Tamiflu Developer: Swine Flu May Have Been Released From A Lab
0 comments Posted by Unknown at 7:38 AMFirst scientist to study genetic makeup of virus says it may have escaped from a vaccine production facility
Paul Joseph Watson
Prison Planet.com
Wednesday, May 13, 2009
One of the first scientists to properly analyze the genetic makeup of the so-called swine flu virus that emerged three weeks ago in Mexico and led to fears of a global pandemic states that the virus may have escaped from a laboratory.
“Adrian Gibbs, 75, who collaborated on research that led to the development of Roche Holding AG’s Tamiflu drug, said in an interview that he intends to publish a report suggesting the new strain may have accidentally evolved in eggs scientists use to grow viruses and drugmakers use to make vaccines,” reports Bloomberg News.
The World Health Organization received Gibbs’ report study last weekend and is now in the process of analyzing it.
“One of the simplest explanations is that it’s a laboratory escape,” said Gibbs, who has studied germ evolution for four decades, adding that the virus could have been released “accidentally” from a virus production facility.
“In addition, Gibbs said his research found the rate of genetic mutation in the new virus was about three times faster than that of the most closely related viruses found in pigs, suggesting it evolved outside of swine,” states the report.
The U.S. Centers for Disease Control and Prevention in Atlanta were quick to deny Gibbs’ report, saying they found no evidence to verify his conclusions.
In our reports immediately following the swine flu outbreak, we speculated that the virus may have been created in a lab due to its highly synthetic nature, being a combination of several never-before-seen intercontinental human, avian and pig viruses from America, Europe and Asia.
As we reported in March, Baxter International, the same company chosen to make the swine flu vaccine, were caught distributing vaccines to 18 different labs in Europe that were tainted with the deadly avian flu virus.
Czech newspapers questioned whether the release was part of a deliberate conspiracy to provoke a pandemic.
In 2006 it was revealed that Bayer Corporation had discovered that their injection drug, which was used by hemophiliacs, was contaminated with the HIV virus. Internal documents prove that after they positively knew that the drug was contaminated, they took it off the U.S. market only to dump it on the European, Asian and Latin American markets, knowingly exposing thousands, most of them children, to the live HIV virus. Government officials in France went to prison for allowing the drug to be distributed. The documents show that the FDA colluded with Bayer to cover-up the scandal and allowed the deadly drug to be distributed globally. No Bayer executives ever faced arrest or prosecution in the United States.
In the UK, a 2007 outbreak of foot and mouth disease that put Britain on high alert has been originated from a government laboratory which is shared with an American pharmaceutical company, mirroring the deadly outbreak of 2001, which was also deliberately released.
Al Qaeda is so spooked by CIA drone attacks that Osama’s crew is staging spectacular bombings in Pakistan, in an attempt to get America to call off its unmanned attack fleet, former U.S. officials and counterterrror advisers say. And the CIA is apparently so spooked about the possibility of a withdrawal that they’re spilling details about their supposedly-secret drone strikes to the New York Times.
On April 19th, agency sources tell the paper, a CIA drone hit a truck parked inside an al Qaeda compound in Pakistan’s tribal province of South Waziristan. Packed with “high explosives, apparently to be used as a bomb,” the truck “erupted in a fireball” when it was struck. “A second, empty truck destroyed in the same attack may also have been there to be outfitted with explosives,” intelligence officials say. “In another significant attack, on April 29, missiles fired from a C.I.A. Predator killed Abu Sulayman al-Jazairi, an Algerian Qaeda planner who American intelligence officials say they believe helped train operatives for attacks in Europe and the United States.”
In other other words: Pay no attention to those reports of civilian casualties, like those reports of “25 bodies" in the latest unmanned attack. These drones are killing terrorists.
The Times goes on to report that “in meetings this past week in Washington, American and Pakistani officials discussed the possibility of limited joint operations with American Predator and Reaper drones. Under one proposal, the United States would retain control over the firing of missiles, but it would share with the Pakistani security forces some sophisticated imagery and communications intercepts that could be relayed to Pakistani combat forces on the ground.”
But according to Gen. David McKiernan, commander of coalition forces in Afghanistan, the U.S. military already shares its drone footage with the Pakistanis. “We exchange frequencies, we exchange intelligence, we have a Predator feed going down to the one [Afghanistan/Pakistan] border coordination center at Torkham Gate that’s looked at by the Pak military,” he said in November.
And according to the Wall Street Journal, the CIA is already sharing footage from its unmanned air force, too.
On Jan. 22, Pakistani paramilitary forces arrested Zabu ul Taifi, a Saudi national and alleged al Qaeda operative… [He] was located at a safe house in the Khyber Agency… through a combination of human intelligence from Pakistani agents, informants on the ground and aerial surveillance by U.S. drones.
Once authorities were confident Mr. Taifi was in the walled, mud compound, Pakistani paramilitary forces backed by helicopters grabbed him, the officer said. Throughout, Predator drones hovered overhead and would have attacked if Mr. Taifi or other suspects had tried to escape, the officer said. In all, Mr. Taifi and six other men — Afghans and Pakistanis — were nabbed in the raid.
