Saturday, August 6, 2011

SEIU Shows No Restraint Despite Restraining Order

John Ransom - SEIU Shows No Restraint Despite Restraining Order

While the rest of us spent the week worrying about what to do to get the U.S. economy going again- with job creation being the biggest issue- those All-American job killers, the various chapters of the SEIU, were up to their usual games of making sure Americans didn’t get paychecks or fair play.

Let’s look at this week’s “hit” parade:

According to the Washington Post a “judge ruled this week that the Service Employees International Union improperly coerced workers caught in the middle of SEIU’s high-stakes turf battle with a breakaway union in California, potentially invalidating a 2010 election involving 43,500 employees” who work in healthcare.

At issue was a competing union’s claims that the SEIU used coercion, intimidation and threats improperly to foil elections that would have helped the other union. Apparently, when you run a union there is a right way and a wrong way to threaten the workers you represent.

“SEIU has been promoting itself an as advocate for labor law reform and workers, and against coercion and intimidation, but no institution has done more to coerce and thwart workers about which union they want to join,” said John Borsos, vice president of the breakaway union via the Post.

A little further up the road, in Washington state, the SEIU was slapped with a restraining order this week when hospital employees tried to call a strike against Olympic Memorial Hospital.

At issue is the long-standing prohibition against public service employees going out on strike and disrupting vital services such as police, firefighting and hospitals. The right to strike had been agreed to in a previous agreement, but since that agreement expired, the common lawful prohibition against public workers going on strike still stands.

“In issuing its order, the Court found that if SEIU members were allowed to strike, the hospital district would ‘suffer actual and substantial injury,’” reports the Sequim Gazette.

Yeah, but that would be nothing to the “actual and substantial injury” that would have been suffered by the patients.

“We are pleased with the Court’s decision on this matter, as it protects our patients,” said OMC CEO Eric Lewis.

Apparently when you run a union there is a right way and a wrong way to threaten the patients your workers are supposed to care for.

In Buffalo, New York workers at a nursing home walked off the job a few days ago because management asked workers with less than six years of service to pay ten percent of the premium for single-employee coverage. Wages were slated to increase and contributions for family insurance plans were to remain the same, says local radio station WBFO 88.7.

Apparently when it comes to threatening the elderly and the infirm, unions can do just about anything they want.

And don’t expect the SEIU assault on America to slacken either.

The union just put $500,000 into a fund with some Hollywood big-shots, including head of Dreamworks Animation, Jeffrey Katzenberg, to try to bolster Obama’s reelection chances.

What a great combination: unions and Hollywood people who play “let’s pretend” for a living.

Maybe now all the threatening, coercion and intimidation can take on a more creative hue.

Maybe Katzenberg can bring us SEIU in 3D.

Oh wait.

No need to animate that. It’s already being done.

today’s KisP fun facts

Knowledge Is Power - I will not be enslaved by "social justice".

today’s KisP fun facts


Debt Will Grow under 'Budget Control Act"

Amid all the sound and fury and the "high noon" drama surrounding the debt-limit deadline and the passing of a deficit reduction measure this week, one discomforting fact emerged: Federal spending will continue to increase and the national debt, now approaching $15 trillion, will grow, not shrink, over the next 10 years.

You might not think so, judging by the reaction found in some of the editorials and columns to the passage of the Budget Control Act of 2011. The budget deal will mean "massive spending cuts borne by the poor, the sick, the elderly and the middle class," wrote Politco's Roger Simon. A New York Times editorial called it "a nearly complete capitulation to the hostage-taking demands of Republican extremists." The headline over a Maureen Dowd column in the same paper called the budget agreement "The Washington Chain Saw Massacre." So what really happened?

The law requires Congress to cut appropriations by about $25 billion for the fiscal year that begins in October. Considering that our federal government will spend $3.7 trillion in the current year, with a $1.5 or $1.6 trillion deficit, $25 billion is 0.6 percent of current spending — a rather modest "massacre" of the budget by those "hostage-taking" extremists. The following year, appropriations may increase by $4 billion. For each year after that, spending is to increase at the rate of inflation.

The Congressional Budget Office calculated that even with those modest restrictions on spending, Congress will spend $917 billion less — including interest on money that won't have to be borrowed — than if spending kept pace with inflation for the entire 10-year period. That, plus the $1.2 trillion in savings the 12-member congressional panel known as the Joint Select Committee on Deficit Reduction is supposed to come up with by November 23, accounts for the $2.1 trillion in "deficit reduction" the Congress passed and President Obama signed this week, while they raised the debt ceiling by another $2.4 trillion. The $2.1 trillion in “savings," if they actually occur, will be over a 10-year period. At the current rate of deficit spending the $2.4 trillion in additional borrowing authority will barely get the President and Congress past the next election — an important political consideration, but not one that bodes well for any long-term spending or deficit reductions.

The debt will grow, and grow substantially. The spending caps adopted by Congress apply to discretionary spending and not to long-term obligations like Social Security, Medicare, and interest on the national debt The bill does nothing to eliminate departments or programs that reach beyond the constitutional authority of the federal government in the areas of education, energy, and agriculture, to cite but a few examples. Congress will continue to pay farmers for crops they don't grow, educators for more regulations to place on local school boards, and energy experts to decide what kind of light bulbs we must buy.

"It does nothing to address the real drivers of our debt," said Senator Tom Coburn, Republican of Oklahoma, one of 26 Senators to vote against the Budget Control Act. "It eliminates no program, consolidates no duplicative programs, cuts no tax earmarks and reforms no entitlement program."

The bill also allows for "adjustments" to the discretionary spending caps for emergency requests and for "Overseas Contingency Operations" in the "Global War on Terrorism." Congress has often proved quite imaginative in designating "emergencies" to justify more spending. And the War on Terrorism is indeed worldwide, with military actions ongoing in Iraq, Afghanistan. Pakistan, Yemen, and Somalia, not to mention our humanitarian bombing in Libya. The names and number of the nations may change, but it seems likely that we'll be waging war in a number of places for quite some time And it's hard to imagine how there could ever be an end to anything as wide-ranging and vaguely defined, as our "Global War on Terrorism."

The sequestration provision of the bill empowers the Office of Management and Budget to eliminate any spending in excess of the discretionary spending caps within 15 days of when Congress adjourns at the end a session. That will leave members free to go home and talk about how they have cut spending, when they are in fact abdicating to an office of the executive branch legislative and budgetary responsibility the Constitution assigns to Congress. Sequestration was also a feature of the Balanced Budget and Emergency Deficit Control Act of 1985, better known as the Gramm-Rudman bill. It was passed during the Reagan administration, when deficits exceeding $200 billion a year were causing nearly as much alarm as our trillion-dollar deficits do now. But Congress voted so many amendments and granted itself so many exceptions to the spending limits that the act had little effect on the piling up of debt, though it remains on the books today. In fact, the bill Congress and President enacted this week is yet another amendment of the Gramm-Rudman Act. The law has yet to stop Congress from overspending or eliminated the frequent demands for raising the debt ceiling.

The new law makes no reductions in current spending levels. All of the "cuts" are in projected increases over the next 10 years, even as the Congressional Budget Office has predicted the government's debt will exceed the nation’s annual economic output by 2021.

"This was a huge missed opportunity," Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, told the New York Times. "Any sensible solution requires that you need to stabilize the debt so that it's not growing faster than the economy." Instead, Congress has continued on course toward an economic crash.

"The current deal to raise the debt ceiling doesn't stop us from going over the fiscal cliff," said Sen. Rand Paul (R-Ky.), wrote in an open letter explaining his opposition. "At best, it slows us from going over it at 80 m.p.h. to going over it at 60 m.p.h."

Written by Jack Kenny

Obamacare: Forcing Private Health Insurance to Pay for Public Social Policy

I posted earlier about how the Obamacarians have now paid off political allies by forcing every private health insurance policy to pay for a broad array of women’s “reproductive” services–for free. This is how banks are broken and healthcare becomes unaffordable. And here’s the irony: The very Obamacarians who railed against “Cadillac” health insurance policies, are in the process of turning every policy into a Cadillac. I mean, why women who make $200,000 per year should be able to access all of these services for free is beyond me.

But that’s not what I want to focus on. In their zeal to lard out the goodies, Obamacarians are requiring health insurance companies to pay for public social policy, e.g., screening for domestic violence. From a San Francisco Chronicle column by Ellen R. Shaffer:

Domestic violence is a widespread, harmful and expensive public health issue. Public awareness campaigns, advocacy groups and laws offer support and a way out, but too many individuals remain isolated and stigmatized. Every year, 2 million women experience domestic violence, more than new cases of breast cancer or deaths from cardiovascular disease. More than three women a day are murdered by current or former husbands or boyfriends. Homicide is the secondleading cause of injury-related death among pregnant women. 6.5 percent of California women report physical violence by a partner in the past year. 24 percent of U.S. women have experienced physical domestic abuse at some point in their lives. Domestic violence can include threats, isolation, humiliation, unwanted sexual activities and limiting access to financial resources.

Domestic violence is unquestionably a serious social problem, but that should be irrelevant to Obamacare regulations. But because the government has seized control of the entire sector, we now see that anything that can possibly be construed as being in any way connected to wellness, being redefined in blatant term-inflation as “health care.”

We see this phenomenon in the column–because doctors sometimes spot the abuse, it should be construed as a health care issue:

Studies show that health care professionals can help to effectively break the cycle by bringing the problem to the surface and offering resources. In one study, women who talked to a health care provider about abuse were nearly four times more likely to use an intervention such as calling a support hotline. On follow-up, they reported fewer threats of violence and assaults. The majority ended their relationships with violent partners and did not re-enter an abusive relationship.

That doesn’t mean it is health care.

