THE FLASHLIGHT, October 25-31, 2008

THE FLASHLIGHT
No Peace without Justice, no Justice without the Facts
October 25-31, 2008
Mary Matossian, Editor
mary@matossian.net, Apt. 9-M

US Economy

CNN 10-24-31. The stock market remained very volatile. The Federal Government started to buy shares in insurance companies. Spending stalled and layoffs increased. Interest rates increased. Banks hoarded cash. PBS 10-28. In September consumer confidence was the lowest in 41 years. NYTimes 10-28. Credit card companies were tightening requirements for giving credit. BBC 10-27. Foreclosure rates in the third quarter as compared to the third quarter of last year were up 71%. Home prices continued to decline. It was expected that from peak to trough home prices will fall on average 30%.
CBS 60 Minutes 10-26. Two experts explained the financial crisis. In 2000 it became legal to make side bets that homeowners would not default on their mortgages. The stock market became a casino. It was assumed that house prices would continually rise. The financial instruments used were derivatives and credit default swaps. The risks were only vaguely understood by managers, boards, and buyers. Hedge fund managers made billions.

NYTimes 10-28. David Brooks, “The Behavioral Revolution.” He said that the quantitative models that financial experts used to predict stock market trends were bogus. They did not take into account misperceptions about risk that prevailed in various social networks. The leading misperceptions were:
1. The tendency to overvalue recent events when anticipating future possibilities.
2. The tendency to see data that confirms our prejudices more vividly than data that contradicts them.
3. The tendency to spin concurring facts into a simple causal narrative.
4. The tendency to applaud our supposed skill in circumstances when we have actually benefited from dumb luck.
He concluded that people are often not good guardians of their self-interest.

US Politics

PBS 10-24. Obama led in many red states. McCain failed to change the Republican brand and create a program of progressive Republicanism. Obama has big money donors as well as small, and his spending advantage over McCain political ads was 3 to 1 or 4 to 1.
CNN 10-27. Senator Ted Stevens of Alaska, 84, was found guilty on all seven counts of fraud: failing to report a quarter million in gifts he received on Senate forms. He refused to withdraw from the current electoral race, however. [If he is re-elected, the Senate will have to decide whether or not to expel him.]

Reuters 10-27. In the Jackson area of Tennessee government agents arrested two Neo-Nazi men plotting to kill Obama and as many black children as possible in a local school.

Associated Press 10-29. A national poll showed Obama 50% and McCain 41%. Men were evenly split, women favored Obama by 19 points. Independents favored Obama by 7 points. In a poll of polls Obama lead in Florida by 5 points. CNN 10-29. Bill Clinton campaigned for Obama in Florida. Obama aired a 30 minute infomercial in the battleground states.
NYTimes 10-31. The number who believe Palin is not prepared for the job has rising from 50 to 59% in the last month. Obama now leads 51 to 40% nationally.

Israel

Haaretz 10-25. Sheldon Adelman, gambling king who claims to be the world’s richest Jews, lost $10 billion in October when the value of his shares in the Las Vegas Sands Corporation declined 80%. He reportedly also suffered losses in his Macao gambling concession.
Mr. Adelman is a strong supporter of the right wing Likud Party led by Benyamin Netanyahu. This party opposes closing the illegal settlements in the West Bank.

NYTimes 10-26. Tsipi Livni, leader of the Kadima Party, failed to form a government. An election is expected next February. The Kadima Party favors the evacuation of illegal Jewish settlements on the West Bank.
Haaretz 10-27. Polls showed Livni beginning to edge out Netanyahu, who had been leading in the polls.

Syria

CNN 10-27. US special forces on a secret mission crossed the border from Iraq into Syria and killed 8 Syrian men. The US claimed that the victims had been smuggling weapons and Islamic militant foreign warriors into Iraq. The Syrians vigorously protested.

Afghanistan

CNN 10-29. The Pentagon and the Afghan Government were seeking talks with unspecified members of the Taliban. Afghan women appealed to President Karzai to maintain their constitutional rights. PBS 10-29. The US needs more troops and a better strategy in Afghanistan. In many villages, there is support for the US and NATO presence for security reasons. Economic conditions are poor because of years of drought and lack of sufficient US investment.

