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China paper urges new currency order after "financial tsunami"

Wed Sep 17, 2008 1:45am EDT

BEIJING (Reuters) - Threatened by a "financial tsunami," the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.

The commentary in the overseas edition of the People's Daily said the collapse of Lehman Brothers Holdings Inc (LEH.P: Quote, Profile, Research, Stock Buzz) "may augur an even larger impending global 'financial tsunami'."

The People's Daily is the official newspaper of China's ruling Communist Party, and the overseas edition is a smaller circulation offshoot of the main paper.

Its pronouncements do not necessarily directly reflect leadership views, but this commentary by a professor at Shanghai's Tongji University suggested considerable official alarm at the strains buckling world financial markets.

China's central bank earlier this week cut its lending rate for the first time in six years, a move analysts said was aimed at bolstering the economy and the battered stock market.

"The eruption of the U.S. sub-prime crisis has exposed massive loopholes in the United States' financial oversight and supervision," writes the commentator, Shi Jianxun.

"The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States."

But Vice Premier Wang Qishan, on a visit to the United States, told U.S. trade officials in a meeting on Tuesday that China and the United States needed to maintain close economic ties with global markets going through such turbulence.

"The Chinese government is well aware of the fact that the United States, which is the world's largest developed country, and China, which is the world's largest developing country, should have constructive and cooperative economic and trade relations," he said.

China is a major buyer of U.S. Treasury bonds, and through its sovereign wealth fund it has taken stakes in two large U.S. financial institutions.

In July 2005, China revalued the yuan and freed it from a dollar peg to float within managed bands. But the yuan and China's trade remains tightly linked to the fortunes of the dollar.

The commentary suggested China must brace for grave economic fallout and look to alternatives, saying the crisis brings to mind the Great Depression of the 1930s.

"Lehman Brothers announced bankruptcy will not only have a domino effect on the global financial world, it will bring a shock to the world economy," the front-page comment stated.

(Reporting by Chris Buckley; Editing by Ken Wills)

http://www.reuters.com/article/newsOne/idUSPEK4365020080917?pageNumber=2&virtualBrandChannel=0

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Anyone Want to Buy a Private Pension Plan? Going Once…

Mon, 09/15/2008 - 19:51 — dlindorff
That deafening silence you hear coming from the McCain campaign is straight-talkin’ John touting his plan for privatizing Social Security...not.

With Wall Street banks falling like dominoes, a hundred billion dollars vanishing overnight, and the Treasury Department scampering about trying to prop up failing enterprises from Bear Stearns to Fannie Mae, and with domestic and global equity and bond markets swooning, Americans are afraid to open those envelopes that come every quarter telling them the value of their hard-earned 401(k) retirement plans.

No wonder John McCain isn’t touting privatizaton these days.

It’s not just that many of those private 401(k) plans McCain and his ilk so love for the working stiff were invested in the very financial institutions that have seen their share values drop to zero, or in other financial institutions that were themselves heavily invested in the stocks or debt instruments of the growing list of failed institutions. It’s that the tottering US financial edifice is shaking the broader markets, making stocks, bonds, and even giant insurance companies like AIG look like houses of cards, and a poor bet for funding one’s dotage.

Paul Krugman, in today’s New York Times, says that the Federal Reserve Bank and the US Treasury Department, in letting Lehman Bros, the nation’s fourth largest investment bank, go bankrupt, instead of doing yet another government bailout, was a kind of financial Russian roulette. Could Lehman’s collapse lead to a wholesale collapse of Wall Street and the US banking system, ala 1929-31? Krugman says, incredibly, that nobody really knows, including Fed Chairman Ben Bernacke and Treasury Secretary Henry Paulson.

That’s not the kind of thing you want to hear when you’ve managed, over the course of a working life, to save maybe a few hundred grand in a tax-deferred retirement plan that is all invested in stocks and bonds. Nor is it very comforting, if you are one of the millions of Americans who put your money into some kind of insurance annuity, expecting to get a guaranteed stream of income for life, to hear that AIG, the largest insurance company and one of the biggest issuers of such “private pension” programs, is struggling to come up with $40 billion in cash to avoid going belly up itself.

