Dorado has become a scene from a Western,” declared one middle-aged shareholder, Therese Klemenz. “UBS was the figurehead of Swiss business. As a good housewife, I know you shouldn’t put all your eggs in one basket. A bank is not a casino.”

Thomas Minder, a local shareholder activist, was even more outraged. “What happened here is a scandal,” he thundered. “You’re responsible for the biggest loss in the history of the Swiss economy. Put an end to the Americanization of the Swiss economy!”

Mr. Minder wasn’t going to leave it at that. He took a run at the podium, perhaps with liquor on his breath and certainly with vengeance on his mind, but was restrained by security guards.

UBS bet $80 billion of shareholders’ money on US mortgage securities. So far, it has lost $37 billion.

UBS shareholders seemed to think that what happened to them should have been illegal. So do a lot of people. And here comes David Komansky, former CEO of Merrill Lynch, with the kind of eye witness testimony we were looking for. Asked what his successor, Stanley O’Neal, had contributed to Merrill’s problems, Komansky said: “What he did to Merrill Lynch was absolutely criminal... The thing I resent about Stan’s tenure is his attempted destruction of the value system and culture that existed at Merrill Lynch.”

Railcars idle as economy falters

April 8, 2008

by Susan Gallaghgher

AP

CRAIG — BNSF Railway Co., the nation’s top hauler of container rail freight, is parking miles of railcars in Montana and elsewhere because there isn’t enough freight to keep them rolling.

Cars that often carry 40-foot containers of goods shipped from Asia stand like an iron fence between the Missouri River and this Montana burg known for world-class fly fishing. They stretch as far as Sandee Cardinal can see when she stands outside her home on the river’s west bank between Helena and Great Falls .

‘‘What is that but a symbol of how America is down in the dumps right now?’’ Cardinal asked as she gazed at the cars that haven’t moved for about three months.

The cars parked are the type that haul cargo from ships on the coast to points inland, mainly imported goods — an area that’s starting to slow down due to the weak economy. Analysts say transportation usually is among the first sectors to show signs of a downturn in the economy and with Americans feeling pinched — employers eliminated 63,000 jobs last month amid declining consumer confidence — it could be a while before the idle cars move.

‘‘If you take a look at transportation, both trucking and rail, you will see that things started softening last summer,’’ said Arnold Maltz, associate professor of supply-chain management at Arizona State University . ‘‘The reason you are seeing all those cars parked is that the consumer economy translates into slower imports.’’

Texas-based BNSF Railway, a division of Burlington Northern Santa Fe Corp., has parked upward of 1,000 cars in Montana alone, spokesman Gus Melonas said. More are parked in other parts of the company’s 32,000-mile system, which operates in 28 states and two Canadian provinces.

‘‘There’s been a downturn in international business and therefore this equipment is not necessary at this point,’’ Melonas said.

The cars standing between Helena and Great Falls constitute 5 percent of the BNSF fleet, Melonas said. He declined to say what percentage of the fleet is parked elsewhere, citing confidentiality issues.

Seasonal car storage is common, he said, but the number of cars now idle is exceptional.

Most of the parked cars are designed for intermodal transportation, when containers filled with imported goods are taken off vessels at U.S. ports and then transported by train, truck or both to distribution centers around the country.

For the first two months of 2008, the volume of intermodal rail freight in the United States was down 3.4 percent compared to the same period last year, according to the Association of American Railroads, an industry group based in Washington , D.C. Last year, intermodal traffic was flat as railroads began to feel the effects of slowing retail orders and the dollar’s decline.

While shipments of store-ready consumer goods such as clothing have dipped, movement of coal, grain and ore have risen, according to the association. The latter are less sensitive to swings in the economy and help balance out the bottom line.

Excluding intermodal traffic, rail freight rose 1.7 percent for the first two months of 2008 compared to the same period a year earlier. Coal was out in front last month with 576,012 carloads, or an increase of 5.7 percent.

‘‘The railroads have actually performed relatively well when you look at their entire portfolio,’’ said transportation analyst Todd Fowler of KeyBanc Capital Markets in Cleveland .

