Douglas Caddy

Operation Cassandra by William S. Lind www.lewrockwell.com March 26, 2008 Admiral Fallon's (forced?) resignation was the last warning we are likely to get of an attack on Iran. It does not mean an attack is certain, but the U.S. could not attack Iran so long as he was the CENTCOM commander. That obstacle is now gone. Vice President Cheney's Middle East tour is another indicator. According to a report in The American Conservative, on his previous trip Cheney told our allies, including the Saudis, that Bush would attack Iran before the end of his term. If that report was correct, then his current tour might have the purpose of telling them when it is coming. Why not just do that through the State Department? State may not be in the loop, nor all of DOD for that matter. The State Department, OSD, the intelligence agencies, the Army and the Marine Corps are all opposed to war with Iran. Of the armed services, only the Air Force reportedly is in favor, seeking an opportunity to show what air power can do. As always, it neglects to inform the decision-makers what it cannot do. The purpose of this column is not to warn of an imminent assault on Iran, though personally I think it is coming, and soon. Rather, it is to warn of a possible consequence of such an attack. Let me state it here, again, as plainly as I can: an American attack on Iran could cost us the whole army we now have in Iraq. Lots of people in Washington are pondering possible consequences of an air and missile assault on Iran, but few if any have thought about this one. The American military's endless "we’re the greatest" propaganda has convinced most people that the U.S. armed forces cannot be beaten in the field. They are the last in a long line of armies that could not be beaten, until they were. Here's roughly how it might play out. In response to American air and missile strikes on military targets inside Iran, Iran moves to cut the supply lines coming up from the south through the Persian Gulf (can anyone in the Pentagon guess why it's called that?) and Kuwait on which most U.S. Army units in Iraq depend (the Marines get most of their stuff through Jordan). It does so by hitting shipping in the Gulf, mining key choke points, and destroying the port facilities we depend on, mostly through sabotage. It also hits oil production and export facilities in the Gulf region, as a decoy: we focus most of our response on protecting the oil, not guarding our army’s supply lines. Simultaneously, Iran activates the Shiite militias to cut the roads that lead from Kuwait to Baghdad. Both the Mahdi Army and the Badr Brigades – the latter now supposedly our allies – enter the war against us with their full strength. Ayatollah Sistani, an Iranian, calls on all Iraqi Shiites to fight the Americans wherever they find them. Instead of fighting the 20% of Iraq's population that is Sunni, we find ourselves battling the 60% that is Shiite. Worse, the Shiites logistics lie directly across those logistics lines coming up from Kuwait. U.S. Army forces in Iraq begin to run out of supplies, especially POL, of which they consume a vast amount. Once they are largely immobilized by lack of fuel, and the region gets some bad weather that keeps our aircraft grounded or at least blind, Iran sends two to four regular army armor and mech divisions across the border. Their objective is to pocket American forces in and around Baghdad. The U.S. military in Iraq is all spread out in penny packets fighting insurgents. We have no field army there anymore. We cannot reconcentrate because we're out of gas and Shiite guerrillas control the roads. What units don't get overrun by Iranian armor or Shiite militia end up in the Baghdad Kessel. General Petraeus calls President Bush and repeals the famous words of Marshal I MacMahon at Sedan: "Nous sorrune dans une pot de chambre, and nous y serron emerdee." Bush thinks he's overheard Petraeus ordering dinner – as, for Bush, he has. U.S. Marines in Iraq, who are mostly in Anbar province, are the only force we have left. Their lines of supply and retreat through Jordan are intact. The local Sunnis want to join them in fighting the hated Persians. What do they do at that point? Good question. How probable is all this? I can't answer that. Unfortunately, the people in Washington who should be able to answer it are not asking it. They need to start doing so, now. It is imperative that we have an up-to-date plan for dealing with this contingency. That plan must not depend on air power to rescue our army. Air power always promises more than it can deliver. As I have warned before, every American ground unit in Iraq needs its own plan to get itself out of the country using only its own resources and whatever it can scrounge locally. Retreat to the north, through Kurdistan into Turkey, will be the only alternative open to most U.S. Army units, other than ending up in an Iranian POW camp. Even if the probability of the above scenario is low, we still need to take it with the utmost seriousness because the consequences would be so vast. If the United States lost the army it has in Iraq, we would never recover from the defeat. It would be another Adrianople, another Manzikert, another Rocroi. Given the many other ways we now resemble Imperial Spain, the last analogy may be the most telling. I have said all this before, in previous columns and elsewhere. If I sound like Cassandra on this point, remember that events ended up proving her right. March 26, 2008 William Lind is an analyst based in Washington, DC. Find this article at: http://www.lewrockwell.com/lind/lind137.html

http://www.veoh.com/channels/douglascaddy I am inaugurating a weekly Internet show in which I interview persons concerning local Houston, Texas, U.S. and international topics. Among these will be interviews dealing with the JFK assassination and Watergate. The first interview will be posted in about two weeks. In the interim the show’s production company has posted the significant speech that President Kennedy gave on government secrecy not long before he was killed. I found listening to his voice and what he said to be an especially moving experience. I hope you do, too.

Why we should fear a McCain presidency By Anatol Lieven Published: March 24 2008 19:12 | Last updated: March 24 2008 19:12 Financial Times http://www.ft.com/cms/s/0/1a47e1ac-f9b0-11...0077b07658.html It may seem incredible to say this, given past experience, but a few years from now Europe and the world could be looking back at the Bush administration with nostalgia. This possibility will arise if the US elects Senator John McCain as president in November. Over the years the US has inserted itself into potential flashpoints in different parts of the world. The Republican party is now about to put forward a natural incendiary as the man to deal with those flashpoints. The problem that Mr McCain poses stems from his ideology, his policies and above all his personality. His ideology, like that of his chief advisers, is neo-conservative. In the past, Mr McCain was considered to be an old-style conservative realist. Today, the role of the realists on his team is merely decorative. Driven in part by his intense commitment to the Iraq war, Mr McCain has relied more on neo-conservatives such as his close friend William Kristol, the Weekly Standard editor. His chief foreign policy advisor is Randy Scheunemann, another leading neo-conservative and a founder of the Committee for the Liberation of Iraq. Mr McCain shares their belief in what Mr Kristol has called “national greatness conservatism”. In 1999, Mr McCain declared: “The US is the indispensable nation because we have proven to be the greatest force for good in human history . . . We have every intention of continuing to use our primacy in world affairs for humanity’s benefit.” Mr McCain’s promises, during last week’s visit to London, to listen more to America’s European allies, need to be taken with a giant pinch of salt. There is, in fact, no evidence that he would be prepared to alter any important US policy at Europe’s request. Reflecting the neo-conservative programme of spreading democracy by force, Mr McCain declared in 2000: “I’d institute a policy that I call ‘rogue state rollback’. I would arm, train, equip, both from without and from within, forces that would eventually overthrow the governments and install free and democratically elected governments.” Mr McCain advocates attacking Iran if necessary in order to prevent it developing nuclear weapons, and last year was filmed singing “Bomb, bomb Iran” to the tune of the Beach Boys’ “Barbara Ann”. Mr McCain suffers from more than the usual degree of US establishment hatred of Russia, coupled with a particular degree of sympathy for Georgia and the restoration of Georgian rule over Abkhazia and South Ossetia. He advocates the expulsion of Russia from the Group of Eight leading industrialised nations and, like Mr Scheunemann, is a strong supporter of early Nato membership for Georgia and Ukraine. Mr Scheunemann has accused even Condoleezza Rice, secretary of state, of “appeasement” of Russia. Nato expansion exemplifies the potential of a McCain presidency. Apart from the threat of Russian reprisals, if the Georgians thought that in a war they could rely on US support, they might be tempted to start one. A McCain presidency would give them good reason to have faith in US support. Mr McCain’s policies would not be so worrying were it not for his notorious quickness to fury in the face of perceived insults to himself or his country. Even Thad Cochran, a fellow Republican senator, has said: “I certainly know no other president since I’ve been here who’s had a temperament like that.” For all his bellicosity, President George W. Bush has known how to deal cautiously and diplomatically with China and even Russia. Could we rely on Mr McCain to do the same? Mr McCain exemplifies “Jacksonian nationalism” – after Andrew Jackson, the 19th-century Indian-fighter and president – and the Scots-Irish military tradition from which both men sprung. As Mr McCain’s superb courage in North Vietnamese captivity and his honourable opposition to torture by US forces demonstrate, he also possesses the virtues of that tradition. Then again, some of the greatest catastrophes of the 20th century were caused by brave, honourable men with a passionate sense of national mission. Not just US voters, but European governments, should use the next nine months to ponder the consequences if Mr McCain is elected and how they could either prevent a McCain administration from pursuing pyromaniac policies or, if necessary, protect Europe from the ensuing conflagrations. The writer is a professor at King’s College, Cambridge, and a senior fellow of the New America Foundation. His book, America Right or Wrong, analyses US nationalism

