The EMP Threat - Knocked Back to Pre-Electric Lifestyles

Electro Magnetic Pulse (EMP)–The Ultimate Iranian Terrorist Weapon « Pronk Palisades

The EMP Threat

Wall Street Journal.

Imagine you're a terrorist with a single nuclear weapon. You could wipe out the U.S. city of your choice, or you could decide to destroy the infrastructure of the entire U.S. economy and leave millions of Americans to die of starvation or want of medical care.

The latter scenario is the one envisioned by a long-running commission to assess the threat from electromagnetic pulse, or EMP. The subject of its latest, and little discussed, report to Congress is the effect an EMP attack could have on civilian infrastructure. If you're prone to nightmares, don't read it before bedtime.

An EMP attack occurs when a nuclear bomb explodes high in the Earth's atmosphere. The electromagnetic pulse generated by the blast destroys all the electronics in its line of sight. For a bomb detonated over the Midwest, that includes most of the continental U.S. Few, if any, people die in the blast. It's what comes next that has the potential to be catastrophic. Since an EMP surge wipes out electronics, virtually every aspect of modern American life would come to a standstill.

The EMP Threat - WSJ.com

The commission's list of horribles is 181 pages long. The chapter on food, for instance, catalogs the disruptions up and down the production chain as food spoils or has no way to get to market. Many families have food supplies of several days or more. But after that, and without refrigeration, what? The U.S. also has 75,000 dams and reservoirs, 168,000 drinking water-treatment facilities, and 19,000 wastewater treatment centers -- all with pumps, valves and filters run by electricity.

Getting everything up and running again is not merely a matter of flipping a switch, and the commission estimates that many systems could be out of service for months or a year or more -- far longer than emergency stockpiles or batteries could cover. The large transformers used in electrical transmission are no longer built in the U.S. and delivery time is typically three years. "Lack of high voltage equipment manufacturing capacity represents a glaring weakness in our survival and recovery," the commission notes.

Many industries rely on automated control systems maintained by small work forces. In emergencies -- say, during a blackout -- companies often have arrangements in place to borrow workers from outside the affected area to augment the locals and help with manual repairs. After an EMP attack, those workers would be busy in their home regions -- or foraging for food and water for their families.

The commission offers extensive recommendations for how industry and government can protect against the effects of an EMP attack and ensure a quicker recovery. They include "hardening" more equipment to withstand an electromagnetic pulse; making sure replacement equipment is on hand; training recovery personnel; increasing federal food stockpiles; and many others.

If not, our vulnerability "can both invite and reward attack," the commission's chairman, William Graham, told Congress last month. Iran's military writings "explicitly discuss a nuclear EMP attack that would gravely harm the United States," he said. James Shinn, an assistant secretary of defense, has said that China is developing EMP weapons. The commission calls an EMP attack "one of a small number of threats that can hold our society at risk of catastrophic consequences." The threat is real. It's past time to address it.

Wall Street Loses, Google Gains in Government

(Compiler's note: Interesting read)

By Anne Laurent

Ugh. That giant sucking sound again, this time as millions of us hear our retirement savings swirl down the drain.

Despite the bailout blow-out, my mind has kept wandering all day to a Washington Post story about Google's new office, of all things. Finally, Bob Gourley, former chief technology officer at the Defense Intelligence Agency, helped me understand why.

Google's clearly moving to Washington (actually Reston, Va., but it's the same thing) to get serious about selling to government and the contractors arrayed around it. I've written about its new Google Video for business (YouTube for the Enterprise) and how logical I believe it will be for agencies to adopt. But of course there's a whole array of other apps surrounding that one: Google Earth, Google Maps, Google Docs, enterprise search, Web browser and Google's server cloud, where more and more businesses find it safe enough to store their data.

When Google first announced its foray into government, I thought it was a big deal -- the revival, but this time for keeps, of software as a service. But after a flurry of PR about improving enterprise search and indexing data for agencies, things seemed to calm down.

Wall Street's meltdown is going to heat them back up big time, according to Gourley, who now runs Crucial Point LLC, a tech consulting firm, and "CTO Vision," a terrific blog. That's where I found his musings on the meaning of the meltdown for federal IT folks.

The whole post is worth reading, but the big takeaway for me was that financial companies clearly won't be spending on IT in the near future, nor will agencies, especially if IT doesn't provide critical value. And increasingly it doesn't since it's rapidly becoming a utility (a la Nicholas Carr), and should mostly be outsourced.

And to whom? Well, one idea might be Google. Agencies already are moving. The Post highlights the District of Columbia, where CTO Vivek Kundra has employees using Google's spreadsheets, email, videos, maps, word processing and a wiki. Alabama has won many plaudits and imitators with its amazing mash-up of Google Maps, Virtual Alabama.

And on and on. My point being that once again, everybody's loss might turn out to be Google's gain.

ODNI: Trade-off information security for good intel

By Bob Brewin

The Office of the Director of National Intelligence issued a directive on Tuesday that recommends managers of information technology systems accept a lower level of security if it provides the United States with better intelligence.

Comment on this article in The Forum.Intelligence Community Directive 503, signed by Director of National Intelligence Mike McConnell on Sept 15, said the principle goal for risk management of any intelligence agency such as the CIA or the National Security Agency should be to protect the agency's ability to perform its mission, "not just to protect its information assets."

"Because risk cannot be eliminated entirely, the risk management process must allow decision-makers to consider the operational economic costs of protective measures weighed against requirements for mission accomplishment," the directive stated. "For example, a very high level of security may reduce risk to a very low level, but can be extremely expensive and may unacceptably impede essential operations."

Intelligence agencies should consider information sharing and collaboration across the community and with foreign partners "as essential mission-sharing capabilities," the directive said.

The directive is part of the push among intelligence agencies to open up their systems with the aim of improving intelligence and stopping attacks on the United States like the ones conducted on Sept. 11, 2001. In its report, which delineated the intelligence failures that resulted in the attacks against the World Trade Center and the Pentagon, the 9/11 commission called for a cultural shift to encourage information sharing. The intelligence reform enshrined those recommendations into law.

The language in the new directive stands in stark contrast to the one it replaces, the Director of Central Intelligence Directive 6/3 issued in 1999, which emphasized security and said nothing about operational requirements. That directive said IT system risk assessments should "identify specific areas that require safeguards against deliberate or inadvertent unauthorized disclosure, modification or destruction of information; denial of service; and unauthorized use of the [IT systems]."

ODNI described the new directive, which codifies strategic goals agreed on with John Grimes, the Defense Department's chief information officer, in January 2007, as "a ground-breaking new policy [that] . . . changes how the intelligence community, and by inference, the entire federal government, will build, validate and approve information technology systems."

"This is an important step forward, but primarily only for ODNI itself," said Pat Howard, the chief information security officer for the Nuclear Regulatory Commission. "This changes ODNI policy on certification and accreditation of IT systems to closely align to that of the civilian agencies."

The policy tracks the National Institute of Standards and Technology Special Publication 800-37. "I do think this is a step in the right direction since it is a move toward a common certification and accreditation standard that is accepted by a large part of the government, by an important agency that has a substantial number of highly sensitive IT systems," Howard said. "Perhaps DoD should move in this direction, too."

The directive lays out broad parameters to simplify accreditation and certification of intelligence community IT systems and calls for reciprocal accreditation of systems operated by other government agencies, including those at the state and local levels, or nongovernmental agencies that meet standards established by ODNI or NIST. The intelligence community also should accept system accreditations conducted by foreign partners including Australia, Canada, New Zealand and the United Kingdom, the directive said.