Baluchistan

CNN 10-29. A 6.4 earthquake made 15,000 homeless.
[Baluchistan is east of Iran, west of India, and south of Pakistan.}

THE FLASHLIGHT, October 18-24, 2008

THE FLASHLIGHT
No Peace without Justice, No Justice without the Facts
October 18-24, 2008
Mary K. Matossian, Editor
mary@matossian.net, Apt. 9-M

US Politics

NBC 10-19. General Colin Powell, former Secretary of State, announced his support for Barack Obama as President. He said he did not believe that Sarah Palin was ready to be President, and that nominating her was an act of bad judgment by John McCain. He praised Obama both for the substance of his positions, and his steady style of leadership. Powell blamed the McCain campaign for tying the McCain to the deck of the Titanic.

NYTiimes 10-20. Obama raised $66 million in August and a record $150 million in September. He has raised a total of $600 million from private sources.
CNN 10-21. Obama now leads by 9 points in national polls. Also 75% of American are angry about the situation today. The “527” groups have run into legal issues and are not raising much money for McCain. 10-22, Obama leads in Virginia 54 to 44 points. Palin is now a drag on McCain except among the Republican base. Independents and seniors nationally are switching to Obama. They are concerned about protecting Social Security and their retirement accounts. There is public resentment that the Republicans spent $150,000 on a chic wardrobe and hardos for Palin.
When McCain says Obama is too inexperienced, Obama says McCain is out of date. He says that McCain is not fighting for Joe the Plumber but Joe the hedge fund manager.

US Economy

PBS 10-20. Economists are predicting a recession until summer, 2009.
` CNN 10-22. Stocks were down 40% in 2008.
PBS 10-22. Corporate earning in the third quarter were poor. Commodity prices were down. There are mass sell-offs on a global scale.
CNN 10-23. Alan Greenspan, former Federal Reserve Chairman, testified in Congress that we are experiencing a once in a century credit tsunami. He was shocked, shocked that banks would so neglect the borrowers’ welfare. Greenspan was under the “collective delusion” that house prices would keep going up.
Oil prices are down to $66.75 a barrel.

US Health

NYTimes op ed. 10-24 (by Billy Beane, Newt Gingrich, and John Kerry). “How to Take American Healthcare from the Worst to the First” Doctors should make medical decisions from statistics in clinical studies of the effectiveness of various medical procedures and technologies. As of now, decisions are too much made on the basis of informed opinion, personal observations, and tradition. As a result the US is spending more than twice as much per capita on health care as almost every other country in the world and getting a worse health quality than most industrialized nations.

Turkey

NYTimes 10-21. A trial began of 86 individuals accused of an ultra-nationalist coup against the elected government. They were charged with planning assassinations and bombings in order to overthrow the government. They were also accused of the murder of three staff members of Christian publishing houses and of plotting the murder of Nobelist writer Orhan Pamuk. They were charged with planning to kill Greek and Armenian religious leaders and a Jewish businessman.

THE FLASHLIGHT, October 11-17, 2008

THE FLASHLIGHT
No Peace without Justice, no Justice without the Facts
October 11-17, 2008

US Economy

BBC 10-10. Japanese stocks are down 53%. Iran so far is relatively unaffected.
NYTimes 10-10. Paul Krugman. It is urgent for the US government to take over major banks, guaranteeing not only deposits, but bank debts, and obtaining equity (partial ownership) in those banks. The British rescue plan for three major banks (Royal Bank of Scotland, Halifax Bank of Scotland, and Lloyds) is a model for the US.
NYTimes 10-13. Paul Krugman won the Nobel Prize for Economics ($1.4 million).
The federal government announced a plan to buy equity in “healthy” banks. CNN 10-13. There was a coordinated response of international support for such an approach.
NYTimes 10-14. Sec. Paulson told nine leading banks that they would have to accept government investment for the sake of the financial system. Of the $700 billion voted by Congress, $250 billion will be used for this purpose. Half of the latter amount will go to Citigroup, Bank of America, Wells Fargo, Goldman Sacks, and Morgan Stanley. The rest will go to smaller banks and thrifts.

CNN 10-15. The market fell by the second greatest amount in its history: -733, D.J. 8577, that is, by 7.9%. The Nasdaq was down by 8.5%. In September, consumer spending fell, as many did not buy new cars or clothes.
CNN 10-16 and Time 10-20. Oil prices fell below $70 a barrel, the lowest point in five years. The fall in oil prices was mainly because China and India were consuming less. Chinese stocks were down 60% this year. Russian stocks were down 67% (Russia is an oil exporter). The US Standard and Poor Index was down 33%. German banks were said to need a massive government bailout. Swiss banks (Credit Suisse and UBS) were receiving government help.
PBS 10-16. Next year’s Social Security cost of living raise will be 5.8%.

