US ‘Still Looking’ at Establishing an Interests Section in Iran

By Patrick Goodenough

(CNSNews.com) – The United States has not shelved a proposal to establish an interests section in Iran, although there are no public signs that the Iranian government is ready to embrace the idea.

An interests section facilitates relations between people of two countries that do not have diplomatic relations, typically dealing with legal issues such as birth and death registrations, and cultural and educational affairs.

Another, unrelated non-governmental initiative aimed at improving ties between the U.S. and Iran also has drawn skeptical responses in Iran.

Secretary of State Condoleezza Rice said at the weekend that the Bush administration continues to consider the idea of an interests section.

“I think it’s an interesting idea,” she told reporters en route to Astana, Kazakhstan. “But, you know, we are going to take a look at it in the light of what it could do for our relationship with the Iranian people.”

Asked whether the step remained a possibility before the end of the Bush administration in January, Rice said, “We are still looking at the idea.” ....

A State Department spokesman referred queries about the AIC license to OFAC, saying only “our policy has not changed. We encourage efforts to increase people-to-people contacts between the people of Iran and the people of the United States in order to expand mutual understanding, as long as parties involved work in accordance with U.S. laws and regulations.”

IMF: It's Worse Than It Looks

The International Monetary Fund on Tuesday increased its estimate of global losses from the financial meltdown to $1.4 trillion and warned that the world's economic downturn was deepening.

"Declared losses on U.S. loans and securitized assets are likely to increase further to about $1.4 trillion," the IMF said, increasing the loss estimate from $945 billion in April and slightly up from $1.3 trillion it cited last month.

In its quarterly assessment of global capital markets, the IMF said global economic activity is slowing down as growth in advanced economies decelerates and emerging economies start to lose momentum.

"Despite better-than-expected performance early this year, rising financial turmoil has led to a downgrade in the IMF's baseline forecast for global economic growth in 2008-09," it said.

The IMF called for "internationally coherent and decisive policy measures" to restore confidence and to avert a more protracted economic slowdown, but warned that central banks would need to continue injecting cash to calm the unprecedented turmoil.

"The risk of a more severe adverse feedback loop between the financial system and the broader economy represents a critical threat," the IMF said.

"The combination of mounting losses, falling asset prices, and a deepening economic downturn has caused serious doubts about the viability of a widening swath of the financial system," it added.

It estimated that major global banks will need about $675 billion in capital over the next several years.

The IMF warned of further losses, with significant gaps between reported and estimated write-downs, as the crisis increasingly becomes disorderly.

It said a further decline in the U.S. housing market and a wider economic slowdown is leading to new loan deterioration. Delinquencies on prime mortgages and commercial real estate are increasing, as well as those for corporate and consumer loans, it noted.

With the economic slowdown spreading, financial institutions will increasingly face losses on non-U.S. assets as well, the IMF said.

The fund said pressures were now emerging in Europe, as house prices in some countries decline, economic growth falters and lending conditions tighten.

The IMF warned that overall risks to emerging markets, which earlier appeared resilient to the credit turmoil, have risen sharply as appetite for emerging assets has declined and capital outflows have intensified, leading to tighter liquidity conditions.

DHS warns of potential terror attacks on public buildings

By Jim Popkin

The Department of Homeland Security (DHS) today issued an analytical "note" to U.S. law-enforcement officials cautioning that al-Qaida terrorists have in the past expressed interest in attacking public buildings using a dozen suicide bombers each carrying 20 kilograms of explosives.

Authors with the U.S. Office of Intelligence and Analysis added that they have "no credible or specific information that terrorists are planning operations against public buildings in the United States." The DHS analysts--after coordinating with the FBI Threat Analysis Unit--said they were releasing the note because "it is important for local authorities and building owners and operators to be aware of potential attack tactics."

According to the note obtained by NBC News, a "recently discovered audio recording of al-Qa‘ida training sessions conducted several years ago provides instruction to potential suicide terrorists on seizing a publicly accessible building and damaging or destroying it with explosive charges."

