Florida church announces Quran burning event

Maybe the tea partiers have found a new hero. News that a Florida pastor was planning a Quran-burning event to mark the ninth anniversary of the Sept. 11 attacks is typical of the kind of ignorant thinking that characterizes the tea party movement and its over-publicized icon, former Alaska governor Sarah Palin. The announcement of the Islamic good book burning that Terry Jones, pastor of the Dove World Outreach Center in Gainesville, says is to remember the victims of attacks on New York and Washington, D.C., and to express outrage against that religion, has sparked cries of outrage from leaders of U.S. religious denominations, according to Cable News Network (CNN). As we all know, the 19 9-11 hijackers were Muslim and the United States blames the attack on al-Qaida leader Osama bin Laden, also a Muslim. "We believe that Islam is of the devil, that it's causing billions of people to go to hell, it is a deceptive religion, it is a violent religion and that is proven many, many times," Jones said on CNN this week. Jones is the author of a book entitled "Islam is of the Devil" and his church sells T-shirts and coffee mugs bearing the phrase. But many Muslim and Christian leaders urged Jones to call off his event because it would just aggravate tensions, Reuters said. "American Muslims and other people of conscience should support positive educational efforts to prevent the spread of Islamophobia," said Ibrahim Hooper, a spokesman for the Council on American Islam Relations. The CAIR called on Muslims and others to hold 'Share the Quran" dinners to educate the public during Ramadan, the month-long fast that begins in August, and began a campaign to distribute copies of the Quran to U.S. leaders, Reuters said. An evangelical Christian group issued a statement promoting "relationships of trust and respect" with members of other religions. "God created human beings in his image, and therefore all should be treated with dignity and respect," the statement said. But "dignity and respect" for others is not what the Dove World Outreach Center is selling. Tellingly, the group also said it was promoting a rally on Monday to protest as "godless" Gainesville's openly gay mayor, Craig Lowe. At least we know this group has nothing to offer. The planet seems always to have been overpopulated with people who claim to know precisely what god is thinking.

Indefinite detentions overseas become Obama administration's dilemma

U.S. citizens who thought last year's change at the top meant a return to the days before al-Qaida and the Sept. 11 terrorist attacks on New York and Washington got another reality check Friday when a federal appeals court in Washington ruled that terror suspects captured overseas may not challenge their detentions in U.S. courts. The unanimous ruling by a three-judge panel means that three detainees held for years without trial at Bagram Air Base in Afghanistan did not have the same right of appeal that suspects being held by the U.S. military at Guantanamo Bay, Cuba, won in a landmark U.S. Supreme Court ruling in 2008, according to the New York Times. The ruling reversed a trial judge's decision that the Bagram detainees -- in this case, two men from Yemen and one from Tunisia who claimed they were captured outside Afghanistan and brought to the U.S. base -- had the same rights as prisoners held at Guantanamo Bay. Critics and supporters of the Bush administration's aggressive post-9/11 detention policies, which Obama criticized while campaigning but has defended in court, reacted to the ruling with expected vehemence. A lawyer for the detainees, Tina Foster of the New York-based International Justice Network, said the appeals court ruling would allow U.S. presidents to “kidnap people from other parts of the world and lock them away for the rest of their lives” without ever having to prove that they were guilty of anything, the Times said. “The thing that is most disappointing for those of us who have been in the fight for this long is all of the people who used to be opposed to the idea of unlimited executive power during the Bush administration but now seem to have embraced it during this administration,” she said. “We have to remember that Obama is not the last president of the United States.” But U.S. Senator Lindsey Graham (R-South Carolina), a backer of the Bush-era detentions, told the Times that the ruling was a "big win" for the U.S. war effort in Afghanistan. “Allowing a noncitizen enemy combatant detained in a combat zone access to American courts would have been a change of historic proportions,” he said. “There is a reason we have never allowed enemy prisoners detained overseas in an active war zone to sue in federal court for their release. It simply makes no sense and would be the ultimate act of turning the war into a crime.” A spokesman for the U.S. Justice Department, Dean Boyd, declined to comment on the decision, the Times said. The three prisoners say they are not terrorists and are being held by mistake.