Newsweek 10-20. Farid Zakaria: Since the 1930’s Americans have consumed more than they produced, and made up the difference by borrowing. Now they have received a wake-up call from Hell. It may be a blessing in disguise. This bad habit must be changed.

US Politics

CNN 10-10. With gasoline prices up, and house prices down, the suburban voters were swinging to Obama.
Obama was getting higher scores than Bill Clinton did.
PBS 10-10. Neither candidate was being honest with voters about how bad the economy was.
Obama was outspending McCain in 15 battleground states. He was attracting new groups of supporters: ethnic minorities, college graduates in the suburbs and exurbs, and youths 18-29.

NYTimes 10-12. An Alaskan legislative investigation concluded that Gov. Sarah Palin had abused her power in trying to get her former brother-in-law fired. This was a violation of the ethics code for Alaskan governors. A second investigation started.

PBS 10-13. According to an ABC-Washington Post poll Obama lead McCain by 10 points. MSNBC. Gov. Crist of Florida avoided a McCain affair and went to Disneyland instead. Conservative leader William Kristol said McCain should fire all his campaign staff.
Washington Post 10-14. A new Gallup poll found Obama leading nationally by 10 points.
CNN 10-14. Obama lead in Virginia by 10 points. This state had voted Republican for the past 40 years. Here Obama outspent McCain 4 to 1.
CBS-NYTimes poll. Obama had an 18 point lead among Independents. The latter did not like McCain’s negative ads. Now Obama had an estimated 277 electoral votes, enough to win the election.

CBS, CNN 10-16. McCain put in his best performance of the three debates, But Obama kept his cool and was considered the winner by a 27 point margin.
MSNBC 10-16. McCain withdrew his team from Wisconsin. A Democratic landslide is possible.

North Korea
NYTimes 10-12, The US removed North Korea from its list of terrorist countries.

Israel
BBC 10-13. The moderate Kadima Party signed a coalition agreement with the Labor Party.

India
BBC 10-15. In Orissa State since late August Hindus have persecuted Christians, forcing them to flee or to convert to Hinduism, destroying their homes and churches, and burning Bibles and prayer books. This was a reaction to a previous Christian persecution of Hindus.

Health
Chicago Sun Times 10-14. According to the Farmington long term heart study, even mild use of alcohol, 1 to 7 drinks a week, serves to speed the shrinkage of the brain, which is a feature of aging.

Science

The Economist, 10-11. Nobel prizes in medicine went to the scientists who discovered the identity of the virus causing HIV and that causing cervical cancer.
In physics the prize went to three Japanese scientists who explored spontaneous symmetry breaking, which is necessary to create and sustain the universe.
In chemistry the prize went to three scientists who discovered a fluorescent green protein. Other proteins in different fluorescent colors were subsequently discovered. This makes possible the coloring and identification of specific neural circuits in the brain.

THE FLASHLIGHT, October 4-10, 2008

THE FLASHLIGHT
No Peace without Justice, no Justice without the Facts
October 4-10, 2008
Editor Mary K. Matossian, 9-M
mary@matossian.net
US Economy

CNN 10-3. The US House of Representatives passed the bailout bill 263-171.
A survey taken before the credit crisis showed that 159,000 jobs had been lost in September.

PBS 10-3. Wells Fargo Bank bought Wachovia Bank.

NY Times 10-6. In spite of the bailout bill, European and Russian stocks fell sharply. The price of oil fell below $90 a barrel
CNN 10-6. Stocks fell by 800 points, then partially recovered, leaving the Dow Jones index under 10,000.
Gold went up 4%, oil down to $87.80 a barrel
Worldwide, stocks declined: China by 5%, Germany 7%, Britain 8%, France 9%. In Russia and Brazil, trading was stopped.

CNN 10-7. Bank of America shares declined 26%. The US market is down 1000 since the House acted on the bailout last Friday. The Federal Reserve may become the bank of last resort for all large corporations, not just investment banks.

PBS 10-8. The British nationalized their leading banks. Major European markets were down another 5%, emerging markets, 8-10%.
CNN 10-9. A commentator predicted that even after the markets come back, house prices will continue to decline, and unemployment will continue to rise.
The Nasdaq index is down 16%.

NY Times 10-10. Krugman. The Federal Reserve should buy into all banks, giving taxpayers equity in them (as the British have already done). The should be done this weekend in cooperation with European and Japanese banks. Otherwise the situation will become much worse.