What Created This Monster? By NELSON D. SCHWARTZ and JULIE CRESWELL The New York Times March 23, 2008 http://www.nytimes.com/2008/03/23/business...agewanted=print LIKE Noah building his ark as thunderheads gathered, Bill Gross has spent the last two years anticipating the flood that swamped Bear Stearns about 10 days ago. As manager of the world’s biggest bond fund and custodian of nearly a trillion dollars in assets, Mr. Gross amassed a cash hoard of $50 billion in case trading partners suddenly demanded payment from his firm, Pimco. And every day for the last three weeks he has convened meetings in a war room in Pimco’s headquarters in Newport Beach, Calif., “to make sure the ark doesn’t have any leaks,” Mr. Gross said. “We come in every day at 3:30 a.m. and leave at 6 p.m. I’m not used to setting my alarm for 2:45 a.m., but these are extraordinary times.” Even though Mr. Gross, 63, is a market veteran who has lived through the collapse of other banks and brokerage firms, the 1987 stock market crash, and the near meltdown of the Long-Term Capital Management hedge fund a decade ago, he says the current crisis feels different — in both size and significance. The Federal Reserve not only taken has action unprecedented since the Great Depression — by lending money directly to major investment banks — but also has put taxpayers on the hook for billions of dollars in questionable trades these same bankers made when the good times were rolling. “Bear Stearns has made it obvious that things have gone too far,” says Mr. Gross, who plans to use some of his cash to bargain-shop. “The investment community has morphed into something beyond banks and something beyond regulation. We call it the shadow banking system.” It is the private trading of complex instruments that lurk in the financial shadows that worries regulators and Wall Street and that have created stresses in the broader economy. Economic downturns and panics have occurred before, of course. Few, however, have posed such a serious threat to the entire financial system that regulators have responded as if they were confronting a potential epidemic. As Congress and Republican and Democratic presidential administrations pushed for financial deregulation over the last decade, the biggest banks and brokerage firms created a dizzying array of innovative products that experts now acknowledge are hard to understand and even harder to value. On Wall Street, of course, what you don’t see can hurt you. In the past decade, there has been an explosion in complex derivative instruments, such as collateralized debt obligations and credit default swaps, which were intended primarily to transfer risk. These products are virtually hidden from investors, analysts and regulators, even though they have emerged as one of Wall Street’s most outsized profit engines. They don’t trade openly on public exchanges, and financial services firms disclose few details about them. Used judiciously, derivatives can limit the damage from financial miscues and uncertainty, greasing the wheels of commerce. Used unwisely — when greed and the urge to gamble with borrowed money overtake sensible risk-taking — derivatives can become Wall Street’s version of nitroglycerin. Bear Stearns’s vast portfolio of these instruments was among the main reasons for the bank’s collapse, but derivatives are buried in the accounts of just about every Wall Street firm, as well as major commercial banks like Citigroup and JPMorgan Chase. What’s more, these exotic investments have been exported all over the globe, causing losses in places as distant from Wall Street as a small Norwegian town north of the Arctic Circle. With Bear Stearns forced into a sale and the entire financial system still under the threat of further losses, Wall Street executives, regulators and politicians are scrambling to figure out just what went wrong and how it can be fixed. But because the forces that have collided in recent weeks were set in motion long before the subprime mortgage mess first made news last year, solutions won’t come easily or quickly, analysts say. In fact, while home loans to risky borrowers were among the first to go bad, analysts say that the crisis didn’t stem from the housing market alone and that it certainly won’t end there. “The problem has been spreading its wings and taking in markets very far afield from mortgages,” says Alan S. Blinder, former vice chairman of the Federal Reserve and now an economics professor at Princeton. “It’s a failure at a lot of levels. It’s hard to find a piece of the system that actually worked well in the lead-up to the bust.” Stung by the new focus on their complex products, advocates of the derivatives trade say they are unfairly being made a scapegoat for the recent panic on Wall Street. “Some people want to blame our industry because they have a vested interest in doing so, either by making a name for themselves or by hampering the adaptability and usefulness of our products for competitive purposes,” said Robert G. Pickel, chief executive of the International Swaps and Derivatives Association, a trade group. “We believe that there are good investment decisions and bad investment decisions. We don’t decry motor vehicles because some have been involved in accidents.” Already, legislators in Washington are offering detailed plans for new regulations, including ones to treat Wall Street banks like their more heavily regulated commercial brethren. At the same time, normally wary corporate leaders like James Dimon, the chief executive of JPMorgan Chase, are beginning to acknowledge that maybe, just maybe, new regulations are necessary. “We have a terribly global world and, over all, financial regulation has not kept up with that,” Mr. Dimon said in an interview on Monday, the day after his bank agreed to take over Bear Stearns at a fire-sale price. “I can’t even describe the seriousness of that. I always talk about how bad things can happen that you can’t expect. I didn’t fathom this event.” TWO months before he resigned as chief executive of Citigroup last year amid nearly $20 billion in write-downs, Charles O. Prince III sat down in Washington with Representative Barney Frank, the chairman of the House Financial Services Committee. Among the topics they discussed were investment vehicles that allowed Citigroup and other banks to keep billions of dollars in potential liabilities off of their balance sheets — and away from the scrutiny of investors and analysts. “Why aren’t they on your balance sheet?” asked Mr. Frank, Democrat of Massachusetts. The congressman recalled that Mr. Prince said doing so would have put Citigroup at a disadvantage with Wall Street investment banks that were more loosely regulated and were allowed to take far greater risks. (A spokeswoman for Mr. Prince confirmed the conversation.) It was at that moment, Mr. Frank says, that he first realized just how much freedom Wall Street firms had, and how lightly regulated they were in comparison with commercial banks, which have to answer to an alphabet soup of government agencies like the Federal Reserve and the comptroller of the currency. “Not only did Wall Street have so much freedom, but it gave commercial banks an incentive to try and evade their regulations,” Mr. Frank says. When it came to Wall Street, he says, “we thought we didn’t need regulation.” In fact, Washington has long followed the financial industry’s lead in supporting deregulation, even as newly minted but little-understood products like derivatives proliferated. During the late 1990s, Wall Street fought bitterly against any attempt to regulate the emerging derivatives market, recalls Michael Greenberger, a former senior regulator at the Commodity Futures Trading Commission. Although the Long-Term Capital debacle in 1998 alerted regulators and bankers alike to the dangers of big bets with borrowed money, a rescue effort engineered by the Federal Reserve Bank of New York prevented the damage from spreading. “After that, all was forgotten,” says Mr. Greenberger, now a professor at the University of Maryland. At the same time, derivatives were being praised as a boon that would make the economy more stable. Speaking in Boca Raton, Fla., in March 1999, Alan Greenspan, then the Fed chairman, told the Futures Industry Association, a Wall Street trade group, that “these instruments enhance the ability to differentiate risk and allocate it to those investors most able and willing to take it.” Although Mr. Greenspan acknowledged that the “possibility of increased systemic risk does appear to be an issue that requires fuller understanding,” he argued that new regulations “would be a major mistake.” “Regulatory risk measurement schemes,” he added, “are simpler and much less accurate than banks’ risk measurement models.” Mr. Greenberger, still concerned about regulatory battles he lost a decade ago, says that Mr. Greenspan “felt derivatives would spread the risk in the economy.” “In reality,” Mr. Greenberger added, “it spread a virus through the economy because these products are so opaque and hard to value.” A representative for Mr. Greenspan said he was preparing to travel and could not comment. A milestone in the deregulation effort came in the fall of 2000, when a lame-duck session of Congress passed a little-noticed piece of legislation called the Commodity Futures Modernization Act. The bill effectively kept much of the market for derivatives and other exotic instruments off-limits to agencies that regulate more conventional assets like stocks, bonds and futures contracts. Supported by Phil Gramm, then a Republican senator from Texas and chairman of the Senate Banking Committee, the legislation was a 262-page amendment to a far larger appropriations bill. It was signed into law by President Bill Clinton that December. Mr. Gramm, now the vice chairman of UBS, the Swiss investment banking giant, was unavailable for comment. (UBS has recently seen its fortunes hammered by ill-considered derivative investments.) “I don’t believe anybody understood the significance of this,” says Mr. Greenberger, describing the bill’s impact. By the beginning of this decade, according to Mr. Frank and Mr. Blinder, Mr. Greenspan resisted suggestions that the Fed use its powers to regulate the mortgage market or to crack down on practices like providing loans to borrowers with little, if any, documentation. “Greenspan specifically refused to act,” Mr. Frank says. “He had the authority, but he didn’t use it.” Others on Capitol Hill, like Representative Scott Garrett, Republican of New Jersey and a member of the Financial Services banking subcommittee, reject the idea that loosening financial rules helped to create the current crisis. “I don’t think deregulation was the cause,” he says. “And had we had additional regulation in place, I’m not sure what we’re experiencing now would have been averted.” Regardless, with profit margins shrinking in traditional businesses like underwriting and trading, Wall Street firms rushed into the new frontier of lucrative financial products like derivatives. Students with doctorates in physics and other mathematical disciplines were hired directly out of graduate school to design them, and Wall Street firms increasingly made big bets on derivatives linked to mortgages and other products. THREE years ago, many of Wall Street’s best and brightest gathered to assess the landscape of financial risk. Top executives from firms like Goldman Sachs, Lehman Brothers and Citigroup — calling themselves the Counterparty Risk Management Policy Group II — debated the likelihood of an event that could send a seismic wave across financial markets. The group’s conclusion, detailed in a 153-page report, was that the chances of a systemic upheaval had declined sharply after the Long-Term Capital bailout. Members recommended some nips and tucks around the market’s edges, to ensure that trades were cleared and settled more efficiently. They also recommended that secretive hedge funds volunteer more information about their activities. Yet, over all, they concluded that financial markets were more stable than they had been just a few years earlier. Few could argue. Wall Street banks were fat and happy. They were posting record profits and had healthy capital cushions. Money flowed easily as corporate default rates were practically nil and the few bumps and bruises that occurred in the market were readily absorbed. More important, innovative products designed to mitigate risk were seen as having reduced the likelihood that a financial cataclysm could put the entire system at risk. “With the 2005 report, my hope at the time was that that work would help in dealing with future financial shocks, and I confess to being quite frustrated that it didn’t do as much as I had hoped,” says E. Gerald Corrigan, a managing director at Goldman Sachs