Now fortunately, for nearly all American workers, there is a backstop: Social Security, which is not invested in any financial instruments, and which pays out monthly benefits to retired and disabled workers and their dependents based not upon the whims of the markets but on the lifetime earnings of the worker in question. Unlike a 401(k) investment, which is dependent for its size and reliability on the performance of the financial markets in which its assets are invested, or an annuity, which is dependent upon the financial survival and viability of the insurance company which issued it, Social Security is a program in which the payments of benefits are an obligation of the federal government, and are paid from a fund of money that has been paid into by the retiree and her employer in earlier years, by current workers and their employers who pay a tax on current earnings, and, if necessary, by supplemental funds allocated by the Congress. Social Security benefits are adjusted each year for inflation (though since President Bill Clinton, those adjustments have been reduced because of a sleight of hand that makes inflation appear to be less than it really is).

McCain, and Republicans in general, have been pressing for years to have Social Security privatized, or partially privatized, with at least some of the money taken from employees and employers for Social Security invested in financial instruments such as stocks or bonds. They’ve tried to sell this snake oil to young workers by pointing to the rising stock market, and claiming ominously that some day, with so many current workers approaching retirement, Social Security will go “bankrupt.” Last year, the Bush Administration, which has filled the Social Security Administration with GOP hacks, actually had notices sent out to every American worker warning that “unless something is done,” Social Security might not be there for younger workers when it’s their turn to retire.

This kind of cynical scare tactic is beneath contempt, and is designed to weaken support for one of the most significant progressive legacies of the New Deal. The reality is that as the Baby Boom generation reaches retirement, starting with the first Boomers who will hit 65 in 2011, the elderly lobby, already enormously powerful, will swell to become perhaps the most powerful “special interest” voting bloc this nation has ever seen. Retired Americans will have the electoral clout in another 10 years to make Social Security whatever they want it to be.

They (we really, since at 59 I am part of that generation) will insure that the government pays us and our fellow retirees a decent retirement stipend, and we will also insist that reforms be undertaken to insure that our kids also get secure retirements.

We will do this not by undermining the program, as McCain and other Republicans have called for, by privatizing all or part Social Security, but by making sure that every dollar earned by even the richest of people is taxed, instead of having the social security tax limited to the first roughly $100,000 of earnings. We will demand that if more taxes are needed, they be paid by employers, not workers. Currently employers and employees each pay about 7.5% of wages as a payroll tax into the Social Security Trust Fund. There is no reason why that split should be 50/50, though. Employers could pay a bigger share. (Right wing economists try to argue that any tax paid by an employer ultimately comes out of the employees’ wages, but this ignores the law of supply and demand: workers don’t negotiate wages, or accept a job at a certain pay level, based upon the gross wage being paid, but on what they will be taking home each payday. Extra taxes paid by an employer could not be automatically taken out of employee pay. They would have to come out of corporate profits.)

The timing of the current spreading financial crisis has exposed McCain’s call for privatization of Social Security as a bad idea masquerading as reform. Since McCain can be expected to pursue the idea if elected, it’s just one more reason for American voters to reject his candidacy.

FLASH! Bush Did it!

From a Reuters dispatch comes word that at the end of August, on about the 28th or 29th, Lehman Bros., the nation's fourth-largest investment bank which today was declared bankrupt, hired former Florida Governor Jeb Bush, younger brother of the president, to "work" in its private equity business. In less than two weeks, the venerable 158-year old firm was belly up.
The younger Bush, in other words, outdid his older sibling, who took several years to run the US economy into the ground.

What a family! One waits with bated breath to see what disasters the next generation of Bushs will wreak.

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Global Poverty Figures Revised Upward

August 28, 2008
Haider Rizvi, OneWorld US


NEW YORK, Aug 27 (OneWorld) - A new study released by the World Bank this week has raised concerns among humanitarian workers worldwide as more people are now believed to be living in impoverished conditions than previously thought.

Despite significant levels of economic achievements made in the past 25 years, well over 1 billion people in the developing world remain as poor as ever, according to the study entitled: "The developing world is poorer than we thought but no less successful in the fight against poverty."