Let the prosecutions begin -- Justice Department open criminal probe of Goldman Sachs

Word comes from New York that federal prosecutors have finally started the practically unconscionably delayed investigation into whether Goldman Sachs and other Wall Street traders should be held criminally liable for crashing the nation's housing market in 2006 and kicking off the global recession. Unnamed sources told the New York Times that the U.S. Securities and Exchange Commission, which last month filed a civil lawsuit accusing Goldman Sachs of fraud, referred its findings to the U.S. Justice Department. Goldman Sachs has denied the allegation in the fraud suit, which accuses the firm of defrauding investors in its Abacus 2007 AC1 collateralized debt obligations. According to the SEC, investors in the Abacus deals were not told that Goldman Sachs was simultaneously allowing other people to bet that the mortgage market would fall. When the market collapsed, Abacus investors lost millions but other investors enjoyed a windfall. One trader, hedge fund manager John Paulson earned more than $1 billion when value of bonds he helped select for Abacus investors crashed, the SEC alleged. Paulson has not been charged with any wrongdoing, the Times said. Of course, getting investigated is not the same as being charged, just as being charged is not the same as being guilty. In fact, two hedge fund managers at Bear Stearns were acquitted of criminal charges last year.

Currency deal could be near between China and United States

Word comes from New York that negotiators for China and the United States are closing in on an agreement to raise the value of China's currency, a point of contention between the two world economic giants. China's president, Hu Jintao, is scheduled to visit Washington this week, days after a surprise visit to China by U.S. Treasury Secretary Timothy Geithner, according to the Cable News Network (CNN). The United States has been pressing China to allow its currency to float against other world currencies, at least temporarily, to help rebalance the value of trade between the two countries. Analysts say an increase in the value of China's currency, the yuan, will help cut a huge surplus in its balance of trade. "It basically seems like it's a done deal," Ashraf Laidi, chief market strategist for CMC Markets, told CNN. In addition to diplomatic friction, the undervalued yuan is hampering economic recovery in the United States, said Peter Morici, a professor at the University of Maryland. "Unemployment would be falling rapidly and the U.S. economy recovering more rapidly but for the trade deficit with China and Beijing's currency policies." China has been keeping its currency undervalued by buying billions of dollars in U.S. currency and notes, CNN said. Most economists now think the yuan is undervalued by up to 40 percent, but raising its value precipitously could cause more problems than it would solve by overheating China's economy. In that scenario, a gradual increase would be more desirable, CNN said. "The movement from managed currency to freely floating currency is not easy to pull off," Mark Vitner, a senior economy with Wells Fargo Securities, told CNN. "If we have a boom and then a bust in China, that could lead to another global recession." In the short run, raising the value of China's currency will raise the price of Chinese goods sold in the United States while cutting the price of China's imports of natural resources like oil. Hu is expected in Washington next week for U.S. President Barack Obama's worldwide nuclear security summit.

Auditing giant could face huge lawsuits over Lehman Brothers collapse

From New York comes word that Big Four accounting giant Ernst & Young could be facing huge liabilities for failing to recognize the perilous state of Lehman Brothers, the giant investment bank that collapsed in 2008 and set off the world financial crisis. A report Thursday from a court-appointed examiner overseeing Lehman's bankruptcy filing suggested that Ernst & Young was negligent or worse for not noticing that Lehman had been writing off assets using an accounting technique to lower its debt on paper, according to the Reuters international news service . In his report, the auditor, Anton Valukas of the Chicago-based Jenner & Price law firm, said Lehman's use of a sale and repurchase program called Repo 105 had no business purpose outside of hiding assets to make the investment bank appear less leveraged than it actually was. Lehman's 2008 bankruptcy filing, the largest in U.S. history, sent shockwaves through the world economy and could have triggered the global economic crisis. In a statement, Ernst & Young said it had done nothing wrong and bore no responsibility for what happened, even though it audited the company for 2007 and already was preparing for the year-end audit when Lehman collapsed. "Our last audit of the company was for the fiscal year ending November 30, 2007. Our opinion indicated that Lehman's financial statements for that year were fairly presented in accordance with Generally Accepted Accounting Principles (GAAP), and we remain of that view," the statement said. "After an exhaustive investigation the examiner made no findings in his report that Lehman's assets or liabilities were improperly valued or accounted for incorrectly in Lehman's November 30, 2007, financial statements." Valukas had stated in his report that the repurchase transactions at least contributed to Lehman's collapse, and that the company had "colorable claims" against Ernst & Young for not realizing the damage they were doing, Reuters said. The chairman of Lehman Brothers Holdings Inc., Bryan Marsal, told Reuters through a representative that the company would "evaluate" the report to see if "it might help us in our ongoing efforts to advance creditor interests."