That seems to be in direct contradiction to the Times report. Something’s not adding up here.
Meanwhile, Pakistani president Asif Ali Zadari keeps saying that he wants killer drones of his own. On Meet the Press yesterday, Zadari was asked if he considered the “drones that fire missiles and target Taliban” to be effective. The Pakistani’s answer: “I would consider them to be very effective if they were part of my arsenal. I’ve been asking for them, but I haven’t got a positive answer as yet. But I’m not giving up.”
Apparently not. According to Air Force Times, “Pakistan is working on its own Predator-like unmanned aerial vehicle,” or UAV.
The country’s air force and government-owned defense conglomerate, the National Engineering and Scientific Commission, are flight-testing a new-design aircraft to be equipped with a… laser designator and laser-guided missiles. The Burraq UAV is named for a winged horse creature in Islamic tradition, similar to Pegasus.
According to local news reports, Pakistan is focusing its unmanned aircraft efforts on upgrading various older UAVs with Chinese help.
But the sources note that no domestically produced UAV is large enough to heft both a missile and a targeting system. The military’s most capable UAV is the air force’s Selex Galileo Falco, which can laser-designate targets for other platforms but cannot deliver munitions.
UPDATE: IF you’re new to the killer drone world, this 60 Minutes segment, which aired last night, is a good primer.
[Photo: Noah Shachtman]
Wired
Influential economists and industrialists were ordered to preserve Nazi power by creating European common market, documents show A writer who was collecting material for a fictional book based around the premise that top Nazis, seeking to preserve their power at the end of the second world war, conspired to create a Fourth Reich under the auspices of the European Union, actually discovered documents proving the plot to be true. In a Daily Mail piece, Adam Lebor reveals how he uncovered US Military Intelligence report EW-Pa 128, also known as The Red House Report, which details how top Nazis secretly met at the Maison Rouge Hotel in Strasbourg on August 10, 1944 and, knowing Germany was on the brink of military defeat, conspired to create a Fourth Reich - a pan-European economic empire based around a European common market. Top Nazi industrialists were ordered by SS Obergruppenfuhrer Dr Scheid to set up front companies abroad and pose as democrats in order to achieve economic penetration and lay the foundations for the re-emergence of the Nazi party. “The Third Reich was defeated militarily, but powerful Nazi-era bankers, industrialists and civil servants, reborn as democrats, soon prospered in the new West Germany. There they worked for a new cause: European economic and political integration,” writes Lebor. Wealthy Nazi industrialists like Alfried Krupp of Krupp Industries and Friedrich Flick, as well as front companies like BMW, Siemens and Volkswagen, set about the task of building a new pan-European business empire. According to historian Dr Michael Pinto-Duschinsky, an adviser to Jewish former slave labourers, “For many leading industrial figures close to the Nazi regime, Europe became a cover for pursuing German national interests after the defeat of Hitler….The continuity of the economy of Germany and the economies of post-war Europe is striking. Some of the leading figures in the Nazi economy became leading builders of the European Union.” Banking titan Hermann Abs, who joined board of Deutsche Bank during the rise of Nazis, also sat on the supervisory board of I.G. Farben, the company that made the Zyklon B gas used to kill concentration camp victims. “Abs was put in charge of allocating Marshall Aid - reconstruction funds - to German industry. By 1948 he was effectively managing Germany’s economic recovery,” writes Lebor. “Crucially, Abs was also a member of the European League for Economic Co-operation, an elite intellectual pressure group set up in 1946. The league was dedicated to the establishment of a common market, the precursor of the European Union.” The European League for Economic Co-operation developed policies for European integration that almost mirrored those proposed by Nazis just years previously. In his book “Europe’s Full Circle,” Rodney Atkinson provides a list of policies proposed by Nazis and their similarity to today’s European Union. “Is it possible that the Fourth Reich those Nazi industrialists foresaw has, in some part at least, come to pass?” asks Lebor. “These three typewritten pages are a reminder that today’s drive towards a European federal state is inexorably tangled up with the plans of the SS and German industrialists for a Fourth Reich - an economic rather than military imperium.” As we have highlighted in the past, Nazism and the EU have some very disturbing parallels. Indeed, the two are fundamentally intertwined and the origins of the EU can be traced directly back to the Nazis. The foundations for the EU and ultimately the Euro single currency were laid by the secretive Bilderberg Group in the mid-1950’s. Bilderberg’s owned leaked documents prove that the agenda to create a European common market and a single currency were formulated by Bilderberg in 1955. One of the group’s principle founders was H. Prince Bernhard of the Netherlands, a former Nazi SS officer. But the ideological framework for the European Union goes back even further, to the 1940’s when top Nazi economists and academics outlined the plan for a single European economic community, an agenda that was duly followed after the end of the second world war. In his 1940 book The European Community, Nazi Economics Minister and war criminal Walther Funk wrote about the need to create a “Central European Union” and “European Economic Area” and for fixed exchange rates, stating “No nation in Europe can achieve on its own the highest level of economic freedom which is compatible with all social requirements…The formation of very large economic areas follows a natural law of development….interstate agreements in Europe will control [economic forces