Steven Aftergood, director of the Project on Government Secrecy for the Federation of American Scientists, called the new directive an "exercise in common sense: It says security is a means, not an end, and risk needs to be managed."

Aftergood said the directive also ties in with the recent intelligence community policy to share information, rather than closely hold on to it.

Philip Coyle, senior adviser with the Center for Defense Information, a security policy research organization in Washington, said the new directive was a way to "fudge" on security, and the government would do better to follow the practices of industry.

Coyle, who served as assistant secretary of Defense and director of its operational test and evaluation office from 1994 to 2001, said he was struck by the differences between private industry and the national security establishment when it comes to information technology development and deployment.

Private industry is innovative, developing applications and systems within small teams, and is cautious about security risks, he said. Defense and the intelligence community, by contrast, are not as cautious. They want to build "gigantic systems that are outdated before they can be deployed, developed by major defense contractors operating with very large teams, wanting to fudge on security to deploy faster, and wanting to bypass testing, which is seen as an obstacle not an opportunity for insight."

China report urges missile shield

By Bill Gertz

The United States needs new weapon systems, including missile defenses and other advanced military capabilities, to deter and counter China's steady buildup of nuclear and conventional arms, according to a draft internal report by a State Department advisory board.

U.S. defense policy has stressed missile defenses against Iran and North Korea. The report, by the Secretary of State's International Security Advisory Board (ISAB), is the first to recommend such defenses against China, including technology in space.

The draft, a copy of which was obtained by The Washington Times, said Chinese strategy goes beyond building forces capable of retaking the island of Taiwan. China seeks to "break out" by projecting power beyond its region including sea lanes that carry energy resources for its modernization, the document said.

"Using superior U.S. military technical capacities, the United States should undertake the development of new weapons, sensors, communications, and other programs and tactics to convince China that it will not be able to overcome the U.S. militarily," the report said.

The draft report presents a tough assessment of Chinese strategic modernization that goes beyond many current government and private-sector analyses that say that China's military modernization does not pose a major challenge to U.S. security interests.

For example, in an interview with The Washington Times in March, CIA Director Michael V. Hayden expressed professional "admiration" for China's rapid and sophisticated buildup and said it is "not inevitable that they will be an enemy." The report said that to reduce the chance of a miscalculation by China that could lead to a crisis or conflict, the United States "must take seriously China's challenge to U.S. military superiority in the Asia-Pacific region. ... China's military modernization is proceeding at a rate ... to be of concern even with the most benign interpretation of China's motivation." ....

The draft by the 17-member advisory board has not been officially released. A State Department official familiar with the report said it is in the late stages and could be completed in the next several weeks. ....

• Click here for China strategic plan PDF

.... Among the areas of U.S. strategic vulnerability identified in the report are gaps in U.S. missile defenses; dependence on space for communications; the U.S. inability to use force against China except through aircraft carrier groups; and "fragile electronics and the Internet." The report recommends that the United States acquire new offensive space and cyber warfare capabilities and missile defenses as well as "more robust sea- and space-based capabilities" to deter any crisis over Taiwan.

China currently has about 20 missiles capable of reaching the United States but is projected to have more than 100 nuclear missiles, some likely with multiple warheads, by 2015, the report said.

....Among the key findings:

• Continued rapid economic growth of 10 percent a year is "vital" for China to continue to compete with the United States and achieve its main goals of regime survival and regional dominance.

• China's industrial and defense espionage is aimed at obtaining advanced technology for economic and military modernization.

• The scale, scope and speed of China's rise fundamentally impacts U.S. national security, yet the U.S. "possesses only a limited understanding of Chinese intentions, and how Beijing's economic and military expansion affects these interests."

• China's military and civilian leaders are not always on the same page and that separation is a potential "focal point" for mitigating hostility. China's civilian leaders understand Americans but the Chinese military suffers from "clear paranoia and misperceptions" about U.S. intentions.

• To avoid an "emerging creep" by China toward strategic nuclear coercion, "the United States will need to pursue new missile defense capabilities, including taking full advantage of space," the report said.

On China's expansion after centuries as a regional power, the ISAB report stated that: "In China's view, Taiwan is the key to breakout: If China is to become a global power, the first step must include control of this island." Taking over the island would allow China to control the seas near its coasts and to project power eastward, the report said.

China views Taiwan, where nationalist forces fled from the mainland in 1949, as central to "the legitimacy of the regime and key to power projection," the report said. Taiwan also is seen by China as a way to deny the United States a key ally in "a highly strategic location" of the western Pacific, the report said.

Chinese authorities have said they desire peaceful reunification with Taiwan but will not allow it to declare formal independence and have not ruled out the use of force.

The advisory panel report also recommended that the U.S. increase sales of advanced conventional forces to allies in Asia and improve counterintelligence efforts.

Larry M. Wortzel, chairman of the congressional U.S.-China Economic and Security Review Commission, said he has not seen the report but that blocking Taiwan independence and gaining control of the island "is one of the highest priorities set for the People's Liberation Army by the Communist Party Politburo Standing Committee and the Central Military Commission." "If China accomplishes this, its military can concentrate on missions to expand China's presence, influence, and even control, in wider areas of the Asia-Pacific region," he said.

Mr. Wang, the Chinese Embassy spokesman, said China's budget for 2007 was $45 billion, or 1.4 percent of gross domestic product. He said this year's defense budget is $57.2 billion, an increase of 17.6 percent.

The United States spends about 4 percent of GDP on defense, according to the CIA World Factbook.

However, the Pentagon's latest annual report on China's military stated that China's military spending figures do not include spending on China's space program, strategic forces, foreign acquisitions, military-related research and development and paramilitary forces.

World leaders look to US for salvation as economies near abyss

Socialist nations push for new bailout plan

World leaders called on the US government to take action to stave off global financial collapse Tuesday after Congress rejected a 700 billion dollar bailout in a move which stunned global markets.

Grid of 100,000 computers heralds new internet dawn

A network of 100,000 computers providing the greatest data processing capacity yet unleashed has been created to cope with information pouring from the world’s largest machine.

The Grid is the latest evolution of the internet and the world wide web and computer scientists will announce on Friday that it is ready to be connected to the Large Hadron Collider (LHC).

It is designed for schemes where huge quantities of data need crunching, such as large research and engineering projects. The Grid has the kind of power required to download movies in seconds, and the ability to make high-definition video phone calls for the same price as a local call. More importantly, it should help to narrow the search for cures for diseases. However, it is unlikely to be directly available to most internet users until telecoms providers build the fibre-optic network required to use it.

....The Grid allows scientist Many believe the world wide web and the internet are the same thing, but the internet is actually a massive network of networks, which connects millions of computers together globally, and the web is an information-sharing model built on top of the internet, which allows information to be accessed over the medium of the internet.s at CERN, the European Organisation for Nuclear Research, to get access to the unemployed processing power of thousands of computers in 33 countries to deal with the data created by the LHC.

Mexico funds Spanish classes for illiterate emigrants to U.S.

By Laura Wides-Munoz, Associated Press

MIAMI — For more than a decade, as the immigration debate has swelled on both sides of the border, the Mexican government has been quietly providing money, materials and even teachers to American schools, colleges and nonprofit organizations.

The programs aren't substitutes for U.S. curricula, but educators familiar with them say they provide a lifeline for adult students with little formal education by helping them become literate in Spanish — and by extension, English.

Yet many educators are wary of even talking about the programs, fearing they might stoke an anti-immigrant backlash.