Among the materials on a CD–ROM seized earlier this year by Belgian authorities and provided to Interpol, the note said, "is a detailed audio explanation by now-deceased senior al-Qa‘ida operative Yousef al-Ayeeri of a method taught in an al-Qa‘ida training camp for attacking a publicly accessible building. Interpol believes the Arabic-language recording was made shortly before al-Ayeeri’s death in 2003."

Saudi security forces killed al-Ayeeri in 2003.

The Audiotape:
The DHS said al-Ayeeri's five-year-old audiotape walks potential suicide bombers through the following scenario:

"Once a target is selected, al-Ayeeri recommends assembling a team of 12 individuals, each armed with an assault rife and grenade and carrying approximately 20 kilograms of explosives. The attackers are to storm the building, seal off escape and access points, and occupy it long enough to set and detonate their explosive packages. Al-Ayeeri stressed the importance of carrying out these steps before law enforcement can respond, even if notified early in the attack. He assumes the attackers will be killed during the operation," the DHS note said.

The instructional audiotape continued:

"Al-Ayeeri believed attackers would be able to enter many publicly accessible buildings easily with little or no resistance from often poorly trained and lightly armed or unarmed security guards, and that an explosion from inside the building would be particularly effective."

In the unclassified report, the analysts added that, "if each of the 12 attackers’ 20 kg charge is combined into a single large bomb, it would have more explosive power than the truck bomb used in the 1983 Beirut Embassy attack. Terrorists to date have not conducted attacks on public buildings using the full range of tactics covered in al-Ayeeri’s training."

Since 9-11, the FBI and DHS have issued hundreds of similar warnings and bulletins to law-enforcement officials, cautioning them about potential terrorist attacks. Critics have said that some of the scenarios seem implausible, including warnings about teams of scuba-diving bombers and terrorists' use of prosthetic devices that would allow women to hide explosives in devices “that mimic the look of a pregnant woman.” Law enforcement officials have responded that there's a need for aggressive intellience sharing--one of the lessons learned the hard way after the 9-11 terrorist attacks.

Update: I have edited this post to make it clear that the Department of Homeland Security authored this document, after consulting with the FBI. As the document states, it was "Prepared by the DHS/Critical Infrastructure Threat Analysis Division. Coordinated with the FBI/Threat Analysis Unit."

Syrian tanks advance to Lebanese Beqaa Valley border. Israel forces on high alert

Russian military experts calculate that the window for an Israeli attack on Iran’s nuclear facilities will shrink to 3-6 months if Moscow sells Iran (and Syria) the sophisticated S-300 system for guarding those sites against air, missile or cruise missile attack. DEBKAfile’s Moscow sources report that Israeli prime minister Ehud Olmert failed in the key missions of his Moscow trip to persuade Russian leaders to discuss Tehran’s nuclear weapons program and to refrain from selling this advanced weapon to Iran and Syria. ...

Syrian tanks advance to Lebanese Beqaa Valley border. Israel forces on high alert

Syria moved tank units up to the Lebanese Beqaa Valley border Tuesday, Oct. 7. DEBKAfile’s military sources report that this is Damascus’ second troop movement on the Lebanese border. For three weeks, commando units have been poised on the North Lebanese border. Israeli defense minister Ehud Barak on an announced visit to the border troops cautioned officers to exercise maximum vigilance. ...

Al-Qaeda Plots New Terror Attacks In Britain

al Qaeda is planning a new wave of terror attacks on Britain, security chiefs have warned.

Intelligence agencies are tracking four plots to unleash carnage on our cities.

And they fear there could be up to a dozen more in the early planning stages. The terror operations are thought to centre on London and Birmingham.

Two are understood to be plans to launch devastating explosions in the city centres.

The intelligence services have less information on the others but fear there could be an attack on a power station, an attempt to poison water supplies or a bid to ASSASSINATE a top politician.

An intelligence source said one reason they were taking the plots so seriously was because there was foreign involvement from Pakistan or Afghanistan.