generally]…There must be a readiness to subordinate one’s own interests in certain cases to those of [the EC].” Funk’s co-authors echoed his sentiments. Nazi academic Heinrich Hunke wrote, “Classic national economy..is dead…community of fate which is the European economy…fate and extent of European co-operation depends on a new unity economic plan”. Fellow Nazi Gustav Koenig observed, “We have a real European Community task before us…I am convinced that this Community effort will last beyond the end of the war.” In 1940, Minister of Propaganda Joseph Goebbels ordered the creation of the “large-scale economic unification of Europe,” believing that “in fifty years’ time [people would] no longer think in terms of countries.” Just 53 years later, the European Union in its current form was established. Other top Nazis who called for the creation of a pan-European federal economic superstate include Ribbentrop, Quisling and Seyss-Inquart, who spoke of “The new Europe of solidarity and co-operation among all its people… will find…rapidly increasing prosperity once national economic boundaries are removed.” Such rhetoric would not look out of place at a present day Bilderberg, Trilateral Commission or CFR confab. The Nazis killed people who spoke out against the Third Reich, whereas the EU has implemented an altogether more efficient solution - simply kill their free speech instead. A Dutch MP was recently refused entry to Britain because his political opinions were deemed offensive under EU laws. Euro MP’s have consistently attempted to ban the “dangerous and unregulated blogosphere” in an attempt to shut down free speech on the Internet. Under the 1999 ruling of the European Court Of Justice (case 274/99), it is illegal to criticize the EU and the EU is on a mission to outlaw any national political parties that do not pander to the European federal superstate agenda. Most of the individuals who hold the reigns of power in the European Union are not Nazis, indeed, they probably believe themselves to be fair-minded liberals working for the “greater good”. However, the European Union by its very nature is totalitarian, because it seeks to remove power from national governments accountable to their electorate and centralize it into the hands of supra-national entities that are accountable to nobody but themselves. It also seeks to remove the right of free speech for anyone in a position of influence who criticizes this agenda. The fact that the EU was a brainchild of top Nazi economists and industrialists, formulated as a means of preserving dictatorial power and then implemented by a former Nazi working under the auspices of the Bilderberg Group in 1955, proves that the entire European Union system is poisoned with a legacy and a raison d’ĂȘtre of totalitarianism. This is becoming increasingly obvious in the 21st century as popular social movements across Europe rise up to oppose the blatant power grab being undertaken by the EU via the Lisbon Treaty, which will again be put before Irish voters later this year despite them already rejecting it in a national referendum, which prevented the treaty from being enforced. Written by Paul Joseph Watson for Prison Planet, May 11, 2009.
House Demands Full Disclosure On DHS “Right-wing Extremism” Report
0 comments Posted by Unknown at 12:24 PMRepublican Representatives have demanded answers from the Department of Homeland Security over the origins of the leaked security intelligence assessmentwhich equates veterans and gun owners with violent terrorists. House Minority Leader John A. Boehner filed the request using a little known legislative procedure called “a resolution of inquiry”, which ensures that the Democratic leadership will publicly resolve the issue within 14 days. “The report that came out of DHS was offensive, and unfortunately, Secretary Napolitano still has a lot of explaining to do,” Boehner told the Washington Times. “She has not explained how this report came about, why she signed off on it, or why she defended it.” the Ohio Republican stated. The resolution, co-sponsored by Rep. Peter T. King of New York, the ranking Republican on the House Homeland Security Committee, requests that all documents and information pertaining to the compilation of the intelligence assessment be revealed. “We have made repeated requests that the committee hold a bipartisan oversight hearing, but unfortunately those requests have been ignored. We are left with no other alternative but to demand answers from the secretary of homeland security herself,” Mr. King commented. The report, entitled Rightwing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment (PDF link) was leaked to the Internet a fortnight ago. Further analysis of the document has indicated that it was created by the DHS in 2007, under the authority of the Bush/Cheney administration, a fact that undermines any opportunity for political pointscoring on behalf of the GOP. The document characterizes concerns about the economy, unemployment, the loss of U.S. sovereignty and the move towards global government as “rightwing extremist chatter on the Internet” which itself is defined as a potential tool for terrorists to network, build bombs, and send encrypted messages to each other. It also lists those opposed to abortion or immigration as potential extremists. A footnote attached to the report by the Homeland Security Office of Intelligence and Analysis defines “rightwing extremism in the United States” as including not just racist or hate groups, but also groups that reject federal authority in favor of state or local authority. Controversy over the assessment was heightened earlier this week when another disturbing DHS security document emerged. Entitled “Domestic Extremism Lexicon”, it shockingly lists the “alternative media” with other radical extremist groups and implies that people who disagree with the mass media’s version of events are potential domestic terrorists. Though Janet Napolitano appeared before the Senate Judiciary Committee yesterday, she was not questioned on either of the documents. Written by Steve Watson for Prison Planet, May 7, 2009.