The Mexican government, which spends more than $1 million annually on the programs, has many reasons to provide the aid to the immigrants and their children. The programs allow it to give back to the growing number of Mexicans living legally and illegally in the U.S. Behind oil, remittances from these individuals are the second-largest source of foreign income for the Mexican economy — almost $24 billion last year. ....

NEXT PLAN WON'T BE MADE IN USA

(Compiler's note: This scary story may just help explain why some very high ranking politicians are bent on ignoring the loud demands of the American people. What else are we NOT being told. rca)

NOW what? Congress and the White House did their best - I guess - to come up with a way to rescue the teetering banking system and Wall Street reacted with a big, wet Bronx cheer.

In case you aren't from The Bronx, that means the financial markets didn't approve - either when the bailout looked like a sure thing in the morning (Dow down 350) or when the plan later seemed dead (Dow down more than 700).

So what's going wrong with the $700 billion experiment in bailout capitalism?

Well, Wall Street is running the show, which automatically engenders suspicion and skepticism.

To me, Treasury Secretary Hank Paulson, a former chairman of Goldman Sachs, seems more interested in taking toxic securities off the books of Wall Street firms than in providing the banking system with the lifeblood it needs - capital.

Here's the problem.

Even if Paulson manages to use the $700 billion to acquire billions in bad mortgage securities from banks, it doesn't mean the banks are going to be willing to increase loans.

In fact, banks might be so scared - and grateful that Paulson got them off the hook - that they might just sit back and watch the disaster unfold.

Lost in the panic of a nearly 800-point drop in the Dow is a scary back story. And it's the reason why Washington yesterday had to pump $330 billion in liquidity into the frozen financial system - not only to the US banking system but also to Europe.

Put simply, it's that we are no longer in control of our own financial markets.

Japanese and Chinese investors, including the governments of both countries, are said to have pressed for our government's takeover of Fannie Mae and Freddie Mac several weeks ago.

The threat, it has been reported, was that foreign government money from so-called sovereign wealth funds would no longer buy Fannie and Freddie's bonds if the feds didn't stand firmly behind them.

Foreign investments have enabled the US to expand its economy over the years, even though Americans have been saving and investing less.

These sovereign funds came to the aid of several US institutions early this year, but not lately.

Given the number of emergency bank deals that have just been accomplished through private transactions, it raises a question that was likely brought up by congressional members: Why did Washington need to kick in another $700 billion when private sources of finance seem to be stepping forward?

Are that many more banks in trouble? Was the Treasury secretary merely looking for an insurance policy if these private deals fail? Or was it, as I suspect, that the White House was being strong-armed by foreign interests?

Sharia Law: Coming to a Western Nation Near You?

By Cinnamon Stillwell

Georgetown University’s Prince Alwaleed Center for Muslim-Christian Understanding (ACMCU) will be hosting a conference on October 23 that asks the loaded question: “Is There a Role for Shari'ah in Modern States?”

The Saudi-funded ACMCU and its founding director, John Esposito, one of the foremost apologists for radical Islam in the academic field of Middle East studies, have certainly been doing their bit to make the idea more palatable.

The Saudi prince for whom ACMCU was named has been pumping millions of dollars into Middle East studies at Georgetown, Harvard, UC Berkeley, and beyond, and as the case of Esposito demonstrates, it magnifies the voices of scholars with a decidedly uncritical bent. As a result, ACMCU analysis regarding Sharia (or Islamic) law tends to focus not on its injustices (amputation, stoning, hanging, honor killing, punishment for blasphemy, execution of apostates, persecution of non-Muslims, sanctioned wife-beating, female genital mutilation, and so on), but rather on repackaging it in ways that will appeal to Western sensibilities. The concept of a more “moderate” version of Sharia law that is compatible with democracy is at the forefront of this effort.

While it’s difficult to predict exactly what will take place at the upcoming ACMCU conference, the fact that Esposito will present the opening remarks provides considerable insight into the politics of the event.

Who Speaks for Islam? What a Billion Muslims Really Think, a book co-authored by Esposito and executive director of the Gallup Center for Muslim Studies Dalia Mogahed, has been widely criticized for its blatant inaccuracies and attempts to whitewash anti-Western and extremist sentiment in the Muslim world. Accordingly, Sharia law is framed in a non-threatening fashion. As Robert Satloff put it in the Weekly Standard:

…Amazing as it sounds, according to Esposito and Mogahed, the proper term for a Muslim who hates America, wants to impose Sharia law, supports suicide bombing, and opposes equal rights for women but does not “completely” justify 9/11 is . . . “moderate.”

At the Newsweek/Washington Post “On Faith” blog earlier this year, Esposito referenced his book as a means of downplaying concerns over support for Sharia law in the Muslim world:

…for many any mention of Shariah is often equated facilely with Taliban-like laws. In fact, as the Gallup World Poll shows, majorities of mainstream Muslims (women as well as men) want some form of Shariah, religious values, as a source of law. This sentiment is not all that different from a majority of Americans who want to see the Bible as a source of legislation. (See Who Speaks for Islam? What a Billion Muslims Really Think)

But comparing Sharia law under a dictatorial or clerical regime to biblical inspiration in a secular, democratic nation is like comparing apples and oranges. Yet this is precisely the kind of moral equivalency one expects from Esposito at the ACMCU conference.

Providing further cause for concern, keynote speaker and Harvard Law professor Noah Feldman is a notorious champion of Sharia law. In a March, 2008 New York Times Magazine article on the subject, Feldman claimed:

In fact, for most of its history, Islamic law offered the most liberal and humane legal principles available anywhere in the world. Today, when we invoke the harsh punishments prescribed by Shariah for a handful of offenses, we rarely acknowledge the high standards of proof necessary for their implementation.

…At its core, Shariah represents the idea that all human beings — and all human governments — are subject to justice under the law.

Reviewing Feldman’s latest book, The Fall and Rise of the Islamic State, Jonathan Schanzer elaborates on this disturbing thesis:

Feldman’s central premise is that the scholars of early and medieval Islam were guardians of justice. These independent scholars, he argues, kept the all-powerful caliph in line by judiciously ensuring that his decrees were in accordance with Shari'a law. The proper application of Shari'a ensured fair governance. Thus, Feldman claims, resurrecting the scholarly class is needed today.

Yet Feldman’s book, Schanzer concludes, “fails to convince the informed reader that Islamic law and democracy are destined for marriage.”

In an aptly titled piece on Feldman’s scholarship, “Shilling for Sharia at Harvard,” Hillel Stavis warns that “it can only be a matter of time before the professor, having asserted that Sharia law is desirable, will assure us that its introduction in the United States is inevitable.”

Considering recent developments in Britain, the inevitability of Sharia law may not just be an abstraction. As reported last week by The Times Online:

Islamic law has been officially adopted in Britain, with sharia courts given powers to rule on Muslim civil cases.

The government has quietly sanctioned the powers for sharia judges to rule on cases ranging from divorce and financial disputes to those involving domestic violence.

Rulings issued by a network of five sharia courts are enforceable with the full power of the judicial system, through the county courts or High Court.

Melanie Phillips, writing for National Review Online, notes the role of Saudi funding and Middle East studies in furthering this process:

Even thought itself is being Islamized, with academic objectivity in the teaching of Islam and Middle East studies set aside in favour of indoctrination and propaganda. An as-yet-unpublished report by Prof. Anthony Glees says that extremist ideas are being spread by Islamic study centers linked to British universities and backed by multi-million-pound donations from Saudi Arabia and Muslim organizations. Professor Glees says, ‘Britain’s universities will have to generate two national cultures: one non-Muslim and largely secular, the other Muslim. We will have two identities, two sets of allegiance and two legal and political systems.

