Analysis of Georgian-Russian conflict and articles with feedback

The US media makes such a habit of sticking its foot in its mouth every time any combination of the words "Russian" and "military" occur that I think we'll have to assume it's genetic. http://www.digitaljournal.com/print/article/258399

In Georgia Clash, a Lesson on U.S. Need for Russia

By HELENE COOPER

WASHINGTON — The image of President Bush smiling and chatting with Prime Minister Vladimir V. Putin of Russia from the stands of the Beijing Olympics even as Russian aircraft were shelling Georgia outlines the reality of America's Russia policy. While America considers Georgia its strongest ally in the bloc of former Soviet countries, Washington needs Russia too much on big issues like Iran to risk it all to defend Georgia.

And State Department officials made it clear on Saturday that there was no chance the United States would intervene militarily.

Mr. Bush did use tough language, demanding that Russia stop bombing. And Secretary of State Condoleezza Rice demanded that Russia "respect Georgia's territorial integrity."

What did Mr. Putin do? First, he repudiated President Nicolas Sarkozy of France in Beijing, refusing to budge when Mr. Sarkozy tried to dissuade Russia from its military operation. "It was a very, very tough meeting," a senior Western official said afterward. "Putin was saying, 'We are going to make them pay. We are going to make justice.' "

Then, Mr. Putin flew from Beijing to a region that borders South Ossetia, arriving after an announcement that Georgia was pulling its troops out of the capital of the breakaway region. He appeared ostensibly to coordinate assistance to refugees who had fled South Ossetia into Russia, but the Russian message was clear: This is our sphere of influence; others stay out.

"What the Russians just did is, for the first time since the fall of the Soviet Union, they have taken a decisive military action and imposed a military reality," said George Friedman, chief executive of Stratfor, a geopolitical analysis and intelligence company. "They've done it unilaterally, and all of the countries that have been looking to the West to intimidate the Russians are now forced into a position to consider what just happened."

And Bush administration officials acknowledged that the outside world, and the United States in particular, had little leverage over Russian actions.

"There is no possibility of drawing NATO or the international community into this," said a senior State Department official in a conference call with reporters.

The unfolding conflict in Georgia set off a flurry of diplomacy. Ms. Rice and other officials at the State Department and the Pentagon have been on the telephone with Russia's foreign minister, Sergey V. Lavrov, and other Russian counterparts, as well as with officials in Georgia, urging both sides to return to peace talks.

The European Union — and Germany, in particular, with its strong ties to Russia — called on both sides to stand down and scheduled meetings to press their concerns. At the United Nations, members of the Security Council met informally to discuss a possible response, but one Security Council diplomat said it remained uncertain whether much could be done.

"Strategically, the Russians have been sending signals that they really wanted to flex their muscles, and they're upset about Kosovo," the diplomat said. He was alluding to Russia's anger at the West for recognizing Kosovo's independence from Serbia.

Indeed, the decision by the United States and Europe to recognize Kosovo may well have paved the way for Russia's lightning-fast decision to send troops to back the separatists in South Ossetia. During one meeting on Kosovo in Brussels this year, Mr. Lavrov, the foreign minister, warned Ms. Rice and European diplomats that if they recognized Kosovo, they would be setting a precedent for South Ossetia and other breakaway provinces.

For the Bush administration, the choice now becomes whether backing Georgia — which, more than any other former Soviet republic has allied with the United States — on the South Ossetia issue is worth alienating Russia at a time when getting Russia's help to rein in Iran's nuclear ambitions is at the top of the United States' foreign policy agenda.

One United Nations diplomat joked on Saturday that "if someone went to the Russians and said, 'OK, Kosovo for Iran,' we'd have a deal."

That might be hyperbole, but there is a growing feeling among some officials in the Bush administration that perhaps the United States cannot have it all, and may have to choose its priorities, particularly when it comes to Russia.

The Bush administration's strong support for Georgia — including the training of Georgia's military and arms support — came, in part, as a reward for its support of the United States in Iraq. The United States has held Georgia up as a beacon of democracy in the former Soviet Union; it was supposed to be an example to other former Soviet republics of the benefits of tilting to the West.

But that, along with America and Europe's actions on Kosovo, left Russia feeling threatened, encircled and more convinced that it had to take aggressive measures to restore its power, dignity and influence in a region it considers its strategic back yard, foreign policy experts said.

