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Today's Stories February 8 / 10, 2008 Paul Craig Roberts Does the GOP Have Aces Up Its Sleeves? Patrick Cockburn Will Moqtada al-Sadr's Truce Hold? Anthony DiMaggio How the Press Covers Waterboarding Andy Worthington The Guántanamo Trials: Where are the Terrorists? Linn Cohen-Cole Hillary, Will You Renounce Your Ties to Monsanto? Firmin DeBrabander Notes from the Foreclosure Front: Suing Your Way to Solvency Cpt. Paul Watson The Other Whaling Industry: How Greenpeace Cashes In on the Suffering and Deaths of the Great Whales Kenneth S. Pope Why I Resigned from the American Psychological Association Jacob G. Hornberger American Soldiers Will Pay the Price for Bush's Torture Policy Robert Bryce Beyond Group Think on Climate Change: If More CO2 is Bad ... Then What? P. Sainath The Last of the Buccaneer Editors Allan Nairn Give Me Back My Land Fred Gardner / Pebbles Trippet "The District Attorney of Shasta County Doesn't Know the Law!" Andrew Wimmer Growing Up Catholic: Ignorance is Death Robert Fantina America's Disgrace: the Case of Omar Khadr David Michael Green Partycide in Six Easy Steps: Watch the Democrats Destroy Themselves Kevin Zeese Is Dennis Kucinich Being McKinney'd? Peter Morici Wall Street Gives Bernacke a Vote of No Confidence Chris Driscoll Could Nader be the Come-Back Kid of 2008? Prairie Miller Black August: Bringing George Jackson's Life to the Screen Website of the Weekend Sympathize with Gaza   February 7, 2008 Patrick Cockburn Why Baghdad Will Explode Again Bill Christison Potholes Bigger Than Ever for Palestinians David Anderson NBC's "To Entrap" a Predator: Perverting Justice for the Sake of Ratings Ron Jacobs Innocent Flesh: Recruiting Kids to Kill Nikolas Kozloff Hugo Chávez's Coca: It's the Real Thing Jane Rockefeller The Moral Economy of an Anti-Poverty Foundation Andy Worthington On Waterboarding: Two Questions for Michael Hayden Dave Zirin Instep Intifada Saul Landau The "Honestest" Candidate Since Lincoln Susie Day Our Blob in the White House Website of the Day George Carlin on Voting   February 6, 2008 Cockburn / St. Clair Super Tuesday's Vote for Chaos Ben Rosenfeld Informant Games: The Disturbing GreenScare Case of Briana Waters Vijay Prashad An Intellectual Hustler Lays It All Out Joe Bageant Nine Billion Little Feet on the Highway of the Damned Michael Donnelly What White Women Do In Private Voting Booths Allan Nairn Does the US Need a Civilizing Mayan Invasion? Kathryn Gray Wilderness on Edge: The Fate of Donner Summit Ray McGovern Powell's UN Fiasco Sheldon Richman The Whining Empire Paul Cantor / Roger Sparks A Presidential Aptitude Examination John Chuckman Political Bits and Pieces Website of the Day Save the Albatross February 5, 2008 Winslow T. Wheeler The Chaos in America's Vast Security Budget Tariq Ali Why I Will Not Participate in the Turin Book Fair Stephen Soldz The Secret Rules of Engagement in Iraq: Did Rumsfeld Authorize War Crimes? Chris Floyd Strange Fruit: America's Gulag and the Good War William S. Lind Saddam's Secret War Strategy: Die and Win Martha Rosenberg Live From the Killing Floor Heather Gray Conversations with Georgia Voters Ayesha Ijaz Khan Obama, Bhagwandas and the Battle for a Secular Politics David Macaray Unions Need to Stop Being So Nice Eliza Ernshire Making Music and Laughing Till the Tears Run Brenda Norrell Hated Nation Website of the Day The Things I Used to Do     February 4, 2008 Marc Levy Winter in America Patrick Cockburn The Bird Market Bombings Saree Makdisi Strangling Gaza Uri Avnery From Stalingrad to Winograd Alan Farago Let's Get Bambi! Someone is Slaughtering Florida's Key Deer Ben Tripp Spare Change: the Whine of the Progressive Voter Paul Wolf Civil Wars North and South Paul Craig Roberts Why Were the 9/11 Tapes Destroyed? Joshua Frank MoveOn's Obama Endorsement: Why There's No Hope for Change John Halle Whither Progressive Democrats? Website of the Day How to Cheat in School   February 2 / 3, 2008 Alexander Cockburn Hot Democratic Properties Pam Martens Bankers Gone Bonkers: Global Finance and the Insanity Defense Ralph Nader The Great Clinton-Obama Debate: Questions They Weren't Asked John Ross Hilaria vs. "El Moreno" Wajahat Ali Hillary, Obama and the Clash of Civilizations: an Interview with Imam Zaid Shakir Robert Fantina A Colony by Any Other Name: Iraq as Stepchild of the American Empire B. R. Gowani Not All Veils and Guns James L. Secor China in Winter: On the Western