Revisions of estimates of poverty since 1981 revealed that 1.4 billion people (one in four) in the developing world were living on less than $1.25 a day in 2005, down from 1.9 billion (one in two) in 1981, said the study's authors Martin Ravallion and Shaohua Chen.

Until now, poverty estimates were based on the (then) best available cost of living data from 1993. The old data indicated that about 985 million people were living below the former international $1-a-day poverty line in 2004, and about 1.5 billion had been living below that line in 1981.

The new estimates continue to assess world poverty by the standards of the poorest countries. The new line of $1.25 for 2005, according to Ravallion and Chen, is the average national poverty line for the poorest 10-20 countries.

"The new estimates are a major advance in poverty measurement because they are based on far better price data for assuring that the poverty lines are comparable across countries," said Ravallion, director of development research at the Bank.

The study's release led to a flurry of calls for increased global actions to fight poverty from some of the world's leading international aid organization and anti-poverty groups.

"This is a pretty grim analysis coming from the World Bank," said Elizabeth Stuart, senior policy advisor at Oxfam International. "Although the overall number of people living under the poverty line has come down, you still have a quarter of the developing world living on less than $2 a day."

Stuart also voiced concern about the negative impact of the recent increase in food prices on worldwide efforts to fight poverty, which, she thinks, will leave half a billion more people living in miserable conditions.

"The urgency to act has never been greater; the clock is ticking," she said, "especially in sub-Saharan Africa where half the population of the continent lives in extreme poverty, a figure that hasn't changed for over 25 years."

According to ActionAid, an independent group fighting against poverty worldwide, much of the sub-Saharan region is now "reaching a tipping point" with increasing numbers of people unable to cope as food prices rise. Its analysts say Ethiopia, Kenya, Somalia, Eritrea, and Djibouti remain extremely affected by poverty.

"If nothing is done, the situation could easily become catastrophic," the group warned in a statement. In Ethiopia, the government estimates that 4.6 million people need emergency food aid. Less documented is the disastrous food crisis in Kenya, with 1.2 million people already affected and numbers rising daily.

In their reflections on the study's results, the World Bank officials and researchers seemed optimistic about the possibility of bringing down the numbers of people living in extreme poverty by the year 2015.

"The new data confirm that the world will likely reach the first Millennium Development Goal of halving the 1990 level of poverty by 2015 and that poverty has fallen by about one percentage point a year since 1981," said Justin Lin, chief economist at the Bank.

"However," he added in a statement, "the sobering news that poverty is more pervasive than we thought means we must redouble our efforts, especially in Sub-Saharan Africa."

The new data show that marked regional differences in progress against poverty persist. Poverty in East Asia has fallen from nearly 80 percent of the population living below $1.25 a day in 1981 to just 18 percent in 2005.

However, the study also shows that the poverty rate in Sub-Saharan Africa remains at 50 percent in 2005 -- no lower than in 1981, although with more encouraging recent signs of progress.

Driven by concerns over the persistent extent of poverty worldwide, groups like Oxfam and ActionAid are trying to turn up the heat on the international community to take immediate and urgent steps to achieve the Millennium Development Goals.

"All eyes will now turn to the special UN event looking at the global poverty goals in New York next month," said Oxfam's Stuart. "Heads of state, business leaders, and others will need to do more than to deliver fine speeches and re-commit to act on tackling poverty.

"A clear plan of action is needed on how we will lift hundreds of millions out of extreme poverty," she added in a statement.

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Russia stands up from its knees

Pravda, 22 August 2008

Long-term consequences of the recent events in the Caucasus are still unclear. The sides involved in the conflict have said everything that they considered necessary to say under the current political situation. The unrecognized republics of South Ossetia and Abkhazia have survived another bloody conflict with Georgia. The conflict has proved that it is absolutely impossible for the three nations to live within the borders of one legal state. It means that the two republics will ask Moscow to recognize their independence again.

Georgia has had an objective impression of its own political administration and its aptitude to the solution of strategic goals. The Georgian military has proved to be absolutely incapable of waging civilized military actions, whereas the authorities of Georgia showed that they did not care to think about their people.

