Stock Market Crash Expected In 2008 To Be Worse Than 1929

[Shammu]

'We want a New World to come out of this,' Sarkozy said

Yes, this is also a possible setup for a one world currency, as well as for the anti-christ.

[Soldier4Christ]

Leaders might close world's markets
Berlusconi says time needed to 'rewrite the rules of international finance'

Italian Prime Minister Silvio Berlusconi said political leaders are discussing the idea of closing the world's financial markets while they ``rewrite the rules of international finance.''

``The idea of suspending the markets for the time it takes to rewrite the rules is being discussed,'' Berlusconi said today after a Cabinet meeting in Naples, Italy. A solution to the financial crisis ``can't just be for one country, or even just for Europe, but global.''

The Dow Jones Industrial Average fell as much 8.1 percent in early trading and pared most of those losses after Berlusconi's remarks. The Dow was down 0.5 percent to 8540.52 at 10:10 in New York.

Group of Seven finance ministers and central bankers are meeting in Washington today, and will stay in town for the International Monetary Fund and World Bank meetings this weekend. European Union leaders may gather in Paris on Oct. 12, three days before a scheduled summit in Brussels, Berlusconi said today, while Group of Eight leaders may hold a meeting on the crisis ``in coming days,'' he said.

Berlusconi didn't give any details about what kind of rules leaders were looking to change, except to say that leaders are ``talking about a new Bretton Woods.''

The Bretton Woods Agreements were adopted to rebuild the international economic system after World War II in a hotel in Bretton Woods, New Hampshire. The aim of the agreements was to establish a monetary management system, initially by pegging currencies to gold. The IMF was set up later to help manage the international financial system.

[Soldier4Christ]

Five Million Illegals Have Illegal Mortgages in U.S.A.!

A single report by KFYI radio of Phoenix, Arizona highlights a shocking claim made by the Department of Housing and Urban Development (HUD). HUD says that five million illegal aliens hold illegal mortgages. This is just one more example of the lax lending laws put into place by Democrats like Barney Frank that have contributed to this economic crisis. One would think this would be big news. But, so far we have only this one report to cover it.

There have been earlier stories of home flipping schemes that made liberal use of illegal aliens as straw buyers and the FBI has followed numerous cases to prosecution and conviction. But the Old Media have not done much with this story.

KFYI reports that these fraudulent straw purchases of mortgages by illegal aliens has affected every state in the union.

    One illegal alien was arrested this year in Tucson after allegedly using a stolen social security number to buy two homes and rack up over $780,000 in bad debt.

    Some five million fraudulent home mortgages are in the hands of illegal aliens, according to the U.S. Department of Housing and Urban Development.

    It’s not known how many of those have contributed to the subprime housing mortgage meltdown, but it has affected every state, including Arizona.

    The problem began years ago when banks were forced to give mortgages without confirming social security numbers or borrower identification. As a result, illegal immigrants were able to obtain home mortgages which they could not afford.

Lax immigration laws have also helped make this crime easy to perpetrate.

In 1965 a Democrat Controlled Congress under President Lyndon Johnson passed the concept of “chain” immigration into law. A later commission named the Hesburgh Commission convened during Ronald Reagan’s first term, found that this concept statistically allowed each single immigrant to bring into this country 84 of his family members. Of course, all these people have to live somewhere making such fraudulent mortgages quite attractive.

What illegal struggling to survive is going to pass up a free house that he can move into without having to present any identification, proof of employment, financial history or even a down payment?

It isn’t impossible for a foreigner to get a mortgage in the U.S., of course. There is a way but it requires a lot of proof and paperwork.

“Known as ITIN mortgages because applicants must have an individual taxpayer identification number, the fixed-rate loans are designed for immigrants who can prove they are creditworthy and pay taxes even though they don’t have legal permanent residency in the U.S…. The mortgages represent a fraction of the $2.8 trillion mortgage market. ”

This story should be in every paper and on every TV news cast.

[Soldier4Christ]

World Bank under cyber siege in 'unprecedented crisis'
Computer repository of sensitive data about economies of every nation raided repeatedly

 The World Bank Group's computer network — one of the largest repositories of sensitive data about the economies of every nation — has been raided repeatedly by outsiders for more than a year, FOX News has learned.

It is still not known how much information was stolen. But sources inside the bank confirm that servers in the institution's highly-restricted treasury unit were deeply penetrated with spy software last April. Invaders also had full access to the rest of the bank's network for nearly a month in June and July.

In total, at least six major intrusions — two of them using the same group of IP addresses originating from China — have been detected at the World Bank since the summer of 2007, with the most recent breach occurring just last month.

In a frantic midnight e-mail to colleagues, the bank's senior technology manager referred to the situation as an "unprecedented crisis." In fact, it may be the worst security breach ever at a global financial institution. And it has left bank officials scrambling to try to understand the nature of the year-long cyber-assault, while also trying to keep the news from leaking to the public.

The crisis comes at an awkward moment for World Bank president Robert Zoellick, who runs the world's largest and most influential anti-poverty agency, which doles out $25 billion a year, and whose board represents 185 member nations. This weekend, the bank holds its annual series of meetings in Washington — and just in advance of those sessions, Zoellick called for a radical revamping of multilateral organizations in light of the global economic meltdown.

Zoellick is positioning himself and the bank as an institution that can help chart a new path toward global financial stability. But that reputation, more than ever, depends on the bank's stable information infrastructure.