US Politics

NYTimes 10-4. Obama is trying to appeal to older voters by talking about federal health insurance.
CNN 10-6. 61% of likely voters think Obama will win.
Obama promised (again) tax breaks for 95% of households, with incomes under $250,000, and unemployment relief.
53% still oppose the bailout bill.
Bush favorability is down to 20%, the same as Nixon at the end of his presidency. Obama is trying to link McCain to Bush. In particular, McCain is trying to make permanent the Bush tax cuts for the very rich.
Poll shows that Biden is considered qualified to be President, 79 to 19. But only 43% think Palin is qualified, vs. 56% who think she is not qualified.
McCain is losing because he is failing to appeal to moderates and the undecided.
BBC 10-6. Obama leads in projected electoral votes 250 to 189. To win, 270 are needed. In Florida, new voters favor Democrats 2 to 1, and in Colorado, 4 to 1.
W Post AP 10-8. After the second debate, Obama was judged the better debater 54 to 30%. Obama received 64% favorability ratings, up from 60% before the debate. McCain remained at 51%. In likeability Obama received 65% to 28% for McCain.
CNN 10-8. A commentator said that the economy will trump race as an issue. “Success “ in Iraq is receding as an issue.
PBS 10-8. There is a great increase in voter interest. Democratic Party registration is way up.
Kansas City Star. Gallup poll shows Obama leading 52 to 41%
NY Times 10-9. David Brooks. The Republicans have alienated professional people; the latter favor Democrats:
lawyers, 4 to 1; doctors, 2 to 1; technology executives 5 to 1; investment bankers, 2 to 1. Liberals now dominate the elite universities and the mainstream media.
Reuters 10-10. Citizens 65 and older are backing McCain 4 to 1. This reflects the die off of those remembering the New Deal; the new old are more conservative. On the other hand, citizens 18 to 29 back Obama 4 to 1.
SF Examine, US News. In a summary of state polls, it was found that in Florida In one poll Obama led 52-44, and in another poll, 50-47. In Minnesota, Obama led 52-45 in one poll, 50-47 in another.
Obama had substantial leads in Michigan, Pennsylvania, New Hampshire, Virginia, and West Virginia. McCain led narrowly in Missouri, 49-46, Obama led narrowly in North Carolina and Ohio.

Health

NYTimes 10-8. The bailout package carries provisions for more mental health insurance coverage. Now these diseases carry the same co-pays and deductibles as other diseases. There will no more time limits on treating mental conditions. This change is based on the understanding that many mental health problems are real diseases of the brain and gene mutations. All conditions in the American Psychiatric Association diagnostic manual are now covered.

Climate

NYTimes 10-7. The government of California has a plan to reduce greenhouse gas emissions by 1) curbing urban sprawl and 2) cutting the time that people have to spend in automobiles.
New zoning laws will be passed so that developers can build housing closer to work sites. New mass transit facilities will be built.

Transcaucasia/Russia

BBC 10-8. Russian troops are withdrawing from Georgia, Ossetia, and Abkhazia, as promised.

THE FLASHLIGHT, September 27 - October 3, 2008

THE FLASHLIGHT
No Peace without Justice, no Justice without the Facts
September 27 – October 3, 2008
Mary K. Matossian, Editor
mary@matossian.net, Apt. 9-M

US Economy

NYTimes 9-27. The Congressional Republicans have strong objections to the bailout package for financial firms proposed by Sec. Henry Paulson. 9-28. The bailout bill ran to 110 pages. The president, the congressional leaders and the two presidential candidates supported it.
CNN, NYTimes. 9-29. However, the mail received by House representatives was overwhelmingly against it. There were critics on both left and right. The bill failed, 228 against, 205 for. Democrats were for it, 140 to 72; Republicans were against, 133 to 65.
9-30. The stock market went down 777 points, the largest single loss in the history of the market. That meant it was down by 7%. $1.2 trillion was lost. Treasury bills were selling at 0.4% interest. A widespread perception in the population was that “Nobody is helping us, and we are expected to help Wall Street.”
CNN 10-1. The Senate bailout called a “rescue plan,” is providing new tax breaks and incentives, and a higher cap on savings deposits, which were now insured at $250,000 instead of $100,000. Rep. Jesse Jackson said that the amended bill was “for the country, not the country clubs.”
CNN 10-2. Stocks down -350: dwindling factory orders, rising unemployment. Widespread losses from retirement accounts.

BBC 10-1. Senate passed the revised “rescue plan” 74-25. CNN 10-2. Senate bill carries huge load of earmarks. McCain voted for it anyway.

