US Invades the State of Palestine Creating Act of War

A 14-plane US airlift lands high-powered FBX radar in Palestine with US personnel

Huge US Air Force C-5 Galaxy and C-17 Gobemaster III transports have ferried the high-powered FBX-T anti-missile radar to Palestine Nevatim Air Base south of Beersheba. Military sources report that the transportable radar surveillance/forward-based X-band radar was accompanied by some 120 American European Command personnel. The area of its deployment at the Negev base has been fenced off and made off-limits to non-American personnel.

This is the first time an Jewish Defense Forces facility housing an American weapons system has been closed to the Jewish military ( this was during the war).

The X-band radar has been deployed with cooling systems, generators, perimeter defense weaponry and dozens of technicians and security forces to operate and defend the installation.

The Raytheon system can detect a flying object the size of a baseball at a distance of 4,700 km, fix on its speed and trajectory and convey the data to the Israeli Arrow anti-missile battery. This equals detecting an Iranian Shehab-3 ballistic missile 5.5 minutes after its launch, which means that it is picked up halfway on its 11-minute flight from Iran to bomb targets in Palestine, adding precious minutes to response time for incoming missile attacks.

Commenting on the FBX radar deployment, a Pentagon source said: First, we want to put Iran on notice that we’re bolstering our capabilities throughout the region, and especially in Palestine. But just as important, we’re telling the Jewish people, ‘Calm down; behave. We’re doing all we can to stand by you and strengthen defenses.’”

By HRM Deborah

As the United States has been well-informed in the past that any tactics of this manner is an act of war on foreign soil and especially with the intention to harm another country, namely Iran and this is not acceptable towards Palestine and most assuredly Iran.

Continued aggression not only towards the Arab Palestinians, but the Jewish people with the age old lie of helping the Jewish people is not acceptable and if the United States does not leave Palestine forthwith; the government of Palestine will do what is necessary to protect our country against this foreign aggression.

With the current economic situation in the United States, it is most assured they can not afford the expense of another war; especially one of this magnitude.

As it stands right now, the State of Palestine which includes not just Arab Palestinians, but the Jewish people are at war with the United States; unless all aggression is removed.

Update:

I wish to thank the United States for there agreement and for the Americans leaving the State of Palestine.

The whole of Palestine will also step down.

It should be understood, I will never agree in people harming each other and it doesn’t make a difference of who they are nor will I agree in my country being used to do so.

Furthermore, as for US President George W. Bush concept of a peace deal before the end of 2008, it is null and void. For the State of Palestine is at full peace between the Arab Palestinians and the Jewish people and any other Bush dialogue on this concept, should be rethought and shoved into the circular filing cabinet without delay.

It is also a strong suggestion towards the US, to stop threatening anyone within the State of Palestine and the use of lying media propaganda; with the sole attempt to harm others, as was mentioned previously.

Bush on US Collapsing Economy with Bailout Failure

US President George W. Bush places phone calls to Congressional members, on 26 September 2008, from the Oval Office of the White House as negotiations continued on the financial rescue package. Must be nice to have such a clean desk, during a crisis?

For Immediate Release
Office of the Press Secretary
September 27, 2008

Audio
THE PRESIDENT: Good morning. This is an extraordinary period for America's economy. Many Americans are anxious about their finances and their future. On Wednesday, I spoke to the Nation, and thanked Congress for working with my Administration to address the instability in our financial system. On Thursday, I hosted Senator McCain, Senator Obama, and congressional leaders from both parties at the White House to discuss the urgency of passing a bipartisan rescue package for our economy.

The problems in our economy are extremely complex, but at their core is uncertainty over "mortgage-backed securities." Many of these financial assets relate to home mortgages that have lost value during the housing decline. In turn, the banks holding these assets have restricted credit, and businesses and consumers have found it more difficult to obtain affordable loans. As a result, our entire economy is in danger. So I proposed that the Federal government reduce the risk posed by these troubled assets, and supply urgently needed money to help banks and other financial institutions avoid collapse and resume lending.

I know many of you listening this morning are frustrated with the situation. You make sacrifices every day to meet your mortgage payments and keep up with your bills. When the government asks you to pay for mistakes on Wall Street, it does not seem fair. And I understand that. And if it were possible to let every irresponsible firm on Wall Street fail without affecting you and your family, I would do it. But that is not possible. The failure of the financial system would mean financial hardship for many of you.

The failure of the financial system would cause banks to stop lending money to one another and to businesses and consumers. That would make it harder for you to take out a loan or borrow money to expand a business. The result would be less economic growth and more American jobs lost. And that would put our economy on the path toward a deep and painful recession.

The rescue effort we're negotiating is not aimed at Wall Street -- it is aimed at your street. And there is now widespread agreement on the major principles. We must free up the flow of credit to consumers and businesses by reducing the risk posed by troubled assets. We must ensure that taxpayers are protected, that failed executives do not receive a windfall from your tax dollars, and that there is a bipartisan board to oversee these efforts.

Under the proposal my Administration sent to Congress, the government would spend up to $700 billion to buy troubled assets from banks and other financial institutions. I know many Americans understand the urgency of this action, but are concerned about such a high price tag. Well, let me address this directly:

The final cost of this plan will be far less than $700 billion. And here's why: As fear and uncertainty have gripped the market for mortgage-related assets, their price has dropped sharply. Yet many of these assets still have significant underlying value, because the vast majority of people will eventually pay off their mortgages. In other words, many of the assets the government would buy are likely to go up in price over time. This means that the government will be able to recoup much, if not all, of the original expenditure.

Members of Congress from both sides of the aisle have contributed constructive proposals that have improved this plan. I appreciate the efforts of House and Senate Democratic and Republican leaders to bring a spirit of bipartisan cooperation to these discussions. Our Nation's economic well-being is an issue that transcends partisanship. Republicans and Democrats must continue to address it together. And I am confident that we will pass a bill to protect the financial security of every American very soon.

Thank you for listening.

Jewish New Year

Jews pray at the Western Wall, Judaism's holiest site in Jerusalem, ahead of the upcoming Jewish New Year holiday of Rosh Hashanah (Days of Awe), on 23 September 2008.

Rosh Hashanah begins on 29 September 2008, at sundown and those not familiar with what Rosh Hashanah actually is; it is the Jewish New Year and also commemorates the creation of the world.

This particular day is a day of rest and for blowing of the Shofar (rams horn).

Usually on the Saturday night before Rosh Hashanah, is a special service called Selichot (forgiveness) where the Jewish people recite a series of important prayers.

As the thirteen attributes of God is remembered usually around midnight, with the first five attributes contributed to the oneness of God or monotheism.

The Secret of How the Titanic Sank

New evidence has experts rethinking how the luxury passenger liner sank

The Titanic left Queenstown harbor and sank while en route to the United States.

25 September 2008
By Justin Ewers

For decades after the disaster, there was little doubt about what sank the Titanic. When the "unsinkable" ship, the largest, most luxurious ocean liner of its time, crashed into an iceberg on its maiden voyage in 1912, it took more than 1,500 of its 2,200 passengers to the bottom. As the ship slipped into the North Atlantic, so, too, did the secret of how and why it sank.