Edge of the Great Snow John V. Walsh The Invisible Green Primary Niranjan Ramakrishnan Barack's Bubble, Bubba's Trouble Dave Zirin Who Stole the Super Bowl's Soul? Jeremy Scahill Blackwater and Blood Fidel Castro Reflections on Lula Joe Allen Tet Reconsidered: the Turning Point in the Vietnam War Stephen Lendman Life in Occupied Gaza Patrick Irelan What Happened to the Streetcars? Andrej Grubacic Ziga Vodovnik Caligula's Horse: the USA, New Europe and Kosovo Josh Karpoff Dead Soldiers and the Antiwar Movement Ron Jacobs Carl Oglesby's War Paul Krassner Tom Waits Meets Super-Joel Website of the Weekend Company Woman: Hillary and Wal-Mart   February 1, 2008 Ray McGovern The Iniquities and Inequalities of War Diane Farsetta The Wild Career of James "Dow 36,000" Glassman Patrick Cockburn The Most Dangerous Country in the World for Journalists Tariq Ali Et Tu, New York Times? Allan Nairn Eating Dirt for Lunch in Haiti Rannie Amiri Collective Punishment in Beirut Ramzy Baroud People Power in Gaza: They Simply Did It Kenneth Couesbouc The Mother of All Snowballs Peter Morici Recession Looms Mumia Abu-Jamal Witha "Brutha" Like This: Bill Clinton as White Negro Rosemary Jackowski 27 Reasons Nader Should Run for President Scott Campbell Direct Action to Stop the War Re-emerges Website of the Day Betes et Hommes   January 31, 2008 Saul Landau Return to Afghanistan Andy Worthington Horror at Guantánamo Mike Whitney Rate Cut as Dagger: America's Teetering Banking System Jeff Ballinger Sustainability for Dictators Initiative? Clinton Praises the "Suharto of the Steppe" Tiffany Ten Eyck The Saga of the Freightliner Five William Loren Katz Waterboarding: Torure or Mystery? Alan Farago Why the Republicans are in Deep Trouble Col. Dan Smith Oh Say Can You See the 2009 Budget? China Hand Slouching Toward Islamabad Dave Lindorff The Usual Suspects Once Again Wadner Pierre Fake Democracy in Haiti Website of the Day One Big Union   January 30, 2008 Cockburn / St. Clair McCain vs. Clinton? Christopher Ketcham The Genius of the Development Industrial-Complex Robert Weissman America By the Numbers: The Shameful State of the Union Neve Gordon An Experiment in Famine Paul Craig Roberts Regulation or Deregulation, Which is Worse? Joanne Mariner How Anti-Terror Laws Threaten Free Speech David Macaray Labor's Only Real Weapon Liaquat Ali Khan Is NATO Committing Genocide in Afghanistan? Raymond J. Lawrence Prankster-in-Chief: Bush's Troubling Non-Verbal Communication Dan Bacher The Collapse of the Central Valley Salmon Website of the Day Onward Through the Fog   January 29, 2008 Franklin C. Spinney Bush's New War Budget: the $70 Billion Hand-Off Mike Whitney The Great Credit Unwind of 2008 Alan Farago Buyer Beware: Florida, the Candidates and the Latin Builders Association Patrick Cockburn "The Americans Bring Us Only Destruction" Gary Leupp "We Can't Afford to Let Them Spill the Beans:" a Sibel Edmonds Timeline R. F. Blader A World Without Abortion: USA v. Romania Ahmad Faruqui Musharraf's Post-Electoral Prospect Fran Shor Obama, the Kennedys and "Change We Can Believe In" Jeremy Scahill Secret Trials and Criminal Convictions: the Ordeal of the Blackwater Protesters Allan Nairn Bush's SOTU: Entitlement, Justice and the War of All Against All Website of the Day The Ghost of Rambo   January 28, 2008 Patrick Cockburn Return to Fallujah Paul Craig Roberts The End of American Liberty Allan Nairn The Breaking of the Gaza Wall Eyad al-Sarraj / Sara Roy Ending the Stranglehold on Gaza Martha Rosenberg Obit for the "Front Page" City Corporate Crime Reporter How They Rip Us Off David Michael Green Kristolizing Iraq: What a Great Freakin' War Jennifer Van Bergen What's Left? Nancy Oden Survival Tips for Hard Times Divya Karnad Saving India's Sea Turtles James L. Secor Pissed About Pistorious: Why the Olympics Needs a Gimp Website of the Day Yellow Journalism?   