and a former New York Fed president, who was chairman of the policy group. “Still, I shudder to think what today would look like if not for the fact that some of the changes were, in fact, implemented.” ONE of the fastest-growing and most lucrative businesses on Wall Street in the past decade has been in derivatives — a sector that boomed after the near collapse of Long-Term Capital. It is a stealth market that relies on trades conducted by phone between Wall Street dealer desks, away from open securities exchanges. How much changes hands or who holds what is ultimately unknown to analysts, investors and regulators. Credit rating agencies, which banks paid to grade some of the new products, slapped high ratings on many of them, despite having only a loose familiarity with the quality of the assets behind these instruments. Even the people running Wall Street firms didn’t really understand what they were buying and selling, says Byron Wien, a 40-year veteran of the stock market who is now the chief investment strategist of Pequot Capital, a hedge fund. “These are ordinary folks who know a spreadsheet, but they are not steeped in the sophistication of these kind of models,” Mr. Wien says. “You put a lot of equations in front of them with little Greek letters on their sides, and they won’t know what they’re looking at.” Mr. Blinder, the former Fed vice chairman, holds a doctorate in economics from M.I.T. but says he has only a “modest understanding” of complex derivatives. “I know the basic understanding of how they work,” he said, “but if you presented me with one and asked me to put a market value on it, I’d be guessing.” Such uncertainty led some to single out derivatives for greater scrutiny and caution. Most famous, perhaps, was Warren E. Buffett, the legendary investor and chairman of Berkshire Hathaway, who in 2003 said derivatives were potential “weapons of mass destruction.” Behind the scenes, however, there was another player who was scrambling to assess the growing power, use and dangers of derivatives. Timothy F. Geithner, a career civil servant who took over as president of the New York Fed in 2003, was trying to solve a variety of global crises while at the Treasury Department. As a Fed president, he tried to get a handle on hedge fund activities and the use of leverage on Wall Street, and he zeroed in on the credit derivatives market. Mr. Geithner brought together leaders of Wall Street firms in a series of meetings in 2005 and 2006 to discuss credit derivatives, and he pushed many of them to clear and settle derivatives trading electronically, hoping to eliminate a large paper backlog that had clogged the system. Even so, Mr. Geithner had one hand tied behind his back. While the Fed regulated large commercial banks like Citigroup and JPMorgan, it had no oversight on activities of the investment banks, hedge funds and other participants in the burgeoning derivatives market. And the industry and sympathetic politicians in Washington fought attempts to regulate the products, arguing that it would force the lucrative business overseas. “Tim has been learning on the job, and he has my sympathy,” said Christopher Whalen, a managing partner of Institutional Risk Analytics, a risk management firm in Torrance, Calif. “But I don’t think he’s enough of a real practitioner to go mano-a-mano with these bankers.” Mr. Geithner declined an interview request for this article. In a May 2006 speech about credit derivatives, Mr. Geithner praised the benefits of the products: improved risk management and distribution, as well as enhanced market efficiency and resiliency. As he had on earlier occasions, he also warned that the “formidable complexity of measuring the scale of potential exposure” to derivatives made it hard to monitor the products and to gauge the financial vulnerability of individual banks, brokerage firms and other institutions. “Perhaps the more difficult challenge is to capture the broader risks the institution might confront in conditions of a general deterioration in confidence in credit and an erosion in liquidity,” Mr. Geithner said in the speech. “Most crises come from the unanticipated.” WHEN increased defaults in subprime mortgages began crushing mortgage-linked securities last summer, several credit markets and many firms that play substantial roles in those markets were sideswiped because of a rapid loss of faith in the value of the products. Two large Bear Stearns hedge funds collapsed because of bad subprime mortgage bets. The losses were amplified by a hefty dollop of borrowed money that was used to try to juice returns in one of the funds. All around the Street, dealers were having trouble moving exotic securities linked to subprime mortgages, particularly collateralized debt obligations, which were backed by pools of bonds. Within days, the once-booming and actively traded C.D.O. market — which in three short years had seen issues triple in size, to $486 billion — ground to a halt. Jeremy Grantham, chairman and chief investment strategist at GMO, a Boston investment firm, said: “When we had the shot across the bow and people realized something was going wrong with subprime, I said: ‘Treat this as a dress rehearsal. Stress-test your portfolios because the next time or the time after, the shot won’t be across the bow.’ ” In the fall, the Treasury Department and several Wall Street banks scrambled to try to put together a bailout plan to save up to $80 billion in troubled securities. The bailout fell apart, quickly replaced by another aimed at major bond guarantors. That crisis was averted after the guarantors raised fresh capital. Yet each near miss brought with it growing fears that the stakes were growing bigger and the risks more dangerous. Wall Street banks, as well as banks abroad, took billions of dollars in write-downs, and the chiefs of UBS, Merrill Lynch and Citigroup were all ousted because of huge losses. “It was like watching a slow-motion train wreck,” Mr. Grantham says. “After all of the write-downs at the banks in June, July and August, we were in a full-fledged credit crisis with C.E.O.’s of top banks running around like headless chickens. And the U.S. equity market’s peak in October? What sort of denial were they in?” Finally, last week, with Wall Street about to take a direct hit, the Fed stepped in and bailed out Bear Stearns. It remains unclear, exactly, what doomsday scenario Federal Reserve officials consider themselves to have averted. Some on Wall Street say the fear was that a collapse of Bear could take other banks, including possibly Lehman Brothers or Merrill Lynch, with it. Others say the concern was that Bear, which held $30 billion in mortgage-related assets, would cause further deterioration in that beleaguered market. Still others say the primary reason the Fed moved so quickly was to divert an even bigger crisis: a meltdown in an arcane yet huge market known as credit default swaps. Like C.D.O.’s, which few outside of Wall Street had ever heard about before last summer, the credit default swaps market is conducted entirely behind the scenes and is not regulated. Nonetheless, the market’s growth has exploded exponentially since Long-Term Capital almost went under. Today, the outstanding value of the swaps stands at more than $45.5 trillion, up from $900 billion in 2001. The contracts act like insurance policies designed to cover losses to banks and bondholders when companies fail to pay their debts. It’s a market that also remains largely untested. While there have been a handful of relatively minor defaults that, in some cases, ended in litigation as participants struggled over contract language and other issues, the market has not had to absorb a bankruptcy of one of its biggest players. Bear Stearns held credit default swap contracts carrying an outstanding value of $2.5 trillion, analysts say. “The rescue was absolutely all about counterparty risk. If Bear went under, everyone’s solvency was going to be thrown into question. There could have been a systematic run on counterparties in general,” said Meredith Whitney, a bank analyst at Oppenheimer. “It was 100 percent related to credit default swaps.” Amid the regulatory swirl surrounding Bear Stearns, analysts have questioned why the Securities and Exchange Commission did not send up any flares about looming problems at that firm or others on Wall Street. After all, they say, it was the S.E.C., not the Federal Reserve, that was Bear’s primary regulator. Although S.E.C. officials were unavailable for comment, its chairman, Christopher Cox, has maintained that the agency has effectively carried out its regulatory duties. In a letter last week to the nongovernmental Basel Committee of Banking Supervision, Mr. Cox attributed the collapse of Bear to “a lack of confidence, not a lack of capital.” IT’S still too early to assess whether the Federal Reserve’s actions have succeeded in protecting the broader economic system. And experts are debating whether the government’s intervention in the Bear Stearns debacle will ultimately encourage riskier behavior on the Street. “It showed that anything important is going to be bailed out one way or the other,” says Kevin Phillips, a former Republican strategist whose new book, “Bad Money,” analyzes what he describes as the intersection of reckless finance and poor public policy. Mr. Phillips says that it’s likely that the Fed’s actions have ushered in a new era in financial regulation. “What we may be looking at is a rethinking of the whole role of the Federal Reserve and what they represent,” he says. “If they didn’t solve it in this round, I’m not sure they can stretch it out and do it again without creating a new law.” On Capitol Hill, leading Democrats like Senator Christopher J. Dodd of Connecticut, chairman of the Senate Banking Committee, and Mr. Frank of the House Financial Services Committee are pushing for just that. Last Thursday, Mr. Frank offered up a raft of suggestions, including requiring investment banks to disclose off-balance-sheet risks while also making the firms subject to audits — much like commercial banks are now. He also wants investment banks to set aside reserves for potential losses to provide a greater cushion during financial panics. Earlier in the week, Mr. Dodd said the Fed should be given some supervisory powers over the investment banks. But broad new rules aimed at systemic risk are likely to face strong opposition from both the industry and others traditionally wary of regulation. Analysts expect new, smaller-bore laws aimed at the mortgage industry in particular, which was the first sector hit in the squeeze and which affected Wall Street millionaires as well as millions of ordinary American homeowners. THERE is an emerging consensus that the ability of mortgage lenders to package their loans as securities that were then sold off to other parties played a key role in allowing borrowing standards to plummet. Mr. Blinder suggests that mortgage originators be required to hold onto a portion of the loans they make, with the investment banks who securitize them also retaining a chunk. “That way, they don’t simply play hot potato,” he says. Mr. Grantham agrees. “There is just a terrible risk created when you can underwrite a piece of junk and simply pass it along to someone else,” he says. Ratings agencies have similarly been under fire ever since the credit crisis began to unfold, and new regulations may force them to distance themselves from the investment banks whose products they were paid to rate. In the meantime, analysts say, a broader reconsideration of derivatives and the shadow banking system is also in order. “Not all innovation is good,” says Mr. Whalen of Institutional Risk Analytics. “If it is too complicated for most of us to understand in 10 to 15 minutes, then we probably shouldn’t be doing it.”