Russia's emerging aggressiveness is now also timed with America's preoccupation with Iraq and Afghanistan, and the looming confrontation with Iran. These counterbalancing considerations mean that Moscow is in the driver's seat, administration officials acknowledged.

"We've placed ourselves in a position that globally we don't have the wherewithal to do anything," Mr. Friedman of Stratfor said. "One would think under those circumstances, we'd shut up."

One senior administration official, when told of that quote, laughed. "Well, maybe we're learning to shut up now," he said. He asked that his name not be used because he was not authorized to speak publicly on the issue.

http://www.nytimes.com/2008/08/10/world/europe/10diplo.html?_r=1&em=&pagewanted=print&oref=slogin

The streets, largely empty of civilians, were full of Georgian military reservists idling in the shadows of shuttered shops as they waited to move out and join the fight against Russian forces that have bombed the city twice in as many days.

Among them were latter-day Rambos in bandannas and middle-age men with potbellies and red faces... http://www.washingtonpost.com/wp-dyn/content/article/2008/08/09/AR2008080901769.html?hpid=topnews

http://english.aljazeera.net/news/europe/2008/08/200881012239836481.html Georgia said a Russian air raid had "completely devastated" the Black Sea port of Poti in attacks that the country's UN ambassador likened to "a full-scale military invasion".

http://www.independent.co.uk/opinion/leading-articles/leading-article-a-war-on-our-blind-side-889635.html?service=Print

http://www.arabnews.com/?page=7&section=0&article=112587&d=9&m=8&y=2008 ...ONLY one thing is clear about the fighting that has broken out in Georgia and that is that it is madness

Russian military vehicles line the road to the South Ossetia area of Georgia.

The official was not authorized to speak on the record due to the sensitive nature of the diplomacy. http://www.cnn.com/2008/WORLD/europe/08/09/georgia.reax/

http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ7.TtiiQI1Y&refer=worldwide

http://www.newsnow.co.uk/h/Breaking+News/Russia||Georgia||South+Ossetia+Conflict

http://www.nytimes.com/2008/08/10/weekinreview/10traub.html?_r=1&ref=world&pagewanted=print&oref=slogin

MOSCOW (Reuters) - The commander of the Russian troops sent to help separatists in Georgia's breakaway region of South Ossetia was wounded in an exchange of fire with Georgian forces on Saturday, Russian state television reported.

Lt. General Anatoly Khrulyov was wounded when a column of armored vehicles of his 58th army came under fire by Georgian forces outside the rebel capital of Tskhinvali, Vesti-24 channel said in a report early on Sunday.

http://www.reuters.com/article/worldNews/idUSL949449820080809

Georgian conflict affects oil

http://www.ogj.com/display_article/336608/7/ONART/none/GenIn/1/BTC-export-alternatives-on-hold-as-Russia,-Georgia-clash/ BP PLC, already acknowledging a loss of significant throughput along the Baku-Tiblisi-Ceyhan oil pipeline, appears to be facing wider problems in the Caucasus region after the Russian government sent troops and bombarded locations in Georgia.

The Russian incursion came Aug. 8 after Georgia earlier launched a major military offensive to retake the breakaway province of South Ossetia, threatening to ignite a broader conflict.

Analysis: energy pipeline that supplies West threatened by war Georgia conflict ... http://www.timesonline.co.uk/tol/news/world/europe/article4484849.ece

http://poligazette.com/2008/08/09/russias-attack-and-the-united-states/ ... All of this begs the question where the United States are. After all, Georgia is a staunch US ally and Russia the old Cold War enemy.

http://debka.com/article.php?aid=1358

Israel backs Georgia in Caspian Oil Pipeline Battle with Russia

DEBKAfile Exclusive Report

August 8, 2008

Georgian tanks and infantry, aided by Israeli military advisers, captured the capital of breakaway South Ossetia, Tskhinvali, early Friday, Aug. 8, bringing the Georgian-Russian conflict over the province to a military climax.

Russian prime minister Vladimir Putin threatened a "military response."

Former Soviet Georgia called up its military reserves after Russian warplanes bombed its new positions in the renegade province.