January 26 / 27, 2008 Uri Avnery Worse Than a Crime JoAnn Wypijewski How the Clintons Lost It, Whatever the Outcome in S. Carolina Ralph Nader Ambition, Power and the Clintons Paul Craig Roberts How Bush Destroyed the Dollar Paul Watson I'm Proud to be a Pirate! John Ross Murder and Cover-Up in Mexico Fred Gardner Ross v. Raging Wire: Employer's Right to Fire Workers Held Sacred by California Supreme Court Allan Nairn Little Hands with Fever: Some Consequences of Poverty Death Joshua Frank Why Bush Wants to Legalize the Nuke Trade with Turkey Binoy Kampmark Société Générale and the Economic Meltdown James T. Phillips America's Sick Comedy: Bringing the War Home Stan Cox The Depressing Truth About Anti-Depressants Eamonn McCann Hillary's Lie: "I Brought Peace to Northern Ireland" Ron Jacobs The Horizons of History: What's at Stake in Bolivia Seth Sandronsky California's Health Care Crisis Ben Terrall The Future is Unwritten Poets' Basement Tripp, Gardner, Gibbons and Davies Website of the Weekend City of Immigrants     January 25, 2008 Douglas Valentine Operation Two-Fold: How the CIA Infiltrated the DEA Patrick Cockburn US Troops Will Be In Iraq for 10 More Years: an Interview with Iraqi Foreign Minister Hoshyar Zebari JoAnn Wypijewski Down to the Wire in South Carolina Heather Gray Are We Seeing a Racial Shift in the South? Conversations with South Carolina Voters Marjorie Cohn Senate Democrats Poised to Fold to Cheney on FISA Erica Rosenberg Environmentalists Out on a Limb: the Perils of Collaboration Alan Farago Jeb Bush Goes Nuclear Robert Weissman Reclaiming Economic Freedom Laura Carlsen Wild Cards: Mining the Hispanic Vote in Nevada Stephen Lendman Israeli Repression in the Hebron Website of the Day The FIX is In   January 24, 2008 JoAnn Wypijewski Obama as Anthologist of Uplift Paul Craig Roberts President Hillary Alexander Cockburn Hillary Wants to Talk About Dirty Legal Dealings? Remember Her Nursing Home Scam? Kathleen Christison One and Two State Solutions and the Myth of International Consensus Jeff Halper Power to the (Palestinian) People! Stanley Heller The Siege of Gaza is Broken George Wuerthner The Moronic Sport: ORVs on the Public Lands Patrick Cockburn Desperate Iraqi Farmers Turn to Opium Jeff Sher Just How "Good" is Your Health Insurance? Patrick Irelan Musharraf, the Steadfast Ally? Charles Modiano Restoring the Anti-War King Website of the Day An Illustrated History of Trepanation   January 23, 2008 David Rosen The Great Disappearing Act: the Presidential Candidates and the Politics of Sex David Isenberg Is It Really So Hard to Believe That Iran Stopped Its Nuclear Weapons Program? Farzana Versey Hillary's Harem Paul Craig Roberts The Empire That Must Be Obeyed Alan Farago Where Did All the Good Times Go? Allan Nairn Indonesian Intelligence Service Threatens to Kill Human Rights Activist Kenneth Couesbouc Another Turn of the Screw Niranjan Ramakrishnan How the West was Re-Sold Michael Donnelly Obama Strikes Back Norman Solomon The Power of Love Website of the Day Rafah Today   January 22, 2008 Paul Craig Roberts Farewell to Old Economic Nostrums JoAnn Wypijewski King Day in Columbia, South Carolina Al Giordano Divide and Conquer Politics: How the Clinton Campaign Armed a Black-Latino Time Bomb in Nevada Felice Pace Power Politics in the Klamath: Water, Dams and Salmon Paul Wolf Bolívar's Sword Robert Weissman Deregulation and the Financial Crisis Dave Lindorff The Bush Dollar Trap Marjorie Cohn Cheney Impeachment Gains Traction Richard Neville Keeping Shakespeare in a Box Don Fitz / Zaki Baruti St. Louis Mayor Booed Off MLK Platform Ben Terrall Cindy Sheehan and the Virtues of Divisiveness Sam Husseini Stoning Martin Luther King, Jr. Website of the Day Defend the Mapuche!     January 21, 2008 Kevin Alexander Gray Playing the Race Card Linn Washington, Jr. Deferring Dreams, Delusions of Democracy Pam Martens How Wall Street Blew Itself Up David Macaray Labor's Grim Dilemma: Do We Need a Labor Party? Uri Avnery Look Who's Talking Omar Barghouti Europe's Collusion in Israel's Slow Genocide Joe DeRaymond Protest and Trial in D.C. B.R. Gowani Why Islam Should Tolerate Images Shepherd Bliss The False U.S. Economy Jean-Guy Allard Philip Agee Versus the CIA Dan Bacher Leaping Steelhead! Website of the Day Destroyed By a Rising Flood January 19 / 20, 2008 Alexander Cockburn The Campaign in Black and White Saul Landau Good Time Charlie's War China Hand Endgame for Pakistan? Conn Hallinan Desert Mirage: What Was the Bombing of Syria Really About? Ron Jacobs No Retreat Dave Lindorff A Tax Rebate Won't Fix This Mess Andy Worthington Canada's Humiliating Double Standard on Torture Paul Armentano What's the Going Price for a Joint? More Than You Might Think Seth Sandronsky High Crimes and Economics Michael Donnelly Dodging Ecocide Patrick Irelan The Ordeal of Dr. Safdar Sarki Martha Rosenberg The Drug Industry Takes Another Hit Sherwood Ross Making the World Safe for Despots: Bush's Global Arms Trade David Michael Green So You Want to be My President, Eh? James Rothenberg Unimpeachable: Under