Two government investigations conducted immediately after the disaster agreed it was the iceberg, not any weakness in the ship itself, that caused the Titanic to sink. Both inquiries concluded the vessel had gone to the bottom intact. Blame for the incident fell on the ship's deceased captain, E. J. Smith, who was condemned for racing at 22 knots through a known ice field in the dark waters off the coast of Newfoundland. The case of the Titanic was considered closed.

But lingering questions about what might have sunk the seemingly indestructible ship never completely disappeared. In 1985, when oceanographer Robert Ballard, after years of searching, finally located the ship's remains 2.5 miles down on the ocean bottom, he discovered that it had, in fact, broken in two on the surface before sinking. His findings made the Titanic rise again in the public imagination. Why had it cracked, experts wondered? If the official inquiries were wrong, was the invincible Titanic weak? A few years after Ballard discovered the wreck, the first pieces of the ship were brought to the surface, raising even more eyebrows when they seemed to offer physical evidence that low-quality steel might have caused the disaster. In 1997, James Cameron's film Titanic, largely mirroring the scientific consensus at the time, seared Titanic's terrifying last moments, with its stern soaring high into the air before it cracked in two and disappeared, into popular memory.
Still, the search for answers about the Titanic didn't end there. In two new books, a group of historians, naval architects, and materials scientists argue that fresh evidence has further unraveled the familiar story of the Titanic, raising more questions about what caused the disaster. In What Really Sank the Titanic: New Forensic Discoveries, Jennifer Hooper McCarty, a materials scientist at Oregon Health and Science University, and Tim Foecke, a scientist at the National Institute of Standards and Technology, make the case that it wasn't the ship's steel that was weak; it was the rivets, the all-important metal pins that held the steel hull plates together. Titanic's Last Secrets, to be published next month, describes the work of Richie Kohler and John Chatterton, wreck-diving historians who believe two recently discovered pieces of the Titanic's bottom prove the ship's stern never rose high in the air the way many Titanic experts, including Cameron, originally believed. The two divers, whose discovery of a lost German U-boat was chronicled in the book Shadow Divers, say the ship broke up and sank while still relatively flat on the surface—a potential sign of weakness, they believe, that was covered up after the disaster.

When the Titanic's keel was laid down in 1909, Harland & Wolff, the Belfast shipbuilder that constructed the ship, certainly didn't believe its design would still be controversial a hundred years later. Built in response to a rival company's construction of a new generation of fast liners, Titanic and her sister ships, Olympic and Britannic, were the biggest ships ever made—from bow to stern, they were almost 900 feet long, dwarfing even the world's biggest skyscrapers. Specially outfitted to handle the challenges of the North Atlantic, including big waves and major collisions, they were also supposed to be among the safest. The Titanic could stay afloat with four of its 16 watertight compartments flooded, more than anyone could imagine on a ship of its size.

On the night of April 14, 1912, though, only a few days into the Titanic's maiden voyage, its Achilles' heel was exposed. The ship wasn't nimble enough to avoid an iceberg that lookouts spotted (the only way to detect icebergs at the time) at the last minute in the darkness. As the ice bumped along its starboard side, it punched holes in the ship's steel plates, flooding six compartments. In a little over two hours, the Titanic filled with water and sank.

Low quality. More than 70 years passed before scientists were able to study the first physical evidence of the wreck. As luck would have it, the first piece of steel pulled up from the bottom seemed to put an end to the mystery. When the steel was placed in ice water and hit with a hammer, it shattered. For much of the 1990s, scientists thought this "brittle" steel was responsible for the massive flooding. Only recently has testing on other, bigger pieces of the ship disproved this theory. The original piece, scientists discovered, had been unusually weak, while the rest of Titanic's steel passed the tests. "We know now there was nothing wrong with the steel," says William Garzke, chairman of a forensics panel formed by the Society of Naval Architects and Marine Engineers to investigate the wreck.

Experts looking for explanations landed on another potentially weak link: The more than 3 million rivets holding the ship together. McCarty and Foecke began examining 48 rivets brought up from the wreck and found they contained high concentrations of "slag," a residue of smelting that can make metal fracture prone. Researching in the Harland & Wolff archives, they discovered that the shipbuilder's ambitious plans to build three large ships at the same time had put a huge strain on its shipyard. "Not because of cost, but because of time pressures, they started using lower-quality material to fill the gaps," says Foecke. This substandard iron was pounded by hand into the ship's bow and stern, where the large machines required to pound in steel rivets didn't fit. Steel rivets, meanwhile, which are much stronger than iron, were put in the more-accessible middle of the ship.

When the Titanic hit the iceberg, McCarty and Foecke say, the weaker iron rivets in the bow popped, opening seams in the hull—and hurrying the ship's demise. It's no accident, Foecke says, that the flooding stopped at the point in the hull where the steel rivets began.
Harland & Wolff, now an engineering and design firm, flatly rejects the notion that its rivets were weak. Tom McCluskie, the company's retired archivist, points out that Olympic, Titanic's sister ship, was riveted with the same iron and served without incident for 25 years, surviving several major collisions, including being rammed by a British cruiser. "Olympic deliberately rammed a German submarine during the First World War and cut it in half," says McCluskie. "She was plenty strong." The Britannic sank after hitting a mine during World War I. Both ships were strengthened after the Titanic disaster with double hulls and taller bulkheads, but their rivets were never changed.

Stronger rivets might have slowed the sinking process, but once water began flooding six of the Titanic's compartments, it was only a matter of time before the ship went down. Questions remain, though, about exactly how and why the ship ultimately broke apart and sank. In 2005, an expedition organized by Kohler and Chatterton found a new clue. Wandering away from the main wreckage site, they stumbled upon two large pieces of the ship's bottom on the ocean floor. Closer examination revealed the two hull sections had split exactly where the ship broke in two, making them a possible key to the mystery of the ship's final moments. Simon Mills, an Olympic-class-ship historian who advised the divers, calls the find "very likely the most interesting piece of Titanic research to be carried out in the last 20 years."

When Roger Long, a naval architect hired to accompany the expedition, began analyzing the edges of the hull pieces, he came to a surprising conclusion. It was impossible, he believed, for the ship to have broken up the way experts for two decades believed it did, with the stern rising up to a 45-degree angle before the ship's hull split. "There are a lot of very contradictory things you can see in the pieces," he says. "But the only scenario I could come up with to explain all of the contradictions was that the ship broke at a very shallow angle." Close examination of the pieces showed that they had been interrupted in the middle of tearing apart—a sign, Long says, that the ship was still at a low-enough angle (he estimates only 11 degrees) that its stern could regain buoyancy as it began to crack. If the back of the ship had been raised out of the water at a 45-degree angle, as depicted in Cameron's movie, once the stern tore off, nothing would have stopped it, and the hull pieces would have torn in two.