In Moscow's first response to the fall of Tskhinvali, president Dimitry Medvedev ordered the Russian army to prepare for a national emergency after calling the UN Security Council into emergency session early Friday.

Reinforcements were rushed to the Russian "peacekeeping force" present in the region to support the separatists.

Georgian tanks entered the capital after heavy overnight heavy aerial strikes, in which dozens of people were killed.

Lado Gurgenidze, Georgia's prime minister, said on Friday that Georgia will continue its military operation in South Ossetia until a "durable peace" is reached. "As soon as a durable peace takes hold we need to move forward with dialogue and peaceful negotiations."

DEBKAfile's geopolitical experts note that on the surface level, the Russians are backing the separatists of S. Ossetia and neighboring Abkhazia as payback for the strengthening of American influence in tiny Georgia and its 4.5 million inhabitants. However, more immediately, the conflict has been sparked by the race for control over the pipelines carrying oil and gas out of the Caspian region.

The Russians may just bear with the pro-US Georgian president Mikhail Saakashvili's ambition to bring his country into NATO. But they draw a heavy line against his plans and those of Western oil companies, including Israeli firms, to route the oil routes from Azerbaijan and the gas lines from Turkmenistan, which transit Georgia, through Turkey instead of hooking them up to Russian pipelines.

Saakashvili need only back away from this plan for Moscow to ditch the two provinces' revolt against Tbilisi. As long as he sticks to his guns, South Ossetia and Abkhazia will wage separatist wars.

DEBKAfile discloses Israel's interest in the conflict from its exclusive military sources:

Jerusalem owns a strong interest in Caspian oil and gas pipelines reach the Turkish terminal port of Ceyhan, rather than the Russian network. Intense negotiations are afoot between Israel Turkey, Georgia, Turkmenistan and Azarbaijan for pipelines to reach Turkey and thence to Israel's oil terminal at Ashkelon and on to its Red Sea port of Eilat. From there, supertankers can carry the gas and oil to the Far East through the Indian Ocean.

Aware of Moscow's sensitivity on the oil question, Israel offered Russia a stake in the project but was rejected.

Last year, the Georgian president commissioned from private Israeli security firms several hundred military advisers, estimated at up to 1,000, to train the Georgian armed forces in commando, air, sea, armored and artillery combat tactics. They also offer instruction on military intelligence and security for the central regime. Tbilisi also purchased weapons, intelligence and electronic warfare systems from Israel.

These advisers were undoubtedly deeply involved in the Georgian army's preparations to conquer the South Ossetian capital Friday.

In recent weeks, Moscow has repeatedly demanded that Jerusalem halt its military assistance to Georgia, finally threatening a crisis in bilateral relations. Israel responded by saying that the only assistance rendered Tbilisi was "defensive."

This has not gone down well in the Kremlin. Therefore, as the military crisis intensifies in South Ossetia, Moscow may be expected to punish Israel for its intervention.

Georgia is key EU energy corridor

http://www.bloomberg.com/apps/news?pid=20601081&sid=awA5_BpkTZT0&refer=australia
Georgia is a key link in a U.S.-backed ``southern energy corridor'' that connects the Caspian Sea region with world markets, bypassing Russia. The BP Plc-led Baku-Tbilisi-Ceyhan oil pipeline to Turkey runs about 100 kilometers (60 miles) south of the South Ossetian capital, Tskhinvali.

The U.S. seeks to connect Central Asia natural gas supplies with European markets, skirting Russia in an attempt to weaken the grip of Russia's state-run OAO Gazprom energy company. One planned pipeline route runs from the Georgia-Turkey border.

http://en.wikipedia.org/wiki/South_Caucasus_Pipeline

http://en.wikipedia.org/wiki/Trans-Caspian_Gas_Pipeline

The Trans-Caspian Gas Pipeline (Turkmen: Transhazar turbaly geçiriji) is a proposed submarine
pipeline between Türkmenbaşy in Turkmenistan, and Baku in Azerbaijan. By some proposals it will also include connection between Tengiz Field in Kazakhstan, and Türkmenbaşy. The aim of the Trans-Caspian Gas Pipeline project is the transportation of natural gas from Kazakhstan and Turkmenistan to central Europe, circumventing both Russia and Iran.