House Protection Daniel Gross Starbucks Shortchanges Dr. King Peter N. Carroll In Memory of Milton Wolff Susie Day Croakin' on Hudson Paul Krassner Woody Allen Meets Tongue Fu Poets' Basement Wolff, Buknatski and Orloski Website of the Day Rocky Mountain Blues   January 18, 2008 Allan Nairn Killing Civilians, Carefully Ralph Nader When the Big Boys Get in Trouble, Who Pays the Ultimate Bill? Joanne Mariner Terrorism and Preventative Detention Alan Farago The Stimulus and the Meltdown P. Sainath Pity the Brahmins R.F. Blader Beyond Steinem's Feminism Andy Worthington A Letter from Guantánamo John Jonik Private Insurance is Bad for Your Health Brian McKenna Where Even Sharing is Prohibited: Notes from Inside a Michigan Women's Prison Daoud Kuttab This Time Next Year? Website of the Day Those South Carolina Voting Machines   January 17, 2008 Paul Craig Roberts Leader and Vassal Christopher Brauchli The FBI's Bills Come Due Robert Fantina Leadership, Bush and the New York Times Patrick Irelan Eternal War Paul A. Moore When the Rich Pay No Taxes Stephen Lendman Institutionalized Spying on Americans Beena Sarwar Bhutto and the "State Within a State" Walter Brasch Buzzwords in the Echo Chamber: Change and the Establishment Brenda Norrell Bush Legacy in Texas Sours Adam Federman End of the Left? Website of the Day Democrats for Romney   January 16, 2008 Jeffrey St. Clair Return of the Native Franklin Lamb The Bombing at Qarantina Julian Sanchez David Weigel Who Wrote Ron Paul's Newsletters? Sharon Smith Ron Paul and the Left: a Slippery Slope? Allan Nairn Economic Indicator: No Free Lunch, No Free Market Ayesha Ijaz Khan How the American Media Enables Bush's Iran Fixation Andy Worthington A Strategic Call to Close Guantánamo Richard Behan Nancy Pelosi, You Must Impeach! Website of the Day Obama the New JFK? He's Not That Bad!   January 15, 2008 Andrea Peacock Breach of Trust in America's Most Toxic Town: How the EPA is Rubbing Poison Into Libby's Wounds Wajahat Ali An Interview with Seymour Hersh on Iraq, Bush Foreign Policy and the Prospects of War with Iran Joe Bageant Getting Out the Bling Vote Ralph Nader The Candidate Taboos John Ross Zero Hour: NAFTA and Mexico's Agrarian Apocalypse Elaine Cassel Jose Padilla vs. John Yoo: Can a National Disgrace be Rectified? Peter Morici The Fed Needs More Than a New Communications Strategy Beena Sarwar Pakistan's Dirty Tricks Brigade Robert Weissman Big Business is Even More Unpopular Than You Thought Binoy Kampmark Going Tata in India Dave Zirin Dennis Brutus Smacks Down the Hall of Fame Website of the Day David Lynch on the iPhone   January 14, 2008 Ishmael Reed Ma and Pa Clinton Flog Uppity Black Man Roger Morris Burials in the Sind Uri Avnery The Hands of Esau Mike Whitney Bush's Voodoo Stimulus Package Allan Nairn General Suharto of Indonesia: One Small Man Leaves a Million Corpses William Blum Oh, By the Way, the Iraqis Don't Really Want Us Alan Farago A Subprime Wake Up Call David Macaray Are Labor Unions Ready for Prime Time? Eva Liddell Getting Drunk with Obama Zoe Blunt Road Kill: New Highway Blocked by Protesting Raccoons Website of the Day Doug and Andrea Peacock on Grizzlies   January 12 / 13, 2008 Andrew Cockburn How the New England Journal of Medicine Undercounted Iraqi Civilian Deaths Saul Landau 60 Years of Empire Corey D. B. Walker Barack Obama and the Crisis of the White Intellectual Col. Dan Smith Bush, Iran and the Magician of the Tarot Eric Toussaint The US Subprime Crisis Goes Global Ron Jacobs Television, Murder and Vietnam Fred Gardner The People vs. Christopher James Chakos Stan Cox Don't Take That Pill! Jacob G. Hornberger The Warfare State Ramzy Baroud The Good, the Bad and the Ugly Joseph Grosso The Anglosphere: a Special Relationship of Elites David Díaz-Arias Imagining An/Other Latin American Left Stacey Warde Before We Move On ... Dan Bacher Pumped to Extinction: the Decline of the Delta Smelt Michael Dickinson Georgie in Jesusland Website of Weekend CounterPunchers Protest Outside NYT Offices   January 11, 2008 Dave Lindorff Did Hillary Really Win New Hampshire? More Questions About Diebold Voting Machines Paul Craig Roberts No Escape from War and Unemployment Andy Worthington Six Years of Guantánamo Kenneth Couesbouc Banking on Thin Ice Jeff Ballinger Inside the Vienna Consensus Christopher Brauchli Lethal Injection, the Supremes and China Manuel Garcia, Jr. Paying No Attention to the Presidential Campaigns Andrew Silverstein Bush's Weepy Visit