Paulson's Gift to His Bankster Buddies Winding Up Bear By MIKE WHITNEY March 20, 2008 www.counterpunch.org http://www.counterpunch.org/whitney03202008.html One picture tells the whole story. It's a photo of five grim looking men in gray suits staring ahead blankly like they were in the dock with Saddam awaiting sentencing. Every one of them looks downcast and dejected; shoulders rounded and jaws set. This is what desperation looks like, which is why the photo was kept off the front pages of the leading newspapers. The group took no questions and, as far as the media was concerned, the meeting never happened. But it did happen; and it happened on Monday at the White House at 2PM. That's when President Bush convened the Working Group on Financial Markets, also known as the Plunge Protection Team, to explain their strategy for dealing with deteriorating conditions in the financial markets. The details of the meeting remain unknown, but judging by the sudden (and irrational) recovery in the stock market on Tuesday; their plan must have succeeded. The Plunge Protection Team is a panel that includes Fed Chairman Ben Bernankee, Treasury Secretary Henry Paulson, Securities and Exchange Commission Chairman Christopher Cox, and acting Commodity Futures Trading Commission head Walter Lukken. According to John Crudele of the New York Post, the Plunge Protection Team's (PPT) objective is to redirect the stock market by ""buying market averages in the futures market, thus stabilizing the market as a whole."" In the event of a terrorist attack or a natural disaster, the group's activities could play an extremely positive role in saving the market from an unnecessary meltdown. However, direct intervention into supposedly "free markets" is less defensible when it is merely a matter of saving an over-leveraged banking system from its inevitable Day of Reckoning. And, yet, that appears to be the reason for the White House confab; to buy a little more time before the final explosion. The psychology behind the PPT's activities is explained in greater detail by Robert McHugh Ph.D. who provides a description of how it works in his essay ""The Plunge Protection Team Indicator"": The PPT decides markets need intervention, a decline needs to be stopped, or the risks associated with political events that could be perceived by markets as highly negative and cause a decline, need to be prevented by a rally already in flight. To get that rally, the PPT's key component -- the Fed -- lends money to surrogates who will take that fresh electronically printed cash and buy markets through some large unknown buyer's account. That buying comes out of the blue at a time when short interest is high. The unexpected rally strikes blood, and fear overcomes those who were betting the market would drop. These shorts need to cover, need to buy the very stocks they had agreed to sell (without owning them) at today's prices in anticipation they could buy them in the future at much lower prices and pocket the difference. Seeing those stocks rally above their committed selling price, the shorts are forced to buy -- and buy they do. Thus, those most pessimistic about the equity market end up buying equities like mad, fueling the rally that the PPT started. Bingo, a huge turnaround rally is well underway, and sidelines money from Hedge Funds, Mutual funds and individuals' rushes in to join in the buying madness for several days and weeks as the rally gathers a life of its own. (Robert McHugh Ph.D., "The Plunge Protection Team Indicator") The powers of the PPT are greatly exaggerated; eventually the liquidity they provide has to be drained from the system. The popular myth that the Fed simply creates as much money as it chooses and spreads it around like confetti; is pure rubbish. The Fed has very definite balance constraints. The system is not quite as rigged as many people imagine. According to Bloomberg News, the Fed has already depleted most of its resources: The Fed has committed as much as 60 percent of the $709 billion in Treasury securities on its balance sheet to providing liquidity and opened the door to more with yesterday's decision to become a lender of last resort for the biggest Wall Street dealers." ("Bernanke May Run Low on Ammunition for Loans, Rates", Bloomberg) The troubles in the credit markets and real estate are bigger than the Fed or the PPT; and they know it. The next step is massive government intervention; mortgage-rate freezes, bailouts and fiscal stimulus. Big government is back; Reaganism has gone full-circle. That doesn't mean that the PPT cannot have an important psychological affect in soothing jittery markets or stalling a system-wide collapse. It just means, that markets will eventually correct regardless of what anyone does to stop them. The sharp downturn in the financial markets is the result of unsustainable credit expansion that can't be fixed by the parlor tricks of the PPT. The rate at which financial institutions are deleveraging and destroying capital will inevitably trigger an economic crisis equal to the Great Depression. What is needed is strong leadership and a re-commitment to transparency, not "more of the same" low interest crack and financial hanky-panky. It's time to come clean with the public and admit we have a problem. "Sucker rallies", like Tuesday's 400 point surge on Wall Street just helps to conceal the deeply rooted problems that need to be addressed before investor confidence can be restored. Blogger Rick Ackerman summed it up succinctly in last night's entry: These psychotic, 400-point rallies in the Dow do not augur renewed confidence. They are being driven almost entirely by short-covering, and even the otherwise clueless news anchors are starting to dismiss them as meaningless. One of these days, moments after the last surviving bear's short position has been liquidated, stocks are going to fall so steeply that even the Plunge Protection Team will call for back-up. Then, the financial collapse that so many have been expecting will unfold in just a few days, with enough power to leave the global economy in ruins for a generation." (Rik's Piks Rick Ackerman) Whether Ackerman's dire predictions materialize or not, there's no denying that the situation is getting worse by the day. In the last week alone, two major financial institutions, Carlyle Capital and Bear Stearns have either gone under or been bailed out wiping out tens of billions in market capitalization. These flameouts have increased the rate of the deflation adding to the already-prodigious losses from housing foreclosures, delinquent credit card debt, defaulting car loans, and the deleveraging in the hedge fund industry. Fortress America has sprung a leak, and capital is escaping in a torrent. "One thing is for certain, we're in challenging times," Bush opined on Monday after meeting with his top economic aides. ""But we are on top of the situation." That's comforting. Bush is all over it. Tuesday's 75 basis point rate cut by the Fed is another sign of desperation. The Fed Funds rate is now 2 percentage points below the rate of inflation; a obvious attempt on Bernanke to reflate the equity bubble at the expense of the dollar. Is that why Wall Street was so jubilant; another savage blow to the currency? The Fed's statement was as bleak as any they have ever released sounding more like passages from the Book of the Dead than minutes of the Federal Open Market Committee: Recent information indicates that the outlook for economic activity has weakened further. Growth in consumer spending has slowed and labor markets have softened. Financial markets remain under considerable stress, and the tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters. Inflation has been elevated, and some indicators of inflation expectations have risen .... uncertainty about the inflation outlook has increased. It will be necessary to continue to monitor inflation developments carefully. Today's policy action..should help to promote moderate growth over time and to mitigate the risks to economic activity. However, downside risks to growth remain. Wall Street rallied on the cheery news. Also, on Tuesday, the battered investment banks began posting first quarter earnings which turned out to be better than expected. Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc. beat estimates which added to the stock market giddiness. Unfortunately, a careful reading of the reports, shows that things are not quite as they seem. The jubilation is unwarranted; it's just more smoke and mirrors. "Lehman Brothers Holdings Inc. reported a 57% drop in fiscal first-quarter net income amid weakness in its fixed-income business, though results topped analysts' expectations." (Wall Street Journal) The same was true of financial giant Goldman Sachs: "Goldman Sachs Group Inc.'s fiscal first-quarter net income dropped 53% on $2 billion in losses on residential mortgages, credit products and investments ...The biggest Wall Street investment bank by market value reported net income of $1.51 billion, or $3.23 a share, for the quarter ended Feb. 29, compared to $3.2 billion, or $6.67 a share, a year earlier....Results included $1 billion in losses on residential mortgage loans and securities, and nearly $1 billion in losses on credit products and investment losses ..." (Wall Street Journal) The bottom line is that both companies first quarter earnings dropped by more than a half in just one year alone while, at the same time, they booked heavy losses. That's hardly a reason for celebration. The major investment banks remain on the critical list because of the billions of dollars of toxic debt they still carry on their balance sheets. Consider industry leader Goldman Sachs, for example, which is sitting on a backlog of bad paper from the subprime/securitization debacle as well as an unknown amount of LBOs (Leveraged buyouts) and commercial real estate deals (CREs) that are heading south fast. Market analyst, Mark Gongloff, sheds a bit of light on the real condition of the big financials in his article ""Crunch Proves A Test of Faith For Street Strong"": "All of the brokerage houses are highly leveraged, with a high ratio of assets to shareholders' equity, a sign they have used debt heavily to build up positions in hope of greater returns. Morgan Stanley, which will report Wednesday, had a leverage ratio of 32.6-to-1 at the end of last year, nearly as high as Bear's 32.8-to-1. Lehman was leveraged 30.7-to-1, and Merrill Lynch 27.8-to-1. And the would-be rock, Goldman? It was leveraged 26.2-to-1.""(""Crunch Proves A Test of Faith For Street Strong", WSJ) Remember, Carlyle Capital was leveraged 32 to 1 ($22 billion equity) and went ""poof"" in a matter of days when it couldn't scrape together a measly $400 million for a margin call. How vulnerable are these other maxed-out players now that the credit bubble has popped and the whole system is quickly unwinding? Not very safe, at all. As Gongloff points out: "Based in part on numbers reported at the end of Bear's fourth quarter, estimated that Bear Stearns had $35 billion in liquid assets and borrowing capacity, enough to operate for 20 months. Turns out it had enough for three days."" That's right; three days and it was over. Why would anyone think it will be different with these other equally-exposed banks? These institutions are basically insolvent now. The Federal Reserve is just trying to prop them up to maintain appearences. But it's a hopeless cause. As hyper-inflated assets are downgraded; structured investments and arcane hedges against default will continue to disintegrate and these profligate institutions will be crushed by a stampede of panicking investors. The flight to safety has already begun. Cash is king. Look what has transpired just since Monday. "Crude oil, copper and coffee led the biggest decline ever in commodities on speculation that a U.S. recession will stall demand for raw materials." (Bloomberg) All asset classes fall in a deflationary spiral, even commodities which many people thought would be spared. Not so. In fact, even gold has begun to retreat as hedge funds and other market participants are forced to relinquish their positions. In other news, Reuters reports: "The yield on U.S. 3-month Treasury bills fell below 1 percent on Monday to levels not seen in 50 years prompted by intense safety bids for cash spurred by the ongoing global credit crunch...Investors were pulling money out of stocks and even the booming commodity market even after the Federal Reserve conducted a fresh round of measures over the weekend to alleviate the credit crisis." Here's another example of the "flight to safety" as investors recognize the warning signs of deflation. This trend is likely to intensify even though the Fed will continue to cut rates and real earnings on Treasuries will go negative. In another report from Reuters: ""The Chicago Board Options Exchange Volatility Index or VIX on Monday surged to its highest level in nearly two months as a fire sale of Bear Stearns and an emergency Federal Reserve cut in the discount rate reignited credit fears." Fear is higher now than it has been in a long time. Option traders are loading up on index puts in the Standard & Poor's 500 index. The "Fear Gage, as it is called, is soaring to new heights as credit problems continue to mount and business begins to slow to a crawl. And, perhaps most important of all: "The cost of borrowing in dollars overnight rose by the most in at least seven years after the Federal Reserve's emergency cut in the discount interest rate stoked concern that credit losses are deepening....The London interbank offered rate, or Libor climbed 81 basis points to 3.86 percent, the British Bankers' Association said today. It was the biggest increase since at least January 2001. The comparable pound rate rose 28 basis points to 5.59 percent, the largest gain since Dec. 31, 2007." (Bloomberg) This may sound like technical gibberish geared for market junkies, but it is critical for understanding the gravity of what is really going on. The Fed's rate cuts are not normalizing the lending between banks. In fact, the situation is actually deteriorating quite quickly. When