The fact that the information vaults of the World Bank have been repeatedly pried open won't help Zoellick's case.

While it remains unclear how much data has been pilfered from the bank, it's a lot. According to internal memos, "a minimum of 18 servers have been compromised," including some of the bank's most sensitive systems — ranging from the bank's security and password server to a Human Resources server "that contains scanned images of staff documents."

One World Bank director tells FOX News that as many as 40 servers have been penetrated, including one that held contract-procurement data.

Despite the gravity of the break-ins, the bank is trying hard to pretend to outsiders it didn't happen. "There were attempts to hack the bank's computer systems last summer," says a World Bank spokesman. "However, there was no compromise of confidential information." Requests for on-the-record interviews with Zoellick and other top officials were declined.

Meanwhile, the bank's treasurer, Kenneth G. Lay, has been briefing Zoellick's senior management team regularly on the situation since April.

Other bank officials are also sleuthing. The bank's chief information officer, Guy De Poerck, has engaged Price Waterhouse Coopers to do a confidential million-dollar assessment that is expected to tell him what's going on in his own department. And a 22-page internal report by a computer security company named MANDIANT, dated August 18, fleshes out many details of the June-July breaches. But very few people have ever seen the report, and nobody has been permitted to retain a paper copy.

At the same time, De Poerck has been downplaying the problem to the bank's 10,000 rank-and-file staffers as mere intrusion "attempts" in his e-mails. Yet most of those staffers have been asked to change their password three times in the past three months.

"As previously reported in mid-July," CIO De Poerck and a senior bank treasury official wrote in an August announcement to employees, "we would like to reassure you that there is no evidence that Bank staff personal information is at risk from the recent external attempts."

It's unclear how that statement squares with an internal memo to De Poerck a month earlier revealing that a sensitive Human Resources server "that contains scanned images of staff documents" had been successfully breached. De Poerk declined to comment to FOX News about any of these details.

In reality, the situation is serious enough that federal investigators have been called in. "We're not talking about hackers playing games or messing up our website," insists a senior member of the bank's IT department at its Washington headquarters. "It's about the FBI coming last summer and saying, 'You should take a look at your systems because we think something weird is going on.' It's about the intruders knowing what information they wanted — and getting to it whenever they wanted to. They took our existing data stores and organized them in a way that they could be easily accessed at will."

In plainspeak: "They had access to everything," says the source. "They had the keys to every room at the bank. And we can't say whether they still do or don't until we fully and openly address what's happening here."

The data raids are not a matter of stealing inconsequential bits and bytes. The World Bank's data center is literally a treasure trove of vital financial information from around the globe. As a clearinghouse for financial data from both governments and companies, the bank's computers could provide intruders with both a financial and intelligence gold mine — from inside information on bids and contracts to the minutes of confidential board meetings.

If the bank takes a position in a currency, for example, that currency usually moves in response to the bank's actions. Stocks and bonds can also swing up and down based on World Bank announcements. "If you know beforehand that the bank is going to put an order in for oil pipelines in Chad or healthcare systems in India, you can actually make a good amount of money," says one insider.

Although the bank typically provides only a fraction of the financing for a project, its influence on those projects is immense. Private corporations see the bank's stamp of approval as a guarantee that their own larger investments will be safe — and profitable. Knowing in advance what projects the bank's board will reject could be just as profitable.

Some insiders fear that contractors — perhaps even governments — might be seeking advance knowledge on the status of the bank's anti-corruption probes. "The bank knows the books of countries almost as well as the countries do — including the corruption at times," says one insider.

The first breach of the bank's secrets was discovered in September, 2007, after the FBI —while at work on a different cybercrime case — notified the bank that something was wrong. The feds pointed to a part of the bank's network that led out of the Johannesburg hub of the International Finance Corp. (IFC), a bank arm that lends to the private sector.

Within a week of the tip, teams of bank investigators sent to Johannesburg discovered that intruders had gained full and total access to all of IFC's worldwide information — including all incoming and outgoing e-mail — for at least six months. "They were downloading everything and anything," says one insider, who says that IFC's monitoring systems were extremely weak. "They [intruders] had full access."

Investigators discovered that the intruders were using a so-called "cluster" of IP addresses from Macao, China. But since those addresses can be spoofed (i.e., disguised) the discovery doesn't prove that the breaches actually originated in China. Nonetheless, bank officials and its executive director for China clashed behind closed doors over whether or not China's government is involved in the break-ins.

cont'd

[Soldier4Christ]

Bank sources tell FOX News that Johannesburg is one of several secret "hubs" containing a "common data store" (or CDS) that the World Bank Group has established around the globe. In layman's terms, a CDS is the cyber-world's version of a bomb shelter where every piece of an organization's data is replicated and backed up in case of a data-wipeout at headquarters in Washington. While it's known that IFC data was accessible at the hub, it remains unclear if all World Bank Group data was compromised there.

The second major breach — of the bank's treasury network in Washington — was discovered in April 2008. The World Bank's Treasury manages $70 billion in assets for 25 clients — including the central banks of some countries. It carries out substantial collaborations with the world's finance ministers on public wealth and debt management, runs an active bond-trading desk in Washington, and does everything from currency trading to capital markets financings.

After a forensic analysis of the treasury breach, bank investigators discovered that spy software was covertly installed on workstations inside the bank's Washington headquarters — allegedly by one or more contractors from Satyam Computer Services, one of India's largest IT companies.