Britain can serve as a cautionary tale for the West. Scholars who downplay the threats to democratic societies posed by the encroachments of Sharia law, and push a sanitized, idealized version thereof, may one day help usher in our worst nightmare.

Now there’s a subject that would make for a truly groundbreaking Middle East studies conference.

Pakistan's Taliban warlord: A profile of Baitullah Mehsud

By Manzar Zaidi

Pakistani Taliban commander Baitullah Mehsud is considered in some intelligence circles as a threat as big as, or bigger than, even Osama bin Laden. His rise from a relatively little known entity in South Waziristan to the head of a full-fledged Taliban movement in Pakistan has not only grave repercussions for local security, but also for the Global War on Terror. The rise of this movement in Pakistan is not just a local disturbance, but the phenomenon of Taliban resurgence after their post-2001 setback in Afghanistan, and with Baitullah as a protégé of Mullah Omar taking charge, has international implications as well.

At the conclusion of the Soviet-Afghan War, the militant Taliban was forced to flee from Afghanistan and found a safe haven in the Federally Administered Tribal Area, particularly in the Waziristan and Bajaur regions. It was here that the Taliban engrossed themselves in the process of reorganization and undertaking fresh recruitment directly or through madrassas (religious seminaries), which flourished after the collapse of educational system provided by the state. Emotionally charged locals, the Pashtuns, had been living well-below subsistence level for a long time under successive governments in Pakistan. A combination of abject poverty, an ultraorthodox religious zeal, and hatred for the Western powers provided a fertile nursery for this new class of militants.

The Pakistani tribal areas already had significant number of Taliban fighters present due to infiltration from adjacent Afghanistan. These bands of Taliban needed legitimacy in the form of local warlords, who shared the same ideological and militant roots as the Taliban, This has given rise to a new Pakistani-bred variant of the Taliban.

This new generation of Taliban is under the influence of al Qaeda, and is supplemented by militants of different localities like Chechens, Bosnians, Uzbeks, Kazakhs, Arabs, and Egyptians. These ethnic groups have started dictating terms based on the conservative interpretation of Islam as per the beliefs and practices of a distorted version of Deobandi school of thought. The foremost leader to emerge from this movement has been Baitullah Mehsud.

Baitullah combines in his personality all the essential requirements of a warlord capable of taking over this new militant movement: Afghan jihadi experience, coupled with a great reverence for Afghan Taliban leader Mullah Omar, and local legitimacy due to belonging to a reputed clan. He has led a charmed militant life, being a favored disciple of a legendary local jihadi leader, Nek Muhammad Wazir and reputed to be a well respected Afghan trained warrior. Luck has favored him in the form of opportunities being given to him due to being at the right place at the right time. Yet, his enormous infamy cannot just be explained away due to a stroke of luck; he is an enormously capable commander and a strategist of the highest order, as his negotiation history with the Pakistan government has tended to demonstrate.

This paper will examine the little that is known about Baitullah’s personal background, his rise to power, and his place in Pakistan.

Click to read Pakistan's Taliban warlord: A profile of Baitullah Mehsud.

Manzar Zaidi is a Senior Associate Editor with The Long War Journal, dealing primarily with the analysis of the phenomenon of radicalisation in Pakistan, and the surrounding region. Manzar directs the The Long War Journal's project on Global Jihadist Movements - The Pakistani Taliban.

Youth Canada's first convicted terrorist

Landmark decision under new law finds teenager was immature but culpable in plot

Canada's first convicted terrorist was a naive 17-year-old Muslim convert who was easily manipulated as well as lacking education and street smarts. But in a landmark decision yesterday a judge ruled there was overwhelming evidence he belonged to a homegrown terrorist group.

The young man, accused of attending two terrorist training camps and stealing items for the so-called Toronto 18, displayed no emotion when the verdict was read in a Brampton court.

"(The youth) clearly understood that the camps were training for a terrorist purpose," said Justice John Sproat as he read from his 94-page decision. "He also understood that contributing materials to be used at the camp enhanced the ability of the group to conduct the training."....

More torture charges against Charles Taylor's son filed in US

The son of imprisoned former Liberian leader Charles Taylor was indicted this week on four new counts of torture, and other ancillary crimes. "Chuckie" Taylor, who commanded his father's palace guard, named the Dragon Forces, is presently serving time in a US prison for a passport violation, and was already facing torture and other criminal charges for his role in torturing civilians whilst his father ruled Liberia. His case is the first known prosecution under a recent US law which prohibits US citizens from committing torture overseas. The Defendant was born in the United States whilst his father was a student in Boston.

Charles Taylor Jr. [UID 32829], who is also known as Charles M. Emmanuel and Roy M. Belfast, Jr., is charged* with:

• Four counts of Torture.
• Conspiracy to commit Torture.
• Use of a firearm in a violent crime or conspiracy.
• Conspiracy to use a firearm in a violent crime.

Taylor is alleged to have personally committed, or ordered these acts;

• Stabbing and cutting prisoners.
• Applying electrical shocks.
• Burning subjects with molten plastic, lit cigarettes and an iron.

The crimes occurred between 1999 and 2003. Trial is scheduled for January 2008. Whether the new indictment will result in a delay is possible.

Dave Ramsey: The Common Sense Fix

(Compiler's note: Dave Ramsey has compiled this set of fixes to today's Wall Street financial crisis from a large group of associates. This represent fixes that they collectively believe should be considered instead of the bailout path currently being followed by our politicians -- the same politicians who are writing themselves a one-way ticket out of office if they continue on their current path. It is time to really "fix" the Congressional attempts at "social re-engineering.")

By Dave Ramsey

The Common Sense Fix

Years of bad decisions and stupid mistakes have created an economic nightmare in this country,
but $700 billion in new debt is not the answer. As a tax-paying American citizen, I will not support any congressperson who votes to implement such a policy. Instead, I submit the following threestep

Common Sense Plan.

I. INSURANCE
a. Insure the subprime bonds/mortgages with an underlying FHA-type insurance. Government-insured and backed loans would have an instant market all over the
world, creating immediate and needed liquidity.

b. In order for a company to accept the government-backed insurance, they must do two
things:

1. Rewrite any mortgage that is more than three months delinquent to a 6% fixed-rate mortgage.

a. Roll all back payments with no late fees or legal costs into the balance. This brings homeowners current and allows them a chance to keep their homes.

b. Cancel all prepayment penalties to encourage refinancing or the sale of the property to pay off the bad loan. In the event of foreclosure or short sale, the borrower will not be held liable for any deficit balance. FHA does this now, and that encourages mortgage companies to go the extra mile while working with the borrower—again limiting foreclosures and ruined lives.

2. Cancel ALL golden parachutes of EXISTING and FUTURE CEOs and executive team members as long as the company holds these government-insured bonds/mortgages. This keeps underperforming executives from being paid when they don’t do their jobs.

c. This backstop will cost less than $50 billion—a small fraction of the current proposal.


II. MARK TO MARKET
a. Remove mark to market accounting rules for two years on only subprime Tier III
bonds/mortgages. This keeps companies from being forced to artificially mark down
bonds/mortgages below the value of the underlying mortgages and real estate.

b. This move creates patience in the market and has an immediate stabilizing effect on
failing and ailing banks—and it costs the taxpayer nothing.


III. CAPITAL GAINS TAX
a. Remove the capital gains tax completely. Investors will flood the real estate and stock
market in search of tax-free profits, creating tremendous—and immediate—liquidity in
the markets. Again, this costs the taxpayer nothing.

b. This move will be seen as a lightning rod politically because many will say it is helping
the rich. The truth is the rich will benefit, but it will be their money that stimulates the economy. This will enable all Americans to have more stable jobs and retirement investments that go up instead of down.