Funding domestic violence screening is properly defined as social policy. One might even say it is laudable social policy. That means, if screening is to be paid for, it should be on the public’s or charity’s dimes–not forced out of the purses of private insurance companies.

But with the government worse than broke, the Obama Administration apparently intends to use Obamacare as a club to force the private sector to pay for public services. That is not only bureaucratic overreach–which won’t stop here–but it is a prescription for making the cost of health insurance unaffordable and/or bankrupting the health insurance industry.

Post Script: If Obamacare can force insurance to provide free reproductive services, why not also free dieticians for the overweight? Heck, why not trainers to help people exercise? It’s all related to healthcare!

Wesley J. Smith

Cost of admission to the next party Obama's throwing: $71600

The parties just keep coming. That BBQ spread followed by a star-studded conga line just wasn’t enough. The president’s third party in three days will be an uptown affair, co-hosted by movie mogul Harvey Weinstein and the inimitable Anna Wintour, editor of Vogue and inspiration for Meryl Streep’s character in The Devil Wears Prada. In keeping with the high-class crowd, tickets will be a bit pricey. NewsMax reports:

The parties just keep coming for birthday-boy Barack Obama. After a Chicago fund-raiser the night before he turned 50 and a White House party on the big ay, a third event is now planned for New York.This time it is high-powered movie mogul Harvey Weinstein who will host the president at his Big Apple home, reports the New York Post.

And despite being described as “a small dinner and discussion” on the invitation, it will raise $2 million for the president’s reelection campaign and the Democratic National Committee. According to the NYP, the cost per couple to chow down is $71,600.

In a post the day after the president signed the debt ceiling deal into law, I wrote that President Obama actually cared about the Aug. 2 deadline because he wanted to get back to campaigning. (The Daily Caller’s Jonathan Strong suggested my headline was a cheap shot and maybe it was. I apologize if I implied the only reason Obama cared about the Aug. 2 deadline was his campaign, but it has to be acknowledged that fundraising surely factored into his sense of urgency, especially given what we know about the true nature of the Aug. 2 deadline.) Anyway, in that post, I said the Obama campaign “canceled” several fundraisers during the debt ceiling debate — because that was what The Washington Post reported. Well, if this event is any indication, he probably just postponed those events (as several commenters sagely suggested). At least, that’s the case with the dinner at Weinstein’s — it was originally scheduled for July 18.

by Tina Korbe

Producers Pick Lesbian Kiss, R-Rated Movies as Teen Choice Award Nominees

A secretive panel of adults has, once again, picked raunchy material for teens award show

By Erin R. Brown

A girl-on-girl lip lock, a movie in which a bulldog masturbates, and a marijuana-smoking middle school teacher are among the nominees for the 2011 Teen Choice Awards. Yes that's right, an awards show specifically aimed at 13-19 year olds will be featuring inappropriate content more suited for the panel of adults that chose the nominees.

This year, teens will vote for their favorites, ranging from artists with hits about S&M, to sex and drug-filled R-rated comedies, to favorite 'break up' songs - one nominated song features the 'F' word 16 times.

Sunday August 7, 2011 marks the 13th annual Teen Choice Awards on Fox in which kids around the country will tune in to see how favorite movies, songs, actors and television series (for which they voted by phone or online) do against their competitors. In 2009, more than 83 million votes were cast online. The star-studded event is always a hit, attracting A-List actors like Reese Witherspoon, Ashton Kutcher, Justin Timberlake, Grammy-winning musicians like Rihanna, Britney Spears and Taylor Swift, and television stars like Steve Carell and Jennifer Love Hewitt.

However, this year's crop of nominees is particularly adult-themed, and that is likely because 'adults' were on the secret panel that determines the nominees. Ten nominated movies are rated 'R,' meaning children under age 17 are not permitted. How are these teens supposed to vote for movies like 'Due Date' and 'No Strings Attached' if they abide by movie theater policy?

'Due Date,' an R-rated comedic tale about two unlikely friends who take an emergency road trip across the country has multiple scenes of marijuana-smoking and a scene in which the main character and his dog masturbate simultaneously. 'No Strings Attached' is a racy romantic comedy in which two friends attempt to maintain a strictly 'f**k buddies' relationship. 'Black Swan' a psychological thriller about a terrorized ballerina is rated 'R' for 'strong sexual content, disturbing violent images, language and some drug use.' Sounds like a perfect teen movie.

'Black Swan' is also nominated for a scene for 'best liplock,' but the kissing is between two women. In a moment of frustration, Natalie Portman's character 'Nina' rebels against her mother and begins passionately kissing Mila Kunis' character 'Lily.' It should be surprising that children are expected to vote for an inappropriate and controversial scene in a movie that they are not supposed to see.

'F**k You' by artist Cee Lo Green is nominated for 'Choice Break-Up Song.' The song contains 16 'F' words and 6 'S' words. Though the lyrics were changed to 'Forget you' for radio play, teens are fully aware of the song's original lyrics.

Rihanna is nominated for 'Choice Female Artist' and though her immense success is notable, her 2010 album 'Loud' contains two controversial songs, which should be a warning that the material is too mature for a teen audience. 'S&M' is about just that - Sadomasochism, with lines like 'whips and chains excite me.' The video for 'Man Down' features the 'Choice Female Artist' nominee killing a man in cold blood in a public place.

But there is hope: in years past, the teens who actually vote for the winners typically pick the more appropriate-themed material, suited for them. In 2010, the heart-warming movie 'The Blind Side' won for 'Choice Movie Drama,' which tells the tale of an underprivileged kid from a bad neighborhood becoming a successful high school football player. 'Toy Story 3' won 'Choice Animated Film,' and Justin Beiber won 'Choice Male Artist,' in 2010 as well. In 2009, 'Choice TV Show, Comedy' went to 'Hannah Montana' and Taylor Swift won 'Choice Female Music Artist.' Let's hope the true teen winners on Sunday are actually age-appropriate.

The Doomsday Scenario Has Happened

Here's What Banks Said They Would Do
Courtney Comstock | Aug. 6, 2011, 7:29 AM

Friday night the S&P downgraded the U.S. credit rating from AAA to AA+.

To bankers, a default, resulting in a downgrade, coupled with higher capital requirements is the "doomsday scenario" that banks said they were preparing for last month. This is totally different from a default, but banks were preparing for both.

Phillips, a political economist at Goldman Sachs, warned clients on a conference call last month that financial sector banks might have higher capital requirements if Treasuries are downgraded. "The complicated factor comes in with some of the larger firms, there could be a slight uptick in the calculated capital required to be set aside related to holdings. But a very minor change in capital requirements."

We wrote an article back then about what they were doing to prepare in the event of the doomsday scenario. Here it is:

The Wall Street Journal says that "according to one banking industry representative, there are indications banks are beginning to take steps to adjust their holdings of Treasuries to prepare for the possibility of default."

So it sounds like banks are preparing to dump Treasuries in the event of a default, because ratings agencies have indicated that they will downgrade the U.S. if there is a default. In fact, they've said that ratings agencies might downgrade the U.S. to AA within 90 days even if there isn't a default. If there's isn't a "credible" plan, S&P says it will downgrade the U.S. (long-term only) to AA.

But of course there's a good chance they won't. If the U.S. avoids a default, there would be no need. And even if the U.S. does get a downgrade, the WSJ says "it's unclear whether regulators would require banks to raise capital against Treasuries in the case of default. Most observers believe regulators wouldn't do this, but regulators haven't said."

Also because if they dump them, what's left to buy?

And people seem to be criticizing the ratings agencies for saying that they would downgrade the U.S., so perhaps they'll backtrack. Also on the Goldman conference call, Former Senator Judd Gregg said, "The ratings agencies put themselves in a corner that's foolish. I've always found them to be incredibly naive about the political process. To be so definitive is foolish."

5 great slides from Goldman on what's at stake in the debt ceiling debate >

The Invisible Hand Is Writing On Our Wall

The Invisible Hand Is Writing On Our Wall
Walter Russell Mead

The invisible hand has been writing on our wall of late, and the message is scaring the markets. The markets should be scared; there is real trouble afoot, and the world’s political and economic leaders are terrifyingly out of their depth.

In the Book of Daniel, King Belshazzar of Babylon held a great feast for a thousand of his lords, and as they ate and drank from the vessels captured when the Temple in Jerusalem was destroyed, they praised the false gods of gold and of silver and of brass, iron, wood and stone.

Suddenly when the party was at its height the fingers of an invisible hand appeared and wrote on the wall: MENE MENE TEKEL UPHARSIN. The shocked king called for his sages and soothsayers to interpret the message; none of them could until Daniel, one of the Hebrews brought up in the royal court, appeared. The king promised Daniel any reward he wanted if he would interpret the message. Said Daniel, rather unlike a modern consultant, “Let thy gifts be to thyself, and give thy rewards to another; yet I will read the writings unto the king and make known to him the interpretation.”

MENE: God hath numbered thy kingdom, and finished it.

TEKEL: Thou art weighed in the balance, and art found wanting.

UPHARSIN: Thy kingdom is divided, and given to the Medes and the Persians.

This is the message our markets, and the invisible hand behind them that shapes us like a potter shapes the clay, have for the kings and rulers of this earth, the Davoisie and the bankers, the economic sages and the lords of finance:

You have been weighed in the balance and found wanting. Now your punishment begins.

The world’s leaders have been on trial these last few months. In Europe, a long running currency crisis has tested the commitment of Europeans to the social ideals they so often speak of, and to the community of nations they have worked to build since the 1940s. TEKEL: weighed in the balance and found wanting.

In China they have been on trial as the accumulating evidence suggests that corruption, incompetence and malfeasance damaged the country’s vaunted high speed rail project and led to the deaths of dozens of passengers. TEKEL.