http://en.wikipedia.org/wiki/Baku-Tbilisi-Ceyhan_pipeline

The Baku-Tbilisi-Ceyhan pipeline (sometimes abbreviated as BTC pipeline) is a crude oil pipeline that covers 1,768 kilometres (1,099 mi) from the Azeri-Chirag-Guneshli
oil field in the Caspian Sea to the Mediterranean Sea. It connects Baku, the capital of Azerbaijan; Tbilisi, the capital of Georgia; and Ceyhan, a port on the south-eastern Mediterranean coast of Turkey, hence its name. It is the second longest oil pipeline in the world after the Druzhba pipeline. The first oil that was pumped from the Baku end of the pipeline on May 10, 2005 reached Ceyhan on May 28, 2006.^[1]

http://en.wikipedia.org/wiki/Poti_Sea_Port

In 2007, the total throughput was 7.7 million tons and container handling was 185,000 TEU.^[2]

In April 2008, Georgia sold a 51% stake of the Poti port area to the Investment Authority of the UAE's Ras Al Khaimah (RAK) emirate to develop a free economic zone (FEZ) in a 49-year management concession, and to manage a new port terminal. The creation of a new FEZ was officially inaugurated by the President of Georgia
Mikheil Saakashvili on April 15, 2008.^[3]

Euro Falls the Most in 8 Years on Reduced Bets for Higher Rate

http://www.bloomberg.com/apps/news?pid=20601087&sid=at.u1aw0Pjy8&refer=worldwide

Euro Falls the Most in 8 Years on Reduced Bets for Higher Rate

By Ye Xie and Anchalee Worrachate

Aug. 8 (Bloomberg) -- The euro fell the most in almost eight years against the dollar as traders pared bets the European Central Bank will raise interest rates as the economy slows.

The euro is poised for its biggest weekly loss since January 2005 after ECB President Jean-Claude Trichet yesterday said economic growth will be ``particularly weak'' through the third quarter. An index that tracks the dollar against the currencies of six U.S. trading partners touched the highest since February. Crude oil fell to a three-month low.

``This is the beginning of a new chapter for the dollar as Trichet and other central banks are paying more attention to the downside risk to growth,'' said Dustin Reid, a senior currency strategist at ABN Amro Bank NV in Chicago. ``The decline of oil prices is a significant driver behind this dollar rally because it enables other central banks to turn their eyes away from inflation and focus on growth.''

The euro declined 1.95 percent to $1.5032 at 10:23 a.m. in New York and reached $1.5005, the lowest level since Feb. 27, from $1.5325 yesterday. It dropped as much as 2.08 percent, the biggest one-day drop since Sept. 6, 2000. Against the yen, the European currency traded at 165.84, from 167.70. The dollar rose 0.5 percent to 109.97 yen after touching 110.08, the strongest since Jan. 10.

Moving Average

The euro's decline below $1.53 and the break of the 200-day moving average at $1.5226 ``marks a significant change in sentiment for the dollar,'' pointing to a further decline to $1.46, Kevin Edgeley, a London-based technical analyst at Goldman Sachs Group Inc., wrote in a report today.

The euro has declined 3.1 percent against the dollar in its fourth weekly decline, the worst losing streak since May 2007. Against the yen, the U.S. currency has advanced 2.1 percent, heading for its biggest weekly gain in almost two months.

``The most important aspect of the dramatic collapse in the euro dollar is the absence of confirmation from other markets,'' said David Woo, global head of currency strategy at Barclays Capital Inc. in London. ``None of the typical drivers of the euro-dollar in the past couple of years could have accounted for the magnitude of this move, which leads one to conclude that this is a technical driven move.''

The South African rand led losses among the most-traded currencies as the prices of gold and platinum dropped, reducing prospects for export earnings from the country's biggest exports. The greenback rose to a six-month high against the Australian dollar, and advanced to the highest since September against the New Zealand dollar on speculation the central banks will cut borrowing costs.

Russia's Ruble

The Russian ruble fell by the most in 2 1/2 years against a dollar-euro basket used by the government after Georgia's Interior Ministry said four Russian fighter-jets entered Georgian airspace and bombed the towns of Gori and Kareli, boosting the risk of war. The ruble dropped as much as 0.8 percent against the basket.