Russia was forced to launch a massive military action in response to Georgia’s aggression. The Russian troops tested their skills on the enemy armed with US, Ukrainian and Israeli weapons.
US presidential runoffs did not miss a good opportunity to exercise their views in foreign politics. For the first time in many years, Washington’s hawks and their secretary of state became honest in their statements about Russia.

Politics is full of cynicism. Georgia was obviously solving its own problems shelling Tskhinvali with bombs and missiles at night. Thousands of Ossetians were thinking about their future existence.

Anti-Russian sentiments were voiced in Washington, Brussels, Kiev, Warsaw, etc. Russia, Europe and the USA had their own reasons to set their claims to each other, of course. However, Georgia and South Ossetia were quickly moved into the background against the issues of the US-Polish missile deal and the future of Russia’s fuel shipments to Europe. Moscow stood up to defend its geopolitical interests, whereas NATO stood up against Russia, and the USA demonstrated its real influence in the world, which in its turn proved to be indifferent to Washington’s views about a small democratic country of Georgia.

The Caucasian knot became a classic example of the beginning of a global crisis. The crisis appeared at the time, when Russia decided to pass from words to deeds for the first time in its recent history. The West was obviously surprised and scared.

The institutions, which imitated the maintenance of peace on the globe, appeared to be worthless organizations. The OSCE became a participant of the conflict because the Georgian administration had previously informed the organization of the imminent attack on South Ossetia. NATO showed that it was unwilling to find itself in a tough opposition against Russia. As for the United Nations, there were no illusions regarding the efficiency of this organization before. Its headquarters can only be good for televising international discussions, but they can not be a platform where consolidated and efficient decisions are made.

The crisis in South Ossetia has split the Western society. Such a large variety of opinions and views in European and American media could last be seen on the threshold of USA’s incursion in Iraq.

It is an open secret that the world has a rather mean opinion of Russia. However, many Western journalists urge their leaders to finally stop annoying the Russian bear, especially when it comes to Russia’s influence in its historic regions.

The Western media have always been quite precautious in their attitude to Russia. Their current approach carries one simple message. The West should have tamed Russia a decade ago, but now it just has to deal with it.

Russia has exercised a strong determination to rise from its knees, although it has not stood out yet. Its actions in South Ossetia and Georgia have tested Russia’s military, diplomatic and political possibilities. It seems that Moscow has been winning the fierce fight in foreign policy, although it does not intend to win the fight at all costs. Russia depends on the West just as like the West depends on Russia.

Russia must do its best not to step into the euphoria of the rising superpower. It is worthy of note that even skeptics acknowledged the new quality of Russia’s policies as a result of Moscow’s political restraint in everything about the recent military activity in the Caucasus.

If Moscow maintains the new status, then the conflict in South Ossetia will become a springboard for serious geopolitical changes in the world. Splitting NATO, Turkey’s opposition to the USA, the nuclear problem of Iran - these are only a few issues of the developing crisis.

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War between Russia and Georgia orchestrated from USA

09.08.2008 Source: Pravda.Ru

The US administration urged for an immediate cease-fire in the conflict between Russia and Georgia over the unrecognized republic of South Ossetia.

In the meantime, Russian officials believe that it was the USA that orchestrated the current conflict. The chairman of the State Duma Committee for Security, Vladimir Vasilyev, believes that the current conflict is South Ossetia is very reminiscent to the wars in Iraq and Kosovo.

“The things that were happening in Kosovo, the things that were happening in Iraq – we are now following the same path. The further the situation unfolds, the more the world will understand that Georgia would never be able to do all this without America. South Ossetian defense officials used to make statements about imminent aggression from Georgia, but the latter denied everything, whereas the US Department of State released no comments on the matter. In essence, they have prepared the force, which destroys everything in South Ossetia, attacks civilians and hospitals. They are responsible for this. The world community will learn about it,” the official said.

In the meantime, it became known that the Georgian troops conducted volley-fire cleansings of several South Ossetian settlements, where people’s houses were simply leveled.