In Japan they have been on trial since the tsunami last spring. Would Japan’s bureaucracy tell the truth to the public? After a lost generation of stagnation would Japan’s government come up with an effective plan to reconstruct the north and rebuild the country’s economy? TEKEL.

And in the United States we have a stagnant economy, a mounting debt and no real idea of the way forward. Would Washington come up with a constructive, future-oriented program to move the economy forward and start the adjustments necessary to prepare us to live within our means – and to grow our means so it wouldn’t be hard? TEKEL again.

Europe, China, Japan, the United States: the leaders of the world’s four largest economies are nowhere near passing the tests that history has set them. In all four places the instincts of the politicians are the same: to dissemble, to delay, to disguise and to deny.

This is not a partisan message. The left in Spain, the right in Germany and, frankly, both left and right in the United States are getting well-deserved kicks in the teeth. Communist tyrants and European democrats, secular dictators and theocratic goons are getting the same message.

The message — and it is not only for the lords of the feast — is that we aren’t great enough for our times. The challenges are immense and exhilarating; too many of us are shabby and small. We tread the endless circles of our own habits and ideas while around us the world is changed beyond recognition. We accept shabby lies and conventional fictions for solid truths; we build our homes upon the sand, and demand government subsidized insurance in case the floods come.

The challenges to the great industrial powers aren’t petty policy challenges. It is not about not knowing when to move interest rates up or down fifty basis points; it is not about the right size of the budget deficit or the right price for the currency.

The challenges the great powers face today run much deeper. Behind Japan’s economic problems and the pathetic inadequacy of its political leadership is a much deeper question of identity and purpose. What is Japan’s job in the world; what does Japan have to teach and to suffer and to do? What is the special contribution that only Japan and the Japanese can make, and how does the country prepare itself for this? Do thousands of years of Japanese culture and philosophy culminate in a cheap consumer culture and relentless demographic decline?

It is the same thing in Europe. The financial problems, real and dangerous as they are, proceed from a vacuum in the hearts of the European peoples. What is it to be a German, a French person, an Italian, a Greek, a Spaniard or a Swiss? Is it a matter of blood, belief, or of culture? What duties do the Europeans have to one another and to the world? When Europeans talk about their decline in the world – and it is worth talking about, since for 100 years Europe has been steadily and sometimes catastrophically in decline – they too often look at questions of imperial power or relative wealth. But what was extraordinary about Europe 100 and 200 years ago and is largely lost now was never imperial power or economic might. It is the cultural energy and dynamism that once made Europe the greatest font of creativity and ideas since ancient times. The art, the music, the philosophy and the science of Europe captured the world. Now Europe designs very nice shoes, and its Michelin starred restaurants serve quite excellent meals.

Europe’s challenge isn’t to fix the euro or to reform its pensions. And it is not to make clunkier shoes or less appetizing meals. Its challenge is to become Europe once more: to be as adventurous, as profound, as creative and yes as dangerous as it once was. The core European debate should not be over the constitutional provisions of the European Union or the financial arrangements behind the euro, important as those things are. What matters in Europe is that the younger generation wakes from the materialist, conformist affluence – deep wells of listlessness, anomie and despair concealed under whatever ephemeral cultural fads and fashionable causes drift by. They must begin to live, to take risks, to dare, to create and to build – and, among other things, that means they (like the other affluent peoples) must start having children again.

China too has bigger fish to fry than high-speed trains. The convulsive transformation of the biggest society in the history of the world, the sudden rise of enormous wealth cheek by jowl with poverty made worse by the alienation and dangers of urban life: all taking place in a moral vacuum where neither tradition, reason nor culture softens the harshness of oppression and injustice. This cannot endure; the people of China are struggling blindly for some better way. Unless China becomes great it cannot live, but by great I do not mean building a blue water navy and winning the fearful awe of its neighbors. I mean the interior greatness that comes from disciplined talent, ambition harnessed to service, creativity addressed to the task of healing, and strengthening a people still scarred by a century of war, revolution and soul-crushing oppression at the hand of foreigners and fellow countrymen alike. China has within it the seeds of an excellence and greatness that the world has never seen. It can become a garden in which all the beauties and aspirations of past millennia can be fulfilled – but that requires a deeper kind of leadership than one fixed on keeping the growth pot boiling lest popular revolt overthrow the regime.

I have written before of the challenges that face us in the United States and will not say more here except that stale quibbling over expense cutbacks that will not significantly reduce the deficits, and reforms that will change very little, is not what we need. Americans have the opportunity and the duty and the urgent pressing need to move into the future, to do and be more than ever. The thin rhetoric of a backward looking president, the obstreperous negativism of an opposition better at rejecting what it hates than building or even conceiving what it needs, the lotus-eating educational formation that cuts us off from our past, and the incessant noise of a superficial pop culture: none of this is worthy of America at its best and none of it will help us now.


We are not at the end of the road, but we are close enough now that the specter of national bankruptcy is becoming discernible through the mist. The frantic twisting and turning in both America and Europe as our societies come to realize just how we have overpromised and underpaid is only the start. We will blame the politicians as much as we can, but we the people have also lied to ourselves. We accepted promises that sounded too good to be true, we accepted counterfeit promises and passed them along as good money.

Denial has been our closest companion and our best friend. Unfortunately it will betray us in the end; following the news from Europe and Washington these days I keep thinking of Carlyle’s meditations on the looming bankruptcy of the French monarchy as that country’s revolution approached:

Great is Bankruptcy: the great bottomless gulf into which all Falsehoods, public and private, do sink, disappearing; whither, from the first origin of them, they were all doomed. For Nature is true and not a lie. No lie you can speak or act but it will come, after longer or shorter circulation, like a Bill drawn on Nature’s Reality, and be presented there for payment, — with the answer, No effects. Pity only that it often had so long a circulation: that the original forger were so seldom he who bore the final smart of it! Lies, and the burden of evil they bring, are passed on; shifted from back to back, and from rank to rank; and so land ultimately on the dumb lowest rank, who with spade and mattock, with sore heart and empty wallet, daily come in contact with reality, and can pass the cheat no further.

To say that Greece is the same as Germany is a lie. To say that the pensions and health care benefits promised to state and local employees in much of this country will be paid in full is a lie. Nature does not honor lies; false promises cannot be paid. Carlyle’s great prose poem in honor of Bankruptcy continues:

Honour to Bankruptcy; ever righteous on the great scale, though in detail it is so cruel! Under all Falsehoods it works, unweariedly mining. No Falsehood, did it rise heaven-high and cover the world, but Bankruptcy, one day, will sweep it down, and make us free of it.

Lehman Brothers was once a great name; Bernie Madoff once had friends and a place in the world. Mr. Ponzi was a very popular guy until the music stopped.

Of what does this looming bankruptcy consist? In our case it is the looming inability to pay the trillions in unfunded liabilities of all levels of government, but behind it lies a deeper failure and a poverty of soul. Spiritual near-bankruptcy is the common condition that binds China, Japan, Europe, the US and much of the rest of the world together.

The extraordinary pettiness and superficiality of what passes for social thought among the Davoisie of all cultures is rooted in a spiritual condition that Carlyle diagnoses with his customary mercilessness and clarity. The Davoisie who try to steer the world’s various ships through the reefs and storms of our day have chosen for their core values what Thomas Carlyle rightly called the meanest and most despicable set of goals that the human race has ever found: we have made ease and wealth the goals of our policies, our governments, and our cultures. This is Carlyle on the worship of wealth.

Moneybag of Mammon (for that, in these times, is what the respectable Republic for the Middle Classes will signify) is a still worse [ideal], while it lasts. Properly, indeed, it is the worst and basest of all banners, and symbols of dominion among men; and indeed is possible only in a time of general Atheism, and Unbelief in anything save in brute Force and Sensualism; pride of birth, pride of office, any known kind of pride being a degree better than purse-pride…

But the rule of Mammon cannot last; the greatness that cannot be torn out of human nature must ultimately revolt at the staleness, the meanness of a Mammon-centered world.

The Heavens cease not their bounty: they send us generous hearts into every generation. And now what generous heart can pretend to itself, or be hoodwinked into believing, that Loyalty to the Moneybag is a noble Loyalty? Mammon, cries the generous heart out of all ages and countries, is the basest of known Gods, even of known Devils. In him what glory is there, that ye should worship him? No glory discernable, not even terror: at best, detestability, ill-matched with despicability!

China, Europe, America, Japan: each of in its own way is moving toward comprehensive bankruptcy: financial, spiritual, social. Recent tremors in world financial markets are a warning from the invisible hand that we are skirting dangerously close to that final frontier, but we will miss the point if we do nothing more than put our financial affairs in slightly better order.

The great crime of Belshazzar and his cronies was to become disconnected from real values and real events. They used the sacred vessels of the Temple for an unholy palace banquet; at a time of great danger to the realm they distracted themselves with good food and good wine. They ignored the great source of meaning that enlightens and guides the world to focus their attention on shiny objects: gold, silver, brass.

All this and more describes our global leadership today.


Al-Qaida Weapons Reaching al-Shabaab

Al-Qaida Weapons Reaching al-Shabaab

by IPT News • Aug 3, 2011 at 5:42 pm

The Somali terrorist group al-Shabaab has acquired weapons from the Yemeni-based al-Qaida in the Arabian Peninsula (AQAP), a Somali official told VOA News.

Ten ships filled with weapons from al-Qaida set sail recently from the coast of Yemen, but the Yemeni government intercepted two of them.

Hussein Haji Ahmed, the Somali consul in Yemen, said that he thinks the remaining ships successfully sailed across the Gulf of Aden and reached part of the Somali coast controlled by al-Shabaab.

The news confirms fears of collaboration between al-Shabaab and al-Qaida's Yemeni branch expressed during a recent House hearing held by Rep. Peter King, R.-N.Y.