This is not a time for envy, and it’s not a time for politics. It’s time for all of us, as Americans, to stand up, speak out, and fix this mess.

Secret, Foreign Money Floods Into Obama Campaign

(Compiler's note: Must read. rca)

By: Kenneth R. Timmerman

More than half of the whopping $426.9 million Barack Obama has raised has come from small donors whose names the Obama campaign won't disclose.

And questions have arisen about millions more in foreign donations the Obama campaign has received that apparently have not been vetted as legitimate.

Obama has raised nearly twice that of John McCain's campaign, according to new campaign finance report.

But because of Obama’s high expenses during the hotly contested Democratic primary season and an early decision to forgo public campaign money and the spending limits it imposes, all that cash has not translated into a financial advantage — at least, not yet.

The Obama campaign and the Democratic National Committee began September with $95 million in cash, according to reports filed with the Federal Election Commission (FEC).

The McCain camp and the Republican National Committee had $94 million, because of an influx of $84 million in public money.

But Obama easily could outpace McCain by $50 million to $100 million or more in new donations before Election Day, thanks to a legion of small contributors whose names and addresses have been kept secret.

Unlike the McCain campaign, which has made its complete donor database available online, the Obama campaign has not identified donors for nearly half the amount he has raised, according to the Center for Responsive Politics (CRP).

Federal law does not require the campaigns to identify donors who give less than $200 during the election cycle. However, it does require that campaigns calculate running totals for each donor and report them once they go beyond the $200 mark.

Surprisingly, the great majority of Obama donors never break the $200 threshold.

“Contributions that come under $200 aggregated per person are not listed,” said Bob Biersack, a spokesman for the FEC. “They don’t appear anywhere, so there’s no way of knowing who they are.”

The FEC breakdown of the Obama campaign has identified a staggering $222.7 million as coming from contributions of $200 or less. Only $39.6 million of that amount comes from donors the Obama campaign has identified.

It is the largest pool of unidentified money that has ever flooded into the U.S. election system, before or after the McCain-Feingold campaign finance reforms of 2002.

Biersack would not comment on whether the FEC was investigating the huge amount of cash that has come into Obama’s coffers with no public reporting.

But Massie Ritsch, a spokesman for CRP, a campaign-finance watchdog group, dismissed the scale of the unreported money.

“We feel comfortable that it isn’t the $20 donations that are corrupting a campaign,” he told Newsmax.

But those small donations have added up to more than $200 million, all of it from unknown and unreported donors.

Ritsch acknowledges that there is skepticism about all the unreported money, especially in the Obama campaign coffers.

“We and seven other watchdog groups asked both campaigns for more information on small donors,” he said. “The Obama campaign never responded,” whereas the McCain campaign “makes all its donor information, including the small donors, available online.”

The rise of the Internet as a campaign funding tool raises new questions about the adequacy of FEC requirements on disclosure. In pre-Internet fundraising, almost all political donations, even small ones, were made by bank check, leaving a paper trail and limiting the amount of fraud.

But credit cards used to make donations on the Internet have allowed for far more abuse.

“While FEC practice is to do a post-election review of all presidential campaigns, given their sluggish metabolism, results can take three or four years,” said Ken Boehm, the chairman of the conservative National Legal and Policy Center.

Already, the FEC has noted unusual patterns in Obama campaign donations among donors who have been disclosed because they have gone beyond the $200 minimum.

FEC and Mr. Doodad Pro

When FEC auditors have questions about contributions, they send letters to the campaign’s finance committee requesting additional information, such as the complete address or employment status of the donor.

Many of the FEC letters that Newsmax reviewed instructed the Obama campaign to “redesignate” contributions in excess of the finance limits.

Under campaign finance laws, an individual can donate $2,300 to a candidate for federal office in both the primary and general election, for a total of $4,600. If a donor has topped the limit in the primary, the campaign can “redesignate” the contribution to the general election on its books.

In a letter dated June 25, 2008, the FEC asked the Obama campaign to verify a series of $25 donations from a contributor identified as “Will, Good” from Austin, Texas.

Mr. Good Will listed his employer as “Loving” and his profession as “You.”

A Newsmax analysis of the 1.4 million individual contributions in the latest master file for the Obama campaign discovered 1,000 separate entries for Mr. Good Will, most of them for $25.

In total, Mr. Good Will gave $17,375.

Following this and subsequent FEC requests, campaign records show that 330 contributions from Mr. Good Will were credited back to a credit card. But the most recent report, filed on Sept. 20, showed a net cumulative balance of $8,950 — still well over the $4,600 limit.

There can be no doubt that the Obama campaign noticed these contributions, since Obama’s Sept. 20 report specified that Good Will’s cumulative contributions since the beginning of the campaign were $9,375.

In an e-mailed response to a query from Newsmax, Obama campaign spokesman Ben LaBolt pledged that the campaign would return the donations. But given the slowness with which the campaign has responded to earlier FEC queries, there’s no guarantee that the money will be returned before the Nov. 4 election.

Similarly, a donor identified as “Pro, Doodad,” from “Nando, NY,” gave $19,500 in 786 separate donations, most of them for $25. For most of these donations, Mr. Doodad Pro listed his employer as “Loving” and his profession as “You,” just as Good Will had done.

But in some of them, he didn’t even go this far, apparently picking letters at random to fill in the blanks on the credit card donation form. In these cases, he said he was employed by “VCX” and that his profession was “VCVC.”

Following FEC requests, the Obama campaign began refunding money to Doodad Pro in February 2008. In all, about $8,425 was charged back to a credit card. But that still left a net total of $11,165 as of Sept. 20, way over the individual limit of $4,600.

Here again, LaBolt pledged that the contributions would be returned but gave no date.

In February, after just 93 donations, Doodad Pro had already gone over the $2,300 limit for the primary. He was over the $4,600 limit for the general election one month later.

In response to FEC complaints, the Obama campaign began refunding money to Doodad Pro even before he reached these limits. But his credit card was the gift that kept on giving. His most recent un-refunded contributions were on July 7, when he made 14 separate donations, apparently by credit card, of $25 each.

Just as with Mr. Good Will, there can be no doubt that the Obama campaign noticed the contributions, since its Sept. 20 report specified that Doodad’s cumulative contributions since the beginning of the campaign were $10,965.

Foreign Donations

And then there are the overseas donations — at least, the ones that we know about.

The FEC has compiled a separate database of potentially questionable overseas donations that contains more than 11,500 contributions totaling $33.8 million. More than 520 listed their “state” as “IR,” often an abbreviation for Iran. Another 63 listed it as “UK,” the United Kingdom.

More than 1,400 of the overseas entries clearly were U.S. diplomats or military personnel, who gave an APO address overseas. Their total contributions came to just $201,680.

But others came from places as far afield as Abu Dhabi, Addis Ababa, Beijing, Fallujah, Florence, Italy, and a wide selection of towns and cities in France.

Until recently, the Obama Web site allowed a contributor to select the country where he resided from the entire membership of the United Nations, including such friendly places as North Korea and the Islamic Republic of Iran.

Unlike McCain’s or Sen. Hillary Clinton’s online donation pages, the Obama site did not ask for proof of citizenship until just recently. Clinton’s presidential campaign required U.S. citizens living abroad to actually fax a copy of their passport before a donation would be accepted.

With such lax vetting of foreign contributions, the Obama campaign may have indirectly contributed to questionable fundraising by foreigners.