to Jerasulem Marwan Bishara Bush in the Middle East Robert Weissman The First Amendment Gone Wild Patrick Irelan Damn the Small Boats! Website of the Day Hillary and the Superdelegates: Or Why She Wins Even When She Loses     January 10, 2008 Alexander Cockburn Now Nader Claims He Didn't Endorse Edwards Bob Wing Marqueece Harris-Dawson Race Within the Race: Obama, the NH Vote and the Specter of Tom Bradley Michael Donnelly White Women Gone Wild? David Macaray Three Big Reasons for the Decline of Labor Unions China Hand Bush's Delusional Policy Pushes Pakistan to Brink of Catastrophe Ayesha Ijaz Khan Saudi Arabia and Pakistan: Brotherly, Friendly Countries? Rannie Amiri Obama, Man of Kansas or Kenya? Website of the Day Iranian Video of the Hormuz Incident   January 9, 2008 Cockburn / St. Clair The Empire Strikes Back Dave Lindorff The Bad News from New Hampshire: Death By Triangulation John Chuckman Pardon My Laughter: Watching the US Primaries from Canada James Bovard Stomping Freedom: Inside the Martial Law Act of 2006 Alan Farago As Florida Sinks: the View from the Titanic Russell Mokhiber Why Picket the New York Times in DC on Friday? William S. Lind Kicking the Can Down the Road in Iraq Peter Morici Beyond the Sophistry: Why the Trade Deficit Matters Josh Reubner Sudan vs. Israel: Double Standard on Divestment Mike Roselle The Pursuit of Happiness Website of the Day Bottles of Tears on the Wall: Steve Perry on NH   January 8, 2008 Paul Craig Roberts No Jobs for the New Economy (or the Old) Russell Mokhiber The Black Hillary: Obama is Just Another Political Sedative Robert Fantina The Gulf of Tonkin and the Strait of Hormuz Dave Zirin Butts on Parade Shamako Nobel I Am an Emcee: the Politics of Hip Hop John Ross Zapatista Women Encounter Themselves Brenda Norrell Apaches Defend Homeland from Homeland Security Laura Carlsen Why Bolivia Matters Patrick Irelan Remember the Maine! Evelyn J. Pringle The Holes in Bush's FDA Jonathan M. Feldman After Iowa and New Hampshire: a Strategy for Rebuilding the Peace Movement Michael Dickinson Playing Soldier Website of the Day Sean Hannity on the Run!   January 7, 2008 Chris Floyd There Will Be Blood: But No Justice for Iraq Atrocities John Blair Remove That Man! Creeping Fascism in Indiana Uri Avnery The Case of the White Bird Andy Worthington Who Are the Gitmo Saudis? Binoy Kampmark Needling the Convict: Lethal Injection and the Supreme Court David Macaray Women on Strike Ralph Nader Obamarama: the Politics of the Smooth Mood Michael Donnelly It's the War Vote(s), Stupid! Ron Jacobs Ron Paul's Run: Is Being Against the War Enough? Gideon Levy The Hostile President Dave Lindorff A Real 9/11 Cover-Up? Sibel Edmonds, Turkey and the Bomb Website of the Day Plagues and Pleasures on the Salton Sea   January 5 / 6, 2008 Douglas Valentine Good Guys in Black Hoods Kevin Young The US Occupation and Popular Opinion in Iraq Richard Rhames Saddam Who? Saul Landau Bush Snatches Defeat from Victory Marc Lynch Why Bush's Iran Strategy is Failing Robert Fantina Iowa, Democrats and the Iraq War Donna Volatile Antiwar Soldier: an Interview with Jonathan Hutto, Sr. Jelle Bruinsma Norman Finkelstein in The Netherlands Bob Sutcliffe Remembering Andrew Glyn, Rebel Economist Harvey Wasserman Anti-Nuclear Renaissance Missy Beattie Why Obama Can't Save Us David Swanson Remembering the Separation of Powers Jacob Hornberger The Importance of the Padilla Case Shepherd Bliss Survival Tools from Kokopelli Farms Ron Jacobs Bleeding Kansas Poets' Basement Patti Smith, B.R. Gowani and Peter Buknatski Website of the Weekend Jimmy Dean Sausage Call Complaint   January 4, 2008 Cockburn / St. Clair A Good Night in Iowa Jonathan Cook War Crimes Airbrushed from History Paul Craig Roberts Thinking for Yourself is Now a Crime Stan Goff Ron Paul's Monkeywrench Dave Lindorff Clinton's Iowa Flop Exposes DLC Myths as Frauds Niranjan Ramakrishnan To Pindi Station Allan Nairn U.S. Elections Over Before They Began Joshua Frank The Failures of Sectarianism Peter Morici Economy on the Skids Mary McInnis Iowa Cocky-Us: How to be a Caucus Tease Website of the Day The Return of Obama Girl   January 3, 2008 Fatima Bhutto Farewell to Wadi Bua Pam Martens The Free Market Myth Dissolves into Chaos Joanne Mariner The Presidential Candidates and Torture Zoltan Grossman Remember the '80s: Social Movements Between Woodstock and the Web David Domke The Echoing Press and Huckabee Norman Solomon Edwards Reconsidered Nikolas Kozloff Return of the Faux Liberal Jacob G. Hornberger The Padilla Case and the Future of Habeas Corpus Martha Rosenberg Quit Picking on Huckabee's Son, Michael Vick Russell Means This Property is Condemned: a Notice to Those Occupying Lakotah Lands Website of the Day WolfQuest       Subscribe Online