The software — which operates through a method known as keystroke logging — enabled every character typed on a keyboard to be transmitted to a still-unknown location via the Internet.

Upon its discovery, insiders report, bank officials shut off the data link between Washington and Chennai, India, where Satyam has long operated the bank's sole offshore computer center responsible for all of the bank's financial and human resources information.

Satyam was also banned from any future work with the bank. "I want them off the premises now," Zoellick reportedly told his deputies. But at the urging of CIO De Poerck, Satyam employees remained at the bank as recently as Oct. 1 while it engaged in "knowledge transfer" with two new India-based contractors.

Satyam — one of the largest and most prestigious IT companies in India — is publicly listed on the NYSE and boasts having $2 billion in sales and more than 150 Fortune 500 companies as clients. In 2003, Satyam — it means "truth" in Sanskrit — won a much-heralded and lucrative five-year "sole source" contract to design, write and maintain all of the World Bank's information systems.

The contract — which began at $10 million and grew to more than $100 million by 2007 — was suddenly not renewed this year. Satyam so far declines to comment.

Then came the June-July breaches in Washington. They were similar to the Johannesburg attack, as the same group of IP addresses from Macao were used.

This time, however, the cyber-burglars used a different spyware. They broke into an external server run by the bank's private sector development unit. They were able to acquire passwords — including the password for the systems administrator.

That enabled them to jump into the servers at MIGA, the bank's giant insurance arm. It was there that they captured the security administrator's password as he was logging on to his computer.

It took ten days for bank officials to detect that they'd been invaded. Once they did, they shut down all external servers, except for e-mail — which it turns out the invaders were already using as their entrance point. By the end of July the invaders "had completely mapped out the topography of the bank's information systems," says one expert — "where everything was, the types of servers, and the types of files on the servers."

What the intruders did with all that information is the World Bank's most sensitive and painful mystery. It has clearly left the institution in a highly vulnerable position.

And the same may go for bank president Zoellick. Bank insiders say that he needs desperately to get the security of his own house in order. Despite the vast sums that the Bank spends on data and data storage, its information systems are deeply in disarray.

Today the total cost to maintain the bank's information infrastructure is at least $280 million per year. But according to one disgruntled bank staffer, "We don't even have an internal search engine that works."

The truly alarming fact, however, is that someone — or many people — seem to know their way around the bank's most valuable resource very well, even though they aren't supposed to be there at all.

UPDATE: After FOX News published its story, a World Bank spokesman issued the following statement:

"The Fox News story is wrong and is riddled with falsehoods and errors. The story cites misinformation from unattributed sources and leaked emails that are taken out of context.

"Like other public and private institutions, the World Bank has repeatedly experienced hacking attacks on its computer systems and is constantly updating its security to defeat these. But at no point has a hacking attack accessed sensitive information in the World Bank's Treasury, procurement, anti-corruption or human resources departments."

[Soldier4Christ]

Countries at risk of bankruptcy from Pakistan to Baltics
Specter raised of strategic crisis in some of world's most dangerous spots

A string of countries face the risk of "going bust" as financial panic sweeps Asia, Eastern Europe, and Latin America, raising the spectre of a strategic crisis in some of the world's most dangerous spots.

Nuclear-armed Pakistan is bleeding foreign reserves at an alarming rate leading to fears that it could default on its loans.

There are mounting fears that Ukraine, Kazakhstan, and Argentina could all now slide into a downward spiral towards bankruptcy, while western banks exposed to property bubble across Eastern Europe have seen their share price crushed.

The markets are pricing an 80pc risk that Ukraine will default, based on five-year credit default swaps (CDS) – an insurance policy on a country being able to pay its debts.

The country's banking system has begun to break down after years of torrid credit growth; its steel mills are shutting as demand collapses; and the political crisis is going from bad to worse.

President Viktor Yushchenko dissolved parliament this week in a dispute that risks bitter conflict with the country's Russian bloc. Diplomats fear Moscow could be drawn into the crisis – or even use it as a pretext to occupy territory in a replay of the Georgia invasion this summer.

Ukraine's government seized Prominvestbank this week, suspending payments to creditors. It closed the Kiev stock market, which has fallen 73pc this year.

Emerging market stocks have been tumbling since their peak in October, when investors were still betting that rising stars such as the BRICs (Brazil, Russia, India, China) were now strong enough to shake off a US crisis. That illusion has been shattered.

The International Monetary Fund said it is mobilising a "rapid-fire" fund worth several hundred billion dollars to stop a domino collapse across the developing world.

The trigger for the latest round of capital flight has been the lightning implosion of Iceland. BNP Paribas warned clients yesterday that the island is heading for "sovereign default" with contagion risks for other economies that have been living beyond their means on foreign credit.

Hungary had to intervene yesterday to prop up its markets following a run on country's biggest lender OTP. The Budapest bourse fell 13pc. The treasury had to scrap a bond auction.

The most new mortgages in Hungary are in Swiss francs, leaving the homeowners facing a vicious squeeze as the forint plunges against the franc.

In Pakistan, the rupee has fallen to an all-time low. Standard & Poor's downgraded the country's sovereign debt to near write-off levels of CCC-plus. The central bank's foreign reserves have fallen to $4.7bn (£2.73billion).

"The danger of default is hovering," said Professor Kaisar Bengali from Karachi University.