In July and August, the head of the Nigeria’s stock market held a series of pro-Obama fundraisers in Lagos, Nigeria’s largest city. The events attracted local Nigerian business owners.

At one event, a table for eight at one fundraising dinner went for $16,800. Nigerian press reports claimed sponsors raked in an estimated $900,000.

The sponsors said the fundraisers were held to help Nigerians attend the Democratic convention in Denver. But the Nigerian press expressed skepticism of that claim, and the Nigerian public anti-fraud commission is now investigating the matter.

Concerns about foreign fundraising have been raised by other anecdotal accounts of illegal activities.

In June, Libyan leader Moammar Gadhafi gave a public speech praising Obama, claiming foreign nationals were donating to his campaign.

“All the people in the Arab and Islamic world and in Africa applauded this man,” the Libyan leader said. “They welcomed him and prayed for him and for his success, and they may have even been involved in legitimate contribution campaigns to enable him to win the American presidency..."

Though Gadhafi asserted that fundraising from Arab and African nations were “legitimate,” the fact is that U.S. federal law bans any foreigner from donating to a U.S. election campaign.

The rise of the Internet and use of credit cards have made it easier for foreign nationals to donate to American campaigns, especially if they claim their donation is less than $200.

Campaign spokesman LaBolt cited several measures that the campaign has adopted to “root out fraud,” including a requirement that anyone attending an Obama fundraising event overseas present a valid U.S. passport, and a new requirement that overseas contributors must provide a passport number when donating online.

One new measure that might not appear obvious at first could be frustrating to foreigners wanting to buy campaign paraphernalia such as T-shirts or bumper stickers through the online store.

In response to an investigation conducted by blogger Pamela Geller, who runs the blog Atlas Shrugs, the Obama campaign has locked down the store.

Geller first revealed on July 31 that donors from the Gaza strip had contributed $33,000 to the Obama campaign through bulk purchases of T-shirts they had shipped to Gaza.

The online campaign store allows buyers to complete their purchases by making an additional donation to the Obama campaign.

A pair of Palestinian brothers named Hosam and Monir Edwan contributed more than $31,300 to the Obama campaign in October and November 2007, FEC records show.

Their largesse attracted the attention of the FEC almost immediately. In an April 15, 2008, report that examined the Obama campaign’s year-end figures for 2007, the FEC asked that some of these contributions be reassigned.

The Obama camp complied sluggishly, prompting a more detailed admonishment form the FEC on July 30.

The Edwan brothers listed their address as “GA,” as in Georgia, although they entered “Gaza” or “Rafah Refugee camp” as their city of residence on most of the online contribution forms.

According to the Obama campaign, they wrongly identified themselves as U.S. citizens, via a voluntary check-off box at the time the donations were made.

Many of the Edwan brothers’ contributions have been purged from the FEC database, but they still can be found in archived versions available for CRP and other watchdog groups.

The latest Obama campaign filing shows that $891.11 still has not been refunded to the Edwan brothers, despite repeated FEC warnings and campaign claims that all the money was refunded in December.

A Newsmax review of the Obama campaign finance filings found that the FEC had asked for the redesignation or refund of 53,828 donations, totaling just under $30 million.

But none involves the donors who never appear in the Obama campaign reports, which the CRP estimates at nearly half the $426.8 million the Obama campaign has raised to date.

Many of the small donors participated in online “matching” programs, which allows them to hook up with other Obama supporters and eventually share e-mail addresses and blogs.

The Obama Web site described the matching contribution program as similar to a public radio fundraising drive.

“Our goal is to bring 50,000 new donors into our movement by Friday at midnight,” campaign manager David Plouffe e-mailed supporters on Sept. 15. “And if you make your first online donation today, your gift will go twice as far. A previous donor has promised to match every dollar you donate.”

FEC spokesman Biersack said he was unfamiliar with the matching donation drive. But he said that if donations from another donor were going to be reassigned to a new donor, as the campaign suggested, “the two people must agree” to do so.

This type of matching drive probably would be legal as long as the matching donor had not exceeded the $2,300 per-election limit, he said.

Obama campaign spokesman LaBolt said, “We have more than 2.5 million donors overall, hundreds of thousands of which have participated in this program.”

Until now, the names of those donors and where they live have remained anonymous — and the federal watchdog agency in charge of ensuring that the presidential campaigns play by the same rules has no tools to find out.

CDC Awards $24 Million for Innovative Pandemic Preparedness

Addresses preparedness areas of concern raised by public health authorities

As fears continue to grow over the emergence of a pandemic strain of influenza in the near future—mutations of several strains other than H5N1 have given rise to increased worry—a Centers for Disease Control and Prevention (CDC) program has awarded $24 million to 29 state and local public health departments to fund 55 projects to come up with innovative approaches for influenza pandemic preparedness, including several preparedness areas of concern that have been raised by numerous public health officials and planners.....

The ACORN Obama knows

By Michelle Malkin

My syndicated column today spotlights the whistleblower report on ACORN, which I’ve been blogging about (here) and which deserves more attention in the media and in Washington–especially in light of the radical activist group’s embrace of Barack Obama. The Consumer Rights League e-mailed to let me know that three GOP congressmen (Hensarling, Feeney, and Royce) have called on Barney Frank (D-Housing Boondoggle) to investigate ACORN’s taxpayer abuses. Snowball’s chance, I know, but conservatives ought to be turning up the heat and using every ounce of energy they have to, well, act like conservatives and push to de-fund the Left.

For excellent background on Obama and ACORN, see Stanley Kurtz’s NR piece here, plus City Journal pieces here and here. Also here and here.

***

The ACORN Obama knows
by Michelle Malkin

If you don’t know what ACORN (the Association of Community Organizations for Reform Now) is all about, you better bone up. This left-wing group takes in 40 percent of its revenues from American taxpayers — you and me — and has leveraged nearly four decades of government subsidies to fund affiliates that promote the welfare state and undermine capitalism and self-reliance, some of which have been implicated in perpetuating illegal immigration and encouraging voter fraud. A new whistleblower report from the Consumer Rights League documents how Chicago-based ACORN has commingled public tax dollars with political projects.

Who in Washington will fight to ensure that your money isn’t being spent on these radical activities?

Don’t bother asking Barack Obama. He cut his ideological teeth working with ACORN as a “community organizer” and legal representative. Naturally, ACORN’s political action committee has warmly endorsed his presidential candidacy. According to ACORN, Obama trained its Chicago members in leadership seminars; in turn, ACORN volunteers worked on his campaigns. Obama also sat on the boards of the Woods Fund and Joyce Foundation, both of which poured money into ACORN’s coffers. ACORN head Maude Hurd gushes that Obama is the candidate who “best understands and can affect change on the issues ACORN cares about” — like ensuring their massive pipeline to your hard-earned money.

Let’s take a closer look at the ACORN Obama knows.

Last July, ACORN settled the largest case of voter fraud in the history of Washington State. Seven ACORN workers had submitted nearly 2,000 bogus voter registration forms. According to case records, they flipped through phone books for names to use on the forms, including “Leon Spinks,” “Frekkie Magoal” and “Fruto Boy Crispila.” Three ACORN election hoaxers pleaded guilty in October. A King County prosecutor called ACORN’s criminal sabotage “an act of vandalism upon the voter rolls.”

The group’s vandalism on electoral integrity is systemic. ACORN has been implicated in similar voter fraud schemes in Missouri, Ohio and at least 12 other states. The Wall Street Journal noted: “In Ohio in 2004, a worker for one affiliate was given crack cocaine in exchange for fraudulent registrations that included underage voters, dead voters and pillars of the community named Mary Poppins, Dick Tracy and Jive Turkey. During a congressional hearing in Ohio in the aftermath of the 2004 election, officials from several counties in the state explained ACORN’s practice of dumping thousands of registration forms in their lap on the submission deadline, even though the forms had been collected months earlier.”