Weekend Edition February 8 / 10, 2008 Bye, Bye Reagan, Hello FDR The Great Bust of '08 By MIKE WHITNEY On January 14, 2008 the FDIC web site began posting the rules for reimbursing depositors in the event of a bank failure. The Federal Deposit Insurance Corporation (FDIC) is required to “determine the total insured amount for each depositor.....as of the day of the failure” and return their money as quickly as possible. The agency is “modernizing its current business processes and procedures for determining deposit insurance coverage in the event of a failure of one of the largest insured depository institutions.” The implication is clear. The FDIC has begun the “death watch” on the many banks which are currently drowning in their own red ink. The problem for the FDIC is that it has never supervised a bank failure which exceeded 175,000 accounts. So the impending financial tsunami is likely to be a crash-course in crisis management. Today some of the larger banks have more than 50 million depositors, which will make the FDIC's job nearly impossible. It's worth noting that, due to a rule change by Congress in 1991, the FDIC is now required to use “the least costly transaction when dealing with a troubled bank. The FDIC won't reimburse uninsured depositors if it means increasing the loss to the deposit insurance fund....As a result, uninsured depositors are protected only if a bank acquiring the failed bank will pay more for all of the deposits than it would for insured deposits only.” (MarketWatch) That's reassuring. And there's more, too. FDIC Chairman Shiela Bair warned that “as of Sept. 30, there were 65 institutions with assets of $18.5 billion on its list of "problem" institutions;” although she wouldn't give names. So, what does it all mean? It means that people who want to hold on to their life savings are going have to be extra vigilant as the situation continues to deteriorate. Right now, many of the country's largest investment banks are holding $500 billion in mortgage-backed securities and other structured investments that are steadily depreciating in value. As these assets wear-away the banks' capital, the likelihood of default becomes greater. This week, Fitch Ratings announced that it will (probably) cut ratings on the 5 main bond insurers (Ambac, MBIA, FGIC, CIFG,SCA) “regardless of their capital levels”. This seemingly innocuous statement has roiled markets and put Wall Street in a panic. If the bond insurers lose their AAA rating (on an estimated $2.4 trillion of bonds) then the banks could lose another $70 billion in downgraded assets. That would increase their losses from the credit crunch -- which began in August 2007 -- to $200 billion with no end in sight. It would also impair their ability to issue loans to even credit worthy customers which will further dampen growth in the larger economy. Structured investments have been the banks' “cash cow” for nearly a decade, but, suddenly, the trend has shifted into reverse. Revenue streams have dried up and capital is being destroyed at an accelerating pace. The $2 trillion market for collateralized debt obligations (CDOs) is virtually frozen leaving horrendous debts that will have to be written-down leaving the banks' either deeply scarred or insolvent. It's a mess. There were some interesting developments in a case involving Merrill Lynch last week which sheds a bit of light on the true “market value” of these complex debt-pools called CDOs. The Massachusetts Secretary of State has charged Merrill with “fraud and misrepresentation” for selling them a CDO that was "highly risky and esoteric" and "unsuitable for the City of Springfield.” (Most cities are required by law to only purchase Triple A rated bonds) The city of Springfield bought the CDO less than a year ago for $13.9 million. It is presently valued at $1.2 million -- more than a 90 per cent loss in less than a year. Merrill has quietly settled out of court for the full amount and seems genuinely confused by the Massachusetts Secretary of State's apparent anger. A Merrill spokesman said blandly, “We are puzzled by this suit. We have been cooperating with the Secretary of State Galvin's office throughout