“The number of victims with women, children and elderly people among them, can be counted in hundreds and even thousands,” a source from South Ossetian government in the capital of Tskhinvali said.

The head of the Russian Foreign Ministry, Sergei Lavrov, told reporters that Georgia’s actions in South Ossetia question its consistency as a state and as a responsible member of the international community, Interfax reports.

"Civilians, including women, children and elderly people, are dying in South Ossetia. In addition to that, Georgia conducts ethnic scouring in South Ossetian villages. The situation in South Ossetia continues to worsen every hour. Georgia uses military hardware and heavy arms against people. They shell residential quarters of Tskhinvali [the capital] and other settlements. They bomb the humanitarian convoys. The number of refugees continues to rise – the people try to save their lives, the lives of their children and relatives. A humanitarian catastrophe is gathering pace,” Russia’s Foreign Minister said.

The minister added that the Georgian administration ignored the appeal from the UN General Assembly to observe the Olympic truce during the Beijing Olympics.

“The Georgian administration has found the use to its arms, which they have been purchasing during the recent several years,” Lavrov said. “The fact that Georgian peacemakers in the structure of joint peacemaking forces opened fire on their Russian comrades from one and the same contingent speaks for itself, I think,” the minister added.

“Now it is clear to us why Georgia never accepted Russia’s offer to sign a legally binding document not to use force for the regulation of the South Ossetian conflict,” Lavrov said. “Not so long ago, before the military actions in South Ossetia, Georgia’s President Saakashvili said that there was no point in such a document because Georgia would not use force against its people, as he said. It just so happens that it is using it,” Sergei Lavrov said.

Sergei Lavrov believes that the international community should stop turning a blind eye on Georgia’s active deals to purchase arms.

“We have repeatedly warned that the international community should not turn a blind eye on massive purchases of offensive arms, in which the Georgian administration has been involved during the recent two years,” Lavrov said.

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Future Based On History!! Steven D. Green gets 90 Days and a slap on the wrist for rape and murder! Released after time served!!

Published on Thursday, July 6, 2006 by Los Angeles Times

In Cold Blood: Iraqi Tells of Massacre at Farmhouse!!

A cousin describes finding the shot and shattered bodies. A U.S. soldier is in custody.

by Raheem Salman and J. Michael Kennedy

BAGHDAD — He was the first to enter the charred farmhouse where the bodies of his relatives lay strewn about the floor, shot and bludgeoned to death.

And he watched more than three months later as a U.S. Army officer took the two surviving children in his arms, barely able to hold back tears as he told them that the people who had killed their family would be punished.

"Never in my mind could I have imagined such a gruesome sight," Abu Firas Janabi said of the day in March when his cousin, Fakhriya Taha Muhsen; her husband, Kasim Hamza Rasheed; and their two daughters were slain and their farmhouse set ablaze.

"Kasim's corpse was in the corner of the room, and his head was smashed into pieces," he said. The 5-year-old daughter, Hadel, was beside her father, and Janabi said he could see that Fakhriya's arms had been broken.

In another room, he found 15-year-old Abeer, naked and burned, with her head smashed in "by a concrete block or a piece of iron."

"There were burns from the bottom of her stomach to the end of her body, except for her feet," he said.

"I did not believe what I was seeing. I tried to fool myself into believing I was in a dream. But the problem was that we were not dreaming. We put a piece of cloth over her body. Then I left the house together with my wife."

At least four American soldiers from a nearby checkpoint are the prime suspects. The case, which includes the alleged rape of the older daughter, has caused a firestorm in the United States and Iraq. And the soldiers, including one charged Monday with rape and murder, have become lurid symbols of the American military at its worst.

The image has not been helped in recent weeks by the emergence of other accusations that U.S. soldiers had killed Iraqi civilians.

Iraqi Prime Minister Nouri Maliki complained Wednesday that immunity from Iraqi prosecution had encouraged atrocities by American troops. And the U.S. military is clearly on the defensive. On Wednesday, Army Maj. Gen. William B. Caldwell IV, the chief military spokesman in Iraq, defended the troops here, complaining that the "acts of a few outweigh the deeds of many."