"There are growing concerns that al-Shabaab in Somalia is linking up with al-Qaida in the Arabian Peninsula in Yemen to better train these radicalized young men in order to attack Americans around the world, as well as launch attacks against our homeland," King said.

"Shabaab's most senior leaders, including its founders, have longstanding ties to al Qaeda," hearing witness Thomas Joscelyn, a senior fellow at the Foundation for the Defense of Democracies, said in written testimony. Witnesses agreed that al-Shabaab poses a "direct threat to the U.S."

Al-Shabaab's foreign support isn't limited to AQAP, indicating that the group has a growing support network in the region.

A recent United Nations report found that members of the Kenyan Muslim Youth Centre (MYC) "openly engage in recruiting for al-Shabaab in Kenya and facilitate travel to Somalia for individuals to train and fight for 'jihad' in Somalia."

MYC Chairman Ahmad Iman Ali, the report said, moved to Somalia in 2009 and has recruited a force of 200-500 fighters there. The Kenyan group also publishes a weekly bulletin that includes al-Shabaab and al-Qaida support material.

Eritrea, which is separated from Somalia's northern border only by the small African country of Djibouti, also has been accused of aiding the Somali terrorist group.

A UN report released in July said that Eritrea has been funneling $80,000 a month to al-Shabaab through its embassy in Kenya. Ethiopian Justice Minister Berhane Hailu claimed there is concrete evidence of Eritrea's al-Shabaab support. Eritrea denies the claims.

Debbie Wasserman-Schultz Proves "You Can't Fix Stupid"

A standard phrase of Ron White, one of my favorite comedians is "You can't fix stupid." Sometimes I wonder if he came up with that phrase because of Democratic National Committee Chair, Debbie Wasserman-Schultz. She may not be the dumbest person in congress, although she does compete with Barbara Boxer and Sheila Jackson Lee for the title, but may very well be the biggest simpleton ever to hold a leadership position in either major political party.

The latest demonstration of cerebral feebleness by the DNC Chair occurred last night during the MSNBC show of racial arsonist, "Reverend" Al Sharpton.

Her interview with the professional bigot included many new Wasserman-Schultz classics.

When discussing the voter ID laws cropping up across the nation to prevent voter fraud, Wasserman Schultz commented "you're more likely to be hit by lightning than be a victim" of fraud. I suppose the progressive from Florida forgot about the systematic voter registration fraud waged by ACORN across the country (including her own state).

Perhaps the worst thing the DNC Chair said was at a level of incompetence rarely seen even for someone like Ms Wasserman-Schultz. With a straight face she said, “We’ve really begun to turn the economy around.” Not a smirk or snicker, she really seemed to believe what she was saying.

That statement in itself proves that Schultz does not possess enough intelligence to read a newspaper, even one with big print. The latest economic news has been horrible. Just in the past week we have been hit with the following bad news:
Layoffs Way Up
Consumer Income lowest growth in 11 months
Consumer Spending first decline in 21 months
Durable Goods orders falling every month since April
Manufacturing Index major drop during the past month
Consumer Confidence down ten points in three months
Investor Confidence down seventeen points in three months
Gross domestic product, the best indicator of the country's overall economic health rose at a paltry annual rate of 1.3% in second quarter, first quarter revised downward to paltry .04%
Factory Orders way down
See what I mean, it is impossible for someone with a normal supply of cranial capacity to decipher that information as turning the economy around.

As a conservative, it's nice to see the DNC Chair wandering around from TV Show to TV Show making idiotic comments about the economy. But I am more than just a political wonk, I am also a human and it pains me to see the Democratic Party sending this poor feeble woman out into the public when it is clear that she lacks the capacity to sound even reasonably intelligent. And her prospects for learning on the job are not good, because as Ron White says "You can't fix stupid."

If you would like to see the evidence for yourself a video of Debbie Wasserman-Schultz's interview is embedded below (if you cannot see video please click here)


Did Tim Geithner Really Say There Was ‘No Risk’ of a Downgrade? Let’s Go…to the Video…

One more reason that Glenn checks Zero Hedge … often:

All you need to know (from April 2011):

Peter Barnes “Is there a risk that the United States could lose its AAA credit rating? Yes or no?”

Geithner’s response: “No risk of that.”

“No risk?” Barnes asked.

“No risk,” Geithner said.

The U.S. Is Downgraded, and Obama Will Be Too

This is a terrible day. For the first time, the creditworthiness of the United States has been called into question by an independent entity, Standard and Poor’s, which has downgraded the country’s credit rating from AAA to AA+. Its statement features this terrifying phrase: “The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.” S&P assigns blame to all players, and by seeing a “negative outlook” down the road, is saying it expects to downgrade to a simple AA within two years.

The Left will and is already blaming the Tea Party and Republicans. The Right will and is blaming the growth of the federal debt and the refusal to deal with the unsustainable path created by the entitlement programs. This is a grinding battle that will lead to an intellectual and ideological stalemate. There’s truth to the Leftist charge that the conservative Republican decision to use the debt ceiling fight as leverage to force a cut in the national debt at a particularly risky time was unsound. But that is nothing next to the liberal fantasy that the U.S. can stay on the present course is the most destructive notion in present-day politics.

But the ideological stalemate does not mean the political fallout will be evenly distributed. This is a colossal disaster for Barack Obama, and anybody who says otherwise is kidding himself or trying to spin you. We know that the election of 2012 is going to be fought on jobs, the economy, and the wisdom of health care. But now the GOP has an overarching theme that I predict will be at the core of a $500 million advertising campaign: “America needs its good name back.”

John Podhoretz

It's not a credit "downgrade", it's a MORAL UPGRADE!

Marshal Pupovich -- never missing a moment to dump more dirt on America’s shallow grave -- has announced earlier tonight that S&P has downgraded the US’s credit to the modest AA+ rating. Marshal, we are humbled by your timeliness in delivering this joyous news to the collective and I am sure Comrade Red Square is upping your rations as we speak.

So what does this all mean? Should the Party be nervous about the coming 2012 election now that we have thoroughly ruined America’s economic prestige? Answer: ABSOLUTELY NOT.

This is an opportunity, comrades. This is an opportunity to explain to the American people that losing an ‘A’ from our AAA rating is an exercise in global economic justice. In losing that single ‘A’, mind you, we are in effect loaning that ‘A’ to a needier nation -- say, North Korea, for example. Now North Korea can afford to borrow more money from China in order to feed its already prosperous and happy people thanks to our self-inflicted ethical economic loss. It is fairness, and that's a good thing!

Allow me to elaborate further, comrades. You see, all the leading Harvard-educated economist agree that there are only so many A’s in the world and just too many nations in need of those A’s in order to have a good rating. America -- being the greedy whore nation that it is -- sought to monopolize these A’s for its own imperial purposes (war for oil, armies, tax cuts, etc. etc.) while denying other morally superior nations (North Korea) the economic right to possess one of those coveted American A's. President Obama, sensing the world’s suffering through his supernatural leadership abilities, sought to correct these wrongs by damaging the US economy in order to save the world and fairly redistribute the A’s.

See! President Obama is saving the world economy by totally destroying the US economy! This is why the world loves Obama and why Teabaggers utterly hate him -- President Obama thinks globally and not locally like some boorish middle-class turd in flyover country. President Obama killed our AAA rating for our imperial sins against the world and is thus strengthening our position in the world through progressive moral superiority. Those of us who read celebrated America-basher Fareed Zakaria would call this *smart power* in action. Smart power is a good thing, write that down.

So what does America do now after being declared the most ethical loser? We spend, comrades. We spend trillions of dollars in new stimulus in order to create the jobs laid off middle-aged white collared workers need the most -- infrastructure projects!

You heard me correctly; it is high time we get Mom, Dad -- Hell, even Grandma and Grandpa! -- out there in the sun building dams, bridges, high-speed railroad, and whatever else the political class can benefit from (Hey, pal -- two hours from my Georgetown townhouse to my Manhattan penthouse via high-speed rail sounds pretty good to me!) We need to do the *big* things again just like in FDR's day!

Comrades, we need to build massive concrete monuments on the backs of tubby former real estate agents named Betty! We need Don from accounting or Pete our IT guy out there hauling railroad ties! We even need the kids to get involved, too! I say we enlist the kids into a federally funded program that teaches them the values of back-breaking work and how to snitch on Mom and Dad when they say something nasty about the President's economic policies. Well, maybe we can go easy on the back-breaking work and just settle for the snitching (we wouldn't want the little squirts to have any self-initiative, now would we?) We need a New New Deal!

Who's with me!?

“A Closed ‘Super Congress’? Oh, I Don’t Think So.”

Posted by Jim Harper

That was my inner conversation when I heard that the “Super Congress”* (or “Super Committee”) created by the debt ceiling deal might operate behind closed doors.

Congress is free to create any committee it wants, of course. Congress determines the rules of its proceedings. But ordinary committees and subcommittees are too opaque. A “Super Committee” should lead—not lag—in transparent operations.

In a forthcoming report on government transparency, we’ll be looking at the kinds of things committees should be publishing in computer-useable formats, and in real time or near-real-time: meeting notices, transcripts, written testimonies, live video, original bills, amendments to bills, motions, and votes. There are ways that many of these documents and records can be optimized for transparency, including by flagging agencies, programs, dollar amounts, and so on in the texts of published documents.

That’s why I’m glad to see transparency stalwart the Sunlight Foundation calling for a transparent Super Committee. “Congress pushed through the ‘Debt Ceiling’ bill with almost no transparency,” they say. “Let’s make sure the new ‘Super Congress’ committee created by this bill operates in the open.”

The things they highlight, reflecting priorities of transparency groups across the ideological spectrum, include: live webcasts of all official meetings and hearings; the committee’s report being posted for 72 hours before a final committee vote; disclosure of every meeting held with lobbyists and other powerful interests; Web disclosure of campaign contributions as they are received; and financial disclosures of committee members and staffers.