Public employee pensions, benefits threaten to bankrupt government as they soar out of control

Will state governments in the United States have to collapse before political leaders take the pension funding crisis seriously? What will happen to the already-gasping financial system if that happens? These questions returned to the headlines Thursday when the nonprofit Pew Center on the States released a new report revealing a $1 trillion shortfall nationwide in state contributions to employee pension and retirement plans. Only four states -- Florida, New York, Washington and Wisconsin -- had paid enough into their pension plans to cover their obligations, the report said, according to the Reuters international news service. Pew Center managing director Susan Urahn characterized the first 10 years of the new century as a "decade of irresponsibility," Reuters said. "Over the last 10 years, many states have shortchanged pension plans in good times and bad," Urahn said. "The growing bill coming due to states could have significant consequences for taxpayers -- higher taxes, less money for public services and lower state bond ratings." The situation with retiree health benefits also is dire, the report said, with only five percent of $587 billion in expected liabilities paid. Only Alaska and Arizona have more than 50 percent of the assets needed to pay that bill. It looks like it's well past time for states to change the system of having public management employees negotiate with public rank-and-file employees to set salaries and benefits, because it's obvious that no one is looking out for the taxpayer.

He's back -- Osama bin Laden vows more attacks on United States

Some guys never give up. We're referring, of course, to al-Qaida leader Osama bin Laden, who apparently released a new audiotape claiming responsibility for a failed attack on an airliner on Christmas Day and threatened new attacks against the United States. The authenticity of the new message was not confirmed by the White House, which characterized it as "hollow justification" for the Sept. 11, 2001, attack on New York and Washington, according to the Reuters international news service. In the tape, the voice presumed to be bin Laden's said the attempted bombing of Northwest Airlines Flight 253 near Detroit was a continuation of its fight against the United States for backing Israel's survival in the Middle East. "Our attacks against you will continue as long as U.S. support for Israel continues," bin Laden said on the tape. "It is not fair that Americans should live in peace as long as our brothers in Gaza live in the worst conditions." Bin Laden also praised the foiled attack on the plane by Umar Farouk Abdulmutallab, who was subdued by fellow passengers before he could ignite chemicals he had been hiding in his underwear. U.S. President Barack Obama, to whom the tape was addressed, said shortly after the failed attack that a wing of the terrorist group based in Yemen was responsible. So, it looks like al-Qaida is still in business -- but so, obviously, is the United States. The spectacularly cataclysmic al-Qaida attack that destroyed the World Trade Center in New York did not, as bin Laden apparently thought, cause the collapse of the United States or the disengagement of its allies. In fact, the opposite has happened, despite the preposterously bad administration of George W. Bush in Washington. And, now, the failed attack on Northwest 253 has prompted an increase in military aid to Yemen and a series of attacks on suspected al-Qaida positions that reportedly killed several of the group's top leaders but not bin Laden himself, even though Yemen became a haven for al-Qaida fighters after the 2001 terrorist attacks, Reuters said. In perhaps the most encouraging development, Western powers have planned two international conferences this week in London to discuss their approaches to Yemen and Afghanistan. The embattled government in Sanaa also is reportedly trying to resist a Shiite rebellion in the country's north and separatists in the south, Reuters said.