For 2007, BNSF Railway’s parent company, Burlington Northern Santa Fe Corp., reported about $15.4 billion in total freight revenues, compared to about $14.6 billion the previous year. That growth was carried largely by coal and agricultural segments.

The annual revenue generated from hauling domestic freight was down about 1 percent from 2006, while international traffic was up 2 percent. Meanwhile, coal and agricultural revenue each grew about 12 percent.

Union Pacific Railroad spokesman James Barnes said the Nebraska-based company’s intermodal business is ‘‘just a little down, but that’s not unusual for this time of year.’’ The company’s total commodity revenue was $15.5 billion in 2007, compared to about $14.9 billion in 2006. The agricultural segment posted an 8 percent increase over 2006.

Another major rail company, CSX Corp. in Florida , said its car storage is not out of the ordinary. The company’s total revenue from surface transportation was up 5 percent, from about $9.6 billion to $10 billion in 2007.

One of the nation’s leading trucking companies, Schneider National in Green Bay , Wis. , says it believes a freight recession began about 20 months ago, well before signs of a downturn closed in on consumers.

‘‘We have been in a freight recession longer than people have been expressing deep concern about the economy,’’ said Bill Matheson, Schneider’s president for intermodal transportation.

Trucking companies are in a unique position. They often compete with railroads for long haul contracts, while also carrying rail freight from the nearest railhead to its final destination.

Schneider is not parking trucks, but neither is it buying new ones to the usual extent, Matheson said.

In Long Beach , Calif. , home of the nation’s busiest port complex with Los Angeles , the movement of goods has been somewhat stagnant. About 7.3 million containers passed through the Port of Long Beach in 2007, the same as in 2006, port spokesman John Pope said.

‘‘That was a big decline from the growth we’d seen in the past decade or so,’’ Pope said. ‘‘Typically, there had been double-digit growth from year to year.’’

In January, Long Beach posted a decrease of about 12 percent in overall volume compared to January 2007. The situation was less extreme last month, with a 2 percent drop in overall volume compared to a year earlier.

While retailers have imported less goods to be hauled by rail or truck nationwide, exports leaving Long Beach rose as the weak dollar strengthened overseas purchases of U.S. goods, Pope said. Rising export volume — including grain and wheat shipped by rail — helped balance falling container imports for most of last year.

‘‘It’s a barometer of the economy,’’ Pope said. ‘‘We’re going to see the ebb and flow that mirrors what happens in the rest of the nation.’’

Foreclosures Come To McMansion Country

April 7, 2008

by Andy Sullivan

Reuters

LEESBURG, Virginia - Million-dollar fixer-upper for sale: five bedrooms, four baths, three-car garage, cavernous living room. Big holes above fireplace where flat-screen TV used to hang.The U.S. housing crisis has come to McMansion country.

Just as the foreclosure crisis has hollowed out poorer neighborhoods, “for sale” signs are sprouting in upscale developments so new they don’t show up on GPS navigation screens.

Poor people weren’t the only ones who took out risky, high-interest loans during the housing boom. The sharp increase in housing costs — and the desire to live in brand-new, spacious houses with modern features — led many affluent buyers to take out loans they couldn’t afford.

“People had in their head, ‘I need a mud room, I need giant columns, I need a media room, and I’m going to do anything to get it,’” said Robert Lang, co-director of Virginia Tech’s Metropolitan Institute, a research organization that focuses on real estate and development.

The crisis has hit especially hard here in Loudoun County , Virginia , where upscale developments have supplanted horse farms over the past fifteen years.

About an hour’s drive from Washington , Loudoun is one of the nation’s most affluent counties, with a median household income of $98,000, more than double the national figure.

The county has also ranked as one of the nation’s fastest growing in recent years as developers built thousands of super-sized, amenity-laden houses to keep pace with the booming high-tech economy.

These houses are sometimes nicknamed “McMansions,” disparaging both their extravagance and their look of mass production — like hamburgers from a McDonald’s restaurant.