Why does it matter exactly how the ship broke in two? For Titanic's passengers, it may have been the difference between life and death. "In the movie, the stern rises up and [then] sinks," says Chatterton. "It's this protracted, dramatic experience." But in Long's scenario, the ship may have tilted over only slightly as the bow filled with water, giving those on board a false sense of security. "If you're standing on the deck with 10 degrees of incline, and they're saying 'Quick, everyone into the lifeboats,' you're thinking, 'You know, things aren't looking so bad here, maybe I can just stay in the bar,' " says Chatterton. "The passengers and many of the crew didn't understand the seriousness of the situation they were in." Of course, since the Titanic had enough lifeboats for only half its passengers, many people were never going to make it off the ship alive. When the bow filled with enough water, Long says, the ship split in two and sank in a matter of minutes.

Interestingly, much of the survivor testimony seems to confirm this sequence of events. Charlie Joughin, Titanic's chief baker, said that he had been standing near the stern when the ship went under, but he reported none of the signs of a high-angle break. No suction, no big splash, and no roller-coaster ride to the surface. He said he swam away from the ship without even getting his hair wet. Unlike in the Cameron film, there was no huge wave reported from any of the lifeboats when the stern went under. One survivor reported slipping into the water, turning around, and discovering the ship had disappeared. "He was in the water 50 feet from the ship, he heard a 'shloop,' and it was gone," says Long. "That's not what a person would remember if 25,000 tons of steel fell nearby."

Eyewitnesses. While some survivors in the lifeboats did remember seeing the ship's stern rising high in the air, Long says that might have been an optical illusion. At an 11-degree angle, the ship's propellers would have been raised out of the water, making the ship, already nearly 20 stories tall, appear even taller and making its angle in the water appear even steeper. Technical advisers to the movie Titanic say Cameron, who did not respond to a request for comment, may have been aware of this but exaggerated the angle at which the ship sank for effect.

Though experts still quibble about the exact nature of how the ship broke up, a consensus does seem to be forming around how Titanic sank. "We all agree that the ship did sink at a shallow angle," says Garzke, head of the naval architects' forensics panel. Historians believe Harland & Wolff was probably aware of this at the time, but when the official inquiries absolved the shipbuilder of any liability in the matter, the company didn't protest.

Some conspiracy theorists believe that the company's silence was a sign of a coverup, and that the post-disaster retrofitting of Titanic's sister ships proves Harland & Wolff knew its ship was flawed. But most historians come to a different conclusion. "The fact that the ship broke up on the surface does not mean she was weak," says Long. When 38,000 tons of water filled its bow, pushing the stern up even 11 degrees out of the water, the ship was loaded beyond its capacity and cracked in two.

Could the Titanic have been stronger? Certainly. Higher-quality rivets or a thicker hull might have kept the ship afloat longer. But ultimately, the Titanic was designed to be a passenger liner, not a battleship. "[The ship] was built to the best of their knowledge at the time and to the proper standards. Nothing could have survived what happened to it," says McCluskie. Extensive forensic analysis of the wreckage has, in a way, brought the story of the Titanic to a familiar place. "The ship," says Foecke, "was just not designed to run into icebergs." When it did, nothing could stop its journey to the bottom.

FBI Probes finance giants for fraud

24 September 2008

Investigation (FBI) confirmed on Wednesday that it is probing allegations of fraud by 24 Wall Street firms, without naming investment giants believed to be under investigation.

WASHINGTON-"The director and others have confirmed the number of investigations that we currently have, but we haven't named any of the companies," a FBI spokesperson said.

"The director last week indicated that there are 24 corporate fraud investigations involving the subprime industry," he added.

US media said late on Tuesday that the FBI has set its sights on investment titan Lehman Brothers, mortgage giants Fannie Mae and Freddie Mac and insurer AIG.

The FBI probe aims to determine whether company executives had any responsibility for the institutions' financial woes through "misinformation or material misinformation", CNN said.

FBI director Robert Mueller said last week the bureau was probing 24 financial institutions, but gave no details other than to describe them as "large corporations" that may face allegations of misstated assets.

ABC News said the probe was "multifaceted and the net is much deeper than the major firms [that] officials confirmed", adding the probe had expanded from 14 major firms to 26 in less than a year.

"The FBI currently has 26 pending corporate fraud investigations involving subprime lenders," FBI spokesperson Richard Kolko told ABC.

"As we have seen, this number can fluctuate over time; however, we do not discuss which companies may or may not be the subject of an investigation."

Solving the Mystery: China's tainted milk problem

An employee removes products containing milk powder from China at a supermarket in Taipei 24 September 2008. Taiwan plans to send experts to China to examine the milk powder contamination after the self-governed island banned all mainland dairy products, the government said on Tuesday.

by HRM Deborah

In all due respect as a precautionary measure, inspect all elements of all products in China that one can, that may or has been suspected of carrying toxic chemical melamine.

To this end, find the source of how this chemical is getting into the food products and hopefully, this will cease the problem and again not only stabilize China’s food market; but for the health safety of everyone concerned.

American's Protesting Bailout Proposal

A man identifying himself as a "hard hat protester" holds a sign during a rally outside the New York Stock Exchange, on 25 September 2008.

Several hundred protesters yelled their enthusiastic support as union leaders decried a proposed $700 billion plan aimed at reinvigorating the credit markets by relieving financial institutions of distressed debt.

Protestors lie on the ground during a rally against the Wall Street bailouts, on 25 September 2008; in New York.

Dara Blumenthal, of Brooklyn, holds up a sign during a rally against Wall Street bailouts, on 25 September 2008; in front of the New York Stock Exchange in New York.

Protestors march past the New York Stock Exchange during a rally against the Wall Street bailouts, on 25 September 2008; in New York.
Signs left from a protest are seen outside the New York Stock Exchange, on 25 September 2008.

Frank blames House GOP for breakdown of deal

House Financial Services Committee Chairman Rep. Barney Frank, D-Mass., left, and Senate Banking, Housing and Urban Affairs Chairman Sen. Christopher Dodd, D-Conn., speak to reporters after a meeting with Secretary of the Treasury Henry Paulson on the financial crisis, on 25 September 2008; on Capitol Hill in Washington.

26 September 2008

By CHARLES BABINGTON

The chairman of the House Financial Services Committee declared Friday that an agreement on legislation to relieve a spreading financial crisis depends on House Republicans "dropping this revolt" against President Bush.

Rep. Barney Frank said leading Democrats on Capitol Hill were shocked by the level of divisiveness that surfaced at a White House meeting Thursday, not long after key congressional players of both parties declared they'd achieved the broad outlines of an agreement on a bill implementing the administration's proposed $700 billion bailout plan.

Bush planned another public statement on the situation from the White House Friday morning. He had delivered a speech to the nation Wednesday night urging support for the plan, but members of Congress say they've been hearing a lot of opposition from constituents to a public-financed bailout.

Frank said he did not think that Democrats were going to see a substantially different proposal from the plan the administration has been trying to sell to lawmakers and which had been the focal point of closed-door talks for days. He called the rival proposal being pushed by House conservative Republicans "an ambush plan."