US and foreign banks were not unwitting victims of circumstance but deliberately culpable in the financial meltdown that engulfed the United States last year, a campaign group said Wednesday.
The Center for Public Integrity named 25 “subprime” mortgage companies whose risky lending was blamed for the US property market collapse and the subsequent global economic crisis.
Many of the lenders were either controlled by US and European banks, or could not have indulged in their high-risk lending spree without the connivance of banks, the investigative journalism group said in a new study.
“The mega-banks that funded the subprime industry were not victims of an unforeseen financial collapse, as they have sometimes portrayed themselves,” the center’s executive director Bill Buzenberg said.
“These banks were deliberate enablers that bankrolled the type of lending that’s now threatening the financial system,” he said.
The study was released as the US House of Representatives was set Wednesday to vote on a Senate-approved bill that would set up a 9/11-style inquiry into the root causes of the financial crisis.
The center said it analyzed US government data on nearly 7.2 million “high-interest” or subprime loans made from 2005 to 2007, when the real estate bubble was at its peak.
It said the “Subprime 25″ accounted for nearly one trillion US dollars or about 72 percent of industry-reported loans extended to risky borrowers who would not normally have qualified for a mortgage.
At least 21 of the 25 were financed by banks that received US government bailout money, and 11 of them have made hefty payments to settle prosecution claims of widespread lending abuses, it said.
Four of them have received bailout funds, including collapsed insurer American International Group and banking behemoth Citigroup. Other banks named included Britain’s HSBC and Barclays Bank.
Top of the list with at least 97.2 billion US dollars in subprime loans was Countrywide Financial, which was bought by Bank of America last year to avert bankruptcy for the giant mortgage company.
Second with 80.6 billion US dollars in loans was Ameriquest Mortgage, now part of the Citigroup family. Third with 75.9 billion was New Century Financial Corp, which went bust in 2007 and now faces a federal investigation.
“The center found that US and European investment banks invested enormous sums in subprime lending due to unceasing demand for high-yield, high-risk bonds backed by home mortgages,” the study said.
“The banks made huge profits while their executives collected handsome bonuses until the bottom fell out of the real estate market.”
The list of lenders (via Business Week) is:
1. Countrywide Financial
At least $97.2 billion
2. Ameriquest Mortgage/ACC Capital Holdings
At least $80.6 billion
3. New Century Financial
At least $75.9 billion
4. First Franklin/National City/Merrill Lynch
At least $68 billion
5. Long Beach Mortgage/Washington Mutual
At least $65.2 billion
6. Option One Mortgage/H&R Block
At least $64.7 billion
7. Fremont Investment & Loan/Fremont General
At least $61.7 billion
8. Wells Fargo Financial/Wells Fargo
At least $51.8 billion
9. HSBC Finance/HSBC Holdings
At least $50.3 billion*
10. WMC Mortgage/General Electric
At least $49.6 billion
11. BNC Mortgage/Lehman Brothers
At least $47.6 billion*
12. Chase Home Finance/JPMorgan Chase
At least $30 billion
13. Accredited Home Lenders/Lone Star Funds V
At least $29.0 billion
14. IndyMac Bancorp
At least $26.4 billion
15. CitiFinancial/Citigroup
At least $26.3 billion
16. EquiFirst/Regions Financial/Barclays Bank
At least $24.4 billion
17. Encore Credit/ECC Capital/Bear Stearns
At least $22.3 billion
18. American General Finance/American International Group (AIG)
At least $21.8 billion*
19. Wachovia
At least $17.6 billion
20. GMAC/Cerberus Capital Management
At least $17.2 billion*
21. NovaStar Financial
At least $16 billion
22. American Home Mortgage Investment
At least $15.3 billion
23. GreenPoint Mortgage Funding/Capital One Financial
At least $13.1 billion
24. ResMAE Mortgage/Citadel Investment Group
At least $13 billion
25. Aegis Mortgage/Cerberus Capital Management
At least $11.5 billion
*Totals include subsidiaries
The Center for Public Integrity has more on its study here.
With AFP.
The Raw Story
The DNA fingerprinting pioneer Professor Sir Alec Jeffreys today condemned government plans to keep the genetic details of hundreds of thousands of innocent people for up to 12 years.
Jeffreys – whose discoveries have been used to establish what has become the world's largest national DNA database – said he was "disappointed" with the proposals, which came after a European court ruled that the current policy breaches people's right to privacy.
"It seems to be as about as minimal a response to the European court of human rights judgment as one could conceive. There is a presumption not of innocence but of future guilt here … which I find very disturbing indeed.
"I do not see this as balanced and proportionate. It still places England, Wales and Northern Ireland as the only jurisdictions in the world, to my knowledge, to retain such large amounts of innocent DNA information."