"Pakistan may not be able to re-pay its debt or import anything," he said, adding that the country cannot assume that it will be bailed out for strategic reasons.

Default risk on Kazakhstan's top banks has risen to 70pc as property bubble bursts in the former Soviet republic and reliance in foreign credit comes back to haunt.

The country has mortgaged its future to oil prices, which crashed below $80 a barrel yesterday as the whole nexus of commodities (except gold) buckled in a wave of forced selling.

Analysts warn that it is leading indicator for what could happen if Russia if crude falls much further.

[Soldier4Christ]

Oil plunges to 13-month low on global crisis
Investors worry about the impact of a severe international downturn

The stunning collapse in oil markets accelerated Friday, sending a barrel of crude plunging below $78 as investors grow more pessimistic about resolving a mushrooming global economic crisis.

Oil hasn’t been this cheap in 13 months — a rare silver lining for consumers amid a rapidly imploding financial landscape.

Crude prices have almost been cut in half since surging to a record near $150 barrel over the summer.
Story continues below ↓advertisement

Energy experts believe prices could go even lower.

Friday’s steep losses came as Wall Street capped its worst weekly drop ever with another wild session. The Dow Jones industrial average fell as much as 700 points earlier in the day before gyrating in and out of positive territory and later finishing the day down 128 points.

The frenzied trading weighed heavily on oil markets, sending prices plummeting more than $9 a barrel at one point.

“There’s so much fear out there and that’s really gripping the oil market. People are just afraid to hold a position so they’re closing out and selling off,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.

Light, sweet crude for November delivery ended the day $8.89 lower at $77.70 a barrel on the New York Mercantile Exchange. It was the lowest settlement price for a front-month crude contract since Sept. 10, 2007.

“As long as this financial crisis continues, we could see prices go down into the $60 range,” Lynch said.

Oil has now lost 47 percent of its value since hitting a record $147.27 on July 11 as a deepening credit crisis sparked by the subprime mortgage fiasco wreaks havoc around the globe and drives down energy demand.

Investors have shrugged off an array of market-stabilizing efforts by world governments, including a $700 billion U.S. financial rescue plan, several bank bailouts and a coordinated interest rate cut by the Federal Reserve and central banks around the globe.

Underscoring Americans’ waning appetite for fuel, a gallon of regular gasoline dropped 5.3 cents overnight to a new national average of $3.35 a gallon, according to auto club AAA, the Oil Price Information Service and Wright Express.

Prices dipped below $3 a gallon on average in Kansas, Missouri and Oklahoma. If crude keeps falling, the rest of country should see sub-$3 gasoline in the next few weeks if not sooner, experts say.

Oil market traders got more proof that energy demand is falling away across the globe.

The International Energy Agency on Friday cut its global oil demand forecasts for this year and 2009, pointing to the worsening economic conditions and the tight credit supply.

The Paris-based energy watchdog cut its forecast for oil demand this year by 240,000 barrels per day, and slashed its 2009 forecast by 440,000 barrels per day. The IEA now expects global oil demand to total 86.5 million barrels per day this year and 87.2 million barrels per day next year.

“The fundamental game for oil has changed. In the last decade, oil went up because of strong global economic growth. That story for the near term is over, so everybody has to re-evaluate,” said Phil Flynn, energy analyst at Alaron Trading Corp. in Chicago.

OPEC signaled it may tighten output to put a floor under falling prices, but it didn’t seem to matter.

The Organization of the Petroleum Exporting Countries said Thursday it will hold a special meeting Nov. 18 to discuss how the economic crisis is affecting oil prices. The head of Libya’s national oil company, Shukri Ghanem, called on oil producing nations to cut output.

Many doubt that an OPEC cut would reverse the extreme downward momentum on oil. OPEC’s decision last month to cut production by 520,000 barrels a day did little to stop the losses.

Flynn said another output cut “may actually accelerate the slide.”

“What’s driving this market right now is fear of demand destruction and lack of credit,” he said. “If you can’t borrow money to buy crude, then demand falls more and so do prices.”

In other Nymex trading, heating oil futures lost 20.86 cents to settle at $2.21 a gallon, while gasoline futures fell 22.03 cents to settle at $1.807 a gallon. Natural gas futures fell 29 cents to settle at $6.535 per 1,000 cubic feet.

In London, November Brent crude lost $8.57 to settle at $74.09 a barrel on the ICE Futures exchange.

[Soldier4Christ]

Pelosi: U.S. needs $150 billion stimulus
House speaker suggests Congress may need to return this year

House Speaker Nancy Pelosi said the nation needs a $150 billion economic stimulus package that "can't wait," and Congress may need to return this year.

"We have some harsh decisions to make. Some of them can't wait until January," she told media in Denver today.

"What we can't wait for is a stimulus package," she said. "We may have to go back into session before the next Congress."

Pelosi expressed support for the Federal Reserve's interest rate reduction, but she said it is not enough, the Denver Post reported.

She said the nation's economy will need $150 billion for new jobs, health care and food stamps.

"We need emergency food assistance," she said.

According to the Post report, Pelosi also said the U.S. needs to join forces with other nations to address the global banking crisis.

"We need this coordinated effort among the industrial countries," she said, because money could flow to nations that promise unlimited deposit insurance and "weaken our financial interests."

The House speaker praised Barack Obama's health care plan and blasted McCain's. She also chided the current administration for the high cost of the Iraq war.