The pound fell below $1.93 for the first time since March 2007 as the Bank of England kept its main interest rate steady at 5 percent yesterday after inflation accelerated and the economy teetered on the brink of a recession. It has dropped 2.7 percent this week to $1.9210, its biggest weekly drop in three years.

The Dollar Index on the ICE futures exchange reached 75.713 today, the highest since Feb. 21.

`No Bias'

Trichet said yesterday he has ``no bias'' or ``pre- commitment'' toward future rate movements after the central bank left the main refinancing rate at 4.25 percent. He told reporters in Frankfurt that while inflation remains a threat, risks to economic growth are ``materializing.''

European retail sales dropped by the most in at least 13 years in June, the European Union said on Aug. 5. Consumer confidence slid in July by the most since the Sept. 11, 2001, terrorist attacks, the European Commission said July 30.

Traders pared bets the ECB will lift rates a second time this year after increasing its main rate by a quarter-point last month. The implied yield on the December interest rate futures, an indication of expectations, retreated 2 basis pointsto 4.94 percent today.

The New Zealand dollar slumped as much as 2.2 percent to 69.84 U.S. cents, the biggest loss in two months. Australia's dollar dropped 1.7 percent, falling for a fourth day, to 89.10 U.S. cents, from 90.66 cents yesterday. The Reserve Bank of Australia said it may lower borrowing costs, after keeping its benchmark interest rate at a 12-year high of 7.25 percent this week.

Oil, Metals, Crops

Crude oil, metal and crop prices fell as the dollar climbed, reducing the appeal of commodities as a currency hedge. Oil has declined to $118.15 a barrel since touching the record of 147.27 on July 11.

The euro-dollar exchange rate and oil have had a correlation of 0.9 in the past year, according to Bloomberg calculations. A reading of 1 would mean they moved in lockstep.

``Oil prices have turned out to be much more supportive of the dollar than I expected,'' said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., Japan's largest currency broker. ``It does temporarily relieve some concern that the U.S. economy will weaken further. This is a plus for sentiment.''

To contact the reporters on this story: Ye Xie in New York at Yxie6@bloomberg.net; Anchalee Worrachate in London at aworrachate@bloomberg.net;

Last Updated: August 8, 2008 10:32 EDT

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Wall St. risk models failed

A group of Wall Street executives released a report on Wednesday that outlined how the industry failed to foresee the financial meltdown of the last year and what companies can do to improve risk management.

http://www.nytimes.com/2008/08/07/business/07report.html?_r=1&em=&pagewanted=print&oref=slogin

In 1769, short of funds to rebuild Prussia after attacks by Russia, Sweden and Austria, Frederick the Great let aristocrats, churches and monasteries raise money by pledging their estates as security to investors. ... http://www.bloomberg.com/apps/news?pid=20601109&sid=amy5j45Oa9Ag&refer=home#

Investors' childlike demand for safety has made the financial world terribly risky. As we rebuild our broken financial system, we must not pretend that risk can be regulated or innovated away. We must demand that investors choose risks and bear consequences. We need more, and more creative, risk-taking, not false promises of safety that taxpayers will inevitably be called upon to keep. ... http://www.nakedcapitalism.com/2008/08/too-much-risk.html

NY and Less-Talented in trouble

"I'm worried by what's coming," he said gloomily. "But this is an opportunity for the talented to get ahead. The less talented will be weeded out."

"I'm worried by what's coming," he said gloomily. "But this is an opportunity for the talented to get ahead. The less talented will be weeded out."

http://www.breitbart.com/article.php?id=080804143812.o8igyxho&show_article=1

Wealthy hit by crunch

http://wcbstv.com/topstories/Wealthy.Spending.Down.2.786657.html

Wealthy Begin Feeling The Pain In Down Economy-Less Money Allocated For Luxury Goods, Investments And Credit Cards Are Signs That Rich, Too, Getting Squeezed

IS THE U.S. BANKING SYSTEM SAFE?

http://www.nolanchart.com/article4339.html ...!!! There is only $274 billion of the $6.84 trillion as cash on hand at banks.

http://www.marketoracle.co.uk/Article5733.html ...Green Mountains loom above the still waters. A loon calls from the next lake over. Who would guess that that not far from such serenity the world's most powerful nation was teetering on the brink of disaster? Though here in the bosom of nature one wonders why we should be surprised. Nations and empires come and then they go.