The proposed new rules include keeping the DNA profiles of innocent people who are arrested for serious offences, but not convicted, for 12 years and those arrested for minor offences for six years. Innocent people's profiles are currently kept until their 100th birthday.
Jeffreys dismissed a Home Office prediction that 4,500 fewer crimes will be detected if the proposals go ahead.
"There is an unspoken assumption in here that these thousands of crimes that will not be detected by not having the DNA will remain undetected and that simply isn't the case. A significant number of these will be detectable through conventional police work, including the obtaining of fresh police DNA samples."
He demanded that the government release further details of its concerns about poorer detection rates.
"We have been told some very cursory figures. One would like to know a great deal more. Are these serious crimes? Are they a relatively small number of individuals, for example serial burglars? We don't have that information at all. And we need that information to be able to balance the improved ability to detect these crimes against the right to a private life."
Jeffreys's genetic discoveries at Leicester University in the mid-1980s enabled the establishment of the national DNA database 10 years later. It is now the largest in the world, storing details on more than 5 million people.
Jeffreys said he supported the plan to dispose of the original hair, blood or other sample once the DNA profile had been obtained.
"I absolutely welcome that because the original samples contain all the information embodied in the DNA profile plus the rest of your genetic information. Now the police have no particular plans to go into that but there is always concern that access to those original DNA samples could lay bare far greater amounts of genetic information than is exploited in DNA profiling.
"This is all part of a right to a private life and retention by the state of genetic samples of innocent people is not appropriate."
The home secretary, Jacqui Smith, said the new proposals, which are out to public consultation, would ensure that the right people were on the database, as well as considering when people should come off it.
"We will ensure that the most serious offenders are added to the database, no matter when or where they were convicted," she said.
The proposals come after the ECHR found that the current legal framework amounted to a violation of human rights.
In one of the harshest ever condemnations of UK law, the court's grand chamber of 17 judges said it had been "struck by the blanket and indiscriminate nature" of the government's powers to take and keep DNA samples.
The ruling came after two innocent people from Sheffield, Michael Marper and a boy known in court as S, complained that their human rights were being violated by the government keeping their DNA profiles.
Their solicitor, Peter Mahy, today described the Home Office plans as "a let-down for the hundreds of thousands of people who are innocent but remain on the database".
"We fought a long, hard legal battle on this issue for over seven years which resulted in the spectacular 17-0 victory in European court of human rights. Unfortunately the government is still not proposing to destroy DNA profiles of innocent people when they have been cleared of any crime but instead keep them for up to 12 years," Mahy said.
"Innocent people should be treated as if they are innocent, not as suspects for years after they have been cleared. Innocent should mean innocent. If the proposals do not change there will undoubtedly be more cases brought by innocent people arguing that keeping their DNA profiles is disproportional and a breach of their human rights.
"I believe that the European court ruling and the change in UK policy will be looked at in years to come as truly defining moments in the UK's history of human rights. The judgment and policy change will not only affect hundreds of thousands of innocent people in the UK but millions of citizens worldwide. It is important that people respond to the consultation."
Shami Chakrabarti, the director of the human rights group Liberty, said the new proposals were disproportionate and could lead to abuses of the system.
"These proposals are not quite two fingers to the European court of human rights but they come pretty close," she said.
"They don't distinguish between people who are under suspicion, people who are wholly innocent and those who are guilty.
"The government is still trying to get away with the largest database possible, including holding the details of people who are wholly innocent of anything.
"If they do not budge in consultation, then we will see them in court."
Last month, Jeffreys told the Guardian that the current system left innocent people "branded as criminals".
The proposals contrast sharply with the situation in Scotland, where only the DNA profiles of suspects arrested for serious violent and sexual offences are retained, and for a maximum of five years.
The Guardian
Labels: Big Brother, DNA, Sir Alec Jeffreys, Surveillance, United Kingdom
U.S. Halts Pilot Program in New York to Detect Biological Attacks
0 comments Posted by Unknown at 7:18 AMThe Department of Homeland Security is dismantling a next-generation biological attack warning system in New York City subways because of technical problems, U.S. officials said.
Robert Hooks, a deputy assistant secretary, said the department no longer believes it is necessary to expand the pilot program, as he told Congress in July, because of resource and technology limits. Hooks said a long-planned alternative sensor system, set for initial deployment late next year, also will not be available nationwide until 2012, to allow for more testing.
The deactivation of the pilot program in late March marks a setback in U.S. efforts to detect biological weapons, and its disclosure comes as the Obama administration is unveiling new security priorities as part of its 2010 budget today.
The federal government installed air samplers in more than 30 U.S. cities in 2003 to detect the release of potential bioweapons such as anthrax spores, plague bacteria and smallpox viruses. The BioWatch program, which cost about $500 million, was meant to speed up the response before disease could spread.
Critics said older samplers are of limited use, however, because they rely on air filters that must be manually collected and evaluated by a laboratory, taking as much as 30 hours. New York City activated newer sensors in late 2007 that can automatically sniff the air hourly for as many as 100 harmful species and transmit results immediately.