Former Tory security spokesman Patrick Mercer, who has also advised Gordon Brown, said: “Because we have not been attacked since the handover of Prime Ministers last year does not mean to say that the threat has gone away. Not by a long chalk.

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Socialism Is Draining America of Capital

By Dick McDonald

A free market capitalist system runs on its capability to devote a reasonable portion of the income it earns each year to investments in its future. For years, no country in the world has done a better job of that than America. Unfortunately for the last few years, Americans are spending more than they earn. That has created a serious shortage of capital in our financial markets and has forced Wall Street to solicit investment funds from foreigners and sovereign wealth funds.

A fear exists that if we continue to allow foreigners to buy up large segments of our economic engine we will lose control of our own destiny. Tom Friedman of the New York Times hopes to ignite that fear in a recent op-ed.

Another friend of mine in the ship-supply business in Baltimore, Alan Kotz, told me about a German customer who recently put in double his normal order. When Alan asked him if he was aware of how much he had ordered, the German brushed his question away and laughed: "Alan, never mind, everything for us is half price."

And a good thing it is. Even though the dollar has strengthened a bit lately, we are going to need foreigners and sovereign wealth funds from China, Asia, Europe and the Middle East more than ever to survive this crisis - and they are going to need us to be healthy as well. In the process, we are going to become even more intertwined and dependent on the rest of the world.

This election season sees capitalism under severe attack from American socialists. Under the guise that 95% of the taxpayers will receive a tax cut, the socialists are playing the Pied Piper leading Americans into believing the same lie that Bill Clinton swept into office with in 1992 and the Democrats took back the Congress in 2006 - middle class tax cuts. Tax cuts were never delivered in 1992 or 1993; rather taxes were raised. In 2006 - 2007, there were no tax cuts either. The question then remains: will Obama deliver a tax cut or will he tax the vibrant American economy unmercifully to establish a socialist state - a state that so many believe to be "fairer" than a free-market economy?

The capital markets, now starved for new sources of capital, appear destined for even more desperate times. A combination of higher prices, inflation and the possible increased taxation on the productive elements of the society will leave little room for investment by ordinary Americans. Combine that with the fact that socialists will flood into Washington in January and you will discover why the stock market has fallen from over 14,000 on the Dow to under 10,000. The people are not stupid. Government governed by those who favor their own concept of fairness over that of freedom signals a massive downturn in economic fortunes of all Americans.

It doesn't have to be so. We have a massive new source of capital to drive the American economy way past the 14,000 level. If we only divert the payroll taxes of $1.4 trillion collected each year by the Federal government into the personal investment accounts of taxpayers and then invest those sums into the capital markets we could put the economy into hyper-drive.

Americans are tired of being told there is no way capitalism can be "fair." They are tired of being robbed of 15.3% of the lifetime income in return for no nest egg whatsoever. It is time to liquidate the $50 trillion in unfunded liabilities for entitlements that the Social Security Administration warns taxpayers may never be funded and therefore cause the total failure of the system.

It is time for capitalism to prove it is the "fair" system ready to vault all Americans into an era of prosperity. As the economy is driven by infusions of new capital every year - we have that new source of that capital that America presently wastes on consumption. See www.riseupamerica.us for the blueprint that will revitalize our economy and enable every American to achieve the American Dream.

U.S. intelligence warns Iraq war could explode again

(Compiler's note: A "must read" rca)

By Jonathan S. Landay, Warren P. Strobel and Nancy A. Youssef,

WASHINGTON — A nearly completed high-level U.S. intelligence analysis warns that unresolved ethnic and sectarian tensions in Iraq could unleash a new wave of violence, potentially reversing the major security and political gains achieved over the last year. ....

Welcoming Terror on Campus

By Jacob Laksin

As the fountainhead of global Islamic terrorism, Egypt’s Muslim Brotherhood has long had a public-relations problem. For years the Brotherhood has struggled to veil its reputation as a violent and reactionary religious movement without moderating the substance of its politics, which continue to include support for terror attacks and the institution of hard-line Sharia law. At the University of California at Irvine (UCI), the Brotherhood has now found an audience receptive to its efforts.