Instead, the hidden idea behind the euro was to literally force the creation of other regional currencies throughout the world.... http://www.marketoracle.co.uk/Article5725.html

Reality is now breaking through the delusion. Some people respond by closing their minds and asserting that the market will come back, "because it always does.".... http://www.larouchepub.com/other/2002/2929two_yrs_crsh.html

http://www.businessspectator.com.au/bs.nsf/Article/NAB-will-shock-Wall-Street-GV4M7?OpenDocument&src=stf

This isn't a "sale"; it's more like abandoning a sinking ship. The investment chieftains are getting scorched by their downgraded assets and have started dumping them at any cost. There's no market for mortgage-backed anything now, and there won't be until housing finds a bottom. By the time that happens, most of the CEOs and CFOs in the mega-brokerage houses will be squatting on street corners on the lower East Side with tin cup in hand. It's that bad... http://onlinejournal.com/artman/publish/printer_3571.shtml

Reality is now breaking through the delusion. Some people respond by closing their minds and asserting that the market will come back, "because it always does.".... http://www.larouchepub.com/other/2002/2929two_yrs_crsh.html

Disasters are hardly unique to our time. Periodic drought, flood, wildfire, recession, boom-and-bust cycles, famine, wars and rumors of wars, earthquakes, volcanic eruptions, tsunamis, tornadoes, hurricanes—all have darkened the human experience for generations.

Yet something unique in this tired old world's history is now occurring. The realists within our society, the real thinkers, those who deeply consider just what is going on upon planet Earth, are taking notice. All of a sudden, there appears to be a confluence of numerous catastrophes that are affecting not just one or two nations here and there, but the entire global system. .... http://www.thetrumpet.com/print.php?q=5377.0.107.0

EUOBSERVER / COMMENT - Anybody who believes the Eurozone is immune to the havoc created in the Anglo-Saxon economies by the credit crunch would do well to look again. Recent figures suggest the outlook for the EU-15 is poor - and if one factors in weakness of the Eurozone's economic governance, the outlook is positively grim. ... http://euobserver.com/9/26571?print=1

Regional banks are going to fall by the dozen before this is over. And some of the very largest banks will be taken over or go bankrupt. The financial sector needs to shrink because a lot of its business is gone and it's never going to come back. If the airline industry has too few passengers we see airlines going out of business. The Federal Reserve seems to have this picture that they can engineer things so that all the financial firms will shrink by fifteen percent. That's not the way a capitalistic system works. http://www.welt.de/wirtschaft/arti2258238/American_economy_will_become_more_European.html

SO ALAN GREENSPAN – former chairman of the Federal Reserve – thinks this equals the Great Crash, if not out-bads it.

"It's getting increasingly evident that this is a once-in-a-century type of phenomenon," http://news.goldseek.com/GoldSeek/1217609460.php

On Friday, British Airways, announcing an 88% plunge in profits, blamed the collapse on the "worst trading environment" the aviation industry has ever experienced.

http://business.scotsman.com/economics/Bill-Jamieson-We-need-a.4352281.jp

http://www.elliottwave.com/freeupdates/archives/2008/08/01/The-Biggest-Financial-Shoe-Drops-Consumer-Spending.aspx

Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite. t's official. Mark your calendars. The crash of the U.S. economy has begun. It was announced the morning of Wednesday, June 13, 2007, by economic writers Steven Pearlstein and Robert Samuelson in the pages of the Washington Post, one of the foremost house organs of the U.S. monetary elite.

http://www.globalresearch.ca/index.php?context=va&aid=5964

Depression and realistic economic numbers from alternative sources

http://www.globalresearch.ca/index.php?context=va&aid=9596 What is really taking place, however, is that the producing economy of working men and women is being crushed by the overall debt burden on households, businesses, and governments that could reach $70 trillion by 2010. The financial system, including mortgage giants Fannie Mae and Freddie Mac, is bankrupt, as the debts it is based on cannot be repaid.