banks don't lend to each other (because they are worried about getting their money back) the wheels of capitalism grind to a halt. The banks are the essential conduit for providing credit to the broader economy. If there's a slowdown in traffic, economic growth begins to slow immediatly. Presently, the banks are hoarding cash to cover the losses on their mortgage-backed investments and to shore up their skimpy capital reserves. As a result, consumer spending is sluggish and GDP is beginning to shrink. "We know we're in a sharp (decline), and there's no doubt that the American people know that the economy has turned down sharply"," said Henry Paulson on NBC television on Sunday. "There's turbulence in our capital markets and it's been going on since August. We're looking for ways to work our way through it." No kidding. But Paulson is clearly out of his depth. He's simply not the man to deal with a crisis of this magnitude. His only concern is bailing out his rich friends in the banking industry. The interests of workers and consumers are just brushed aside. Has anyone from the Dept of the Treasury (or the Fed) suggested a bailout for the 14,000 Bear Stearns employees who just lost not only their jobs but the entire retirement when the company was purchased by JP Morgan? Of course, not. Because both Paulson and Bernanke take a class oriented approach to the problem that narrows their range of vision and limits their ability to pose viable remedies. They are unable to see the whole playing field. For example, Bernanke assumes that if he keeps cutting rates, he can reflate the equity bubble by stimulating consumer spending. But that is not going happen. First of all, the banks are not passing on the savings to customers. And, second, the banks are only lending to applicants with a flawless credit history. In other words, the Fed's cuts may be good for Bernanke and Paulson's buddies, but they do nothing for either the consumer or the broader economy. Also, as Michael Hudson notes in his latest article "Save the Economy, Dismantle the Empire" (counterpunch.org) the banks are taking the money they borrow from the Fed and investing it elsewhere: "This week the Fed tried to reverse the plunge in asset prices by flooding the banking system with $200 billion of credit. Banks were allowed to turn their bad mortgage loans and other loans over to the Federal Reserve at par value (rather at just 20% "mark to market" prices). The Fed's cover story is that this infusion will enable the banks to resume lending to "get the economy moving again." But the banks are using the money to bet against the dollar. They are borrowing from the Fed at a low interest rate, and buying foreign euro-denominated bonds yielding a higher interest rate--and in the process, making a currency gain as the euro rises against dollar-denominated assets. The Fed thus is subsidizing capital flight, exacerbating inflation by making the price of imports (headed by oil and other raw materials) more expensive. These commodities are not more expensive to European buyers, but only to buyers paying in depreciated dollars."" The banksters are "buying foreign euro-denominated bonds" during an economic crisis in America? Whoa. Now there's an interesting take on patriotism. The Fed's strategy has even failed to lower mortgage rates which are pinned to the 30-year Treasury and which has actually gone up since Bernanke began slashing rates. This inability to pass on the Fed's rate cuts to potential mortgage applicants ensures that the housing meltdown will continue unabated well into 2009 and, perhaps, 2010. In the last few days, the Fed has provided $30 billion to buy up the least-liquid speculative debts of a privately-owned investment bank, Bear Stearns, which was leveraged at 32 to 1 and which will remain unsupervised by federal regulators. How does that address the underlying issues of the credit crunch? Are Bernanke and Paulson really trying to put the financial markets back on solid footing again or are they merely expressing their bank-centered bias? That question was answered in an article on Tuesday in the Wall Street Journal which explained the real reasons behind the Bear bailout: "The illusion was shattered Saturday morning, when Mr. Paulson was deluged by calls to his home from bank chief executives. They told him they worried the run on Bear would spread to other financial institutions. After several such calls, Mr. Paulson realized the Fed and Treasury had to get the J.P. Morgan deal done before the markets in Asia opened on late Sunday, New York time. "It was just clear that this franchise was going to unravel if the deal wasn't done by the end of the weekend," Mr. Paulson said in an interview yesterday.'" ("The Week that Shook Wall Street", Wall Street Journal) So all it took was a little nudge from his banking cohorts for Paulson to swing into action and firm up the deal. That says it all. The interests of the American people were never even considered. It was all choreographed to bail out the financial industry. No wonder so many people believe that the Federal Reserve and the US Treasury are merely an extension of the banking establishment. The Bear bailout proves it. Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

Investment Giant Rushed to ICU by Panicky Fed Chief Bearly Alive By MIKE WHITNEY March 15/16 2008 www.counterpunch.org http://www.counterpunch.org/whitney03152008.html On Friday, Bear Stearns blew up. It was the worst possible news at the worst possible time. A day earlier, the politically-connected Carlyle Capital hedge fund defaulted on $16.6 billion of its debt. Carlyle boasted a $21.7 billion portfolio of AAA-rated residential mortgage-backed securities, but was unable to make a margin call of just $400 million. (Where did the $21.7 billion go?) The news on Bear was the last straw. The stock market started reeling immediately; shedding 300 points in less than an hour. Then, miraculously, the tide shifted and the market began to rebound. If there was ever a time for Paulson's Plunge Protection Team to come to the rescue; this was it. For weeks, the markets have been battered with bad news. Retail sales are down, unemployment is up, consumer confidence is in the tank, inflation is rising, the dollar is on the ropes, and the credit crunch has spread to even the safest corners of the market. Facing these fierce headwinds, Washington mandarins and financial heavyweights had to decide whether to sit back and let one small investment bank take down the whole equities market in an afternoon or stealthily buy a few futures and live to fight another day? Tough choice, eh? We'll never know for sure, but that's probably what happened. We'll also never know if Bernanke's real purpose in setting up his new $200 billion auction facility was to provide the cash-strapped banks with a place where they could off-load the mortgage-backed junk that Carlyle dumped on the market when they went belly-up. That worked out well, didn't it? Now the banks can trade these worthless MBS bonds with the Fed for US Treasuries at nearly full value. What a deal! That must have been the plan from the get-go. The Bear Stearns bailout has ignited a firestorm of controversy about moral hazard and whether the Fed should be in the business of spreading its largess to profligate investment banks. But the Fed had no choice. This isn't about one bank caving in from its bad bets. The entire financial system is teetering and a failure at Bear would have taken a wrecking ball to the equities market and sent stocks around the world into a violent death-spiral. The New York Times summed it up like this in Saturday's edition: "If the Fed hadn't acted this morning and Bear did default on its obligations, then that could have triggered a widespread panic and potentially a collapse of the financial system". Bingo. So, what makes Bear so special? How is it that one of the smallest investment banks can pose such a threat to the whole system? That's the question that will be addressed in the next couple weeks and people are not going to like the answer. For the last decade or so the markets have been reconfigured according to a new "structured finance" model which has transformed the interactions between institutions and investors. The focus has been on maximizing profit by creating a vast galaxy of exotic debt-instruments which increase overall risk and volatility in slumping market conditions. Derivatives trading which, according to the Bank of International Settlements, now exceeds $500 trillion, has sewn together the various lending and investment institutions in a way that one failure can set the derivatives dominoes in motion and bring down the entire financial scaffolding in a heap. That's why the Fed got involved and (I believe) approached Congress in a closed-door session (which was supposed to be about FISA legislation) to inform lawmakers about the growing possibly of a major economic meltdown if conditions in the credit markets were not stabilized quickly. The troubles at Bear and the danger they pose to the overall system were articulated in an article by Counterpunch co-editor, Alexander Cockburn in a November, 2006 article "Lame Duck: The Downside of Capitalism": "In a briefing paper under the chaste title, 'Private Equity: A discussion of Risk and Regulatory Engagement', the FSA raises the alarm. "Excessive leverage: The amount of credit that lenders are willing to extend on private equity transactions has risen substantially. This lending may not, in some circumstances, be entirely prudent. Given current leverage levels and recent developments in the economic/credit cycle, the default of a large private equity backed company or a cluster of smaller private equity backed companies seems inevitable. This has negative implications for lenders, purchasers of the debt, orderly markets and conceivably, in extreme circumstances, financial stability and elements of the UK economy." Translation: It's about to blow! "The duration and potential impact of any credit event may be exacerbated by operational issues which make it difficult to identify who ultimately owns the economic risk associated with a leveraged buy out and how these owners will react in a crisis. These operational issues arise out of the extensive use of opaque, complex and time consuming risk transfer practices such as assignment and sub-participation, together with the increased use of credit derivatives. These credit derivatives may not be confirmed in a timely manner and the amount traded may substantially exceed the amount of the underlying assets." Translation: "The world's credit system is a vast recycling bin of untraceable transactions of wildly inflated value." The problem is that the oversight and stability of the world credit system is no longer within the purview of familiar international institutions like the International Monetary Fund or the Bank of International Settlements. Private traders are now installed at all the strategic nodes, gambling with stratospheric sums in such speculative pyramids as the credit derivative market which was almost nonexistent in 2001, yet which reached $17.3 trillion by the end of 2005. Warren Buffett, America's most famous investor, has called credit derivatives "financial weapons of mass destruction." Cockburn's article anticipates the current problems at Bear and shows why the Fed cannot allow them to fester and spread throughout the system. The investment banks and brokerages all do business with each other, taking sides in trades as counterparties. If one player goes down it increases the likelihood of more failures. So the problem has to be contained. The volume of derivatives contracts, that are not traded publicly on any of the major exchanges, has exploded in the last few years. These unregulated transactions, what Pimco's Bill Gross calls the shadow banking system, have taken center-stage as market conditions continue to deteriorate and the downward-cycle of deleveraging begins to accelerate. The ongoing massacre in real estate has left the structured investment market frozen, which means that the foundation blocks (ie mortgage-backed securities) upon which all this excessive leveraging rests; is starting to crumble. It's a real mess. Derivatives trading, particularly in credit default swaps, is oftentimes exceeds the value of the underlying asset many times over. Credit Default Swaps are financial instruments that are based on loans and bonds that speculate on a company's ability to repay debt. (a type of unregulated insurance) The CDS market is roughly $45 trillion, whereas, the aggregate value of the US mortgage market is only $11 trillion; four times smaller. That's a lot of leverage and it can have a snowball effect when the CDS trades begin to unwind. In truth, the biggest risk to the financial system is counterparty risk; the possibility that some large investment bank, like Bear, goes under and sucks the rest of the market with it from the magnitude of its losses. Last year, Bear was the 12th largest counterparty to CDS trades according to Fitch ratings. If they were to suddenly disappear, the effects to the rest of the system would be catastrophic. Fed Chairman Bernanke sat on the board of the FOMC when the investment gurus and brokerage sharpies customized the markets in a way that enhanced their own personal fortunes while increasing the risks of systemic failure. The SIVs, the conduits, the opaque derivatives, the off-balance sheets operations, the dark pools, the massive leverage, and the reckless expansion of credit; all emerged during his (and Greenspan's) tenure. The Federal Reserve has its own large share of responsibility for the brushfire it is presently trying to put out. Now, in capitalism's extreme crisis Bernanke, acting beyond his mandate, invokes a law that hasn't been used since the 1960s so the Fed can become the creditor for an institution that attempted to enrich itself through wild speculative bets on dubious toxic investments which are now utterly worthless. Mike Whitney lives in Washington state. He can be reached at: fergiewhitney@msn.com

If you wish an answer to this, you should direct your question to Mr. Dankbaar.