The legislation creating the Super Committee calls for some minimal transparency measures: public announcement of meetings seven days in advance; release of agendas 48 hours ahead of meetings, and:

Upon the approval or disapproval of the joint committee report and legislative language pursuant to clause (ii), the joint committee shall promptly make the full report and legislative language, and a record of the vote, available to the public.

By my read, that’s a requirement to release the language the committee is voting upon after the vote has been taken.

I don’t see public access to the language of such an important document as conducive to the public overseeing the committee’s work. Some may argue that the committee will be pressure-cooker enough if it operates in closed sessions. Delicate political balances require important decisions to be made out of the limelight. This is how massed power in Washington fully manifests itself: major decisions about the direction of the country that people cannot even know about until the decisions are finalized. I’m not havin’ it. Kudos, Sunlight Foundation, for pressing an open Super Committee.

*Many are calling the committee “Super Congress.” It’s a joke I … don’t quite get. So I’ll go with “Super Committee.”

Only the Tea Party Had a $4 Trillion Plan

Read this:

Here was the question to S&P exec John Chambers, and his reply:

Q: “There’s been a figure of $4 trillion dollars circulating as an example of the scope of fiscal consolidation measures that could work to stabilize the U.S. debt-gdp ratios. Could you explain how that figure was arrived at since it was mentioned in S&P’s reports and where it figures in S&P analysis?”

A: “First of all, that figure comes initially from the Bowles-Simpson fiscal commission, and it was embraced by President Obama in his April 13 speech and Paul Ryan in his counter-budget proposal. And so you had policy makers converging around the amount. Now actually the $4 trillion, depending on whether it is front-loaded or back-loaded, is not going to do the trick in terms of stabilizing U.S. government debt-to GDP ratios. But it takes you pretty far along. And I think a grand bargain of that nature would signal, you know, the seriousness of policy makers to address the fiscal issues of the United States, to actually stabilize the debt-to-GDP. The IMF says it takes 7.5% of GDP consolidation. I think we have more than that.”

The U.S. annual budget deficit is now around 9% of GDP.

Chambers adds: “But $4 trillion would be a good down payment. We thought that..if policy makers could deliver the goods on that, then that would be a strong sign on our political scores and eventually on our projections on the fiscal side.”

S&P has already said it may slash the Triple-A rating if a debt ceiling deal is not accompanied by what it deems is a credible plan to cut the $14.3 trillion federal [debt] by $4 trillion. The plan has “to have bipartisan support,” Chambers said. “If you have a plan that is only backed by one side or the other, even if you got it through, you would be faced with the prospect of it being unwound.”

So, S&P’s Chambers is saying the ratings agency wants to see at least a $4 trillion deal, one that would come with bipartisan support, too, because the ratings agency fears without that support, Congress will upend any debt-cutting plan.

There was only ever one plan that did what S&P said was required — $4 trillion in cuts with bipartisan support. That’d be Cut, Cap, and Balance — a plan that cut $4 trillion and got bipartisan support in the House of Representatives.

As Democrats tonight, and some Republicans, lash out and blame the Tea Party for causing the United States to lose its credit rating, it is worth pointing out that only the Tea Party offered up a plan to avoid what happened.

This is precisely why the GOP should have held the line.

A Friendly Reminder....

Obama By the Numbers: Yes, He Own's This Economy

The new gift that keeps on giving, the unctuous Debbie Wasserman-Schultz, helpfully provided the GOP with a sledgehammer to use against Barack Obama in the 2012 election. Courtesy of the Washington Examiner we have the devastating summary above to clarify the numbers.

It's not pretty. Not at all.
"We own the economy. We own the beginning of the turnaround and we want to make sure that we continue that pace of recovery, not go back to the policies of the past under the Bush administration that put us in the ditch in the first place,” DNC Chair Debbie Wasserman Schultz told this morning's Politico Playbook Breakfast.

Did DWS say this on purpose? Is this part of some new Democratic game plan? Is President Obama going to stop blaming Bush for everything? Or did DWS get a little carried while trying to talk up the administration's accomplishments?
Here's DWS Wednesday. If the Democrats keep trotting this dim bulb out they must have a death wish. As to those numbers above,it's rarely mentioned but we really started going downhill in the second halfof the second Bush term, which just so happened to be when wealthy elitist Nancy Pelosi became House Speaker and Dingy Harry Senate Majority Leader.

Just saying.

4 US Companies Are Now Rated Higher Than The Government

The financial crisis had many casualties -- one being the S&P AAA rating in Corporate America. Behemoths like Berkshire Hathaway, GE and Pfizer all lost their AAA status during the depths of the crisis.

But interestingly, it didn't matter much anyway, because the markets had already weighed in before the S&P downgraded the companies. Investors hardly flinched.

It's a sea change from the early 1980s, when the top rating was coveted. Back then, 60 U.S. corporations held the title. By 1995, half as many were rated AAA.

Today, it's only four: Microsoft, Exxon Mobil, Johnson & Johnson and Automatic Data Processing. (This is excluding some financial and government-affiliated organizations.)

The New York Times reports that, beyond the recession, corporate buyouts and acquisitions (financed by cheap debt) contributed to the downgrading trend among U.S. companies.

Aimee Groth

Russia uses dirty tricks despite U.S. ‘reset’

Intelligence agents tell of intimidation, smears of American officials, diplomats are concerned about the acts of intimidation as well as their record on previous agreements and other activities. It’s a real concern, I’ve raised it. It’s not the intelligence committee that fails to understand the problem. It’s the Obama administration.” -Former Sen. Christopher S. Bond, (right) who served as the vice chairman of the Senate Select
By Eli Lake

In the past four years, Russia’s intelligence services have stepped up a campaign of intimidation and dirty tricks against U.S. officials and diplomats in Russia and the countries that used to form the Soviet Union.

U.S. diplomats and officials have found their homes broken into and vandalized, or altered in ways as trivial as bathroom use; faced anonymous or veiled threats; and in some cases found themselves set up in compromising photos or videos that are later leaked to the local press and presented as a sex scandal.

“The point was to show that ‘we can get to you where you sleep,’ ” one U.S. intelligence officer told The Washington Times. “It’s a psychological kind of attack.”

Despite a stated policy from President Obama and Russian President Dmitry Medvedev of warm U.S.-Russian ties, the campaign of intelligence intimidation - or what the CIA calls “direct action” - has persisted throughout what both sides have called a “reset” in the relations.

They have become worse in just the past year, some U.S. officials said. Also, their targets are broadening to include human rights workers and nongovernmental organizations as well as embassy staff.

The most brazen example of this kind of intimidation was the Sept. 22 bombing attack on the U.S. Embassy in Tbilisi, Georgia. A National Intelligence Council assessment sent to Congress last week confirmed that the bombing was ordered by Maj. Yevgeny Borisov of Russian military intelligence, said four U.S. officials who have read the report.

False rape charge

One example of such intimidation occurred in 2009 against a senior U.S. official in the Moscow office of the National Democratic Institute (NDI), the congressionally funded nongovernmental organization that promotes democracy throughout the world. The Times has withheld the name of the official at the request of NDI.

According to a Jan. 30, 2009, cable from U.S. Ambassador John Beyrle disclosed by WikiLeaks, USAID employees received an email with a doctored photo of the NDI official reclining with an underage girl.

The email from someone purporting to be a Russian citizen accused the official of raping her 9-year-old daughter.

In the cable, Mr. Beyrle said the embassy thought the Russia’s Federal Security Service (FSB) was behind the smear attack, which also appeared in Russian newspapers. The FSB is the successor agency of the Soviet-era KGB.

Kathy Gest, the NDI director of public affairs, said, “The allegations recounted in the WikiLeaks memo are all false and were protested at the time. We consider the matter closed and NDI, which is legally registered in Russia, continues its programs.”

Former Sen. Christopher S. Bond, who served as the vice chairman of the Senate Select Committee on Intelligence between 2007 and 2010, said he had raised the issue of Russian intimidation of U.S. diplomats with the Obama administration.

“We are concerned about the acts of intimidation as well as their record on previous agreements and other activities,” Mr. Bond said. “It’s a real concern, I’ve raised it. It’s not the intelligence committee that fails to understand the problem. It’s the Obama administration.”

Yevgeny Khorishko, a spokesman for the Russian Embassy in Washington, said accusations that Russian diplomats have stepped up intimidation of U.S. officials were false.

“Those are absolutely false insinuations that are not worth any comments. Such kind of ‘information’ is disseminated by those who are not pleased with the new state of the Russian-American relations,” he said.

Recent escalations

Since 2007, according to two U.S. intelligence officials, American posts in Belarus, Russia, Georgia and Kyrgyzstan have complained about instances in which junior Foreign Service officers have come home to find jewelry rearranged, cigarette butts stubbed out on the kitchen table, defecations in the bathroom, and break-ins with nothing of value stolen.

More recently, visiting congressional staff on official delegations have complained of having their hotel rooms broken into and seeing their things rearranged, according to these officials.

David A. Merkel, who served as deputy assistant secretary of state for European and Eurasian affairs in 2008 and 2009, said he had seen an escalation in these kinds of direct actions starting in the last two years of the George W. Bush administration.

“It’s meant to limit a diplomat’s ability to meet with individuals by aggressively demonstrating that they are being watched. If you are a political officer and you are cognizant your actions are being watched, you are less willing to meet with people, even if this is a normal activity for a political officer,” said Mr. Merkel, who also served as director for European and Eurasian affairs on the National Security Council from 2005 to 2007.

Other U.S. officials said the intimidation campaign escalated even more in 2010 after the Obama administration expelled 10 Russian “deep cover” agents as part of a spy swap.