Participants in a meeting late Thursday afternoon that Bush had at the White House with congressional leaders and presidential candidates John McCain and Barack Obama said it descended into arguments. The disagreements were so deep-seated that some lawmakers wondered aloud just who — and how many — would show up for the resumption of talks later Friday morning at the Capitol.

"I didn't know I was going to be the referee for an internal GOP ideological civil war," Frank, D-Mass., said on CBS's "The Early Show."

McCain headed to the Capitol Friday after Democrats put responsibility on him and Bush for getting House Republicans back into the negotiations.

Sen. Richard Shelby, an Alabama Republican who appeared on the same show, said many GOP lawmakers dislike the proposal that has been pushed on the administration's behalf principally by Treasury Secretary Henry Paulson.

"Basically, I believe the Paulson proposal is badly structured," Shelby said. "It does nothing basically for the stressed mortgage payer. It does a lot for three or four or five banks . ... "

The political infighting happened even as Washington Mutual Inc., one of the country's largest banks, collapsed under the weight of its bad bets on the mortgage market. The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift's banking assets to JPMorgan Chase & Co. for $1.9 billion.

As if that wasn't enough bad news, the Commerce Department reported Friday that the spring rebound the economy enjoyed earlier wasn't as healthy as first thought. The gross domestic product, or GDP, increased at a 2.8 percent annual rate in the April-June period, not as good as the 3.3 percent growth rate first reported a month ago.

Even for a party whose president suffers dismal approval ratings, whose legislative wing lost control of Congress and whose presidential nominee trails in the polls, Thursday was a remarkably bad day for Republicans.

The White House summit meeting had been called for the purpose of sealing the deal that Bush has argued is indispensable to stabilizing frenzied markets and reassuring the nervous American public. But it quickly revealed that Bush's proposal had been suddenly sidetracked by fellow Republicans in the House, who refused to embrace a plan that appeared close to acceptance by the Senate and most House Democrats.

Paulson begged Democratic participants not to disclose how badly the meeting had gone, dropping to one knee in a teasing way to make his point according to witnesses.

And when Paulson hastily tried to revive talks in a nighttime meeting near the Senate chamber, the House's top Republican refused to send a negotiator.

"This is the president's own party," Frank said at the time. "I don't think a president has been repudiated so strongly by the congressional wing of his own party in a long time."

The presence of McCain and Obama at the White House session indeed lent a greater aura of urgency — and personal intensity — to the discussion.

McCain's leadership in the negotiations "is to try to stop us from yelling at each other, announcing deals that don't exist, to actually talk to the House and the Senate and get agreement and then go to the press," Sen. Lindsey Graham, R-S.C., said on NBC's "Today" show.

What caught some by surprise, either at the White House meeting or shortly before it, was the sudden momentum behind a dramatically different plan drafted by House conservatives with Minority Leader John Boehner's blessing.

Instead of the government buying the distressed securities, the new plan would have banks, financial firms and other investors that hold such loans pay the Treasury to insure them. Rep. Paul Ryan, R-Wis., a chief sponsor, said it was clear that Bush's plan "was not going to pass the House."

But Democrats said the same was true of the conservatives' plan. It calls for tax cuts and insurance provisions the majority party will not accept, they said.

At one point in the White House meeting, according to two officials, McCain voiced support for Ryan's criticisms of the administration's proposal. Frank, a gruff Massachusetts liberal, angrily demanded to know what plan McCain favored.

These officials also said that as tempers flared, Bush struggled at times to maintain control.

At one point, several minutes into the session, Obama said it was time to hear from McCain. According to a Republican who was there, "all he said was, 'I support the principles that House Republicans are fighting for.'"

Some at the table took that to mean the conservatives' alternative proposal, which stands little chance of passage.

WaMu becomes biggest bank to fail in US history

Washington Mutual customer Kyle Davidson talks on his cell phone as he withdraws some money from the ATM at a Washington Mutual branch at the WaMu Center in Seattle Thursday Sept. 25, 2008. JPMorgan Chase & Co. Inc. came to the rescue of ailing Washington Mutual Inc. Thursday, buying the ailing thrift's banking assets after WaMu was seized by the Federal Deposit Insurance Corp.

26 September 2008

By MADLEN READ

As the debate over a $700 billion bank bailout rages on in Washington, one of the nation's largest banks — Washington Mutual Inc. — has collapsed under the weight of its enormous bad bets on the mortgage market.

The Federal Deposit Insurance Corp. seized WaMu on Thursday, and then sold the thrift's banking assets to JPMorgan Chase & Co. for $1.9 billion.

Seattle-based WaMu, which was founded in 1889, is the largest bank to fail by far in the country's history. Its $307 billion in assets eclipse the $40 billion of Continental Illinois National Bank, which failed in 1984, and the $32 billion of IndyMac, which the government seized in July.

One positive is that the sale of WaMu's assets to JPMorgan Chase prevents the thrift's collapse from depleting the FDIC's insurance fund. But that detail is likely to give only marginal solace to Americans facing tighter lending and watching their stock portfolios plunge in the wake of the nation's most momentous financial crisis since the Great Depression.

Because of WaMu's souring mortgages and other risky debt, JPMorgan plans to write down WaMu's loan portfolio by about $31 billion — a figure that could change if the government goes through with its bailout plan and JPMorgan decides to take advantage of it.

"We're in favor of what the government is doing, but we're not relying on what the government is doing. We would've done it anyway," JPMorgan's Chief Executive Jamie Dimon said in a conference call Thursday night, referring to the acquisition. Dimon said he does not know if JPMorgan will take advantage of the bailout.

WaMu is JPMorgan Chase's second acquisition this year of a major financial institution hobbled by losing bets on mortgages. In March, JPMorgan bought the investment bank Bear Stearns Cos. for about $1.4 billion, plus another $900 million in stock ahead of the deal to secure it.

JPMorgan Chase is now the second-largest bank in the United States after Bank of America Corp., which recently bought Merrill Lynch in a flurry of events that included Lehman Brothers Holdings Inc. going bankrupt and American International Group Inc., the world's largest insurer, getting taken over by the government.

JPMorgan also said Thursday it plans to sell $8 billion in common stock to raise capital.

The downfall of WaMu has been widely anticipated for some time because of the company's heavy mortgage-related losses. As investors grew nervous about the bank's health, its stock price plummeted 95 percent from a 52-week high of $36.47 to its close of $1.69 Thursday. On Wednesday, it suffered a ratings downgrade by Standard & Poor's that put it in danger of collapse.

WaMu "was under severe liquidity pressure," FDIC Chairman Sheila Bair told reporters in a conference call.

"For all depositors and other customers of Washington Mutual Bank, this is simply a combination of two banks," Bair said in a statement. "For bank customers, it will be a seamless transition. There will be no interruption in services and bank customers should expect business as usual come Friday morning."

Besides JPMorgan Chase, Wells Fargo & Co., Citigroup Inc., HSBC, Spain's Banco Santander and Toronto-Dominion Bank of Canada were also reportedly possible suitors. WaMu was believed to be talking to private equity firms as well.