In the past three or four months, however, officials noticed that an instrument designed to detect a particular agent in several of the Autonomous Pathogen Detection System sensors began malfunctioning, Hooks said. The department's science and technology directorate is working with an independent assessor and the sensors' maker, the Lawrence Livermore National Laboratory, to troubleshoot the problem, he said.
DHS and New York officials said that the decision was mutual and that the city is still protected by older sensors, whose samples are being evaluated more frequently.
Lawrence Livermore spokesman Steve Wampler said the lab supports additional DHS testing and added: "We believe we have a technology solution for detecting biological agents that is available now."
DHS expects tests to begin this summer of a new generation of sensors, called Gen 3 BioWatch, Hooks said. "It's always a trade-off, a balance between how you can get technology out there and how much . . . risk there is that it will divert resources" from better options, he said. "We anticipate because of the production cycle and further testing we'll be deploying in 2012 widely across the country."
Written by Spencer S. Hsu, for The Washington Post, Thursday, May 7, 2009.
Uncertainty Remains, but Officials Say Most Have Capital to Outlast Recession
Long-awaited results of the government's stress test of 19 major banks show that nearly all, including several that verged on collapse during the financial crisis, now have enough money to weather the recession, the Obama administration plans to announce this afternoon.
In an outcome more positive than many investors had expected, the tests concluded that the banks have enough capital in reserve but may need to strengthen the ability of those holdings to absorb losses.
The report is expected to show clear distinctions among the nation's largest banks, according to sources familiar with the findings. J.P. Morgan Chase will not require additional capital, clearing the way for the bank to repay the government's investment.
Bank of America and Wells Fargo also do not need more money, but will be required to strengthen their reserves, potentially by converting tens of billions of dollars of other forms of capital to common equity, the most dependable form of capital. Bank of America will need to increase these holdings by about $34 billion and Wells Fargo by $15 billion, sources said. Citigroup, the weakest of the giants, will be required to raise about $5 billion in new capital and take additional steps to strengthen its reserves.
The formal unveiling of the results scheduled for this afternoon marks the end of a months-long process designed by the Obama administration to restore confidence in the banking industry, in part by forcing some banks to accept additional capital.
The markets responded to early reports of the results yesterday with a euphoric burst, bumping up shares of Bank of America by 17 percent, Citigroup by 16 percent and Wells Fargo by 15 percent. But it might not be clear for some time whether the government has succeeded in restoring confidence, a prerequisite for economic revival.
Auto-financing giant GMAC may be the company most likely to require a new federal investment, according to sources familiar with the situation. Sources said the government would require GMAC to increase by $11.5 billion its holdings of common equity -- money raised from the sale of common stock and retained from profit. The company, with only $5 billion in government money that can be converted to common equity, has struggled to attract private investors and may be forced to accept additional federal aid. The government already is planning to pump billions of dollars more into the company to help it replace Chrysler Financial as the primary source of loans for Chrysler dealers and car buyers.
The 19 banks, which together hold two-thirds of the nation's deposits, were required to provide regulators with reams of data detailing loans and other commitments. The banks also estimated loan defaults and losses through the end of 2010, based on a moderately bleak economic forecast provided by the government. Finally, regulators adjusted the findings to ensure comparability among firms.
Some economists have warned that the recession may prove even more severe, raising the prospect that banks still won't have enough capital.
Prevailing regulations require all banks to maintain a capital reserve equal to 6 percent of their outstanding loans and other commitments, so the bank can absorb unexpected losses. For the purpose of the stress test, regulators also required that banks keep most of that reserve in the form of common equity.
The change is a concession to investors who are concerned that banks increasingly hold capital from less dependable sources, such as the sale of preferred shares, which are structured like loans that must be repaid. This problem was exacerbated by the government's investment in banks, which came in the form of preferred shares.
Nearly all of the banks have enough capital to meet the first requirement, but many were unprepared to meet the narrower requirement.
The results, which will be released by Treasury Secretary Timothy F. Geithner and the heads of the major regulatory agencies, divide banks into three categories.
A small number of institutions need more money to buttress their reserves. A larger group of banks do not need more money, but will be required to raise additional common equity to strengthen their reserves. Some banks will receive a clean bill of health.
Regulators have been careful to note that all of the tested banks have enough capital at present; the question is whether they will maintain enough capital through 2010.
Banks that must take remedial action have until June 8 to develop detailed plans, officials said yesterday. The firms then have until Nov. 9 to meet the government's requirements before they are required to accept federal aid, or else they will be required to accept federal aid.
Officials say they are confident that most companies will not need additional money from the government, although companies that convert existing federal investments will be able to suspend dividend payments, potentially erasing billions of dollars in expected returns for the government.
Citigroup will be required to raise about $5 billion in additional capital, and to increase its holdings of common equity by about $50 billion, or more than 60 percent. That's the largest hole for any bank.