"Should we be spending money on a war without end when we cannot support our own economy?"

[nChrist]

Eurpoean Crisis deepens: Officails Vow to Save Banks

Bloomberg Financial News, Oct. 6, 2008

"French President Nicolas Sarkozy, who convened the Oct. 4th meeting, called for a global summit as soon as possible to 'implement a real and complete reform of the international financial system.' He said 'all actors' must be supervised, including credit rating firms and hedge funds. Executive pay system must also be reviewed, he said.'

'We want a New World to come out of this,' Sarkozy said. 

Right on cue, President Bush announced a global summit meeting for later today!!! Interesting!!!

YES - Everything is falling into place perfectly for the END DAYS! This is more evidence of the amazing accuracy of the Holy Bible. As Christians, we already know that the Holy Bible is GOD'S WORD and all BIBLE PROPHECY will be fulfilled perfectly at GOD'S APPOINTED TIME! GOD'S APPOINTED TIME APPEARS TO BE NEAR!

[Soldier4Christ]

China stiffing America
for $100 billion in debt
Yet U.S. taxpayers helping Beijing
as part of trillion-$ credit bailout

While Chinese companies are in line to benefit directly from U.S. taxpayers' $700 billion-plus bailout of Wall Street, Fannie Mae, Freddie Mac and other financial institutions, Beijing is stiffing the U.S. for $100 billion or more in unpaid debt.

The status of the Chinese economy, including its repudiated debt, has prompted one analyst to warn of an "ominous threat" involving China's finances and suggest the possibility of "a dramatic reversal" for the "so-called Chinese Miracle."

"One of the greatest problems facing China is the government's failure to acknowledge and effectively address the true extent of state institutions' bad debt," Kevin O'Brien writes in an article titled, "Reassessing China's Sovereign Risk: Emerging Global and Domestic Trends Threaten the 'Chinese Miracle."

O'Brien's report was published at a website for the Global Association of Risk Professionals, a not-for-profit independent trade association of risk management practitioners around the world. It has 77,000 members from fields such as banking, investment management and academics.

One problem that should be addressed, he writes, is the $260 billion in sovereign debt owed U.S. and other investors which China has said it simply won't repay.

"The repayment obligation was inherited by the People's Republic of China, when the communists took control in 1949. The successor government doctrine of settled international law affirms continuity of obligations among international recognized successive governments," O'Brien said.

"The PRC is the internationally recognized successor government … which contracted the credit sovereign debt … and which had a loan agreement that states that such debt is intended to be 'a binding engagement upon the Republic of China and its successors.'"

The bonds, however, were excluded from a 1979 settlement of Chinese debts and in 1987, China even "concluded a discriminatory settlement accord with bondholders in Great Britain – an agreement that excluded from settlement any bonds held by non-UK citizens."

Then in 2006, the Chinese Ministry of Finance issued an official communiqué addressed to "the Embassy of the United States of America in China," in which the Chinese government formally repudiated China's defaulted full faith and credit sovereign debt and announced that it would not repay any debt held by American citizens, O'Brien said.

The repudiation still stands, even though the China Economic Review confirmed that major Chinese banks own $8 billion in Fannie Mae and Freddie Mac securities that are the targets of bailout provisions.

"Bank of China said last month it owned $7.5 billion in Fannie and Freddie bonds," the report continued. "The bank also held $5.2 billion in mortgage-backed securities guaranteed by the two agencies."

Those owners will be among the beneficiaries of the overall bailout plan assembled by the government and funded by taxpayers to "rescue" bad debt created by an agenda of loaning money to "subprime" recipients who may not have had the wherewithal to repay the loans.

Recipients of the U.S. taxpayers' generosity also may include various private Chinese interests with investments in American real estate and mortgage.

As recently as three weeks ago, China Investment Corp. was in active discussions to buy into U.S. financial institutions, including Morgan Stanley.

All the while Congress has been aware of the Chinese default but unwilling to mandate action.

Elton Gallegly, a California Republican in Congress, called it the "China debt syndrome."

"After Saddam Hussein's government was replaced in Iraq, China demanded that the new government pay off the debt Saddam's regime ran up against China. China prevailed and is getting 100 percent of the more than $10 billion Iraq owes it," he said in a recent commentary.

"China, however, refuses to recognize the debt its current government inherited when the communists took control in 1949. That debt includes about $260 billion on bonds issued by the former Republic of China. Of that, more than 300 American citizens are owed nearly $100 billion from bonds on which the People's Republic of China has defaulted," the congressman wrote.

"It's time China owned up to its international obligations. Pressure is the only thing China understands. And pressure works. Americans weren't the only ones owed billions when the communists seized control. British citizens were among the bondholders communist China had been ignoring. That lasted until 1987, when Great Britain enacted a law denying Chinese access to British capital markets and China responded by negotiating a settlement to pay off the bonds," he wrote.

Now, he said, China is in negotiations with France on defaulted bonds but "continues to ignore the United States."

He said worse than the actual monetary loss is the message that suggests China "does not have to play by the rules when it competes in the global economy. This helps explain Beijing's refusal to abide by trade agreements, the manipulation of its currency, its underwriting of the genocidal regime in Sudan and its financial relationship with the terrorist-sponsoring government in Iran."