this inquiry.” Is it really that hard to understand why people don't like getting ripped off? This anecdote shows that these exotic mortgage-backed securities are real stinkers. They're worthless. The market for structured debt-instruments has evaporated overnight leaving a massive hole in the banks' balance sheets. The Fed's multi-billion bailout plan; the “Temporary Auction Facility” (TAF) is a quick-fix, but not a permanent solution. The real problem is insolvency, not liquidity. The smaller banks are dire straights, too. They're bogged down with commercial and residential loans that are defaulting faster than any time since the Great Depression. The Comptroller of the Currency,John Dugan -- who is presently investigating commercial real estate loans -- discovered that commercial banks “wrote off $524 million in construction and development loans in the third quarter of 2007, almost nine times the amount of 2006”. The commercial real estate market is following residential real estate off a cliff. Dugan found out that, “More than 60 per cent of Florida banks have commercial real estate loans worth more than 300 per cent of their capital, a level that automatically attracts more attention from examiners.” (Wall Street Journal) He said that his office was prepared to intervene if banks with large real estate exposure maintained unreasonably low reserves for bad loans. Dugan is forecasting a steep “increase in bank failures.” “Dozens of U.S. banks will fail in the next two years as losses from soured loans mount and regulators crack down on lenders that take too much risk, especially in real estate and construction," eport Reuters, quoting Gerard Cassidy, RBC Capital Markets analyst. Apart from the growing losses in commercial and residential real estate, the banks are carrying over $150 billion of “unsyndidated” debt connected to leveraged buyout deals (LBOs) which are presently stuck in the mud. Like CDOs, there's no market for these sketchy transactions which require billions in cheap, easily available credit. They've just become another anvil dragging the banks under. On January 31, Bloomberg News reported: “Losses from securities linked to subprime mortgages may exceed $265 billion as regional U.S. banks, credit unions and overseas financial institutions write down the value of their holdings.” Standard and Poor's added that “it may cut or reduce ratings of $534 billion of subprime-mortgage securities and CDOs as default rates rise.” Another blow to the banks withering balance shee There's an even bigger threat to the financial system than these huge losses at the banks. A default by one of the big bond insurers could trigger a meltdown in the credit-default swaps market, which could lead to the implosion of trillions of dollars in derivatives bets. The inability of the under-capitalized monolines (bond insurers) to “make good” on their coverage is likely to set the first domino in motion by increasing the number of downgrades on bond issues and intensifying the credit-paralysis which already is spreading throughout the system. MSN Money's financial analyst Jim Jubak summed it up like this: "Actually, I'm worried not so much about the junk-bond market itself as the huge market for a derivative called a credit-default swap, or CDS, built on top of that junk-bond market. Credit-default swaps are a kind of insurance against default, arranged between two parties. One party, the seller, agrees to pay the face value of the policy in case of a default by a specific company. The buyer pays a premium, a fee, to the seller for that protection. This has grown to be a huge market: The total value of all CDS contracts is something like $450 trillion..... Some studies have put the real credit risk at just 6 per cent of the total, or about $27 trillion. That puts the CDS market at somewhere between two and six times the size of the U.S. economy. All it will take in the CDS market is enough buyers and sellers deciding they can't rely on this insurance anymore for junk-bond prices to tumble and for companies to find it very expensive or impossible to raise money in this market." (Jim Jubak's Journal; "The Next Banking Crisis is on the Way", MSN Money) Jubak really nails it here. In fact, this is what Wall Street is really worried about. $450 trillion in cyber-credit has been created through various off balance sheets operations which neither the Fed nor any other regulatory body can control. No one even knows how these