The seizure by the government means shareholders' equity in WaMu was wiped out. The deal leaves private equity investors including the firm TPG Capital, which gave WaMu a cash infusion totaling $7 billion this spring, on the sidelines empty handed.

WaMu ran into trouble after it got caught up in the once-booming subprime mortgage business. Troubles then spread to other parts of WaMu's home loan portfolio, namely its "option" adjustable-rate mortgage loans. Option ARM loans offer very low introductory payments and let borrowers defer some interest payments until later years. The bank stopped originating those loans in June.

Problems in WaMu's home loan business began to surface in 2006, when the bank reported that the division lost $48 million, compared with net income of about $1 billion in 2005.

At the start of 2007, following the release of the company's annual financial report, then-CEO Kerry Killinger said the bank had prepared for a slowdown in its housing business by sharply reducing its subprime mortgage lending and servicing of loans. Alan H. Fishman, the former president and chief operating officer of Sovereign Bank and president and CEO of Independence Community Bank, replaced Killinger earlier this month.

As more borrowers became delinquent on their mortgages, WaMu worked to help troubled customers refinance their loans as a way to avoid default and foreclosure, committing $2 billion to the effort last April. But that proved to be too little, too late.

At the same time, fears of growing credit problems kept investors from purchasing debt backed by those loans, drying up a source of cash flow for banks that made subprime loans.

In December, WaMu said it would shutter its subprime lending business and reduce expenses with layoffs and a dividend cut.

The bank in July reported a $3 billion second-quarter loss — the biggest in its history — as it boosted its reserves to more than $8 billion to cover losses on bad loans. Over the last three quarters, it added $10.9 billion to its loan-loss provisions.

JPMorgan Chase said it was not acquiring any senior unsecured debt, subordinated debt, and preferred stock of WaMu's banks, or any assets or liabilities of the holding company, Washington Mutual Inc. JPMorgan also said it will not take on the lawsuits facing the holding company.

JPMorgan Chase said the acquisition will give it 5,400 branches in 23 states, and that it plans to close less than 10 percent of the two companies' branches.

The WaMu acquisition would add 50 cents per share to JPMorgan's earnings in 2009, the bank said, adding that it expects to have pretax merger costs of approximately $1.5 billion while achieving pretax savings of approximately $1.5 billion by 2010.

"This is a definite win for JPMorgan," said Sebastian Hindman, an analyst at SNL Financial, who said JPMorgan should be able to shoulder the $31 billion writedown to WaMu's portfolio.

Terrorists in the White House

US President Bush Meets with Abbas

US President George W. Bush and global terrorist, Interpol fugitive Mahmoud Abbas exchange handshakes, on 25 September 2008, during their visit in the Oval Office of the White House. Bush is also classified, as a global terrorist, Interpol fugitive. Both Bush and Abbas preparing for new threats towards Palestine.

For Immediate Release
Office of the Press Secretary
September 25, 2008

Video

Audio
PRESIDENT BUSH: Mr. President, welcome back. You and I have met a lot since I have been the President and you have been the President. And I appreciate your determination and your desire to have a Palestinian state, and I share that desire with you.

It's not easy -- no doubt it must be frustrating at times for you, because it's hard work to get a state after all these years. But nevertheless, there is a firm determination on your part and on my part to give the Palestinians a place where there can be dignity and hope.

We are working hard with you on security matters. We're working hard with you on helping the international community help you get the economy going in the West Bank. And I welcome you back.

As you know, I've got four more months left in office and I'm hopeful that the vision that you and I have worked on can come to pass. And my only pledge to you is that I'll continue to work hard to see that it can come to pass. And so I welcome you back -- and I think it's safe for me to say I welcome you back, my friend.

ABBAS: Thank you. (As translated.) Thank you very much, Mr. President. I am delighted, as well as the members of my delegation, to come here again to Washington and meet with you. We've met together for numerous times. Mr. President, we know very well how important this issue is for you and we will continue to work very hard together in order to realize your vision of two states living side by side.

There is no doubt that you have done a great deal, Mr. President, and you have exerted a great deal of efforts aiming at achieving that vision that we will work together to achieve. Your efforts, Mr. President, as well as your vision, both help us and the Israelis to work very hard during the last year and since the convening of the Annapolis Conference. Hope will remain, Mr. President. We cannot live without hope. We will continue to work to achieve and realize that hope.

And Mr. President, I would like to take the opportunity to thank you and thank the United States for the help and the support and the aid that you have given us, and as well as the efforts that you led to mobilize the world to help the Palestinian Authority on the economic front as well as on the security front.

Mr. President, we will continue to work with you and we will continue to keep the hope alive in order to reach a political solution for our issue and for the Middle East.

PRESIDENT BUSH: Thank you, sir.

END

Experts offer alternatives to bailout approach

Leading economists argue that other solutions could address financial crisis

23 September 2008

By Anthony Faiola and David Cho

To hear Henry M. Paulson Jr. and Ben S. Bernanke tell it, there is only one plan to save the economy -- use $700 billion in taxpayer money to take the worst of Wall Street's assets off its books.

But leading economists and financial thinkers argue that there are a host of alternatives that would reduce taxpayers' liabilities and perhaps more effectively address the urgent crisis in financial markets. Although these experts concede that the clock is ticking, they say different approaches have been dismissed too quickly.

While the government's plan is built around buying troubled assets, other options offer sharply different visions.

One approach seeks to reduce taxpayers' liability by offering collateral-backed loans to troubled banks, leaving them to work out their own solutions. Another idea is to have the government set up a profit-driven investment fund with the aim of infusing the financial system with cash without taking on bad debt. Still others suggest radically different tactics of directly helping homeowners by reducing mortgage principal or bolstering banks by suspending capital gains taxes.

The administration has said it is willing to negotiate key parts of its plan -- including a possible concession allowing the government to take equity stakes in financial firms in exchange for bailing them out -- but senior officials stand by the fundamental approach they have adopted to solve the crisis.

"They presented this as a comprehensive, decisive solution, but it's clearly not comprehensive and probably not decisive," said Simon Johnson, a former chief economist at the International Monetary Fund and a professor at Massachusetts Institute of Technology.

The cost of a mistake could be huge. It could result in a catastrophic collapse of the U.S. financial system that could ripple across the world or in a staggering clean-up bill for taxpayers. At the core of the debate is whether Paulson, the former chief executive of Goldman Sachs now charged with rescuing Wall Street as Treasury secretary, and Bernanke, the Federal Reserve chairman and one of the leading academics on financial crises, are serving up the best possible recipe for purging the U.S. financial system of billions of dollars worth of distressed mortgage-related debt.

Under the administration's rescue plan, the Treasury secretary would have broad discretion to buy up to $700 billion worth of troubled mortgage-backed assets and other securities that Wall Street firms have been struggling to sell. Administration officials hope that once those assets are cleansed, money will flow freely through the financial system once again and that the government can hold onto the securities until they recover some of their value.

In testimony on Capitol Hill yesterday, Bernanke and Paulson explained that they formulated their plan after considering past crises, from the U.S. savings-and-loan bailouts of the 1980s to the bursting of Japan's economic bubble a few years later. But they ultimately decided that the response to the current crisis needed to be a fast and massive fix.