Seal was a friend of mine. I used to work for Radio KEPS Eagle Pass Texas, I know the Murchinsions. I am from Dallas. Peter Brewton (The Mafia CIA and George Bush; 1992; pgs 91-93-95) interviewed me many times as to some the above information. I flew C-130's all around Iron Mountain, Eagle Pass, Lajitas MX (referenced and documented; Tri-State Drug Task Force) during the Iran/Contra resupply network. I worked an undercover federal interdiction program. Some of the information above is perhaps correct and some is not correct. I would be very careful as to background research and where it came from on some of this information. I smell something funny here. Seal was in no way associated with Dallas and the assassination of JFK... I have gone over this years ago and produced documentation to that fact... I was called names because I would not go along with the story. I was in Mexico many times with Seal and have pictures and documentation to support that. I testified in the Seal case and I know some of the players. If you would like to talk about this with me, then Email me privately. If I do not hear from you then I know a con is in the works. Simkin has my email. and I'll be happy to talk with Mr. WorthingtonII and you in reference to this subject matter. However, I am sure some will advise you not to do that. AND that TOO, will tell me something about the credibility of this story. http://toshplumlee.info/pdf/DEAfiles.pdf Referenced documentation and file locator numbers: 1-99-J DH 39711 (RUC) 1989 1-99-J R- 39711-7 ITE-0653 1-99-R-DN-39711-3 10-17-89 Report of: Feb. 9, 1990 Classified Secret SA Wayne Schmidt DEA SA Hector Berrellez DEA SA Susan Baldwin DEA ...also reference found as to the investigations of the murder of KiKi Camarena and his pilot Alverz. ... ... References as to Richmont Aviation Mena Ark. reference; C-130 N- 0699 P pilot W. Plumlee; C-123 pilot B Seal fuel forms; Setco aviation Costa Rico. ref; Plumlee aircraft, (Big Toad); B A Seal, aircraft (Fat Lady 1) Operation "Iron Butterfly" It appears that with Mr. Plumlee the forum may have another Ashton Gray on its hands. We all remember him, don’t we? I have never met or corresponded with Mr. Plumlee. Yet, like Mr. Gray, Mr. Plumlee appears all too willing to engage in character assassination, implying that I am engaged in some sort of con, which is dictionary defined as a “swindle.” I have been an attorney for 38 years and this is the first time that someone, in this case a complete stranger, has used that term in connection with my professional reputation. I got involved in the forum primarily because John Simkin started a thread on me, which can be found at http://educationforum.ipbhost.com/index.php?showtopic=4727 Another reason I got involved in the forum was because Alfred Baldwin was willingly answering members’ questions about Watergate. Then Mr. Gray emerged from nowhere and engaged unceasingly in character assassination against Mr. Baldwin and myself for our roles in the scandal. Mr. Baldwin, apparently taking the understandable attitude of “who needs this crap?”, withdrew from the forum and with him an invaluable source of new information into Watergate dried up, thanks to Mr. Gray. I decided to stick with the forum and not reply to Mr. Gray’s numerous verbal assaults, expecting that his rude and insulting behavior would expand to include other members and that such activity would eventually lead to his withdrawal from the forum, which indeed is what occurred. I do not hold myself out as an expert on the assassination of JFK. (For that matter neither does Jack Worthington II.) My strategy has always been as I uncover promising lines for research that these should be posted on the forum in the event that real experts, such as John Simkin, Pat Speer, J. Raymond Carroll and other forum members, might find a clue therein worth further pursuit. Mr. Worthington’s contention as to his JFK parentage has already produced one great embarrassment for two eminent scholars. Robert Caro and J. Robert Dallek, who are acknowledged as the foremost biographers of LBJ, are quoted in the April 2008 Vanity Fair article, “A Claim to Camelot”, as stating on page 238 that “they’ve never come across a reference to Johnson residing with” Maverick County Judge Robert Bibb. Yet the Toronto Globe and Mail of February 18, 2008, in its article on the Bibbs’ relationship to Jack Worthington II, reported from Maverick County that “Lyndon Johnson spent the night at our house and my father spent the night in the White House,” said Gravis Bibb, the judge’s son. “My father was a very, very good friend of LBJ. They were buddies going way back.” So here is a promising line of inquiry into the life and times of LBJ, heretofore not known, that serendipitously has been opened up as a result of the effort by Jack Worthington II to establish his parentage. Mr. Plumlee appears above to object to the contents of the emails of Jack Worthington II that can be viewed on Vanity Fair’s blog. Vanity Fair saw fit to post these, so it is safe to assume that the magazine believed they are worthy of public attention. Mr. Plumlee, like Mr. Gray, must learn one of life’s most basic lessons: employing common courtesy and good manners usually cause strangers to respond reciprocally, thus achieving one’s goal, whereas insults and boorishness get one nowhere.