"To that list we can add China’s refusal to crack down on the widespread theft of intellectual property. The piracy of U.S. movies, books, music and other products is costing Americans billions of dollars each year," he said.

China, meanwhile, is boasting of its economy growth and influence. On a Chinese-promoted website today the headlines bragged: "China ranks among the world’s top 30 economies," "China Investment Corp to start investing in Japan stocks" and "China's ship industry strives for No. 1 spot."

A resolution similar to Gallegly's also has been introduced in the Senate. The plan by Sen. James Inhofe, R-Okla., targets China's attempt "to conceal its defaulted government debt from investors."

"The Senate measure labels China's present 'investment-grade' credit rating as artificial and in testimony before the Senate Banking Committee, SEC Chairman Christopher Cox acknowledged that wrongful actions by a credit rating agency may subject the agency to revocation of its SEC registration," an announcement said.

At Washington Watch, the criticism focused on the U.S. credit rating agencies that have allowed the situation to remain under the radar.

"In China's instance, the three largest rating agencies (Standard & Poor's, Moody's and Fitch) are accused of intentionally violating their published criteria and metrics," said the report. "Sovereign Advisers, a risk metrics firm assisting the defaulted creditors of the Chinese government, has performed comprehensive research on this matter and has provided the U.S. Congress and the Securities and Exchange Commission with evidence suggesting that the actions of Standard & Poor's and Moody's were intentionally designed to conceal the Chinese government's debt repudiation and establish an artificial sovereign benchmark in order to increase ratings revenue from expanded securities issuance by Chinese corporations."

On the Washington Watch website, several participants in an online discussion expressed concern over the situation.

"It is about time the PRC was made to pay for their financial indiscretions from the past," said one.

"The situation is crystal clear," said another. "China has an obligation and if it wishes to operate globally it must meet this and any other obligations."

"If it walks like a duck, quacks like a duck, looks like a duck. China's credibility should be disclosed so investors are aware of the risk. China needs to pay its debts," added another.

Gallegly's effort also was to encourage that knowledge among investors.

"This action will put all investors on notice that China has refused to honor its obligations in contravention of international law," he wrote. "It will also encourage China to negotiate in good faith with American bondholders to settle their claims on defaulted bonds."

O'Brien called China's actions "selective default."

He said that's "a practice whereby a government selectively defaults on one specific class of full faith and credit soverereign obligations … yet honors repayment to selected creditors of a separate class.."

"China's refusal to honor repayment of its full faith and credit sovereign debt to American bondholders is best characterized by a statement that appeared in a recent news article: 'When it comes to territory, China claims Tibet and Taiwan based on historical claims predating the current communist government assuming power, but when it comes to debts owed to American citizens, it's a different story," he wrote.

WND reported in 2007 about the influence China wielded over the American dollar because of its investments in financial instruments.

WND also has reported extensively on a long list of defective and even dangerous products that have been exported from China to the U.S.

[Soldier4Christ]

Fannie, Freddie to Buy $40 Billion a Month of Troubled Assets


 Federal regulators directed Fannie Mae and Freddie Mac to start purchasing $40 billion a month of underperforming mortgage bonds as the Bush administration expands its options to buy troubled financial assets and resuscitate the U.S. economy, according to three people briefed about the plan.

Fannie and Freddie began notifying bond traders last week that each company needs to buy $20 billion a month in mostly subprime, Alt-A and non-performing prime mortgage securities, according to the people, who asked not to be identified because the plans are confidential. The purchases would be separate from the U.S. Treasury's $700 billion Troubled Asset Relief Program.

The Federal Housing Finance Agency, which placed the two companies in conservatorship on Sept. 7, directed them last month to start increasing their purchases of loans and mortgage-backed securities as the Treasury seeks to absorb underperforming and illiquid assets from financial companies.

``For now, they're under conservatorship and they have to be used to keep the flow of capital going to the housing market,'' former Treasury Secretary Lawrence Summers said in an interview on Bloomberg Television's ``Conversations with Judy Woodruff.'' ``They're important to maintaining the flow of government finance'' and need to be used actively, he said.

Adding underperforming assets to Fannie and Freddie's combined $1.52 trillion mortgage portfolios would come at a time when the two mortgage-finance companies already hold as much as $210 billion of bad debt that may be eligible itself for the Treasury's relief program, their regulator said Oct. 5.

A spokesman for Washington-based Fannie, Brian Faith, and Doug Duvall at McLean, Virginia-based Freddie wouldn't comment.

Overall Goal

Neither Fannie nor Freddie has turned a profit in the past year, accumulating $14.9 billion in combined quarterly losses, largely related to bad subprime and Alt-A mortgage assets.

FHFA spokeswoman Stefanie Mullin declined to comment on the details of the program. Treasury spokeswoman Jennifer Zuccarelli wasn't immediately available to comment.

``The overall goal of the program will be to contribute greater stability and liquidity in the mortgage market, which should enhance consumers' access to mortgage financing and ultimately result in reduced mortgage interest rates,'' FHFA Director James Lockhart said in a Sept. 19 statement.

Subprime loans were given to borrowers with poor or limited credit records or high debt burdens. Alt-A loans were made to borrowers who wanted atypical terms such as proof-of-income waivers, without sufficient compensating attributes. About 35 percent of subprime loans in non-agency mortgage securities are at least 60 days late, while 15 percent of Alt-A loans are, according to a Sept. 9 report by FTN Financial Capital Markets.