The company has announced plans to exchange common shares for $52.5 billion in preferred shares, including $25 billion held by the government, which would give taxpayers a roughly 36 percent stake. The firm is also selling a number of business units, including much of its operation in Japan.
Executives have expressed confidence that the company will not require additional federal aid.
Regions Financial of Alabama also will be required to raise additional capital.
The longer list of banks that need to raise common equity is headlined by Bank of America, which will be required to raise $33.9 billion, an increase of roughly 50 percent in the bank's common equity, according to a person familiar with the matter.
The bank could meet that requirement by converting a portion of the government's existing $45 billion investment, a step that would not involve raising any new money. But the bank is likely to consider other options, such as the sale of business units, because exchanging common shares for the preferred shares now held by the Treasury would give the government a significant ownership stake in the company.
Bank of America is shopping its mutual fund unit, Columbia Management, and also exploring the sale of its stake in China Construction Bank. The company also has about $33 billion in preferred shares held by private investors, which it could try to convert to common shares.
Regulators plan to require Wells Fargo to increase its common equity by $15 billion. The company has issued $25 billion in preferred shares to the government.
The list of banks judged by the government to have sufficient capital and sufficient common equity also includes Goldman Sachs, Bank of New York Mellon and American Express. Tests determined that Capital One Financial of McLean needs little, if any, additional common equity, sources said.
Several of these companies are expected to push for permission to repay the government's existing investments. The administration has said that it would only allow banks to repay that money if they also demonstrate that they no longer need to rely on another government aid program, administered by the Federal Deposit Insurance Corp., which allows banks to issue debt at lower interest rates by guaranteeing investors against loss.
All of the banks declined to comment yesterday, citing orders from the government not to speak about the test results.
This first article, written by Binyamin Appelbaum for the Washington Post, Thursday, May 7, 2009.
The second article, Some Big Banks Are Seen in Need of More Capital, is written by Eric Dash and Louise Story of the New York Times, also dated today, May 7, 2009.
The results of the bank stress tests have been trickling out for days, from Washington and from Wall Street, and the leaks seem to confirm what many bankers feel in their bones: despite all those bailouts, some of the nation’s largest banks still need more money.
But that does not necessarily mean the banks will get that money from the government. The findings, to be released Thursday by the Obama administration, suggest that the rescue money that Congress has already approved will be enough to fill the gaps. If so, the big bailouts for the banks may be over.
All of this assumes that the economy does not take another turn for the worse, which would result in even more losses at the banks — and the need for even more money to prop them up. But hopes that the tests will be a turning point in this financial crisis electrified Wall Street on Wednesday and some overseas markets the next day. Financial shares soared, lifting the broader American stock market to its highest level in four months. The Dow Jones industrial average rose 101.63, or 1.2 percent, to close at 8,512.28 Wednesday, while Japan's Nikkei index rose more than 4 percent by midday Thursday.
How well many of the banks fared in the tests seems to have become something of a open secret on Wall Street, where the results, and mere whispers of them, have been the subject of intense speculation.
After news this week that Bank of America and Citigroup would be required to bolster their finances again, word came Wednesday that regulators had determined that Wells Fargo and GMAC, the deeply troubled financial arm of General Motors, would need to do so as well. But regulators decided that American Express, Capital One, Bank of New York Mellon, Goldman Sachs, JPMorgan Chase and MetLife would not need to take action. The official word is due at 5 p.m. Thursday.
The results so far seem to suggest that the 19 institutions that underwent these exams will need less than $100 billion in additional equity to cope with a deep recession, far less than some investors had feared. The question now is, where will banks get that capital?
Most of them would prefer to raise money privately, either by selling shares to the public or a big investor, or by selling some of their businesses. But if that is not enough, the odds are the government will step in.
The thinking is that some banks will ask the government to convert preferred shares that it bought last year, at the height of the financial crisis, to common stock. As a result, the government would become a significant shareholder in a number of banks besides Citigroup.
But under that assumption, no new taxpayer money would go to the banks. The government would merely exchange one investment, its preferred stock, which is much like a loan, for ordinary common shares. The move amounts to shifting public money from one pot to another to ensure that these big lenders — those deemed too big to fail — have enough common stock to cushion their potential losses.
This would represent a riskier deal for taxpayers. Whether they get out whole would depend on the stock market. And by exchanging its preferred shares for common stock, the government would also forgo dividend payments on its preferred shares.
“What is positive is that there’s a line being drawn,” said Jim Reichbach, a vice chairman of United States financial services at Deloitte. “There’s a number being put on the table.”
To help cover a huge shortfall, Citigroup has announced plans to convert a portion of the government’s $45 billion investment to common stock, which would give the government a stake of as much as 36 percent. Regional lenders like Fifth Third Bank of Ohio or Regions Financial of Alabama could find themselves in a similar boat.
The banks are eager to avoid having the government increase its stake drastically because that would dilute the holdings of the banks’ existing shareholders. Bank of America, for instance, is looking to sell businesses and to cash in investments to help cover a shortfall of nearly $34 billion.