"The situation we have now is unique and new," Bernanke said. He later continued, "The firms we're dealing with now are not necessarily failing, but they are contracting. They are de-leveraging. They're pulling back. And they will be unwilling to make credit available as long as these market conditions are in the condition they are."

Many of the alternatives fall under four basic approaches:

Government as lender

Critics of the administration's plan argue that an alternative could be crafted to minimize the exposure of the government -- and taxpayers -- to risk. Johnson, the MIT professor, suggested that the government, instead of taking on the bad debt, could offer loans to troubled banks, allowing them to put up their sickened portfolios of mortgage-backed debt as collateral.

This would give the banks access to badly needed cash at attractive interest rates set by the government. But it would not completely let them off the hook for making those bad investments in the first place. Because government money would come in the form of loans, rather an outright purchase of the risky investments, taxpayers would be offered greater protection. Ultimately, the banks would have to pay off the loans and take back the securities, though at a time when the market for them may have improved. If the value of the securities is still depressed, that would be the banks' problem, not the taxpayers'.

"The risk to the government/taxpayer is that the bank goes out of business and so isn't around to settle up," Johnson said. "But the government is also the regulator, and they can do a more forceful job of making sure the banks have enough capital, so the incentives are pretty well aligned."

Interest rates would be set at a level attractive to banks, the relatively low rate at which the Treasury borrows plus a small premium. Only if the banks were nearing default would the government take a more active role in propping them up, perhaps even taking them over outright.

Government as hedge fund

Some market analysts and fund managers worry that the Paulson plan would allow Wall Street to dump the worst kind of mortgage securities on the federal government. One solution could be the establishment of a fund that limits its purchases to profitable mortgage securities and other assets.

The creation of a $700 billion investment fund could help reinvigorate the business of trading mortgage securities, greasing the wheels of the credit markets by bringing in a new, cash-rich investor: the federal government. While this solution runs the risk of not cleaning up enough of the bad debt on firms' books, taxpayers could be more confident of getting their money back because the government would be selective about which securities it bought.

Mortgage breaks

Liberal thinkers say the government could intervene in the financial system by addressing the ailing mortgages at the heart of the crisis. Under this approach, the government could reduce the amount of principal that struggling homeowners owe.

"It's about foreclosures, stupid," said John Taylor, chief executive of the liberal National Community Reinvestment Coalition.

One idea is for the government to take control of some mortgage-backed securities -- most likely by buying them from financial firms -- and then work to restructure the underlying loans into something homeowners could afford. The value of the securities, both those bought by the government and those in private hands, could improve as foreclosures and late payments drop. If so, financial firms holding mortgage-backed securities could see a recovery in their balance sheets.

To make it fair for homeowners who keep up with their payments, borrowers who receive federal help would be required to give the government some of their gains if they eventually sell their homes for a profit.

But advocates of the idea acknowledge that it may take time to address the problems of millions of struggling homeowners. In the meantime, critics of this approach say the financial system could fall into chaos.

Tax breaks for Wall Street

Conservative analysts take a different tack, though their criticism of the Paulson plan has been no less sharp. They say that because the proposal forgives Wall Street for its past sins, it creates an incentive for investors to behave irresponsibly in the future.

Some of these thinkers complain that the government's rescue punishes taxpayers too severely for Wall Street's mistakes. They propose a cheaper alternative that calls for the repeal of the capital gains tax for two years, which would provide Wall Street a stimulus to reinvigorate the financial system.

Accounting rules that require banks to estimate the market value of their troubled mortgage securities would also be suspended for five years, giving financial firms the ability to value these assets at prices more reflective of the market before the panic gripped Wall Street.

Rep. Jeb Hensarling (R-Tex.) said this plan, which he announced on Capitol Hill yesterday, was still being finalized. Hensarling said the precise cost of the capital gains tax repeal, for instance, was still being determined.

"We agreed that inaction is not an option, but that doesn't mean that we've concluded that the Paulson plan is the only option," said Hensarling. "There are alternatives to consider, and we think we have a worthy one."

All of these alternatives try to get at the root of the turmoil facing the financial markets and the economy but in different ways. According to Lawrence Summers, former Treasury secretary, the government might have to try multiple approaches.

"If you have hypertension, you're way overweight and you're in the process of having a heart attack, what's your most fundamental problem? It's really not that useful to distinguish between them," Summers said at a Brookings Institute forum. "They're all components of the situation, and you're not going to get to a very satisfactory place unless you address all of them. That's how I think of our financial reality right now."

New Home Sales Tumbled Slowest Pace in 17 Years

A condominium is put up for sale in San Francisco, California; on 14 August 2008.

New home sales tumbled in August to the slowest pace in 17 years, while the average sales price fell by the largest amount on record.

The Commerce Department said Thursday that new homes sales fell by 11.5 percent in August to a seasonally adjusted annual sales rate of 460,000 units, the slowest sales pace since January 1991.

It was a much bigger sales decline than the small 1 percent drop that economists had been expecting. The average price of a new home sold in August dropped by a record amount of 11.8 percent to $263,900, compared to the July average of $299,100. The median price was also down, falling 5.5 percent to $221,900.

The big drop in new home sales followed news Wednesday that sales of existing homes were down 2.2 percent in August to a seasonally adjusted annual rate of 4.91 million units. Both segments of the market remain under pressure from the steepest housing downturn in decades.

That housing slump has contributed to a record surge in mortgage defaults, leading to billions of dollars in losses by financial firms and spawning a severe credit crisis in what some are calling a deeping recession, while others say it is becoming a bigger economic crisis then the 1930’s Great Depression.

The report on new home sales showed that business was off in every region of the country except the Midwest, which posted a 7.2 percent increase. Sales plunged by 36.1 percent in the West and were down 31.9 percent in the Northeast. Sales fell a more modest 2.1 percent in the South.

Palin once blessed to be free from 'witchcraft'

24 September 2008

By GARANCE BURKE

ANCHORAGE, Alaska -A grainy YouTube video surfaced Wednesday showing Sarah Palin being blessed in her hometown church three years ago by a Kenyan pastor who prayed for protection from "witchcraft" as she prepared to seek higher office.

The video shows Palin standing before Bishop Thomas Muthee in the pulpit of the Wasilla Assembly of God church, holding her hands open as he asked Jesus Christ to keep her safe from "every form of witchcraft."

"Come on, talk to God about this woman. We declare, save her from Satan," Muthee said as two attendants placed their hands on Palin's shoulders. "Make her way my God. Bring finances her way even for the campaign in the name of Jesus. ... Use her to turn this nation the other way around."

Palin formally announced her bid for governor a few months later, in October 2005.

Palin does not say anything on the video and keeps her head bowed throughout the blessing. The Republican vice presidential candidate was baptized at the church but stopped attending regularly in 2002.

A spokesman for the McCain campaign declined to comment. A person who answered the phone at the Wasilla church confirmed the video was from May 2005 but declined further comment.

Palin was baptized Roman Catholic as a newborn.