Between 1990 and 2005, the county’s population tripled to 272,000. Many of those moving here relied on risky, high-interest loans to buy the house of their dreams.

“People pushed the limits to be able to buy. They couldn’t afford to buy there otherwise,” said Virginia Tech consumer-affairs professor Irene Leach.

High-interest loans accounted for 16 percent of the total during the height of the mortgage boom in 2005, less than other outer-ring suburban counties in the region but more than neighboring counties closer to Washington .

Now the bill has come due. One out of every 69 households in the county was in foreclosure in the last three months of 2008, well above the national average of one filing for every 555 households, according to RealtyTrac.

Most of these have been concentrated in the county’s poorer neighborhoods, but local realtor Danilo Bogdanovic says he is increasingly seeing more foreclosures on properties worth more than $800,000 as affluent borrowers burn through savings in a vain attempt to stay in houses they can’t afford.

“They’ve just prolonged the pain,” Bogdanovic said. “I don’t think they’re immune to it.”

At the end of 2007, 20 of the 25 houses for sale for more than $850,000 in Loudoun County appeared to be foreclosures, according to Tony Arko, his partner.

These can take years to sell, as they must compete with brand-new developments still coming online.

Housing prices in the county plummeted 8 percent in 2007, the sharpest drop in the region, according to the Washington Post. New home starts plummeted by 50 percent.

Bogdanovic and Arko have sold many foreclosed properties to investors looking to rent them out. But there’s no market for a million-dollar rental property, they say.

In the Beacon Hill development, a golf course snakes among large houses and gazebos set on rolling hills. Residents keep their horses at an equestrian center.

A 7,300-square-foot mansion on Spectacular Bid Place features three chandeliers, a spiral staircase and a state-of-the-art kitchen. The owner offered it at $1.35 million in January 2006, before foreclosing in August 2007. The house found a buyer in January 2008 — for $963,000.

Several miles away, the million-dollar fixer-upper with the holes in the walls has been on the market since December. It is still unsold.

Reporting by Andy Sullivan; Editing by Eddie Evans

Fuel Costs Just Part of Airlines’ List of Woes

April 10, 2008

by Jeff Bailey

New York Times

Even before the recent flight cancellations, airlines and passengers were facing a new wave of travel misery.

Record-high fuel prices and the industry’s fragile finances have led to a new round of bankruptcies among smaller carriers in recent weeks, including ATA Airlines, Skybus and Aloha Airgroup.

Bigger airlines are shrinking their fleets to cut fuel costs, even as demand for travel remains strong — meaning flights are growing more crowded and unpleasant.

And layoffs are beginning again for a business that, to many of its customers, is already suffering service problems. It feels that way to airline workers, too, and as the industry’s decline accelerates, passengers can expect harried and grumpy gate agents and flight attendants.

Moreover, all across the air travel system in the United States , equipment — air traffic control systems, airplanes, airline computer systems — is aging and in many cases overtaxed. That means breakdowns and weather problems become more disruptive.

In the near term, airlines cannot raise fares fast enough to cover rising fuel costs; oil settled at a record price on Wednesday, $110.87 a barrel. That has plunged the industry back into the red after a brief two-year run of profits. A Merrill Lynch analyst, Michael Linenberg, expects the industry to lose $1.9 billion this year.

One bad sign: a handful of airline shares are cheaper (Frontier, $1.79; Expressjet, $2.21; Mesa Air, 96 cents) than an airport beer.

Years of cost-cutting on maintenance and, to some critics, a lax regulatory approach by the Federal Aviation Administration, appear to be catching up with domestic airlines and their customers.

American Airlines and its domestic competitors have been scaling back maintenance spending for years. Some airlines sent work overseas in search of cheaper labor. Some also cut wages of mechanics in the United States and reduced their number. Others quickened the pace of work at maintenance facilities.

“They let too many people go,” said Kevin Cornwell, an MD-80 captain at American who is also a pilots union official. “They sold spare parts years ago to raise cash. Things don’t get fixed as fast.”

The industry’s biggest problem is the price of jet fuel. It follows the price of oil, which has more than doubled since dropping to $52 a barrel in January 2007.