Morgan Stanley plans to meet an expected shortfall of $1 billion to $2 billion by selling assets or stock to private investors, a person briefed on the plan said. Citigroup has also sold several big businesses, reducing its large capital deficit to around $6 billion.
In fact, after so much talk of nationalizing banks, the administration’s stress tests and capital programs seem to be intended to encourage lenders to take steps to minimize government ownership. The Treasury Department plans to offer a special type of preferred stock that banks can convert to full-voting common shares only as needed. To use it, they will first have to try to raise private capital or do similar exchanges with private investors.
What is more, any gains from asset sales, stock sales or larger-than-expected profits over the next two quarters can be used to offset the shortfalls. That might encourage banks to take bolder action, although some have struggled to find buyers for their businesses, or at least ones willing to pay the prices they seek.
Timothy F. Geithner, the Treasury secretary, said Wednesday that the results of the stress tests might be comforting news.
“It will help lift this fog of uncertainty over the financial system, and I think the results will be, on balance, reassuring,” Mr. Geithner said Wednesday on “The Charlie Rose Show.”
Critics say the tests have eroded confidence rather than bolstered it. The tests have occupied banking executives for months and fed the Wall Street rumor mill, adding to the volatility in the markets. Some also ask why the banks were able to negotiate with regulators behind closed doors over the tests and the results.
“The banks are healing themselves, and it could have been done a lot faster if government had gotten out of the way instead of parking the emergency equipment in the middle of the road,” said Gary B. Townsend, a former banking regulator who now runs his own investment firm.
It may come as a surprise to many people that by most standards, all of the banks that underwent these tests are already adequately capitalized. But regulators are focusing on the amount of capital made up of common stock, the first layer to absorb losses on bad loans.
The government is betting that if banks have a bigger buffer of equity, private investors will be confident enough in the banks’ health to pour money in. That should encourage the banks to start lending again.
“This is sending a message that the banks need more capital, but their losses are manageable and the system itself is solvent,” said Kevin Fitzsimmons, an analyst at Sandler O’Neill. “Whether it sticks is something else.”
Billionaire media mogul Rupert Murdoch gave a strange response when asked about plans for mainstream news websites to charge for content, declaring, “The current days of the internet will soon be over.” He was making reference to the fact that corporate media websites cannot continue to survive under their current failing business model. The establishment media is dying and advertising revenue has plummeted as people turn to blogs and the alternative media for their news in an environment of corporate lies and spin. This has forced sectors of the corporate media to charge the dwindling number of loyal readers they have left for news content, a practice which is set to become widespread according to Murdoch. This will only send more people over to the alternative media as the old organs of de facto state-controlled propaganda wither and die. “Asked whether he envisaged fees at his British papers such as the Times, the Sunday Times, the Sun and the News of the World, (Murdoch) replied: “We’re absolutely looking at that,”reports the Guardian. “Taking questions on a conference call with reporters and analysts, he said that moves could begin “within the next 12 months‚” adding: “The current days of the internet will soon be over.” Murdoch’s newspapers and TV networks, which include Fox News and the Asian Star Network, have seen profits plummet from $216m to just $7m year-on-year. MySpace.com is also floundering despite a recent move to replace the company’s entire management staff. It was all but over for the Boston Globe this week, following a threat to close the 137-year-old publication after net losses of $85 million this year alone. Only a last minute cost-cutting agreement on behalf of its owner, The New York Times Company, and The Boston Newspaper Guild, saved the newspaper. But it’s not just establishment newspapers that are struggling to survive - social networking websites like Twitter and corporate online video giant You Tube are also deep in the red. Apparently, paying out millions in server fees for half the population of the planet to watch clips of cute puppies isn’t a sustainable business model. This is why You Tube is being forced to pursue lucrative partnerships with giant production studios and broadcasters, at the expense of user generated content which has been relegated to a sub-section of its website, taking the “You” out of You Tube altogether. Content that may be deemed harmful to You Tube’s corporate agenda and its multi-million dollar partnership deals, like The Alex Jones Channel, is being systematically erased from You Tube’s website under the pretext of flimsy copyright infringement claims. The jig is up for the corporate media. If they continue to allow free access to their content they will go out of business because there’s not enough advertising revenue coming in, whereas if they charge for content they will lose a huge chunk of their audience and their influence in shaping the news agenda will wane completely. This is the price the corporate media has paid for lying, spinning and obfuscating on behalf of the virulently corrupt power elite and expecting the population to eat it up without question. The corporate media monopoly has terminal cancer and they are losing their power, which is why they are aggressively supporting moves to phase out the old Internet altogether and replace it with “Internet 2,” a highly regulated and controlled electronic Berlin wall, where alternative voices will be silenced and giant corporate propaganda organs will dominate once again. This what Murdoch is really getting at when he assures us that, “The Internet will soon be over” and it’s down to us to stop that agenda from being realized. Written by Paul Joseph Watson for Prison Planet, May 7, 2009.
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