Mr. Merkel said these acts of intimidation were reported throughout what Russia calls its “near abroad,” or the independent states that used to be part of the Soviet Union.

“It’s mainly focused on people whose jobs are domestic politics and human rights reporting,” he said. “You have to appreciate how much courage it takes for a foreign national, a Russian or a Belarusian to meet with our diplomats because they know they are being watched.”

Another diplomat who was targeted for embarrassment was Kyle Hatcher, who served at the U.S. Embassy in Moscow as a political officer responsible for tracking religious freedom in Russia.

In August 2009, two Russian newspapers printed stories based on spliced video footage of Mr. Hatcher at a hotel room, claiming he was employing the services of a prostitute.

Two U.S. officials familiar with the incident, who asked not to be named, said the U.S. intelligence community saw this as the work of the FSB.

“They intercepted some phone calls he made and spliced them in a way that made them look strange. Then they took footage of him in a hotel room or something. They made it all look like they had footage of him in sex acts with prostitutes in a hotel,” one of those officials said.

Long history

Moscow’s intelligence services long have played dirty tricks on U.S. diplomats. In the “Spy vs. Spy” world of the Cold War, operations known as “honey traps” - a young, attractive woman woos a U.S. Foreign Service officer into state of semi-undress where he can be photographed and blackmailed later - were commonplace.

The KGB-trained services also on occasion would deliberately break into the hotel room or residence of visiting dignitaries. In some cases, these incidents escalated and U.S. diplomats found their pets killed.

These kinds of tactics largely quieted down after the Cold War, but a spike in such incidents at the end of the 1990s prompted the Clinton administration to form a special bilateral committee to look into them. Moscow’s representative at the time was Vladimir Putin, a former KGB officer who would later become president of the Russian Federation.

The spike in these incidents, described by one U.S. intelligence official as “discreet acts of intimidation,” has been raised discreetly by members of Congress with the Obama administration since 2009.

But the issue became public last month after The Times published a series of stories about the bombing attempt in Georgia.

After The Times published an interview with a Georgian interior ministry official laying out evidence that Mr. Borisov was behind the bombing attempt, five senators led by Republicans Jon Kyl of Arizona and Mark Kirk of Illinois asked the Office of the Director of National Intelligence to provide a briefing on the incident.

In response to that query, the Obama administration released an assessment from the National Intelligence Council, the analytic arm of the Office of the Director of National Intelligence.

That report, four U.S. officials said, concluded that two bombs were placed outside a parking lot that abuts the U.S. Embassy compound. One bomb exploded outside the parking lot, another unexploded bomb was tossed over the parking lot wall.

The CIA concluded that Mr. Borisov was acting on orders from Russian military intelligence headquarters, according to these officials. The State Department’s Bureau of Intelligence and Research assessed that Mr. Borisov was acting as a rogue agent, these officials said.

Jamie Fly, executive director of the Foreign Policy Initiative who also served on the National Security Council staff in 2008 and 2009, said the incidents of intimidation of U.S. officials were evidence that the “reset” policy had failed.

“These types of Russian activities directed against U.S. officials, combined with Russian policies pursued by Moscow against U.S. allies, show the concept of a reset in relations with Russia is a joke,” Mr. Fly said.

Internal Russian politics

Mr. Obama was far more optimistic last week in an interview with Russia’s official ITAR-Tass news agency.

“Well, first of all, I think it’s important for us to look back over the last two years and see the enormous progress we’ve made. I started talking about reset when I was still a candidate for president, and immediately reached out to President Medvedev as soon as I was elected. And we have been, I think, extraordinarily successful partners in moving towards reset,” he said.

An administration official who defended Mr. Obama’s reset policy stressed that the political leadership of Russia was sincere in wanting to improve ties with the United States.

“There are most certainly some in the Russian government - nationalists, hard-liners, KGB folks, etc. - who don’t like the reset and are doing whatever they can to derail it,” this official said.

The official compared the Russia situation to domestic U.S. political divisions.

“We also have our critics/skeptics here within the U.S. government who are also still busy fighting the Cold War. And in these matters, they have good justification since certain elements of the Russian establishment are also still fighting the Cold War,” the official said.

This official pointed to Russia’s willingness to help supply U.S. troops in Afghanistan and their support for U.N. sanctions against Iran, North Korea and Libya as evidence of the reset policy’s success.

“The Kremlin seems to be a willing partner, even if maybe some in that regime don’t like this new trend and are doing what they can to derail it,” he said.

However, on Tuesday, Mr. Putin, now Russia’s prime minister and widely seen as its real leader, made some belligerent comments about the U.S., calling it a “parasite” on the world economy.

At a conference of the Nashi and Young Guard youth associations, Mr. Putin also suggested that his country would invite the Georgian breakaway province of South Ossetia into the Russian Federation, effectively annexing land taken in a war three years ago.

Mr. Putin, a former FSB director, is widely regarded as the real man in charge of Russia’s elite establishment of current FSB and former KGB officers.

In 2006, sociologist Olga Kryshtanovskaya produced a study that found 78 percent of Russia’s current elite had ties to the KGB or FSB.

© Copyright 2011 The Washington Times


Italy agrees to liberalise economy

By Guy Dinmore in Rome, Quentin Peel in Berlin, James Boxell in Paris and Joshua Chaffin in Brussels

Silvio Berlusconi, Italy’s centre-right prime minister, and Giulio Tremonti, finance minister, held several hours of emergency talks on Friday in which they agreed to speed up a package of measures to liberalise the economy.

The measures were announced at a press conference after the close of markets following a day in which the spread between Italian and German 10-year bonds overtook that of Spain, placing Italy – the eurozone’s third-largest economy – at the centre of the sovereign debt crisis.

News of the Italian plans were welcomed in Berlin, where action in both Rome and Madrid has been seen as top priority for restoring the credibility of both countries in the debt markets.

The talks in Rome, joined by Gianni Letta, cabinet undersecretary, represented the first significant departure from Mr Berlusconi’s failed efforts to ride the storm by largely blaming external forces and market “speculators” for the sharp increase in Italy’s borrowing costs. The country’s debt is equal to almost 120 per cent of gross domestic product.

The Italian government would continue to work on the package through August and parliament could be called back early from its summer recess to pass the necessary legislation, the official said.

The measures included a plan to amend the constitution to make a balanced budget mandatory, a second constitutional change that would force “closed professions” to liberalise services, a speeding up of welfare reforms, and other structural reforms designed to boost Italy’s stagnant economy.

Cuts in the “cost of politics” – including salaries of elected officials and subsidies to political parties – were also on the agenda, which had been agreed in outline with leaders of employers’ associations and trade unions on Thursday.

“This is a strong and credible plan,” the official insisted. He said Mr Berlusconi and Mr Tremonti were trying to put their deep personal difference behind them and work together. There was also a hope that the centre-right coalition would be able to boost its slender majority in parliament by winning the support of two smaller centrist parties that had previously supported Mr Berlusconi.

The Italian initiative came as Nicolas Sarkozy, French president and the current chairman of the Group of 20 leading economies, sought to co-ordinate a eurozone response to the turmoil in financial markets, with telephone calls to Angela Merkel, the German chancellor, and José Luis Rodríguez Zapatero, Spanish prime minister.

The German government has already firmly dismissed a proposal from José Manuel Barroso, president of the European Commission, for an increase in the size of the €440bn European financial stability facility – the eurozone rescue fund. Philipp Rösler, the German economy minister and vice-chancellor, described the proposal as “ill-timed”.

Officials in Berlin and Paris played down expectations of any big developments from the calls. A senior French official said he did not think the EFSF would be on the agenda.

Germany has stuck stubbornly to the line all week that wider crisis resolution measures for the eurozone have already been agreed – at the eurozone leaders’ summit on July 21.

Those measures – including allowing the EFSF to buy eurozone government bonds in the secondary market, and issue “precautionary” loans to governments facing liquidity problems – require approval by the national parliaments of the 17 eurozone states. That is unlikely to be forthcoming before the end of September.

Germany has long opposed any substantial increase in the size of the EFSF, arguing that such a move could ease the pressure on eurozone governments to take essential national measures to curb their spending.

In Brussels, however, Olli Rehn, the commissioner for economic and monetary affairs, supported Mr Barroso’s call for the EFSF to be increased to contain the crisis. Calling the recent market turmoil “incomprehensible” and detached from economic fundamentals, he said: “I think experience has really shown that we need to stand ready to adapt our crisis management tools – preferably ahead of the curve – to be credible.”

Carlos Slim Loses $6.7 Billion in a Week

Carlos Slim, the world’s richest man, lost about $6.7 billion this week.

The Mexican billionaire’s stock portfolio, measured in U.S. dollars, has dropped about 9.5 percent since July 29 and is valued at about $64.4 billion, according to data compiled by Bloomberg. That compares with a 7.2 percent slide in the Standard & Poor’s 500 Index.

Slim, 71, has taken a hit as Mexico’s benchmark IPC index dropped 6.4 percent and the peso slid 2.3 percent against the dollar on concerns that the flagging U.S. economy will hurt demand for assets in its southern neighbor. The removal of three of Slim’s companies from the IPC index has made matters worse for the billionaire.

“He’s been particularly hurt by those companies leaving the IPC,” said Leon Cabrera, a trader at Mexico City-based Vanguardia Casa de Bolsa. “It reflects the nervousness out there. It’s part of being in the market.”

America Movil SAB, the biggest wireless carrier in the Americas and Slim’s largest asset, has declined a relatively benign 6 percent this week. Its Telefonos de Mexico SAB unit has been Slim’s only gainer in Mexico, rising 11 percent on the parent company’s offer to buy out minority shareholders.