This Wednesday, four separate UCI programs – including the department of history; the Center for Research on International and Global Studies at UCI’s School of Social Sciences; the school’s Middle East Studies Student Initiative and its Center for Global Peace and Conflict Studies – will host Ibrahim el-Houdaiby, a young member of the Muslim Brotherhood and the leader of its new generation of self-styled “moderate Islamist” activists. Still in his twenties, the Cairo-based Houdaiby has a long lineage in the Brotherhood: His grandfather was Hassan el-Houdaiby, a prominent Brotherhood ideologist. Houdaiby has carried on the family tradition, writing a column for the Brotherhood’s official English-language website, IkhwaWeb.com, and generally trying to arouse foreign sympathy for a movement still regarded as dangerous in the West.

On the UCI faculty, at least, Houdaiby has made a favorable impression. In particular, he has impressed history professor Mark LeVine, who helped organize this week’s event. In an interview, LeVine said that he met Houdaiby in Cairo while conducting research for his recent book, Heavy Metal Islam: Religion, Popular Culture and Resistance in the Middle East, and came away convinced that the young activist truly represents a new breed of Muslim Brother – a clear break with the rigid fundamentalists who dominated the movement throughout its 80-year history.

As an example, LeVine says that Houdaiby is “more interested in working with the secular forces in Egypt, which is something that the Muslim Brotherhood has not traditionally done. And he has a willingness to be critical of the leadership, something that you would not have seen a generation ago.” Inviting Houdaiby to UCI, according to LeVine, is a way for students to engage with a Muslim activist who is not only close in age but also represents a new model of Islamic leadership.

That is a flattering description. Yet, there is reason to doubt whether Houdaiby really represents a trend toward moderation, and whether it is fitting for an American university to provide him with a platform. On the evidence of his published writings, Houdaiby is not the democratic reformer he affects to be.

Houdaiby certainly sounds convincing. Even as he describes himself as a moderate Islamist, he takes care to stipulate that “moderate Islamists fully endorse democracy, and their discourse illustrates a clear respect of civil liberties and human rights.” As for Islamic politicians, he explains, they “fully endorse democracy, support freedom of the press, and believe in equality as the basis of citizenship.”

So it is with the Brotherhood, which, as Houdaiby tells it, should not be considered a fundamentalist group. Rather, it is a “reformist organization that upholds the principles of tolerance [and] peaceful reform.” Instead of imposing its views on society, the Brotherhood champions “constructive dialogue that is based on mutual respect and appreciation of diversity.” It’s no coincidence that the topic of Houdaiby’s appearance at UCI will be “religion and democracy in the Middle East.” If Houdaiby is to be believed, the Brotherhood is now the Middle East’s foremost advocate of democracy and democratic values.

That is not whole story, however. A closer look at Houdaiby’s writings suggests that while he has shrewdly adopted the rhetoric of Western democrats, his political goals, like those of the Brotherhood, could hardly be more opposite. Where Houdaybi departs from his predecessors is largely in his success in putting a fresh and tolerant face on an old and intolerant agenda.

For instance, there are his countless contradictions. While Houdaybi says that the “state should not interfere in the individual’s personal choice to violate Islamic teachings and drink alcohol,” he insists that this is only true “as long as he does not violate the societal rights by threatening its security.” Of course, the notion that deviating from Islamic teachings constitutes a societal “threat” would convince only those who, like the Brotherhood, argue that society should be governed exclusively by Sharia law. Brotherhood founder Hassan el-Banna similarly proclaimed that Islam must be “given hegemony over all matters of life.” Houdaiby’s references to personal choice may sound more congenial to Western ears but it is noteworthy that his underlying assumption about the supremacy of Sharia is exactly the same as el-Banna’s.