http://www.vanityfair.com/ontheweb/blogs/d...worthingto.html March 12, 2008 The Magazine Jack Worthington II Responds Canada-based investment banker Jack Worthington II is the subject of a story in the current issue of Vanity Fair, which explores whether or not he is the long-lost son of President John F. Kennedy. Worthington has a MySpace page in which he decries the Vanity Fair piece, offers a rebuttal to his Houston family (who characterized his statements as "unequivocally false"), and calls for a boycott of the magazine and the Waverly Inn restaurant. In addition, Worthington sent three e-mails to the magazine today and yesterday, which we reprint here. MARCH 11 E-MAIL (Subject Field: Important Information) …I risked public humiliation to bring this situation to public attention. You certainly did your part on public humiliation. I was hoping that ABC or Vanity Fair would discover the information below on their own, and bring a bit more light into this dark area of our history. Now, would you please look into the real story, as a matter of public service/duty? That is why I’ve come forward. I’m skeptical of the idea that American media will do anything with these facts, and that it must go international. Prove me wrong. FACTS: • • The Bibbs were very close, lifelong friends and political allies of LBJ. Proven by letters written to Bob Bibb from LBJ contained in the LBJ library and reported by VF. My mother framed and gave me a note written to her by LBJ stating, "I had a nice talk with your daddy today. Your friend, Lyndon". Also framed LBJ inauguration invitation to my mother’s parents. • • • The Bibbs were very close friends with Richmond Harper, a fellow resident, banker, business partner, and rancher of Eagle Pass, Texas (Maverick County). Richmond Harper’s name was frequently discussed in my family when growing up. I remember my family discussing it when he was arrested with Barry Seal. To verify the relationship: I believe they were co-owners of the bank that the Bibb’s owned. Or, ask any Eagle Pass old-timers about their relationship. I cannot remember the name of the bank, but the note LBJ wrote my mother is on a deposit slip. It’s in storage in the US and I can access it if needed. To locate that bank and its history officially: http://www.banking.state.tx.us/corp/bnkhistory.htm . The social network diagram for Richmond Chase Harper on http://www.namebase.org/cgi-bin/nb06?HARPER_RICHMOND_CHASE includes the Gambino family http://en.wikipedia.org/wiki/Gambino_crime_family , major Dallas/Ft Worth oilmen Clint Murchison and Sid Richardson amongst others who have been accused of being involved in the JFK assassination, and key leaders of American organized crime. Direct links. • • • Richmond Harper was arrested by the FBI with Barry Seal, and Murray Kessler in 1972 for smuggling explosives and weapons to Anti-Castro Cubans in Mexico via the international border crossing at Eagle Pass (Maverick County), which the Bibb’s controlled. Comments on Richmond Harper, Barry Seal, etc… from the FBI agent assigned to investigate Barry Seal http://www.freerepublic.com/forum/a395415382bea.htm • • • The Bibb’s controlled the Federal international border crossing at Eagle Pass via Customs, Naturalization and Immigration, and Maverick County politically for over 30 years. Vanity Fair and the Globe and Mail have research on the Bibbs. The Bibb’s relationship dynamic with LBJ is best understood via Barr McClellan’s book. • • • Barry Seal and the following people are best understood via Jim Garrison’s work (Oliver Stone movie), and subsequently Wim Dankbaar. Seal trained under David Ferrie in the Civilian Air Patrol, where he also met Lee Harvey Oswald. Seal’s New Orleans office was operated or owned by Clay Shaw. Seal’s wife has said he was involved in the assassination. Barry Seal was closely associated with the prime suspects in the JFK assassination conspiracy theory proposed by Jim Garrison (Oliver Stone). More on Barry Seal: http://www.spartacus.schoolnet.co.uk/JFKseal.htm . http://www.spartacus.schoolnet.co.uk/CIAseal.htm Illumination on Barry Seal’s life: http://www.hightimes.com/ht/news/content.p...d=208&aid=3 <http://www.hightimes.com/ht/news/content.php?bid=208&aid=3> . http://educationforum.ipbhost.com/index.php?showtopic=6930 . • • • Richmond Harper was a close friend and business partner of Murray Kessler, who was also arrested along with Seal and Harper in 1972. Murray Kessler was a nephew of mob boss Carlo Gambino. • • • Douglas Valentine might be a good investigator to help out with this. http://www.douglasvalentine.com/ . Interview of Doug Valentine: http://www.scoop.co.nz/stories/HL0708/S00242.htm . • • • My grandfather slept with a loaded pistol under his mattress. Well-known fact by all in my family. I slept in the same room with him when visiting. • • • My mother inherited an important sum of money from the Bibbs. I don’t know the amount. • • • My birthdate is 2 years prior to JFK’s assassination. My sister’s birthdate is 3 years prior to RFK’s assassination (the day he was shot – around midnight 4 June). Douglas Valentine would be a good investigator to help out with this. http://www.douglasvalentine.com/ . Interview of Doug Valentine: http://www.scoop.co.nz/stories/HL0708/S00242.htm . It should be clear why the "Family" issued a statement disputing me. It should be clear why I’m coming forward with these facts. This is not about me. In my view, airing our dirty laundry is vitally important to the credibility of our claim to be a truly free and open society dedicated to the betterment of the human condition. In fact, I believe this purging process is awe inspiring in our world of cynicism. I’m willing to go through a public humiliation for it. I don’t believe American journalists will go here. Prove me wrong. MARCH 12 E-MAIL #1 (Subject Field: Additionally) Porter Goss and George HW Bush knew Barry Seal very well. MARCH 12 E-MAIL #2 (Subject Field: Bibb Link to Oswald) Link from Bibb to Oswald: In the Warren Commission interviews (Nodule 10 link: http://www.ajweberman.com/nodules2/nodulec10.htm Under the section “TITO AND CONCHITA HARPER” ———————————————————————————————————————————————————— TITO AND CONCHITA HARPER During his testimony before the Warren Commission, George DeMohrenschildt told Albert Jenner he had visited Tito and Conchita Harper on their ranch straddling the U.S./Mexican border. On July 3, 1972, The New York Times reported that Federal officials arrested nine men in Texas and Louisiana on charges of conspiring to smuggle munitions to Mexico. Among those arrested were Richmond C. Harper, 48, the brother of Tito Harper, a rancher and Director of the Frontier State Bank of Eagle Pass, Texas, and Marion Hagler, a former Inspector with the Immigration and Naturalization Service. Murray Kessler and Alder B. Seal were also arrested. Kessler, who was a house guest at the Harper ranch last June, had a record of six convictions in Federal and state courts on charges of interstate theft, transporting stolen property, bookmaking and conspiracy to possess heroin. Federal authorities described him as an associate of the Gambino organized-crime family. ———————————————————————————————————————————————————- Richmond Harper is described as a Director of the Frontier State Bank of Eagle Pass, Texas. This is the bank owned by the Bibbs. Marion Hagler worked for the Bibbs as a Customs Inspector (the Bibbs fall guy above). This Warren Commission interview says it all. George DeMohrenschildt is a mutual friend of Lee Harvey Oswald and Richmond Harper per the Warren Commission. Seal and Kessler are CIA and Mafia respectively. JFK and RFK were assassinated on the birthday’s of Mary Evelyn Bibb’s children (my sister and I). I’ll bet it can be found that the Bibb’s were also friends of DeMohrenschildt. The Bibbs had a larger ranch outside Piedras Negras, Mexico than the Harpers, and still own it. People are still alive to talk about this.

Dr. Edgar Mitchell, the sixth astronaut to walk on the Moon, reveals in this recent audio interview that the incident at Roswell did occur and that the presence of aliens visiting planet Earth will soon be acknowledged. The interview is not to be missed as Dr. Mitchell imparts new information and knowledge on a wide variety of vital topics. There is no charge for listening to the interview. Merely click on the link below and then go to the top of the masthead and click on “listen now.” The interview is recorded on the March 8, 2008 Dreamland program of www.unknowncountry.com. http://www.unknowncountry.com/dreamland/?id=383 Edgar Mitchell: The Way of the Explorer Here is Dr. Edgar Mitchell in one of his most moving and revealing interviews ever! Did you know that he grew up in Roswell, New Mexico? He speaks with total candor about his knowledge of the Roswell Incident, and about the issue of alien presence in general. His discussion of his new book, The Way of the Explorer is moving and highly informative, and his description of what happened to him on the way back from the moon is unforgettable. Lynne McTaggart says of Edgar Mitchell, "His journey into outer space has been matched by a lifelong journey into inner space, where he investigated the final frontier, the nature of mind, and returned with nothing less than an extraordinary new science of life." Dr. Edgar Mitchell’s website is EdMitchellApollo14.com. His foundation, the Institute for Noetic Sciences is found at Noetic.org.

War is hell - and hellishly expensive By William D Hartung Asia Times March 8, 2008 http://www.atimes.com/atimes/Middle_East/JC08Ak01.html War is hell - deadly, dangerous and expensive. But just how expensive is it? In a recent interview, Nobel Prize-winning economist Joseph Stiglitz asserted that the costs of the Iraq war - budgetary, economic and societal - could reach US$5 trillion. That's a hard number to comprehend. Figuring out how many times $5 trillion would circle the globe (if we took it all in $1 bills) doesn't really help matters much, nor does estimating how many times we could paper over every square inch of Rhode Island with it. The fact that total war costs could buy six trillion donuts for volunteers to the presidential campaigns - assuming a bulk discount - is impressive in its own way, but not all that meaningful either. In fact, the George W Bush administration's war costs have already moved beyond the human scale of comprehension. But what if we were to try another tack? How about breaking those soaring trillions down into smaller pieces, into mere millions and billions? How much, for instance, does one week of Bush's wars cost? Glad you asked. If we consider the wars in Iraq and Afghanistan together - which we might as well do, since we and our children and grandchildren will be paying for them together into the distant future - a conservative single-week estimate comes to $3.5 billion. Remember, that's per week! By contrast, the whole international community spends less than $400 million per year on the International Atomic Energy Agency, the primary institution for monitoring and preventing the spread of nuclear weapons; that's less than one day's worth of war costs. The US government spends just $1 billion per year securing and destroying loose nuclear weapons and bomb-making materials, or less than two days' worth of war costs; and Washington spends a total of just $7 billion per year on combating global warming, or a whopping two weeks' worth of war costs. So, perhaps you're wondering, what does that $3.5 billion per week actually pay for? And how would we even know? The Bush administration submits a supplemental request - over and above the more than $500 billion per year the Pentagon is now receiving in its official budget - to pay for the purported costs of the wars in Iraq, Afghanistan, and for the global "war on terror". If you can stay awake long enough to read the whole 159-page document for 2008, it has some fascinating revelations. For example, to hear the howling of the white-collar warriors in Washington every time anyone suggests knocking a nickel off administration war-spending requests, you would think that the weekly $3.5 billion outlay is all "for the troops". In fact, only 10% of it, or under $350 million per week, goes to pay and benefits for uniformed military personnel. That's less than a quarter of the weekly $1.4 billion that goes to war contractors to pay for everything from bullets to bombers. As a slogan, insisting that we need to keep the current flood of military outlays flowing "for Boeing and Lockheed Martin" just doesn't quite have the same ring to it. You could argue, of course, that all these contracting dollars represent the most efficient way to get our troops the equipment they need to operate safely and effectively in a war zone - but you would be wrong. Much of that money is being wasted every week on the wrong kinds of equipment at exorbitant prices. And even when it is the right kind of equipment, there are often startling delays in getting it to the battlefield, as was the case with advanced armored vehicles for the US Marine