Pentecostals are conservative in their reading of the Bible. Unlike most other Christians — including most evangelicals — Pentecostals believe in "baptism in the Holy Spirit." That can manifest itself through speaking in tongues, modern-day prophesy and faith healing, which includes the laying on of hands.

Maria Comella, a spokeswoman for the McCain-Palin campaign, has said Palin attends different churches and does not consider herself Pentecostal.

A Pre Eid Al-Fitr Reflection

A Palestinian woman is seen through a window display as she shops in the main market during preparations for the Eid Al-Fitr feast in Gaza City, on 24 September 2008.

Muslims around the world are preparing to celebrate the Eid Al-Fitr holiday, which marks the end of Islam's holy fasting month of Ramadan, on 1 October 2008.

US: Jobless claims pushed to 7-year high

25 September 2008

WASHINGTON -New claims for unemployment benefits jumped last week to their highest level in seven years due to the impact of a slowing economy and Hurricanes Ike and Gustav, the Labor Department reported Thursday.

The department said new requests for jobless benefits for the week ending Sept. 20 increased by 32,000 to a seasonally-adjusted 493,000, much higher than analysts' expectations of 445,000.

Wall Street was more focused on Washington, though, where lawmakers and the administration appeared to be moving closer to a $700 billion bailout package for the financial system. Stocks were headed for a moderately higher open.

The two hurricanes added about 50,000 new claims in Louisiana and Texas, the department said. The four-week moving average, which smooths out fluctuations, rose to 462,500.

Even excluding the effects of the hurricanes, jobless claims remain at elevated levels. Weekly claims have now topped 400,000 for ten straight weeks, a level economists consider a sign of recession. A year ago, claims stood at 309,000.

The number of people continuing to draw jobless benefits last week was 3.54 million, up 63,000 from the previous week and nearly a five-year high. The four-week average of continuing claims was 3.49 million.

Hurricane Gustav first had an impact on jobless claims for the week ending Sept. 13. The department said Thursday that Louisiana reported an increase in claims of 18,409 during that week, mostly due to Gustav.

The financial crisis, falling home prices and slowing consumer spending continue to apply the brakes to the U.S. economy. The unemployment rate jumped unexpectedly to 6.1 percent in August, the highest level in five years.

Last week, drug maker Schering-Plough Corp. said it plans to cut 1,000 sales jobs to reduce costs, part of a 10 percent reduction in staff announced in April. Also, the nation's largest chicken producer, Pilgrim's Pride Corp., announced it would reduce 100 jobs besides the 600 job losses it previously announced.

Bush's Economic Address to the U.S. Nation

For Immediate Release
Office of the Press Secretary
September 24, 2008

Video
THE PRESIDENT: Good evening. This is an extraordinary period for America's economy. Over the past few weeks, many Americans have felt anxiety about their finances and their future. I understand their worry and their frustration. We've seen triple-digit swings in the stock market. Major financial institutions have teetered on the edge of collapse, and some have failed. As uncertainty has grown, many banks have restricted lending. Credit markets have frozen. And families and businesses have found it harder to borrow money.

We're in the midst of a serious financial crisis, and the federal government is responding with decisive action. We've boosted confidence in money market mutual funds, and acted to prevent major investors from intentionally driving down stocks for their own personal gain.

Most importantly, my administration is working with Congress to address the root cause behind much of the instability in our markets. Financial assets related to home mortgages have lost value during the housing decline. And the banks holding these assets have restricted credit. As a result, our entire economy is in danger. So I've proposed that the federal government reduce the risk posed by these troubled assets, and supply urgently-needed money so banks and other financial institutions can avoid collapse and resume lending.

This rescue effort is not aimed at preserving any individual company or industry -- it is aimed at preserving America's overall economy. It will help American consumers and businesses get credit to meet their daily needs and create jobs. And it will help send a signal to markets around the world that America's financial system is back on track.

I know many Americans have questions tonight: How did we reach this point in our economy? How will the solution I've proposed work? And what does this mean for your financial future? These are good questions, and they deserve clear answers.

First, how did our economy reach this point?

Well, most economists agree that the problems we are witnessing today developed over a long period of time. For more than a decade, a massive amount of money flowed into the United States from investors abroad, because our country is an attractive and secure place to do business. This large influx of money to U.S. banks and financial institutions -- along with low interest rates -- made it easier for Americans to get credit. These developments allowed more families to borrow money for cars and homes and college tuition -- some for the first time. They allowed more entrepreneurs to get loans to start new businesses and create jobs.

Unfortunately, there were also some serious negative consequences, particularly in the housing market. Easy credit -- combined with the faulty assumption that home values would continue to rise -- led to excesses and bad decisions. Many mortgage lenders approved loans for borrowers without carefully examining their ability to pay. Many borrowers took out loans larger than they could afford, assuming that they could sell or refinance their homes at a higher price later on.

Optimism about housing values also led to a boom in home construction. Eventually the number of new houses exceeded the number of people willing to buy them. And with supply exceeding demand, housing prices fell. And this created a problem: Borrowers with adjustable rate mortgages who had been planning to sell or refinance their homes at a higher price were stuck with homes worth less than expected -- along with mortgage payments they could not afford. As a result, many mortgage holders began to default.

These widespread defaults had effects far beyond the housing market. See, in today's mortgage industry, home loans are often packaged together, and converted into financial products called "mortgage-backed securities." These securities were sold to investors around the world. Many investors assumed these securities were trustworthy, and asked few questions about their actual value. Two of the leading purchasers of mortgage-backed securities were Fannie Mae and Freddie Mac. Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk.

The decline in the housing market set off a domino effect across our economy. When home values declined, borrowers defaulted on their mortgages, and investors holding mortgage-backed securities began to incur serious losses. Before long, these securities became so unreliable that they were not being bought or sold. Investment banks such as Bear Stearns and Lehman Brothers found themselves saddled with large amounts of assets they could not sell. They ran out of the money needed to meet their immediate obligations. And they faced imminent collapse. Other banks found themselves in severe financial trouble. These banks began holding on to their money, and lending dried up, and the gears of the American financial system began grinding to a halt.

With the situation becoming more precarious by the day, I faced a choice: To step in with dramatic government action, or to stand back and allow the irresponsible actions of some to undermine the financial security of all.

I'm a strong believer in free enterprise. So my natural instinct is to oppose government intervention. I believe companies that make bad decisions should be allowed to go out of business. Under normal circumstances, I would have followed this course. But these are not normal circumstances. The market is not functioning properly. There's been a widespread loss of confidence. And major sectors of America's financial system are at risk of shutting down.

The government's top economic experts warn that without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold:

More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs. Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And ultimately, our country could experience a long and painful recession.

Fellow citizens: We must not let this happen. I appreciate the work of leaders from both parties in both houses of Congress to address this problem -- and to make improvements to the proposal my administration sent to them. There is a spirit of cooperation between Democrats and Republicans, and between Congress and this administration. In that spirit, I've invited Senators McCain and Obama to join congressional leaders of both parties at the White House tomorrow to help speed our discussions toward a bipartisan bill.