Growth

Non-agency, or private-label, bonds are issued by banks and don't carry guarantees by Fannie, Freddie or government-agency Ginnie Mae. Freddie held about $207 billion in non-agency debt in its $760.9 billion portfolio as of August, according to its latest monthly volume summary. Fannie had about $104 billion of such securities in its $759.9 billion portfolio in August.

Regulators initially restricted Fannie and Freddie's growth when they seized control of the government-sponsored enterprises Sept. 7. To ``promote stability'' and lower mortgage costs to borrowers, Treasury Secretary Henry Paulson said the two would be allowed to ``modestly increase'' their mortgage portfolios to as much as $1.7 trillion through the end of next year and said they would no longer be run ``to maximize shareholder returns.''

Less than two weeks later, Fannie and Freddie were told to ramp up their mortgage bond purchases as the financial crisis deepened and credit activity came to near standstill.

Fannie and Freddie which own or guarantee almost half of the $12 trillion U.S. home loan market, were given access to $200 billion in emergency Treasury financing as part of their rescue package. The companies may also be able to sell their bad debt to the Treasury through its $700 billion financial-rescue program signed into law Oct. 3.

FHFA has said the companies plan to release third-quarter results next month as scheduled. Analysts surveyed by Bloomberg project losses for both Fannie and Freddie at least through 2009.

[Soldier4Christ]

This is the same action that caused this economic problem in the first place. Guess they still haven't learned.

[nChrist]

Pastor Roger and All,

The government ship is sinking, mainly because members of government kept drilling BIG HOLES in the hull of the ship. Their MESS is HUGE and it might even be intentional. I'm not one of those doom and gloom folks, but I think the ship is going to SINK. As Christians, we still have GOD, and we are held in the MIGHTY HANDS of GOD. BUT, things are still going to be rough and times are going to be hard!

Things as we knew them are gone, and we might or might not recover. I still think the first order of business should be to prosecute everyone who committed crimes. That includes everyone, regardless of how high their office is or was. Probably only GOD knows what's left to work with. We haven't deserved GOD'S Blessings, so we shouldn't dare try to blame GOD. I don't think that anyone knows yet how hard things are going to get, and I don't think our CORRUPT POLITICIANS can fix things. Regardless of how the coming election goes, I think they will simply preside over a sinking ship. We are now reaping what was sown, and I think that the same is true for the entire world. Let's just face the TRUTH:  THIS WORLD IS CORRUPT AND EVIL MORE BY THE DAY! It is getting RIPE for the HOLY AND RIGHTEOUS WRATH OF ALMIGHTY GOD. The time may not be now, but I think that the time is soon.

Brothers and Sisters, we should have already separated ourselves from this world anyway because it isn't our HOME. Biblical teaching tells us not to love this world or the things in it. Our HOPES are ETERNAL IN CHRIST and NOT subject to change or failure. Maybe the hard times will draw us closer to CHRIST. Further, we don't know how much longer Christians will be on this earth. Regardless, we should further separate ourselves from the EVIL of this world. I'm not hinting that we should stop or slow down the work we do for the LOST - just the opposite. NOW more than ever, we should yield ourselves to GOD for HIS Use. We need to do MORE for the LOST - not less. We should know that the time remaining to help the LOST is limited. Our FULLNESS OF JOY should be based and centered on JESUS CHRIST - not this world.

Love In Christ,
Tom

Favorite Bible Quotes - 1 Corinthians 1:21-24 NASB
For since in the wisdom of God the world through
its wisdom did not come to know God, God was
well-pleased through the foolishness of the
message preached to save those who believe. 22 For
indeed Jews ask for signs and Greeks search for
wisdom; 23 but we preach Christ crucified, to Jews
a stumbling block and to Gentiles foolishness, 24
but to those who are the called, both Jews and
Greeks, Christ the power of God and the wisdom of
God.

[Shammu]

Financial crisis reshapes world order
David R. Sands
October 12, 2008

As shell-shocked central bankers and finance ministers gather in Washington to confront the world's financial meltdown this weekend, that grinding noise in the background is the sound of the global balance of power shifting.

In sharp contrast to past crises — from the Latin American debt problems of the 1980s to the Asian and Russian currency collapses of the 1990s — the emerging markets of the developing world boast the strong balance sheets and deep financial pockets while the United States and Western Europe lurch from crisis to crisis.

"In a very bizarre way, roles have been reversed in the global economy," said Alex Patelis, head of international economics at Merrill Lynch. "The typical troublemakers of the global economy, the emerging markets, are actually now the world's creditors.

"We do need a new world financial order, and we will probably get one as a side effect of this crisis," he said.

Treasury Secretary Henry M. Paulson Jr. gave a clear signal of the new pecking order last week on the sidelines of the annual Washington meetings of the World Bank and the International Monetary Fund (IMF).

With world financial markets reeling, Mr. Paulson said, he was following up an emergency meeting Friday of finance ministers from the traditional Group of Seven industrial powers — Britain, France, Canada, Germany, Japan, Italy and the United States — with a larger gathering Saturday of the so-called Group of 20, which includes China, India, Russia and Brazil.

The meeting was designed to "coordinate [policies] to lessen the effects of global market turmoil and the economic slowdown on all of our countries," Mr. Paulson said.

Before the meeting, President Bush issued a plea for nations to work together to address the crisis, avoiding the go-it-alone protectionist trade strategies that worsened conditions during the Great Depression.