Janabi, who has emerged as a potential witness, has been interviewed by a U.S. investigator.

He lives about half a mile from the scene of the killings, just outside the town of Mahmoudiya. It's agricultural country, where the small farms are divided by mesh wire fences and the people who toil on them make a subsistence living.

Janabi and his wife were home March 12 when a neighbor ran to tell him that the farmhouse of his cousin and her husband was on fire and that he could see slain family members inside the burning building.

Janabi said that when he arrived at the house, he began to call for others to help him.

"But nobody came," he said in a telephone interview Tuesday from Mahmoudiya, describing the eeriness he felt as he and his wife stood there. "I felt that I had made a disastrous decision. I felt I had made a mistake to rush so quickly to the house, because if the murderers were still there, they would kill me as well."

He and his wife had to douse some of the flames before they could enter the home.

The couple had found the two young boys in the family crying as they stood outside the farmhouse, where they could see the bodies inside. The boys had been at school when the killings occurred but were home by the time Janabi and his wife arrived.

Together, they went to a checkpoint guarded by Iraqi soldiers to tell them what had happened. Then they went back to the house and watched as the bodies were placed in nylon bags and taken to a nearby Iraqi base.

Janabi said Abeer was not in school and, like other peasant girls, seldom left the house. But he said that three days before the killings, the Rasheed family was at his house and his cousin was complaining that the American soldiers at the nearby guard post were constantly searching her house. Janabi said the parents believed that the "girl was the target."

"I suggested they come and live in the house beside mine that was empty," Janabi said. "But they said, 'There are a lot of families close to us, and nothing bad will happen.' "

Janabi said he returned to the burned-out house the day after the attack as villagers gathered to scavenge for furniture. He asked the villagers whether they knew of any enemies that Kasim had made. They answered no, saying he was just a poor farmer like them who barely made ends meet, working in a Baghdad factory to earn an extra $3 a day. But the villagers had heard stories about the slayings.

In one story, the killers wore black shirts and military pants. In another, they were wearing track suits, and in a third, there was a dog with them.

Janabi said he suspected the Americans because the dozens of shots fired would have been heard by U.S. troops at the nearby checkpoint. And from what he could gather, the killers were at the house for more than two hours, too long for them to have gone unnoticed by the Americans. He also said he suspected that whoever carried out the killings had used Kasim's AK-47 assault rifle, the only item that Janabi said was missing from the house.

Initially, U.S. military officials said the killings were the result of intra-Iraqi feuding, a plausible conclusion given the dozens of revenge killings that happen each day in the country. But a U.S. soldier came forward recently with rumors of American involvement in the alleged rape and killings.
On Monday, Steven D. Green, 21, a former private with the 502nd Infantry Regiment, was charged in Charlotte, N.C., in the case. The Army has said that no other soldiers have been charged or detained, but that several were under close supervision in Iraq.

Janabi said he learned of the inquiry involving the soldiers last week, and an American investigator asked him to tell his side of the story.

"He was saying that he wants to find out the truth," Janabi said. "I told him I didn't want any money or compensation. The most important thing is that the criminal must be punished in a punishment in the same level of the crime he committed. He must not be imprisoned for four to six months and that is all."

Janabi said he asked the investigator why all this was happening now, when the killings took place three months earlier.

"He told me that a soldier confessed and we want to know the truth," he said.

Then, Janabi said, the investigator told him that a high-ranking U.S. officer wished to pay his condolences to the family. The next day, he brought Fakhriya's cousin, Mohammed, to the base along with the two boys to meet the commander.

"He hugged the children and kissed them several times," Janabi said. "It was hard for him to control his tears."

The discussions, Janabi said, now center on whether the bodies can be exhumed for autopsies. He said they received only a cursory examination when they were taken to the Mahmoudiya hospital in March.

Janabi said that the two boys were with their uncle in the village of Iskandariya, but that their faces told the effects of their misery.

"They lost their father and mother," Janabi said. "They lost their house and sisters. Basically their family was too poor and they have not inherited anything. Their life is deplorable."

Copyright 2006 Los Angeles Times
http://www.commondreams.org/headlines06/0706-02.htm