Venezuela's Chavez could lose control of Congress

Venezuelans returned to the streets today in protests over the country's deteriorating economic picture as this year's parliamentary elections drew nearer. Observers say President Hugo Chavez's hold on Congress could be in danger after devaluation of the currency and in the face of water and power outages caused by a severe drought. An opposition legislature could prevent Chavez from ruling by decree, a tactic he has used to make fundamental socialist-inspired changes in the Venezuelan economy, according to the Reuters international news service. Pro-Chavez marchers also took the streets on Saturday in a show of support for the government's aid programs for Venezuela's poor. "Tremble, you oligarchs -- this is the joy of the patriotic revolution," Chavez told his supporters, Reuters said. "The streets no longer belong to the oligarchs." The pro-Chavez march also was celebrating the 11th year of his presidency, which ushered in years of friction with the United States. Chavez called former U.S. President George W. Bush "the devil" at the United Nations in New York in 2006, no doubt because he was briefly removed from power in 2002 by a coup he blamed on the U.S. Central Intelligence Agency. But Chavez returned to office and has since consolidated government control of the economy, including the state oil company and the judicial system. Chavez gained control of the legislature in 2005 after opposition parties boycotted parliamentary elections, Reuters said.

White House report on failed airline bombing reveals glaring mistakes

We're all happy that the attempted bombing of a Northwest Airlines plane failed on Christmas Day when the alleged terrorist was overpowered and subdued by alert passengers. But a lot of people, including U.S. President Barack Obama, were not happy to find out that federal authorities knew the suspect, Umar Farouk Abdul Mutallab of Nigeria, posed a threat but hadn't yet placed him on a no-fly list. "The intelligence fell through the cracks," Deputy National Security Adviser John Brennan told reporters Thursday, according to Cable News Network (CNN). "This happened in more than one organization." That could well be what happened, but it's far from reassuring. Nine years after the Sept. 11, 2001, attacks on New York and Washington exposed major weaknesses in U.S. intelligence and led to the creation of a multibillion-dollar domestic security operation, the new apparatus failed a basic test. "Though all of the information was available to all-source analysts at the CIA and the NCTC [National Counter Terrorism Center] prior to the attempted attack, the dots were never connected," said the report, written by a Brennan-led panel. The dots were never connected? There are terrorists trying to kill us and the government is looking for dots? Maybe that's the problem, right there! It's sounds a little like all of the excuses we heard after the 9-11 attacks about how three hijacked airliners could have flown undisturbed for hours until they had crashed into buildings and killed thousands of people in New York and Washington in 2001, doesn't it? Isn't a little late for the country to rely on luck to prevent terrorist attacks? Or, if we were going to rely on luck, why did we spend those untold billions of dollars on security upgrades?

West rachets up aid to Yemen to boost anti-terror battle

Why would a sudden increase in U.S. military aid to the Arabian Peninsula nation of Yemen transform the Middle East's poorest nation into a loyal ally in the war on terror? It's kind of hard to see, given that Yemen harbors a branch of the al-Qaida
terrorist group that has been the avowed enemy of the United States for years and is responsible for devastating attacks that have killed thousands of people. But Gen. David Petraeus, head of the U.S. Central Command, announced Friday that the United States would more than double its $70 million in annual military support to help the government in Sanaa, Yemen's capital, crack down on militants believed to be setting up headquarters there, according to the Reuters international news service. "We have, it's well known, about $70 million in security assistance last year, Petraeus said at a news conference. "That will more than double this coming year." British Prime Minister Gordon Brown said Western support was needed to help Yemen avoid becoming a haven for terrorists, and announced a high-level meeting in London later this month. "The international community must not deny Yemen the support it needs to tackle extremism," Brown said. The al-Qaida in Yemen branch itself has claimed responsibility for this month's aborted attack on a passenger jet and is responsible for the attack on the USS Cole in Aden that killed 17 U.S. sailors in 2000 -- even before the still-hard-to-believe attack by its parent organization that destroyed the World Trade Center in New York.