With current air fares, a lot of planes simply cannot operate profitably. Though airlines raised fares on a broad scale 10 times in the first quarter of 2008, four of those increases failed to hold. And on many routes, the increases that did hold were ineffective because discount airlines had refused to match the increases.

Southwest Airlines, the most influential carrier on domestic fares, raised its average fare just 2 percent last year, to $106.60. And consumers have become surprisingly adept at shopping on the Internet for the lowest fare, frustrating the industry.

So major carriers like Northwest Airlines, Delta Air Lines and United Airlines have responded in part by grounding older, fuel-guzzling planes.

But the planes most vulnerable to higher fuel prices may be regional jets that seat 50 or fewer passengers. Smaller jets became more prominent in recent years as major carriers withdrew their larger planes from many smaller markets.

Most of the smaller jets are operated by regional airlines under contract to major carriers. And the major carriers are looking for ways to rid themselves of some of these money-losing arrangements.

Mike Boyd, an aviation consultant, expects the North American fleet of 1,675 regional jets to begin shrinking this year to 1,042 by 2013. That would reduce service to many smaller cities and could eliminate flights to some markets altogether.

American said in November that it wanted to sell or spin off its American Eagle unit, which operates about 200 of the smaller, less efficient jets. No buyer has publicly emerged.

Continental Airlines scaled back contracts with Expressjet, cutting 69 regional jets. Trying to fly most of those planes under it own name, Expressjet lost $70.2 million last year versus a profit of $92.6 million in 2006. Even with low ticket prices, it was able to sell only 56 percent of the seats on those planes.

And Delta last month told Mesa Air it planned to cancel an agreement paying Mesa to fly about three dozen regional jets.

“There’s no place to put those planes,” said Mr. Boyd, the consultant.

“It’s like a dead-end plane,” added Roger King, an analyst at CreditSights. “The 50-seat jets are not economic in this high-fuel environment.”

Some major carriers think merging will be their salvation. Delta and Northwest appear to be in talks again about a combination.

For passengers, however, such a deal could hold a big downside. Some business travelers who range far and wide would be able to travel more through a single airline, and perhaps more cheaply.

But a merger, especially at current fuel prices, would probably lead to fewer combined flights in some markets, making the remaining planes more crowded.

The New Bush Presidential Library Project!

The George W. Bush Presidential Library is now in the planning stage.

You will want to be the first in your area to make a contribution to this great man's legacy!

The library will include:

·                     The Hurricane Katrina Room, which is still under construction.

·                     The Alberto Gonzales Room, where you can't remember anything.

·                     The Texas Air National Guard Room, where you don't even have to show up.

·                     The Walter Reed Hospital Room, where they don't let you in.

·                     The Guantanamo Bay Room, where they don't let you out.

·                     The Weapons of Mass Destruction Room (which no one has been able to find).

·                     The Iraq War Room. After you complete your first tour, you go back for a second, third, and sometimes fourth time.

·                     The Dick Cheney Room, in an undisclosed location, complete with shooting gallery.

·                     The Airport Men's Room, where you can meet some of your favorite Republican Senators.

There will be an entire floor devoted to a 7/8 scale model of the President's ego.

The book stacks will contain the President's favorite books. He will finish coloring them before the library opening.

Finally, to highlight the President's accomplishments, the museum will have an electron microscope to help you locate them!

Ecumenical Madness

More Religious Mania

Daily Rotten Weird News

The Jerusalem Post reports that high rabbinical sources have confirmed the birth of a rare red heifer named Melody in a kibbutz near Haifa . The ashes from such a beast will be needed to ceremonially purify any Jews before they would be permitted to enter the former site of Solomon's Temple in Jerusalem .

At present, the parcel is occupied by the Dome of the Rock mosque, which is located on the spot where Muslims believe that Mohammed rode his horse into Heaven. The goal here is to reconstruct the Hebrew temple, but this would necessitate tearing down the mosque, virtually guaranteeing outright war between Israel and the Arab world.