In March, Philadelphia elections officials accused the nonprofit advocacy group of filing fraudulent voter registrations in advance of the April 22nd Pennsylvania primary. The charges have been forwarded to the city district attorney’s office.

Under the guise of “consumer advocacy,” ACORN has lined its pockets. The Department of Housing and Urban Development funds hundreds, if not thousands, of left-wing “anti-poverty” groups across the country led by ACORN. Last October, HUD announced more than $44 million in new housing counseling grants to over 400 state and local efforts. The White House has increased funding for housing counseling by 150 percent since taking office in 2001, despite the role most of these recipients play as activist satellites of the Democratic Party. The AARP scored nearly $400,000 for training; the National Council of La Raza (”The Race”) scooped up more than $1.3 million; the National Urban League raked in nearly $1 million; and the ACORN Housing Corporation received more than $1.6 million.

As the Consumer Rights League points out in its new expose, the ACORN Housing Corporation has worked to obtain mortgages for illegal aliens in partnership with Citibank. It relies on undocumented income, “under the table” money, which may not be reported to the Internal Revenue Service. Moreover, the group’s “financial justice” operations attack lenders for “exotic” loans, while recommending 10-year interest-only loans (which deny equity to the buyer) and risky reverse mortgages. Whistleblower documents reveal internal discussions among the group that blur the lines between its tax-exempt housing work and its aggressive electioneering activities. The group appears to shake down corporate interests with relentless PR attacks, and then enters “no lobby” agreements with targeted corporations after receiving payment.

Republicans have largely looked the other way as ACORN has expanded its government-funded empire. But finally, a few conservative voices in Congress have called for investigation of the group’s apparent extortion schemes. This week, GOP Reps. Tom Feeney, Jeb Hensarling and Ed Royce called on Democrat Barney Frank, chair of the House Financial Services Committee, to convene a hearing to probe potential illegalities and abuse of taxpayer funds by ACORN’s management and minions alike.

Where does the candidate of Hope and Change — the candidate of Reform and New Politics — stand on the issue? Barack Obama, ACORN’s senator, is for more of the same old, same old subsidizing of far-left politics in the name of fighting for the poor while enriching ideological cronies. It’s the Chicago way.

HOUSE OF CARDS

By STAN LIEBOWITZ

HOW did America wind up in its worst financial crisis in decades? Sen. Barack Obama explained it this way last week: "When sub-prime-mortgage lending took a reckless and unsustainable turn, a patchwork of regulators systematically and deliberately eliminated the regulations protecting the American people."

That's exactly backward. Mortgage lending took that "reckless and unsustainable turn" because of regulation - regulation driven by liberals and progressives, not free-market "deregulators." bailout

Pushed hard by politicians and community activists, the regulators systematically and deliberately altered financially sound lending practices.

The mortgage market was humming along just fine when, in the late 1980s, progressives decided that it needed to be "fixed." Their complaint: Some ethnic groups got approved for mortgages at lower rates than others.

In reality, mortgage lenders were simply being prudent - taking care to provide mortgages to those who could best afford to make the payments.

The shift began in 1989, when Congress amended the Home Mortgage Disclosure Act to force banks to collect racial data on mortgage applicants. By 1991, critics were using that data to paint lenders as racist by showing that minority applicants were approved at far lower rates. Banks were "Shamed By Publicity," as one 1993 New York Times headline put it.

In fact, they found a racial disparity only by ignoring relevant data on applicants' ability to make mortgage payments - such as their assets and credit history.

But the political pressure was intense - with few in politics or media eager to speak the truth. And then, in 1992, came a study from four researchers at the Boston Fed, which seemed to bear out the critics' contentions.

That study was, in fact, based on quite flawed data - but the authors' political, media and academic protectors stifled most serious criticism, smearing the reputation of one whistleblower and allowing the Boston authors to avoid answering serious academic challenges (mine included) to their work. Other studies with different conclusions were ignored.

The very next year, the Boston Fed announced new requirements for banks - rules that have now turned out to be monumentally catastrophic: Adopt "relaxed lending standards" or risk being labeled as racists, and face serious penalties under the federal Community Reinvestment Act.

Gone (as "arbitrary" and "outdated") were traditional lending requirements such as requiring a down payment or limiting mortgage payments to 28 percent of income. (Of course, the loosened lending standards weren't limited to poor and minority applicants - that would be discriminatory.)

The new standards performed as intended: Home- ownership rates, stagnant for 25 years, began a rapid 10-year ascent in 1995, with many new homeowners being lower-income and/or minority families.

The large rise in demand for houses, however, fed a run-up in prices starting in 1997 - the infamous housing bubble. And rising prices hid the great vulnerability of these loans to defaults and foreclosures, because refinancing or selling at a profit was the easy alternative.

Soon, these loans began to be sold in the secondary market. Fannie Mae and Freddie Mac were enthusiastic proponents of relaxed lending standards and purchased large swaths of these loans.

Time after time, Fannie and Freddie trumped criticism by pointing to how they were helping broaden homeownership. Because of the subject's racial overtones, they beat back calls for reform even after financial irregularities were found.

Rating agencies such as Standard & Poor's had no experience with such loans - and imprudently used the misleading bubble-induced performance to incorrectly judge the likely performance of financial instruments based on such loans.

In 2002, the "reformers" declared victory. In a Fannie report, four academic supporters of relaxed standards crowed how these changes were "fundamentally altering the terms upon which mortgage credit had been offered in the United States from the 1960s through the 1980s . . . These changes in lending herald what we refer to as mortgage innovation."

Lucky us.

Now that the popped bubble has left us swimming in foreclosures, the supporters of loosened credit standards seem shy about taking credit for their "mortgage innovations." Instead, they blame subprime lenders for becoming "predatory" - when they were simply taking the Boston Fed rules to their logical conclusion while broadening the mortgage market.

Investors holding mortgage-based assets now want out. Perhaps they deserve a $700 billion refund - since they were sold a bill of goods by "progressive" politicians, academics and government officials who, in the hope of remaking society, insisted that loans based on relaxed underwriting standards were sound.

Stan Liebowitz is the Ashbel Smith professor of economics at the Business School at the University of Texas at Dallas.

New al-Qaida threat: Thermobaric bombs

Packs power like a nuke, but easier to build, blow up

Investigators now believe the bombing on Sep. 21 that killed dozens and left massive damage at the Islamabad Marriott, including a gaping hole in the ground in front of the building, was a crude form of a device that intensifies and enhances an explosive – a thermobaric bomb, according to a report from Joseph Farah's G2 Bulletin.

The bomb was delivered in a truck that contained what investigators believe was aluminum powder in addition to grenades and artillery shells. The aluminum power is believed to have been responsible for the acceleration and expansion of the impact of the bomb.

While barriers around the hotel kept the truck bomb at some distance from the structure, the devastation indicated that there had to be something capable of raising the devastation level considerably.

The blast was thought to be targeting Americans, since the hotel is a central location for U.S. personnel including intelligence agents to meet outside the U.S. embassy. The hotel also is a temporary residence for U.S. personnel staying in the country.

Some five dozen people, including U.S. government employees, were killed by the truck bomb which was said to include more than a ton of explosives.

If this analysis of the presence of aluminum powder is confirmed, it means that terrorists with the capability can make such bombs without detection, since all ingredients are off-the-shelf.