"In an interconnected world, no nation will gain by driving down the fortunes of another. We are in this together. We will come through it together," Mr. Bush said during an appearance in the Rose Garden after a private White House meeting with ministers and officials from nearly a dozen nations and international organizations.

"There have been moments of crisis in the past when powerful nations turned their energies against each other or sought to wall themselves off from the world. This time is different," he said.

French Finance Minister Christine Lagarde said the rapid spread of U.S. credit, stock and asset woes to markets around the world in recent weeks demonstrated that developing countries can never fully decouple their economies from the West.

"The effects [of the crisis] have spread around the globe, so the emerging markets have to be represented," she said Friday.

With China and other Asian markets supplying much of the liquidity that keeps the U.S. economy afloat, analysts say, the economic meltdown could signal a rearrangement of the pecking order at institutions like the IMF and World Bank that has been largely unchanged since the end of World War II.

Robert B. Zoellick, the American head of the World Bank, argued explicitly last week for a larger "steering group" of countries to replace the long dominance of Western industrial powers at the World Bank and IMF.

"The G-7 is not working," he said. "We need a better group for a better time."

Developing countries have not been immune to the recent market shocks.

The MSCI Emerging Markets Index fell 21 percent last week to 583.32, the biggest weekly loss since the index was established in 1988. Stock markets in Brazil, Russia, Indonesia and elsewhere were forced to shut down at times in the face of steep sell-offs.

But with bulging government coffers and relatively small exposure to the imploding U.S. mortgage market, countries such as China, India and Russia enter a period of deep global uncertainty from a position of strength.

China's Academy of Social Sciences estimated Friday that the country's gross domestic product will grow at a 9.5 percent rate next year, down only slightly from the 10.1 percent clip this year, even as major Western economies are bracing for severe recessions.

Although India's currency has come under pressure in recent weeks, the country's banks have not been "seriously affected" by the global credit crisis, Rakesh Mohan, deputy governor at the Reserve Bank of India, told IMF officials in a speech Friday.

Like several emerging Asian economies that largely steered clear of the U.S. mortgage troubles, "India has by and large been spared of global financial contagion due to the subprime turmoil," Mr. Mohan said.

Merrill Lynch's Mr. Patelis noted one remarkable turnaround. In 1998, a bankrupt Russian government was forced to accept an international bailout after the ruble collapsed.

Ten years later, Moscow, flush with petrodollars, is considering a massive bailout loan to Iceland, once one of the West's wealthiest countries, after the collapse in recent days of Iceland's three largest banks.

Philip Stephens, a columnist with the Financial Times, said the rise of China and other emerging economies comes as no surprise. But the events of the past week, he said, have punctured the hopes of policymakers in Washington and Western Europe that they could shape the global order "in their own image."

"For more than two centuries, the U.S. and Europe have exercised an effortless economic, political and cultural hegemony," he wrote. "That era is ending."

Financial crisis reshapes world order

[Shammu]

A Socialist Tsunami

By INVESTOR'S BUSINESS DAILY
October 10, 2008 4:20 PM PT

The Crash: "Why has the market dropped so much?" everyone asks. What is it about the specter of our first socialist president and the end of capitalism as we know it that they don't understand?

The freeze-up of the financial system — and government's seeming inability to thaw it out — are a main concern, no doubt. But more people are also starting to look across the valley, as they say, at what's in store once this crisis passes.

And right now it looks like the U.S., which built the mightiest, most prosperous economy the world has ever known, is about to turn its back on the free-enterprise system that made it all possible.

It isn't only that the most anti-capitalist politician ever nominated by a major party is favored to take the White House. It's that he'll also have a filibuster-proof Congress led by politicians who are almost as liberal.

Throw in a media establishment dedicated to the implementation of a liberal agenda, and the smothering of dissent wherever it arises, and it's no wonder panic has set in.

What is that agenda? It starts with a tax system right out of Marx: A massive redistribution of income — from each according to his ability, to each according to his need — all in the name of "neighborliness," "patriotism," "fairness" and "justice."

It continues with a call for a new world order that turns its back on free trade, has no problem with government controlling the means of production, imposes global taxes to support continents where our interests are negligible, signs on to climate treaties that will sap billions more in U.S. productivity and wealth, and institutes an authoritarian health care system that will strip Americans' freedoms and run up costs.

All the while, it ensures that nothing — absolutely nothing — will be done to secure a sufficient, terror-proof supply of our economic lifeblood — oil — a resource we'll need much more of in the years ahead.

The businesses that create jobs and generate wealth are already discounting the future based on what they know about Obama's plans to raise income, capital gains, dividend and payroll taxes, and his various other economy-crippling policies. Which helps explain why world stock markets have been so topsy-turvy.

But don't take our word for it. One hundred economists, five Nobel winners among them, have signed a letter noting just that:

"The prospect of such tax-rate increases in 2010 is already a drag on the economy," they wrote, noting that the potential of higher taxes in the next year or two is reducing hiring and investment.

It was "misguided tax hikes and protectionism, enacted when the U.S. economy was weak in the early 1930s," the economists remind us, that "greatly increased the severity of the Great Depression."

We can't afford to repeat these grave errors.

Yet much of the electorate is determined to vote for the candidate most likely to make them. If he wins, what we consider to be a crisis in today's economy will be a routine affair in tomorrow's.

A Socialist Tsunami