Even more ominous, the construction project is a necessary prerequisite for the second coming of Christ, which itself involves all the End Times stuff in the book of Revelation. Melody is the first red heifer in 2,000 years, and quite possibly the last.

‘Church’ plans teen funeral protests

April 11, 2008

by Bryan Schutt,

Carroll County Times/Md

The family and friends of two teenagers who died in a car accident over the weekend are puzzled as to why a fundamentalist church group plans to demonstrate at the teens' funerals.

Tracey Burke, whose daughter Emily died in the crash near Finksburg late Saturday night, said she doesn't understand the logic of Topeka, Kan.-based Westboro Baptist Church unless its members, "are just people of hate."

"It makes no sense," Burke said. "I can't believe they'd choose to [demonstrate at] the funeral of a child."

Julio Calderon, whose brother Rodolfo Calderon also died in the crash, said he was stunned to find out about the picketing.

"I don't know why people want to interfere with our moment of privacy and grief," he said.

According to a release from the Westboro Baptist Church , tragedies are happening in Maryland because the state is persecuting the organization, and their demonstration is based on their belief that "God hates Maryland ."

Shirley Phelps-Roper, the daughter of Westboro Baptist Church leader the Rev. Fred W. Phelps Sr., said the teens died because God put a curse on Maryland .

" Maryland is a state of rebels with no cause," Shirley Phelps-Roper said Monday.

Maryland State Police said they are looking into Westboro Baptist's decision to attend the funeral and deciding what, if anything, they can do.

Saturday night, Emily Burke, 15, of Sykesville and Rodolfo Calderon, 14, of Finksburg died after the minivan they were riding in struck a tree near Finksburg. Emily's brother, Paul Burke, 17, and Alison Hird, 15, of Sykesville were also injured during the crash and both were flown to University of Maryland Shock Trauma Center in Baltimore following the accident.

Paul Burke was released on Sunday.

State police were continuing to investigate the cause of the accident Monday evening. Police say there was no immediate indication of alcohol or drug use, but it is possible the driver fell asleep at the wheel.

Jeff Atkinson of Eldersburg, a family friend of the Burkes, said he was extremely angry to hear about the church planning to demonstrate at the funerals.

"They're nut-jobs who I wouldn't even consider a Christian entity," Atkinson said. "Why disrupt this family's mourning?"

He said the family did nothing wrong and he said he believed the church group had no reasonable cause to attending the funeral other than to draw attention to themselves.

In March 2006, the group demonstrated in Westminster at the funeral of Lance Cpl. Matthew Snyder of Westminster . Phelps-Roper said the organization stood lawfully and peacefully aside from the Mass and no one went into the church, but they were still persecuted by the state of Maryland .

Last November, a jury found that the church intentionally inflicted emotional distress upon Matthew Snyder's father, Albert Snyder of York , Pa. and awarded him $10.9 million. The award was recently reduced to $5 million.

Last week, a federal judge issued liens against the church and ordered two of its members to post cash bonds while they appeal the $5 million judgment resulting from the church's protest at Snyder's funeral. The church has filed a motion to stay the verdict.

The liens mean that no new mortgages can be taken out on the properties and no money can be borrowed against the equity in them.

Regardless of what happens with the church group, both the Calderon family and the Burke family said they appreciate the community's help through this trying time.

Tracey Burke said the family has been overwhelmed with support from the community. She said friends, church members and Liberty High School faculty have been more than helpful.

Both Liberty and Westminster High School provided counseling for any students dealing with the grief from the loss. Principal Dwayne Piper of Liberty High School and Principal John Seaman of Westminster High School said it was a tough day for the schools, but they tried to provide support while still proceeding with the school day somewhat normally.

"We're so much better for [their support]," Burke said. "We thank everyone for their prayers and support; they've made [this time] more manageable."

This year, there have been four fatal crashes in Carroll County . The crashes resulted in five deaths, three of which were teens.

Reach staff writer Bryan Schutt at 410-857-7886 or bryan.schutt@carrollcountytimes.com. The Associated Press contributed to this report

Comment: This is one coven of Baptists who weren’t held under water long enough. BH