www.globalresearch.ca/index.php?context=va&aid=9162 Economic depression in America: Evidence of a withering economy is everywhere

http://www.shadowstats.com/ Shadow Government Statistics

Financial collapse – Legislation + market meltdown

http://www.alternet.org/workplace/93509/america's_economic_free_fall/ ...The same legislation also repealed the federal law prohibiting usury -- the predatory practices that ruin debtors of modest means by lending on terms that ensure borrowers will fail. Usurious lending is now commonplace in America, from credit cards and "payday loans" to the notorious subprime mortgages.

http://www.financialsense.com/Market/wrapup.htm 200 day MA indicates market collapse

http://www.investigatethesec.com/drupal-5.5/node/350
The Federal Reserve Bank of New York expanded efforts to clean up trading in the privately negotiated derivatives markets to include contracts linked to interest rates, commodities and currencies.

JPMorgan Chase & Co., Goldman Sachs Group Inc. and 15 other banks committed to speed up processing and reduce errors in the $454 trillion over-the-counter derivatives market by putting more trading onto electronic platforms and improving the market's infrastructure, the New York Fed said today in a statement. They also committed to start clearing by yearend some credit-default swap trades through a central counterparty that could absorb the failure of a market-maker.

Merrill `Co-Opted' Analysts Backed Auction-Rate Debt

http://www.bloomberg.com/apps/news?pid=20601087&sid=aH7fMLO4eagk&refer=home# Aug. 1 (Bloomberg) -- Four days before Merrill Lynch & Co. stopped supporting the auction-rate securities market and left thousands of individual investors stuck with securities they couldn't sell, the firm's analysts recommended clients buy.

``Reports of the imminent demise of the auction market seem to be greatly exaggerated, again,'' analyst Kevin Conery wrote in a Feb. 8 research note. ``We continue to be impressed by the auction market's resiliency.''

The remarks show Merrill's researchers were ``co-opted'' during a seven-month drive by the New York-based firm's sales force to prevent a meltdown in the $330 billion market, Massachusetts Secretary of State William Galvin alleged yesterday in an administrative complaint filed in Boston. As the sales desk pushed analysts to publish upbeat notes, managers used gallows humor to complain about a ``collapsing'' market and the end of $2,000 dinners.

``Come on down and visit us in the vomitorium!!'' the auction-rate desk's managing director, Frances Constable, wrote to a co-worker in August, as demand began to dry up. ``Market is collapsing,'' another executive cited in Galvin's complaint said in a November 2007 personal e-mail. ``No more $2K dinners at CRU,'' a Manhattan restaurant where the wine list includes dozens of bottles for more than $1,000.

Bank losses shame disgruntled Swiss

http://news.bbc.co.uk/2/hi/business/7532251.stm

Bank losses shame disgruntled Swiss

 

In Zurich's central square trams rumble past the tourist stalls doing a gentle trade in Swiss souvenirs.

But while local chocolate, miniature cuckoo clocks and pen knives are still proving popular in the summer sunshine, another icon of Swiss identity is desperately trying to hold onto its good name.

Paulson suggests covered bonds

http://www.reuters.com/article/newsOne/idUSWEQ00007020080728
WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said the nation's four biggest banks were ready to kick-start a market for covered bonds that could help significantly expand home mortgage financing.

"I believe covered bonds have the potential to increase mortgage financing, improve underwriting standards and strengthen U.S. financial institutions by providing a new funding source," Paulson said in prepared remarks for a press conference on Monday.

Covered bonds, issued by banks and secured by pools of assets like home loans, are widely used in Europe but have only become attractive in the United States since the segment of the mortgage securitization market driven by investment banks dried up last year amid a wave of foreclosures.

http://www.portfolio.com/views/blogs/market-movers/2008/07/08/what-is-a-covered-bond Covered Bonds Explained

http://en.wikipedia.org/wiki/Covered_bonds

http://europe.pimco.com/LeftNav/Bond+Basics/2006/Covered+Bond+Basics.htm Pimco explains covered bonds

http://www.iht.com/articles/2007/11/22/bloomberg/bxloan.php German banks agreed Thursday to suspend trading in pfandbrief mortgage bonds to "calm down" the market following a slump that has shut down trading in the securities, which are the biggest source of funds for home lenders in Europe.

The Association of German Pfandbrief Banks, an industry group that represents securities firms and borrowers in the $1.3 trillion German market, was following advice Wednesday from the European Covered Bond Council to withdraw from interbank trading until Nov. 26.