Given his explicit support for Sharia law, it’s hard to give credence to Houdaiby’s professed belief in equality. And indeed Houdaiby’s writings point in a very different direction. For example, Houdaiby has criticized Muslim Brotherhood leader Mohammed Mahdi Akef for denouncing as “naked” those women who do not wear the hijab, or headscarf. However, Houdaiby isn’t prepared to say that women should be given a choice on the matter. On the contrary, he has written that “I support Akef’s stance on wearing the hijab, and like him view it as a religious obligation.” One need only consider the Taliban’s promises to assault with disfiguring acid all women who do not wear the hijab to see how tolerant Islamists tend to be of women who do not abide by such “religious obligations.”

Lest one take him for a radical, Houdaiby insists that his ideal of an Islamic society would look nothing like Taliban-era Afghanistan. But his support for criminalizing adultery in accordance with Sharia law belies such assurances. Although he has written that it is a “couple’s personal choice to adhere to Islamic teachings, prohibiting sexual relations outside marriage,” he insists that “the choice should not violate their society’s right to have a decent environment. Therefore, extramarital sexual relations are only a punishable crime if there are four eyewitnesses to the relation.” As with the hijab, the Islamic world provides revealing examples of what such a standard for punishing adultery might look like in practice. In November 2007, a Saudi appeals court sentenced a married woman to 200 lashes and six months in prison after she was gang-raped for the crime of “being in the car with an unrelated male.” In that case, her rapists were also her accusers. In Afghanistan, similarly, women are often sentenced to prison terms of up to twenty years after being raped. Houdaiby’s praise for “Western political systems” may have convinced some Western liberals that he is one of them, but his support for a Sharia-ruled state, with all the gender inequities it implies, indicates otherwise.

Indeed, in his ideology, Houdaiby is an Islamist of the old school. As his spiritual inspiration, he invokes the Muslim Brotherhood’s Sheikh Youssef el-Qaradawi. Of Qaradawi, Houdaiby claims that he has “shown a high level of respect for human rights and civil liberties.” In fact, Qaradawi is an anti-Semite who rejects all dialogue with Jews – “There is no dialogue between them and us other than… the language of the sword and force,” he has declared – and a supporter of terrorism. In 2007, Khaled Mashal, the Damascus-based leader of Brotherhood offshoot Hamas, praised Qaradawi for his “support of martyrdom operations.” According to Mashal, the good sheikh “never hesitated to issue rulings in support of these operations, and there were times when we were in dire need of these rulings.” That Houdaiby regards Qaradawi as a model religious guide is a telling commentary on what it means to be a “moderate Islamist.”

If UCI faculty and administrators are troubled by Houdaiby’s agenda, they show no evidence of it. Professor LeVine, while conceding that he has not read all of Houdaiby’s writing, defended him as someone who “absolutely” does not represent the Brotherhood’s more extreme positions. And yet, LeVine added that he would support inviting him to the school even if that were the case. “In the end I don’t really care,” Levine said. “I think he represents a rising generation of Islamic activists that we need to talk with, and I don’t think I need to read everything he’s written to see that he’s worth engaging.”

Still, LeVine says that he would be happy to invite critics of Islam and Islamism to UCI, including Ayan Hirsi Ali and Dutch politician Geert Wilders, provided that the school can afford their fees. (LeVine said that the Houdaiby will not be receiving an honorarium for his appearance and that the school has paid only for his trip from Egypt.) For now, though, that sentiment does not appear widely shared at UCI. The school does not plan to have a speaker to challenge Houdaiby's presentation of the Muslim Brotherhood.

The only clear winner in that scenario would seem to be the Muslim Brotherhood. The forerunner of al-Qaeda has long tried to present itself as a force for tolerance, human-rights and democracy in the Muslim world. Even in the Middle East that self-description has not gone unchallenged. How ironic that it should meet with so little skepticism at an institution devoted, at least in theory, to promoting critical thinking.

Fed to lend to companies in emergency move

By JEANNINE AVERSA

WASHINGTON (AP) - Frantically trying to stop the bleeding on Wall Street, the Federal Reserve took a first-time step Tuesday to get cash directly to businesses and hinted that interest rates could come down soon. Stocks continued their free fall anyway and hit new five-year lows.

The central bank invoked emergency powers to lend money to companies outside the financial sector and buy up mounds of commercial paper, the short-term debt that firms use to pay for everyday expenses like salaries and supplies.