Al-Qaida and related terrorist groups such as the Tehrik-e-Taliban of Pakistan are thought to have made the attack on the Islamabad Marriott hotel. If that is accurate, then by extension al-Qaida has developed an ability to fashion thermobaric bombs of huge potential.

"Thermobaric bombs … may be emerging as a weapon of choice for terrorists," declared Tom Burky, an explosives expert at the Ohio-based Battelle defense research institute.

Burky pointed out that thermobaric bombs are meant to take out big buildings and cave complexes where metal fragmentations from traditional bombs don't work well. He added that thermobaric blasts can push around corners and down corridors or deep inside caves.

When an explosion occurs in a bomb using aluminum powder as in the Islamabad Marriott hotel blast, metal powder creates a fireball as it contacts the air.

Agency founded to shore up nuclear security

VIENNA (Reuters) - U.S. non-proliferation campaigners launched an agency on Monday aimed at sharing information to improve security at the world's nuclear sites.

"Global nuclear security is only as strong as the weakest link in the chain. We can't afford to wait for a security Chernobyl before we act," said Charles Curtis, president of the Washington-based Nuclear Threat Initiative (NTI), referring to the 1986 Soviet nuclear reactor meltdown.

A World Institute for Nuclear Security (WINS) is to be set up with $3 million in funding from the NTI, a matching $3 million from the U.S. Energy Department and $100,000 from Norway and have a full-time staff of 5-10 experts.

"Through WINS, professionals responsible for on the ground security will collect the world's best security practices for dealing with nuclear facilities and materials and share that information with peers worldwide," an NTI statement said.

The agency will be based in Vienna, headquarters of the International Atomic Energy Agency, and is to complement IAEA work in nuclear security. The IAEA praised the undertaking at a joint news conference with NTI and U.S. officials.

"We have come to realize we have to become more intelligent and act in a preventative way" against terrorist groups keen on stealing nuclear technology and materials, IAEA director Mohamed ElBaradei said.

"There is still a lot of vulnerability and lacunas," said ElBaradei, with more than 200 reports of radioactive material gone astray annually. Cases only rarely involve bomb ingredients but lax security and policing is a problem in many regions.

Concern persists for the security of materials used in atomic bomb-making at installations particularly in former Soviet republics and other non-Western countries.

"We're doing a better job controlling nuclear materials than 10 years ago but this is not something we can ever declare victory over as long as the atom is with us," said NTI founder Sam Nunn, a former senior U.S. senator.

(Reporting by Mark Heinrich; Editing by Janet Lawrence)

Who caused “the biggest financial crisis since the Great Depression?”

From PajamasMedia

Powerline links to a video that answers this question with admirable clarity. I’ll link to the video below. First, here are a few data points from the video and other sources:

The Root Cause

* According to Senator Chris Dodd (D. CT) the “root cause” of the problem is “the housing foreclosure crisis.”

Not 100% accurate, perhaps–it’s really a credit crisis–but close enough for government work, especially from someone who has just happens to chair the Senate Banking Committee and who, completely coincidentally, has been such a conspicuous beneficiary of preferential mortgages and who, also coincidentally, leads the list of those who have received campaign contributions from Fannie Mae and Freddie Mac. (Guess who comes in 2nd and 3rd?)

* But what caused the housing crisis to which Senator Dodd alludes? The housing “bubble.”

* And what caused the housing bubble? “Sub-prime,” i.e., risky, mortgages; that is, mortgages made to people who, in the normal course of things would have to pay a premium in order to obtain a mortgage (if they could obtain one at all) because

a) they had bad or non-existent credit

b) their income was insufficient or

c) both.

Packaging the American Dream

A home of your own. It’s part of the American dream. Work hard, save up for a down payment, pay your bills on time and, presto, you, too, can buy a home.

For decades the government has done things to help Americans to realize the dream, e.g., graciously allowing citizens to keep some of their own money to help pay for the interest on a mortgage (the official term for this is a “tax deduction,” but I prefer my locution since it emphasizes the fact that it is YOUR MONEY we are talking about).

But what about people who do not work hard (if they work at all)? What about people who have not saved up for a down payment? What about people who do not pay their bills on time (if they pay them at all)? Why shouldn’t they get to live the American dream?

That was the question that led to

”The Community Reinvestment Act” (see here for more).

* The original Community Reinvestment Act was signed into law in 1977 by Jimmy Carter. Its purpose, in a nutshell, was to require banks to provide credit to “under-served populations,” i.e., those with poor credit.

The buzz word was “affordable mortgages,” e.g., mortgages with low teaser-rates, which required the borrower to put no money down, which required the borrower to pay only the interest for a set number of years, etc.

* In 1995, Bill Clinton’s administration made various changes to the CRA, increasing “access to mortgage credit for inner city and distressed rural communities,” i.e., it provided for the securitization, i.e. public underwriting, of what everyone now calls “sub-prime mortgages.”

Bottom line? It forced banks to issue $1 trillion in sub-prime mortgages.

$1 trillion, i.e., a thousand billion dollars in sub-prime,i.e., risky, mortgages, in order to push this latest example of social engineering.

But wait: how did it force banks to do this? Easy. Introduce a federal requirement that banks make the loans or face penalties. As Howard Husock, writing in City Journal way back in 2000 observed: “Bank examiners would use federal home-loan data, broken down by neighborhood, income group, and race, to rate banks on performance. There would be no more A’s for effort. Only results—specific loans, specific levels of service—would count.” Way back in 1994, for example, Barack Obama sued Citibank on behalf of a client who charged that the bank “systematically denied mortgages to African-American applicants and others from minority neighborhoods.”

* In 1997, Bear Stearns–O firm of blessed memory–was the first to get onto the sub-prime gravy train.

* Fannie Mae & Freddy Mac–were there near the beginning, too.

Anatomy of a bubble

Step 1. The intoxication: “My house is worth millions!” From 1995 - 2005, the number of sub-prime mortgages skyrocket. So did the house prices.

Step 2. The hangover: “Oh my God, my house isn’t selling. What went wrong?”

Why didn’t someone try to stop it?

Someone did: “The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago,” The New York Times, September 11, 2003.

But someone intervened to stymie the Bush administration. Who? The New York Times reports:

Supporters of the companies said efforts to regulate the lenders tightly under those agencies might diminish their ability to finance loans for lower-income families. . . . “These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Why didn’t someone else ring the alarm?

Someone else did. In 2005, John McCain co-sponsored the “Federal Housing Enterprise Regulatory Reform Act,” which among other things provided for more oversight of Freddie & Fannie. The bill didn’t pass. Guess who blocked it?

The bill was reintroduced in 2007. But again, no luck. Fannie Mae and Freddie Mac had friends in the Senate:

* Chris Dodd, a recipient of “sweetheart” loans from a Freddie and Fannie backed company.

* The junior senator from Illinois, i.e., Barack Obama, who turned to Jim Johnson, former head (1991-1998) of Fannie Mae, to help advise him on whom to pick for the vice-presidential slot on his ticket. From 1985 to 1990, incidentally, Johnson was managing director of Lehman Brothers. Remember them?

* You might also want to check out one of Barack Obama’s other advisors: Franklin Raines, former CEO of Freddie Mac: see here , for example, or here , or here.

Towards the end of the video, we read this salutary observation: “Everyone deserves a home, not a house of cards.”

Who gave us the house of cards? Watch the whole thing here (original link was here). And then pass it along to everyone you know.

Pelosi Attacks Bush, Praises Clinton Surplus Prior to Vote on Bailout

If you've been watching this site (e.g. do a search on "bailout"), you simply have to hear this to believe it ..... click on the title above.