I know that an economic rescue package will present a tough vote for many members of Congress. It is difficult to pass a bill that commits so much of the taxpayers' hard-earned money. I also understand the frustration of responsible Americans who pay their mortgages on time, file their tax returns every April 15th, and are reluctant to pay the cost of excesses on Wall Street. But given the situation we are facing, not passing a bill now would cost these Americans much more later.

Many Americans are asking: How would a rescue plan work?

After much discussion, there is now widespread agreement on the principles such a plan would include. It would remove the risk posed by the troubled assets -- including mortgage-backed securities -- now clogging the financial system. This would free banks to resume the flow of credit to American families and businesses. Any rescue plan should also be designed to ensure that taxpayers are protected. It should welcome the participation of financial institutions large and small. It should make certain that failed executives do not receive a windfall from your tax dollars. It should establish a bipartisan board to oversee the plan's implementation. And it should be enacted as soon as possible.

In close consultation with Treasury Secretary Hank Paulson, Federal Reserve Chairman Ben Bernanke, and SEC Chairman Chris Cox, I announced a plan on Friday. First, the plan is big enough to solve a serious problem. Under our proposal, the federal government would put up to $700 billion taxpayer dollars on the line to purchase troubled assets that are clogging the financial system. In the short term, this will free up banks to resume the flow of credit to American families and businesses. And this will help our economy grow.

Second, as markets have lost confidence in mortgage-backed securities, their prices have dropped sharply. Yet the value of many of these assets will likely be higher than their current price, because the vast majority of Americans will ultimately pay off their mortgages. The government is the one institution with the patience and resources to buy these assets at their current low prices and hold them until markets return to normal. And when that happens, money will flow back to the Treasury as these assets are sold. And we expect that much, if not all, of the tax dollars we invest will be paid back.

A final question is: What does this mean for your economic future?

The primary steps -- purpose of the steps I have outlined tonight is to safeguard the financial security of American workers and families and small businesses. The federal government also continues to enforce laws and regulations protecting your money. The Treasury Department recently offered government insurance for money market mutual funds. And through the FDIC, every savings account, checking account, and certificate of deposit is insured by the federal government for up to $100,000. The FDIC has been in existence for 75 years, and no one has ever lost a penny on an insured deposit -- and this will not change.

Once this crisis is resolved, there will be time to update our financial regulatory structures. Our 21st century global economy remains regulated largely by outdated 20th century laws. Recently, we've seen how one company can grow so large that its failure jeopardizes the entire financial system.

Earlier this year, Secretary Paulson proposed a blueprint that would modernize our financial regulations. For example, the Federal Reserve would be authorized to take a closer look at the operations of companies across the financial spectrum and ensure that their practices do not threaten overall financial stability. There are other good ideas, and members of Congress should consider them. As they do, they must ensure that efforts to regulate Wall Street do not end up hampering our economy's ability to grow.

In the long run, Americans have good reason to be confident in our economic strength. Despite corrections in the marketplace and instances of abuse, democratic capitalism is the best system ever devised. It has unleashed the talents and the productivity, and entrepreneurial spirit of our citizens. It has made this country the best place in the world to invest and do business. And it gives our economy the flexibility and resilience to absorb shocks, adjust, and bounce back.

Our economy is facing a moment of great challenge. But we've overcome tough challenges before -- and we will overcome this one. I know that Americans sometimes get discouraged by the tone in Washington, and the seemingly endless partisan struggles. Yet history has shown that in times of real trial, elected officials rise to the occasion. And together, we will show the world once again what kind of country America is -- a nation that tackles problems head on, where leaders come together to meet great tests, and where people of every background can work hard, develop their talents, and realize their dreams.

Thank you for listening. May God bless you.

END

Further Reading:

Obama, McCain to attend economic bailout talks

New York Stock Exchange Traders at Work

During the Current US Economic Meltdown

Traders work on the floor of the New York Stock Exchange in New York, on 24 September 2008.

Olmert Plays Football

Interim Jewish Prime Minister Ehud Omert kicks a ball during a visit to a stadium in the city of Kiryat Shmona, on 23 September 2008.

Interim Jewish Prime Minister Ehud Omert looses his shoes as he kicks the ball.

Always nice to know that other people loose there shoes when playing a game.

For myself, football was when I was in school with other girls and have never had the opportunity to play since.

But nevertheless, I have had my share of flying shoes over the years, with children inviting me to play some sort of game and I always seem to be wearing sandals and yes, I had my share of laughter.

This event seemed to have made Olmert laugh too and I have to admit, I laughed with him; in what seemed an enjoyable day.

As for being athletic, I always seemed to be to short or light weight; even have been picked-up in a California Santa Ana wind while hanging unto the fence when I was in elementary school and over the years have not really faired much better; except, I was fairly good at American baseball, Equestrian and gymnastics.

Something I should admit, that their where numerous thing’s I used to like to do, but too many of them went by the wayside because of extreme physical tortuous injuries. I was told by doctors over the later years, that most of my bones had been broken and some more then once; due to not just the assassination attempts, but mainly by torture.

Preview of a Canada's passengers’ bill of rights

A passengers' bill of rights recently passed in Canada gives travelers entitlement to a meal after a four-hour delay, a voucher for a hotel after an eight-hour delay and the right to get off a plane after waiting more than 90 minutes.

The legislation is novel, columnist Rob Lovitt writes, but will it fly?

President Bush Returns To White House

U.S. President George W. Bush walks toward the Oval Office after arriving back at the White House, on 24 September 2008, in Washington DC.; after cancelling his fund raising event in Florida.

It appears the economic bailout has been a busy topic, on Capitol Hill, as Warren Buffet calls the crisis 'economic Pearl Harbor'; to Bush planning a 9 p.m ET. speech to the nation on the economic crisis.

Peres addresses 63rd session of the United Nations General Assembly

Jewish President Shimon Peres addresses the 63rd session of the United Nations General Assembly at the United Nations in New York, on 24 September 2008.
Peres departs after addressing the 63rd session of the United Nations General Assembly at the United Nations in New York.

Bernanke: Growth hinges on stabilizing markets

Traders work in the crude oil options pit on the floor of the New York Mercantile Exchange, on 23 September 2008, in New York.

Bush administration's $700 billion bailout plan, digs deeper into taxpayer pockets with no dilemma help in the future projection.

24 September 2008
By JULIE HIRSCHFELD DAVIS

Federal Reserve Chairman Ben Bernanke gave Congress a grim assessment of the state of the economy Wednesday, saying that business growth hinges on stabilizing troubled financial markets.

Bernanke, in remarks prepared for the Joint Economic Committee of Congress, said the Fed will "act as needed" to minimize the disruptions to America's business life. His appearance came not long after President Bush said he remained confident that the administration and Congress will reach agreement soon on a "robust" plan to relieve the financial and credit crisis.

Lawmakers have voiced skepticism about the the administration's $700 billion bailout plan, however, and both Bernanke and Treasury Secretary Henry Paulson heard skeptical statements from Senate Banking Committee members when they went to Capitol Hill Tuesday to plea for passage of the plan.