The Standard & Poor’s index extended its decline today, falling 0.1 percent at close. The IPC rose 1.1 percent, and America Movil gained 1.1 percent.
Buying Opportunity

The drop in America Movil, which has fallen 20 percent this year as regulators seek to put a dent in its 70 percent share of Mexico’s mobile-phone market, is an opportunity for investors to buy stock in a solid company, Cabrera said yesterday in a telephone interview.

Even measured in Mexican pesos, Slim’s holdings have dropped about 7.3 percent this week, a bigger decline than the broader Mexican market. Bolsa Mexicana de Valores SAB, the Mexican stock exchange operator, said Aug. 2 that it would drop Slim’s Grupo Financiero Inbursa SAB, Inmuebles Carso SAB and Grupo Carso SAB from the IPC index as part of an annual rebalancing.

Inbursa, Slim’s financial-services firm, slid 8.2 percent this week, while Inmuebles Carso, a real estate firm, declined 11 percent, and Grupo Carso, a holding company with retail and construction units, fell 14 percent.

Slim was named the world’s richest man for a second year in a row by Forbes magazine in March. Bill Gates and Warren Buffett, second and third on the magazine’s list, have had better weeks, at least for their biggest holdings.

Gates’s Microsoft Corp. (MSFT) dropped 6.3 percent this week. Buffett’s Berkshire Hathaway Inc. (BRK/A) slid 3.9 percent.

Arturo Elias, a spokesman for Slim, declined to comment in an e-mail.

To contact the reporter on this story: Crayton Harrison in Mexico City at

To contact the editor responsible for this story: Peter Elstrom at
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Details of America's Historic First Ever Downgrade

S&P downgrades U.S. credit rating for first time

By Zachary A. Goldfarb, Published: August 5 | Updated: Saturday, August 6, 12:35 AM

Standard & Poor’s announced Friday night that it has downgraded the U.S. credit rating for the first time, dealing a symbolic blow to the world’s economic superpower in what was a sharply worded critique of the American political system.

Lowering the nation’s rating to one notch below AAA, the credit rating company said “political brinkmanship” in the debate over the debt had made the U.S. government’s ability to manage its finances “less stable, less effective and less predictable.” It said the bipartisan agreement reached this week to find at least $2.1 trillion in budget savings “fell short” of what was necessary to tame the nation’s debt over time and predicted that leaders would not be likely to achieve more savings in the future.

“It’s always possible the rating will come back, but we don’t think it’s coming back anytime soon,” said David Beers, head of S&P’s government debt rating unit.

The decision came after a day of furious back-and-forth debate between the Obama administration and S&P. Treasury Department officials fought back hard, arguing that the firm’s political analysis was flawed and that it had made a numerical error in a draft of its downgrade report that overstated the deficit over 10 years by $2 trillion. Officials had reviewed the draft earlier in the day.

“A judgment flawed by a $2 trillion error speaks for itself,” a Treasury spokesman said Friday night.

The downgrade to AA+ will push the global financial markets into uncharted territory after a volatile week fueled by concerns over a worsening debt crisis in Europe and a faltering economy in the United States.

The AAA rating has made the U.S. Treasury bond one of the world’s safest investments — and has helped the nation borrow at extraordinarily cheap rates to finance its government operations, including two wars and an expensive social safety net for retirees.

Treasury bonds have also been a stalwart of stability amid the economic upheaval of the past few years. The nation has had a AAA rating for 70 years.

Analysts say that, over time, the downgrade could push up borrowing costs for the U.S. government, costing taxpayers tens of billions of dollars a year. It could also drive up interest rates for consumers and companies seeking mortgages, credit cards and business loans.

A downgrade could also have a cascading series of effects on states and localities, including nearly all of those in the Washington metro area. These governments could lose their AAA credit ratings as well, potentially raising the cost of borrowing for schools, roads and parks.

But the exact effects of the downgrade won’t be known until at least Sunday night, when Asian markets open, and perhaps not fully grasped for months. Analysts say the initial effect on the markets could be modest because they have been anticipating an S&P downgrade for weeks.

Federal officials are also examining the impact of a downgrade in large but esoteric financial markets where U.S. government bonds serve an extremely important function. They were generally confident that markets would hold up but were closely monitoring the situation. Regulators said that the downgrade would not affect how banking rules treat Treasury bonds — as risk-free assets.

The ratings action immediately fueled partisan wrangling Friday night. Allies to President Obama said it underscored his call for a “grand bargain” that would trim $4 trillion from the federal budget involving a mix of tax revenue and spending cuts.

Republicans criticized Obama’s handling of the economy.

“Standard & Poor’s rating downgrade is a deeply troubling indicator of our country’s decline under President Obama,” Republican presidential candidate Mitt Romney said.

S&P has angered government officials with aggressive warnings during the past few months of a potential downgrade. S&P corrected its draft report Friday after Treasury raised concerns about the math.

Over the past few months, the multiple warnings from S&P have not worried government bond markets. What’s more, the two other major credit rating companies, Moody’s Investors Service and Fitch Ratings, have said they would preserve the nation’s AAA rating for now.

S&P’s downgrade was as much a political critique as a financial conclusion. It is based on a view that U.S. political leaders would be unable to come up with at least $4 trillion in savings, which is needed to bring the nation’s debt to a manageable level over the next decade.

The debt deal swung earlier this week proposed spending cuts in two phases. Democrats and Republicans agreed to the first round, worth nearly $1 trillion. But a congressional committee must decide on the remaining $1.2 trillion to $1.5 trillion — and S&P questioned whether that would ever happen.

S&P added that it expects that the upper income Bush-era tax cuts will continue, despite vows from Obama to end the breaks next year.

“The majority of Republicans in Congress continue to resist any measure that would raise revenues,” the firm said.

S&P’s downgrade served as an indictment of the gridlock that sent the nation to the edge of defaulting on its debt obligations. It is also striking in part because it reflects the tremendous power of a small group of financial analysts employed by a New York company — part of McGraw-Hill. Credit-rating companies’ reputations were sullied during the financial crisis.

In Europe, political leaders have taken aim at credit rating companies when they cut the ratings of governments struggling with heavy debt burdens.

S&P said the nation could suffer additional downgrades later on if the nation’s debt burden grows worse. “A new political consensus might [or might not] emerge after the 2012 election, but we believe that by then the government debt burden will likely be higher,” the firm said.

The company said the United States’s financial position was diverging from that of other AAA countries, including Canada, France, Germany and Britain.

Countries with a AA+ rating include New Zealand and Belgium. Among those countries with a AA rating, one notch lower, are Bermuda, Spain and Qatar.

Staff writers Neil Irwin and Cezary Podkul contributed to this report.

Sticks, Stones and Dehumanization – History Repeats

Aug 5th, 2011 by TMH

Have you noticed the left’s marginalization of conservative values, more specifically folks who align themselves with the Tea Party movement? Glenn Beck touched on it during his radio show the other day; focusing on a disgusting name calling explosion which aired on MSNBC.

“Well Martin Bashir really went all out on this one. He brought a guest on who called Tea Party members aliens, cannibals, addicts and more – plus he said that if they don’t get their (…) what they want they will end up in a “Norway” situation!”


“Many of the Tea Party people, they are some of the most responsible among us. These are people that have paid taxes their whole life. They have run businesses their whole life. They have done the right thing. They have never broken the law. They have never taken a handout. They have paid charity. They have tried to be decent law abiding citizens. And now what they are saying is, we will pay the price as well. We understand. But it’s best for our country and our children’s freedom to do it. That’s a psychosis? That’s nirvana? No, nirvana, nirvana is some socialist communist utopia that never happens. It always ends, can I even say poorly or is that the understatement of the entire universe?” Glenn said.

During the radio broadcast a history lesson was given, a reminder of a time, not too long ago, when an unpopular group of people were similarly branded as less than human; part of an agenda to have them eventually eradicated. Yes, the reference was to the Jews during the build up of public resentment and ridicule which marked the extermination of millions of people during the Holocaust.

People in high places are calling Tea Partiers a variety of names, none of them too flattering. From an article by Brian Faughnan, House Democrat Leaders: Tea Partiers Are Racist, Nazi, Gun Nuts, something the more than pliant news media is happy to broadcast steadily.

“This initiative is funded by the high end; we call it AstroTurf, it’s not really a grass-roots movement. It’s AstroTurf by some of the wealthiest people in America to keep the focus on tax cuts for the rich instead of for the great middle class,” Pelosi said.

Other House Democratic leaders took a different tack: One senior aide has been circulating a document to the media that debunks the effort as one driven by corporate lobbyists and attended by neo-Nazis…

In addition, the Tea Parties are “not really all about average citizens,” the document continues, saying neo-Nazis, militias, secessionists and racists are attending them. The tea parties are also not peaceful, since reporters in Cincinnati had to seek “police protection” during one of the events, it states.”

Nancy Pelosi, while speaking at Tufts University in Massachusetts back in April, gave some advice to the “other side of the isle,” but if you read between the lines the information is more telling about the old guard Republicans than perhaps they would like us to know.

“To my Republican friends: take back your party. So that it doesn’t matter so much who wins the election, because we have shared values about the education of our children, the growth of our economy, how we defend our country, our security and civil liberties, how we respect our seniors.”

This is the same (old guard) Republican Party which advocated larger government through No Child Left Behind, the same (old guard) Republican Party that caved over the “debt ceiling crisis” and agreed to add to the national debt rather than act responsibly. They promised to cut spending, eventually; except the spending cuts would happen so far down the line as to be a pipe dream which only the dimmest of light bulbs might accept as plausible.

Pelosi wants everyone to know how dangerous the Tea Party movement is to the rest of us. Tea Partiers are to be blamed for nearly taking the country over the cliff, defaulting on our monthly payments to those who’ve been dumb enough to lend us several trillion dollars more than we could ever pay back in several life times; but we can at least put together enough to pay the interest due. Tea Partiers are to blame for Obama considering a hold on Social Security payments to our elderly. Tea Partiers are to blame for our troops not getting paid as well; but only if Obama decides not to pay them.