 

 

 

Cuil debuts

Ex-Google engineers debut 'Cuil' way to search www.cuil.com

By MICHAEL LIEDTKE – 4 hours ago

SAN FRANCISCO (AP) — Anna Patterson's last Internet search engine was so impressive that industry leader Google Inc. bought the technology in 2004 to upgrade its own system.

She believes her latest invention is even more valuable — only this time it's not for sale.

Patterson instead intends to upstage Google, which she quit in 2006 to develop a more comprehensive and efficient way to scour the Internet.

The end result is Cuil, pronounced "cool." Backed by $33 million in venture capital, the search engine plans to begin processing requests for the first time Monday.

Cuil had kept a low profile while Patterson, her husband, Tom Costello, and two other former Google engineers — Russell Power and Louis Monier — searched for better ways to search.

Now, it's boasting time.

For starters, Cuil's search index spans 120 billion Web pages.

Patterson believes that's at least three times the size of Google's index, although there is no way to know for certain. Google stopped publicly quantifying its index's breadth nearly three years ago when the catalog spanned 8.2 billion Web pages.

Cuil won't divulge the formula it has developed to cover a wider swath of the Web with far fewer computers than Google. And Google isn't ceding the point: Spokeswoman Katie Watson said her company still believes its index is the largest.

After getting inquiries about Cuil, Google asserted on its blog Friday that it regularly scans through 1 trillion unique Web links. But Google said it doesn't index them all because they either point to similar content or would diminish the quality of its search results in some other way. The posting didn't quantify the size of Google's index.

A search index's scope is important because information, pictures and content can't be found unless they're stored in a database. But Cuil believes it will outshine Google in several other ways, including its method for identifying and displaying pertinent results.

Rather than trying to mimic Google's method of ranking the quantity and quality of links to Web sites, Patterson says Cuil's technology drills into the actual content of a page. And Cuil's results will be presented in a more magazine-like format instead of just a vertical stack of Web links. Cuil's results are displayed with more photos spread horizontally across the page and include sidebars that can be clicked on to learn more about topics related to the original search request.

Finally, Cuil is hoping to attract traffic by promising not to retain information about its users' search histories or surfing patterns — something that Google does, much to the consternation of privacy watchdogs.

Cuil is just the latest in a long line of Google challengers.

The list includes swaggering startups like Teoma (whose technology became the backbone of Ask.com), Vivisimo, Snap, Mahalo and, most recently, Powerset, which was acquired by Microsoft Corp. this month.

Even after investing hundreds of millions of dollars on search, both Microsoft and Yahoo Inc. have been losing ground to Google. Through May, Google held a 62 percent share of the U.S. search market followed by Yahoo at 21 percent and Microsoft at 8.5 percent, according to comScore Inc.

Google has become so synonymous with Internet search that it may no longer matter how good Cuil or any other challenger is, said Gartner Inc. analyst Allen Weiner.

"Search has become as much about branding as anything else," Weiner said. "I doubt (Cuil) will be keeping anyone at Google awake at night."

Google welcomed Cuil to the fray with its usual mantra about its rivals. "Having great competitors is a huge benefit to us and everyone in the search space," Watson said. "It makes us all work harder, and at the end of the day our users benefit from that."

But this will be the first time that Google has battled a general-purpose search engine created by its own alumni. It probably won't be the last time, given that Google now has nearly 20,000 employees.

Patterson joined Google in 2004 after she built and sold Recall, a search index that probed old Web sites for the Internet Archive. She and Power worked on the same team at Google.

Although he also worked for Google for a short time, Monier is best known as the former chief technology officer of AltaVista, which was considered the best search engine before Google came along in 1998. Monier also helped build the search engine on eBay's online auction site.

The trio of former Googlers are teaming up with Patterson's husband, Costello, who built a once-promising search engine called Xift in the late 1990s. He later joined IBM Corp., where he worked on an "analytic engine" called WebFountain.

Costello's Irish heritage inspired Cuil's odd name. It was derived from a character named Finn McCuill in Celtic folklore.

Patterson enjoyed her time at Google, but became disenchanted with the company's approach to search. "Google has looked pretty much the same for 10 years now," she said, "and I can guarantee it will look the same a year from now."

www.cuil.com