U.S. regulators let CIT Group go under despite $2 billion investment

Why would the government allow a 100-year-old lender that provided funds to hundreds of thousands of small and medium-sized businesses fail while bailing out large sectors of the financial system? That was the obvious question Sunday when CIT Group Inc. of New York filed for bankruptcy under the weight of nearly $65 billion in debt, according to the Reuters international news service. The bankruptcy is the fifth largest in U.S. corporate history, and sidelines, at least temporarily, a major source of financing for a sector of the economy responsible for nearly half of the nation's jobs. CIT said in a statement that it hoped to eliminate $10 billion of debt in bankruptcy and emerge quickly. The company has $71 billion in assets. “The decision to proceed with our plan of reorganization will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy,” CIT's chairman and CEO, Jeffrey Peek, said in a prepared statement. “This market-based solution allows CIT to enter into the reorganization process well-prepared and positioned for a swift emergence. We also acknowledge our constructive working relationship with our regulators and look forward to their continued guidance as we move through this process.” Analysts said the 101-year-old company was a victim of the global credit crisis, Reuters said, as its loan porfolio suffered heavy losses and it ultimately was unable to raise enough money by selling bonds. In a letter to customers on Nov. 1, CIT said none of its subsidiary businesses, such as CIT Bank of Utah, would be affected by the bankruptcy filing. But the U.S. taxpayer is affected, since CIT received $2.33 billion from the Troubled Asset Relief Program in December. The government will only be repaid now if any money is left after banks and bond investors are paid because it is considered a preferred stockholder. Holders of CIT's common stock will not be repaid, Reuters said.

Crisis atmosphere returns to Honduras with Zelaya's return from exile

Demonstrators returned to the streets of Tegucigalpa on Monday after ousted leftist President Manual Zelaya returned to Honduras for the first time after a June coup forced him from office. Zelaya was forced to sneak back into the country and took refuge in Brazil's embassy under threat of arrest by the new conservative government, according to the Reuters international news service. Thousands of protesters defied a curfew and stayed outside Brazil's embassy in a peaceful show of support of Zelaya, who was forced into exile by the military in a dispute over term limits. Conservative legislative leader Roberto Micheletti, who was chosen to lead the interim government, has resisted worldwide calls to restore Zelaya to office. The United States, the Organization of American States and the European Union have refused to recognize the Micheletti government and have called for the restoration of Zelaya to power. "I am the legitimate president chosen by the people and that is why I came here," Zelaya told Reuters by telephone from inside the embassy. U.S. Secretary of State Hillary Clinton said Zelaya and the coup leaders must find a way to avoid violence in Honduras, Reuters said. "It's imperative that dialogue begin ... (and) there be a channel of communication between President Zelaya and the de facto regime in Honduras," Clinton said after a meeting with President Oscar Arias of nearby Costa Rica. But Micheletti wants Zelaya arrested on corruption charges and called on Brazil to turn him over to the de facto government. "A call to the government of Brazil: respect the judicial order against Mr. Zelaya and turn him into Honduran authorities ... The eyes of the world are on Brazil and Honduras," Micheletti said. Zelaya was due to leave office in January but his opponents accused him of trying to change Honduras' constitution to permit him to stay in office. In New York, Brazilian Foreign Minister Celso Amorim told Reuters he hoped Zelaya's return to Honduras would start a new stage in negotiations to end the crisis.

Federal judge cuts through the bailout rhetoric in New York courtroom

Think it's been awhile since there's been any straight talk about last year's $700 billion taxpayer rescue of the nation's financial system? Well, the wait is over. A federal judge in New York has issued a scathing ruling rejecting a proposed $33 million settlement of a lawsuit arising out of Bank of America's regulator-arranged takeover of the failing Merrill Lynch brokerage house, according to the New York Times. The ruling by U.S. Judge Jed Rakoff accuses the government's chief regulator, the U.S. Securities and Exchange Commission, of being too lenient and blames BofA officials for failing to tell their shareholders that Merrill Lynch had paid as much as $4 billion in bonuses to its employees just before the merger. The lawsuit was filed by the SEC against BofA, but the judge said the SEC and the bank came up with the settlement to absolve themselves of any further responsibility. “The S.E.C. gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger,” the judge said, according to the Times, and “the Bank’s management gets to claim that they have been coerced into an onerous settlement by overzealous regulators.” The judge ordered the parties to trial in February, pending what is likely to be numerous appeals of the ruling. The decision came on the same day that President Barack Obama told Wall Street banking executives in New York that "we will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis.” Obama has proposed an overhaul of the federal government's financial regulatory system. The Times said the BofA case was one of several active investigations of the $50 billion merger, including one by New York State Attorney General Andrew Cuomo that is expected to result in a criminal complaint later this month. An investigation by the House Committee on Government Oversight and Reform also is underway, the Times said.