The Fed, which has only loaned money to banks before, made the move as the gravest financial crisis in decades wore on and concern spread around the world.

In a speech to the National Association for Business Economics, Fed Chairman Ben Bernanke delivered a strong signal interest rates may need to be cut. And he warned the country could be stuck in the economic doldrums for some time.

"The outlook for economic growth has worsened," Bernanke said. "The heightened financial turmoil that we have experienced of late may well lengthen the period of weak economic performance."

The gloomy assessment appeared to open the door wider to an interest rate cut on or before the Fed convenes again Oct. 28. The Fed's key interest rate now stands at 2 percent.

Wall Street turned its back. The Dow Jones industrials lost 508 points, more than 5 percent, to close at 9,447, the lowest since Sept. 30, 2003. The Standard & Poor's 500, a broader stock index, closed below 1,000 for the first time since that same day.

President Bush again sought to strike a reassuring tone and said the nation would make it through an economy blighted by job losses, record foreclosures and shriveled retirement savings. Congress' top budget analyst estimated Tuesday that Americans' retirement plans have lost as much as $2 trillion in 15 months.

"Have faith, this economy is going to recover over time," the president said in a speech in Virginia. "I wish I could snap my fingers and make what happened stop. But that's not the way it works."

Bush reached out to European leaders earlier Tuesday to urge coordination on efforts to solve the crisis. The White House said Bush was open to the idea of a summit.

The contagion has spread overseas. Britain's chief financial regulator was readying a statement to make before markets opened Wednesday, and the BBC reported that the British government was poised to announce a rescue package for the banking system there.

Concerns are mounting that a global recession is developing, and pressure is growing on the U.S. government to do something beyond the $700 billion financial bailout package that Bush signed into law Friday.

To that end, the Fed announced it would begin buying companies' short-term debt. The powers were bestowed during the Depression as part of the Federal Reserve Act.

The government's bailout package is aimed at thawing lending by buying bad mortgage-related debt off the books of troubled financial institutions. The idea is that the banks would then be in a better position to lend and get the economy moving.

Commercial paper borrowing usually ranges from overnight to less than a week. But in the current climate of mistrust, the market has dried up considerably.

The action makes the Fed a crucial source of credit for nonfinancial businesses in addition to commercial banks and investment firms—and also exposes it to risk because so much of the debt would not be backed by collateral.

Credit markets, clenched up for weeks now, relaxed somewhat after the Fed's move.

The Fed said it was creating a new entity to buy two types of short-term debt, known as three-month unsecured and asset-backed commercial paper, directly from eligible companies. It hopes to have the program up and running soon, Fed officials said.

Fed officials said they would buy as much of the debt as necessary to get the market functioning again but refused to say how much that might be. They noted that around $1.3 trillion worth of commercial paper would qualify.

The Treasury Department, which worked with the Fed on the program, said the action was "necessary to prevent substantial disruptions to the financial markets and the economy."

The Treasury will provide money to the Federal Reserve Bank of New York to support the new program, the Fed said. The money would be separate from the $700 billion financial bailout package.

The Fed said it planned to stop buying the short-term debt on April 30 but may extend the program.

There was $1.6 trillion in outstanding commercial paper, seasonally adjusted, on the market as of last week, the most recent data from the Fed. The market has shrunk from $2.2 trillion last summer.

ACORN office in Vegas raided in voter-fraud probe

By OSKAR GARCIA

LAS VEGAS (AP) - Nevada state authorities are raiding the Las Vegas headquarters of an organization that works to get low-income people to vote.

A Nevada secretary of state's office spokesman said Tuesday that investigators are looking for evidence of voter fraud at the office of the Association of Community Organizations for Reform Now, also called ACORN.

No one was at the ACORN office when state agents arrived with a search warrant and began carting records and documents away.

Secretary of State spokesman Bob Walsh says ACORN is accused of submitting multiple voter registrations with false and duplicate names.

The raid comes two months after state and federal authorities formed a task force to pursue election-fraud allegations in Nevada.