John Kerry is following the play book as well, speaking on August 4th, Tea Partiers are hostage takers with guns:

“There is a small group that has the ability in the last days to hold the entire country and our economy hostage and were willing to literally shoot the hostage,” said Senator Kerry.

The Democratic U.S Senator from Massachusetts slammed the Tea Party for equating compromise to a “form of treason” and bringing the country to the brink of default by blocking efforts in Washington to raise the federal debt ceiling “that would have guaranteed a financial crisis more severe than anything since the Great Depression.”’

In yet another assault on Tea Party members within the Republican Party, as reported by Jonathan Allen and John Bresnahan at the Politico:

“Rep. Emanuel Cleaver (D-Mo.) called it a “Satan sandwich,” and Rep. Luis Gutierrez (D-Ill.) seemed to enjoy the heat analogy, saying: “the Tea Partiers and the GOP have made their slash and burn lunacy clear, and while I do not love this compromise, my vote is a hose to stop the burning. The arsonists must be stopped.”

It wouldn’t be fair to leave out Joe Bidden, Vice President and heir to the Presidency. Joe must not be taking his lithium; but it’s fun to listen when he babbles on, even if he denies having said it during the Democrat Caucus this past Monday.

“We have negotiated with terrorists,” an angry (Rep Mike) Doyle (D-Pa) said, according to sources in the room. “This small group of terrorists have made it impossible to spend any money.”

Biden, driven by his Democratic allies’ misgivings about the debt-limit deal, responded: “They have acted like terrorists.”

Do you see how this matches the template used by the propaganda machine in pre WWII Germany? The Jews were to blame for the poor economy, the Jews were to blame for unemployment, the Jews were to blame; get rid of the Jews and Germany will once again be able to stand proud.

Tea Partiers are to blame for all the ills of our broken nation. If only the Tea Partiers would shut up; better yet, go away! Isn’t that the message being sent?

“Sticks and stones may break my bones; but words can never harm me;” a particle of truth in the popular saying when we were in grade school. The cold hard fact of it, there’s a purpose behind attacking the Tea Party movement. The ideas of our founders must be eradicated from public discourse regardless of the methods used. Those who support constitutional restraints on government, responsible spending and a balanced budget must be marginalized and their influence on society removed in order for the statist Utopia promised by Hope and Change to come about.

This article has been cross-posted to The Moral Liberal, a publication whose banner reads, “Defending The Judeo-Christian Ethic, Limited Government & The American Constitution.”

Ron Paul warns Savage of 'next bubble burst'

After bloodbath, Ron Paul warns of 'next bubble burst'
Texas congressman assesses damage in wake of market plunge

Acting as a "central economic planner," the Federal Reserve is moving the U.S. economy from one market bubble to another, and the next one will be a disaster, Rep. Ron Paul, R-Texas, told Michael Savage on the "Savage Nation" national radio show.

After the collapse of the tech, housing and financial bubbles, Paul said, the "dollar bubble" will be next.

"That's going to be the big one," the Texas congressman said on the heels of yesterday's worldwide market plummet, which saw the Dow lose more than 500 points.

In response to the market bloodbath, Paul noted, investors are pouring money into treasury bills and dollars, "but that is a bubble, too."

"When the panic comes, and they leave the dollar and go into real assets, that's when the whole world knows that a new monetary system is on the horizon, because this one will not last," Paul warned.

Days like yesterday, he said, "are warning signs that that big crash is coming for the dollar."

Paul emphasized that along with Congress balancing the budget and stopping spending, the U.S. needs a new monetary system.

"The system is built on a monetary system where the Fed creates money out of thin air," he said. "You have to stop doing that, because that is what caused the deficits to pile on and the financial bubble."

Pointing to the bank bailouts, he said lawmakers "must allow bankruptcy to occur instead of bailing them out."

Instead, a new bubble was created, "and that's why these financial now are in so much trouble."

"All they were doing is sucking in all this money the Fed was creating," Paul said, "and the Fed was buying up all this debt. And guess what? The average person in the middle class suffered from that. They're the ones who lost their jobs and lost their houses."

Tending his roses

Savage pointed out that while many banks benefited from the so-called Troubled Asset Relief Program passed by Congress, known as TARP, there was no ultimate benefit to the economy.

"The average person didn't get that money," Paul affirmed.

Paul recalled pointing out to Fed Chairman Ben Bernanke that with the amount given to financial institutions and big corporations, "you could have given every single person in this country $16,000."

"But you gave it to the big corporations and it didn't help the economy," he told Bernanke. "It helped the big banks, but they're in the same trouble again."

Paul agreed with Savage that one needed fix is a raise in the Social Security retirement age.

"The money that was put in there has been already spent, so if you're going to salvage it, you're going to have to do that," Paul said.

The lawmaker also would like to give young people a chance to opt out of the government's retirement system.

"We talk about opting out of Obamacare, why shouldn't young people say, 'Look, government's not very good at giving me my insurance, whether it's medical insurance or retirement insurance?'"

Paul said that the young people he talks to "don't believe for a minute that this government is going to provide them with a retirement benefit when they're 65."

To offer that opt-out, he noted, there will need to be spending cuts in other areas.

Savage pinned blame for yesterday's market slide on Obama and congressional Democrats.

"The people were screaming, 'Balance the budget, cut spending, cut benefits.' No, he said the opposite," Savage told his listeners. "'Not only will we not cut spending, not only will we not cut benefits, but we're going to increase spending. We're going to raise the debt limit.'

"And Harry Reid went home to tend to his roses, Barack Hussein went back to the barbeque pit to slather some thick, greasy sauce on whatever they're cooking over there, and look what happened."

Stocks: Worst week since financial crisis

NEW YORK (CNNMoney) -- It was a wild ride on Wall Street.

Stocks ended Friday on a mixed note after violently whipsawing throughout the day. The Dow had a massive trading range of 400 points as investors scrambled to make sense of a whirlwind of news.

Deep investor concerns about the U.S. economy and the European debt crisis caused heavy damage to U.S. stocks this week. All three indexes had their worst week since the darkest months of the 2008-09 financial crisis.

The Dow Jones industrial average (DJIA) rose 61 points, or 0.5%, to close at 11,445. The Dow at one point was down nearly 240 points.

The blue chips were lifted by shares of Kraft (KFT, Fortune 500) and Procter & Gamble (PG, Fortune 500), while the biggest drag on the Dow were shares of Bank of America (BAC, Fortune 500), which fell more than 7%.

The S&P 500 (INX) fell less than a point, or 0.1%; to 1,199; and the Nasdaq Composite (COMP) slid 24 points, or 1%, to 2,532.

The Dow fell nearly 6% for the week, the S&P 500 lost 7% and the Nasdaq dropped 8%. It was the worst week for the S&P 500 and Nasdaq on a percentage basis since November 2008 and the worst week for the Dow since March 2009.

Stocks started Friday's session sharply higher after investors got a strong U.S. jobs report. But the rally had little fuel, with the major indexes turning sharply lower as fears about Europe's escalating debt problems quickly dampened any early enthusiasm.

"The jobs report was modestly reassuring," said Bruce McCain, chief market strategist with Key Private Bank. "But it's been the heightened concerns over Europe that has dominated trading today."

Italy is quickly becoming the latest domino to potentially fall in the eurozone, with many investors worrying that the eurozone's third-largest economy may be too large to save.
Young investors stay put amid turmoil

Stocks found some support after the European Central Bank said it agreed to buy Italian bonds in exchange for massive budget cuts. But traders said investors were reluctant to hold stocks going into the weekend.

"The crisis in Europe is continuing to unfold and while I suspect Europe's debt story will not have a good ending, it's not clear how many more chapters this book has," McCain said.

It's clear that fear is still dominating sentiment. Wall Street's "fear" gauge -- the VIX (VIX) -- jumped to a reading of 32.05 in late-afternoon trading. Anything above 30 indicates a heightened sense of fear.
Choppy waters ahead - StockTwits

Stocks plunged Thursday, with the Dow tumbling 512 points. It was the steepest point loss since October 2008 -- as fear about the global economy spooked investors.

All three major indexes have erased their gains for the year and now are deep into "correction" territory -- defined as a 10% drop from recent highs. And while Wall Street took a hammering the past few weeks, stocks remain well above their March 2009 lows.

World markets: European stocks sank yet again on Friday before Italy's debt deal was announced. Britain's FTSE 100 (UKX) fell 2.7%, the DAX (DAX) in Germany slipped 2.7%, while France's CAC 40 (CAC40) was down 1.3%.

Asian markets ended the session deep in the red follow Thursday's big selloff in U.S. The Shanghai Composite (SHCOMP) lost 2.2%, the Hang Seng (HSI) in Hong Kong plunged 4.3% and Japan's Nikkei (N225) lost 3.7%.

Commodities and currencies: The dollar rose against the euro, the Japanese yen and British pound.

The greenback also rose for a third straight session against the Swiss franc, following the Swiss National Bank's intervention in the currency market earlier this week.

Gold futures for December delivery gained $3 .to $1,662.60 an ounce Friday, while oil for September delivery added 25 cents to $86.88 a barrel.
Regaining faith in U.S. but not the economy

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 2.56% from 2.46% late Thursday.

Companies: Shares of Procter & Gamble (PG, Fortune 500) rose 2%, after the Dow component posted earnings and sales that were ahead of expectations. The company also warned that results for the current quarter would fall short of estimates. (PCLN) shares jumped 9%, following the online travel site's better-than-expected earnings and a strong outlook for the rest of the year.

By Ken Sweet, contributing writer