abstruse, credit-inventions will perform in a falling market. But, so far, it doesn't look good. The enormity of the derivatives market ($450 trillion) is the result of Greenspan's easy-credit monetary policies as well as the reconfiguring of the markets according to the “structured finance” model. The new model allows banks to run off-balance sheets operations that, in effect, create money out of thin air. Similarly, “synthetic” securitization, in the form of credit default swaps (CDS) has turned out to be another scam to avoid maintaining sufficient capital to cover a sudden rash of defaults. The bottom line is that the banks and non-bank institutions wanted to maximize their profits by keeping all their capital in play rather than maintaining the reserves they'd need in the event of a market downturn. In a deregulated market, the Federal Reserve cannot control the creation of credit by non-bank institutions. As the massive derivatives bubble unwinds, it is likely to have real and disastrous effects on the underlying-productive economy. That's why Jubak and many other market analysts are so concerned. The persistent rise in home foreclosures, means that the derivatives which were levered on the original assets (sometimes exceeding 25-times their value) will vanish down a black hole. As trillions of dollars in virtual-capital are extinguished by a click of the mouse; the prospects of a downward deflationary spiral become more likely. As economist Nouriel Roubini said: “One has to realize that there is now a rising probability of a 'catastrophic' financial and economic outcome, i.e. a vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe. That is why the Fed has thrown caution to the wind and taken a very aggressive approach to risk management.” (Nouriel Roubini EconoMonitor) "In the fourth quarter of 2007, new foreclosures averaged 2,939 a day, double the pace of a year earlier." (RealtyTrac Inc.) The banks are presently cutting back on home equity loans which provided an additional $600 billion to homeowners last year for personal consumption. Bush's $150 billion “stimulus package” will barely cover a quarter of the amount that is lost. As consumer spending slows and the banks become more constrained in their lending; businesses will face overproduction problems and will have to limit their expansion and lay off workers. This is the downside of “low interest” bubble-making; a painful descent into deflation. Bernanke wants direct government action that will provide immediate stimulus. But that takes political consensus and there's still debate about the gravity of the upcoming recession. The pace of the economic contraction is breathtaking. This week's release of the Institute for Supply Management's Non-Manufacturing Index (ISM) was a real shocker. It showed steep declines in all areas of the nation's service sector---including banks, travel companies, contractors, retail stores etc—The Business Activity Index, the New Orders Index, the Employment Index, and the Supplier Delivery Index have all contracted at a “historic” pace. Everyone took a hit. “The numbers are so terrible, it's beyond belief,” said Scott Anderson, senior economist at Wells Fargo & Co. The $2 trillion that has been wiped out from falling home prices, the slowdown in lending activity at the banks, the loss $600 billion in home equity loans, and the faltering stock market have all contributed to a noticeable change in the public's attitudes towards spending. Traffic to the shopping malls has slowed to a crawl. Retail shops had their worst January on record. Homeowners are hoarding their earnings to cover basic expenses and to make up for their lack of personal savings. America's consumer culture is in full-retreat. The slowdown is here. When equity bubbles collapse; everybody pays. Demand for goods and services diminishes, unemployment soars, banks fold, and the economy stalls. That's when governments have to step in and provide programs and resources that keep people working and sustain business activity. Otherwise there will be anarchy. Middle class people are ill-suited for life under a freeway overpass. They need a helping hand from government. Big government. Good-bye, Reagan. Hello, F.D.R. The Bush stimulus plan is a drop in the bucket. It'll take much, much more. And, we're not holding our breath for a New Deal from George Walker Bush. Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

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