Robert Reich’s Explanation for the Economic Crisis
Digest of a speech given 9/24/08, posted on the Internet. Reich is currently a professor at the School for Public Policy, University of California at Berkeley. He was Secretary of Labor under Clinton.

The loss of confidence in sub-prime mortgages was only the trigger for the economic meltdown. The underlying cause was that the population as a whole does not have enough aggregate demand. Rich people have a lot of money, but they already own more than enough for their needs. Others are finding it increasing difficult to provide for their needs, especially to make payments on their mortgages, pay for medical care, and pay for college tuition.
Since the 1970’s, the pay for male workers, corrected for inflation, has declined. First, married women went to work because the pay of their husbands was buying less. Then, all workers worked longer hours. Finally, households began to pile up debts. As a result, spending has started to decline. Inequality has increased to the level of 1928, just before the Crash of 1929. The more the inequality, the less the aggregated demand.

Meanwhile, the federal government, under Republicans and during the last Clinton years, has deregulated the securities markets. It eliminated the distinction between commercial and investment banks. It lowered interest rates, making it possible for banks to lend freely, to take huge risks, and to devise complicated investment vehicles, e.g. derivatives. There has been plenty of cupidity and stupidity.

In order to rebuild family income, it is necessary to reorganize the economy. New and better regulation of markets is needed to prevent fraud. People in danger of losing their homes must be given an opportunity to renegotiate their mortgages. Rebuilding infrastructure is a good way to create more jobs. We should not bail out automobile companies because they have refused to increase their fuel economy standards, making them uncompetitive with foreign manufacturers.

US Politics

The First Presidential Debate. CNN and PBS, 9-26. McCain stressed the importance of eliminating congressional earmarks on bills (pork barrel spending). Obama pointed out that earmarks account for only $18 billion in the national budget, compared to $300 billion for tax cuts for the rich. Obama wants to eliminate loopholes in corporate tax laws. McCain suggested a freeze on spending except for the military, veterans, and entitlement bills. Obama suggested spending could be drastically cut by eliminating the war on Iraq. It is costing 10 billion a month. McCain spoke for alternative energy, but Obama said that McCain has voted 23 alternative energy bills so far.
As for foreign policy, McCain stressed the importance of the “success of the surge,” Obama said the war was a mistake from the beginning: the lesson is to avoid such involvements.
David Gergen judged the debate a tie, but he said that a tie was not good enough for McCain to win the election, because foreign policy, in which he is more experienced, is less important to the voters now than the economy, in which Obama is stronger.

NYTimes 9-28. McCain, who is a lifelong gambler, has many ties to the gambling industry. He has twice been chairman of the Indian Affairs Committee.

CNN 9-29. Sarah Palin often does not understand the question she is asked. Thus, she cannot answer appropriately.
Comedy Central, Steven Colbert. The president of the National Organization for Women endorsed Obama for president.

NYTimes 9-30. During the last ten days Obama gained momentum. Polls show him 9 points ahead in Virginia, 11 points in Minnesota, and 1 point in Missouri. He is competing hard in the key states of Missouri, Florida, and Ohio. In particular, he has improved his standing with voters over 50, who stand to lose most from the current economic crisis.
WPost/ABC poll 10-2. 60% see Paliin as lacking the necessary experience to be President, and 30% are less likely to vote for McCain in the light of this. Of the half of voter concerned about McCain’s age, 85% are skeptical of her. Of Independents, two-thirds are skeptical of her.
CBS/NYTimes poll 10-2. Obama leads by 9 points, 49-40. AP 10-2. Obama leads by 7 points, 48-40.
MSNBC 10-1. Palin’s favorability among women has fallen from 43 to 30 points.
CNN 10-2. McCain pulls out staff from Michigan, conceding the state. CNN poll: Obama leads nationally by +6. He has more money and field people, and is now ahead in states worth 260 electoral votes, ten votes shy of victory.

Israel

NYTimes 9-30. Olmert said that Israel must pull completely out of the West Bank and East Jerusalem. He also said that many Israelis had lost their sense of proportion in relating to Iran.


Russia

CNN 10-1. Tomorrow four Russian warships will pass through the Bosphorus and Dardanelles on the their way across the Mediterranean and the Atlantic to Venezuela.

Humor

Comedy Central, Steven Colbert 9-30. On account of the economic situation in the US, the number of illegal immigrants has declined. Now there are new jobs for Wall Street workers: those who have been picking stocks can now pick strawberries; those who managed hedge funds can now trim hedges.