Corps. But before we get to equipment costs, let's take a look at a week's worth of another kind of support. The Pentagon and the State Department don't make a big point - or really any kind of point - out of telling us how much we're spending on gun-toting private-contract employees from companies like Blackwater and Triple Canopy, our "shadow army" in Iraq, but we can make an educated guess. For example, at the high end of the scale, individual employees of private military firms make up to 10 times what many US enlisted personnel make, or as much as $7,500 per week. If even one-tenth of the 5,000 to 6,000 armed contract employees in Iraq make that much, we're talking about at least $40 million per week. If the rest make $1,000 a week - an extremely conservative estimate - then we have nearly $100 million per week going just to the armed cohort of private-contract employees operating there. Now, let's add into that figure the whole private crew of non-government employees operating in Iraq, including all the cooks, weapons technicians, translators, interrogators and other private-contract support personnel. That combined cost probably comes closer to $300 million per week, or almost as much as is spent on uniformed personnel by the air force, army, navy and marines. By one reliable estimate, there are more contract employees in Iraq alone - about 180,000 - than there are US troops. There are thousands more in Afghanistan. But since many of these non-military employees are poorly paid subcontract workers involved in cooking meals, doing laundry and cleaning latrines, the total costs for the services of all private-contractor employees in Iraq probably runs somewhat less than the costs of the uniformed military. Hence our estimate. So, if $650 million or so a week is spent on people, where does the other nearly $3 billion go? It goes for goods and services, from tanks and fighter planes to fuel and food. Most of this money ends up in the hands of private companies like Boeing, Lockheed Martin and the former Halliburton subsidiary, Kellogg, Brown and Root. The list of weapons and accessories paid for from our $3.5 billion is long and daunting: $1.5 million for M-4 carbines (about 900 guns per week). $2.3 million for machine guns (about 170 per week). $4.3 million for Hellfire missiles (about 50 missiles per week). $6.9 million for night vision devices (about 2,100 per week). $10.8 million for fuel per week. $5 million to store and transport that fuel per week. $14.8 million for F-18E/F fighter planes per week (one every four weeks). $23.4 million for ammunition per week. $30.7 million for Bradley fighting vehicles (10 per week). And that's only a very partial list. What about the more mundane items? "Laundries, showers and latrines" cost more than $110,000 per week. "Parachutes and aerial delivery systems" cost $950,000 per week. "Runway snow removal and cleaning" costs $132,000 per week. Flares cost $50,000 per week. Some of these figures, of course, may cover worldwide military operations for the US armed forces. After all, by sticking the acronym GWOT (global war on terror)in the title of any supplemental war-spending request, you can cram almost anything into it. Then there are the sobering figures like: $2.4 million per week for "death gratuities" (payments to families of troops killed in action) and $10.6 million per week in "extra hazard pay". And don't forget that all the death and destruction lurking behind these weekly numbers makes it that much harder to get people to join the military. But not to worry, $1 million per week is factored into that supplemental funding request for "advertising and recruitment" - not enough perhaps to fill the ranks, but at least they're trying. Keep in mind that this only gives us a sense of what we do know from the public Pentagon request; there's plenty more that we don't know. As a start, the Pentagon's breakdown of the money in its "emergency" supplemental budget leaves huge gaps. Even your own congressman doesn't know for sure what is really in the US war budget. What we do know is that the Pentagon and the military services have been stuffing more and more projects that have nothing to do with the fighting in Iraq and Afghanistan, or even the "war on terror", into those war supplementals. Layered in are requests for new equipment that will take years, or even decades, to build and may never be used in combat - unless the Iraq war really does go on for another century, as Republican presidential nominee John McCain recently suggested. These "non-war" items include high-tech armored vehicles and communications devices for the army as well as new combat aircraft for the air force. Even though these systems may never be used on the US's current battlefields, they are war costs nonetheless. If they weren't inserted into the supplemental requests for Iraq and Afghanistan, they might never have been funded. After all, who wants to vote against a bill that is allegedly all "for the troops", even if it includes weapons those troops will never get? These add-ons are not small change. They probably cost in the area of $500 million per week. Given all of this, it may sound like we have a fair amount of detail about the costs of a week of war. No such luck. Until the "supplemental" costs of war are subjected to the same scrutiny as the regular Pentagon budget, there will continue to be hundreds of millions of dollars unaccounted for each and every week that the wars go on. And there will be all sorts of money for pet projects that have nothing to do with fighting current conflicts. So don't just think of that $3.5 billion per week figure as a given. Think of it as $3.5 billion ... and counting. Doesn't that make you feel safer? William D Hartung is the director of the Arms and Security Initiative at the New America Foundation. He is the author of And Weapons for All (Harper Collins, 1994) and How Much Are You Making on the War, Daddy? A Quick and Dirty Guide to War Profiteering in the Bush Administration (Nation Books, 2004). His commentaries on military and economic issues have appeared in the Washington Post, the New York Times, the Los Angeles Times, Newsday, and the Nation magazine. (Source note: Readers who want to check out the latest Department of Defense supplemental request for war-fighting funds can click here and read, "FY 2008 Global War on Terror Pending Request" from the Office of the Secretary of Defense.) http://www.atimes.com/atimes/Middle_East/JC08Ak01.html

Wiretapping focus shifts to email, as firms move data overseas Microsoft, Google don't deny participation in NSA program WWW.RAWSTORY.COM March 7, 2008 http://rawstory.com/news/2008/Wiretapping_...email_0307.html Little-noticed comments by a senior Justice Department official suggest Congress' fight over renewal of the Foreign Intelligence Surveillance Act surround interception of email and Internet data. At a Monday breakfast sponsored by the American Bar Association, Assistant Attorney General for National Security Kenneth Wainstein remarked that the fight over the eavesdropping bill actually centers on US interception of email. "In response to a question at the meeting by David Kris, a former federal prosecutor and a FISA expert, Wainstein said FISA's current strictures did not cover strictly foreign wire and radio communications, even if acquired in the United States," the Washington Post reported Tuesday. "The real concern, he said, is primarily e-mail, because "essentially you don't know where the recipient is going to be" and so you would not know in advance whether the communication is entirely outside the United States." Unlike phone calls, email messages are generally stored before being transmitted to the sender. Most messages are stored on an email provider's servers before they are accessed by the recipient. Because they can be located anywhere, this means any portion of the law related to the Web could snare Americans' data overseas. Microsoft declined to comment when asked about their participation in any NSA program, saying only that they have 300 million active email accounts. Google told CNET: "As our privacy policy states, we comply with law enforcement requests made with proper service. We do not discuss specific law enforcement requests and generally do not share aggregate information about them. There are also some legal restrictions on what information we can share about law enforcement requests." US companies moving data centers overseas The admission comes amidst US email and Internet companies moving some of their servers overseas. According to a piece in March's edition of Harper's Magazine, AT&T, Microsoft and Google all have or plan overseas data centers in an effort by the companies to cut costs. "Microsoft has announced plans for a data center in Siberia, AT&T has built two in Shanghai, and Dublin has attracted Google and Microsoft," Harper's notes. Americans' personal data isn't just email. More and more computer users are storing personal word processing, photographs and other files online through document sharing programs like Google Documents. "As the functions long performed by personal computers come to be executed by these far-flung data centers," the magazine writes, "the technology industry has rapturously rebranded the Internet as 'the cloud.'" Some say Wainstein's admission that the debate over the eavesdropping act is centered not on "wire and radio" transmissions -- eg, phone calls -- suggests that most of the National Security Agency's concern is about their ability to spy on Internet data. Director of National Intelligence "Michael McConnell, the serial exaggerator who claims to be a non-political straight shooter, himself kept saying the NSA lost 70 percent of its capabilities after the ruling," Wired blogger Ryan Singer writes. "If that's the case, that means that 70 percent of what the NSA does is collect emails inside United States telecom infrastructure and service providers." If Congress approves immunity for companies that participated in President Bush's warrantless wiretapping program, these email carriers will get a pass. Though most debate centers around those companies already identified as participants -- Verizon, AT&T and Sprint -- the Act provides immunity for all companies that complied with federal orders, provided they had a solid legal foundation. CNET's Chris Soghoian offers more. He writes that yet more companies could have been involved, noting that there are numerous firms that make up the Internet backbone -- Tier 1 Internet service providers. According to Wikipedia, Soghoian continues, these providers are: AOL Transit Data Network, AT&T, Global Crossing, Verizon Business, NTT Communications, Qwest, SAVVIS, and Sprint. "That leaves AOL, Global Crossing, NTT Communications, and SAVVIS as other potential participants in any NSA effort to sniff email communications," he adds.

You wrote: Please give me quote to where the article says that. Maybe I missed something, or maybe you did? I don't recall reading about a DNA comparison with his family's DNA. But if such a DNA test was done and it proved what you said it proved, than you've got me over. Files a crackpot? 10 million viewers in Japan last february 21 didn't think so .... Oh well, you can't win them all ....... I realize you idolize JFK, and blind yourself for his less marvelous virtues, but that doesn't make truth untrue, only inconvenient. Don't watch this film then, especially not if you want to blame it on Bobby Baker only: http://www.offthefence.com/content/programme.php?ID=431 "End of discussion" is usually a sign of weakness. Wim 'JFK Love Child': Now I Don't Want To Know Jack Worthington Says His Quest to Know If JFK Is His Biological Father Has Ruined His Life By BRIAN ROSS, ANNA SCHECTER and MADDY SAUER ABC NEWS http://abcnews.go.com/Blotter/story?id=4408596&page=1 March 7, 2008— The man who told ABC News and numerous other media outlets that he might be the love child of John F. Kennedy now says his quest for the truth has ruined his life and he no longer wants his DNA tested against that of the former president. Jack Worthington II, who is featured in an exclusive broadcast interview on tonight's "20/20," is standing by his story that his mother told him his father is JFK, but says that if his mother lied, "at a minimum she is emotionally disturbed, if not criminally liable in my view," he wrote in an e-mail to ABC News earlier this week. Watch the full investigation tonight on "20/20" at 10 p.m. ET. Worthington, who is featured in a lengthy article in this week's Vanity Fair magazine, told ABC News that four years ago his mother told him that he is the late president's son. "I lived my whole life believing in one thing, and then all of a sudden, the blocks have been thrown up into the air," he said. During the illness, which would eventually lead to the death of the father that raised him, Jack Worthington Sr., Worthington says he wanted to test himself and his children for the genetic disease that his father carried. "'Mom, we should, everybody should be tested,'" he says he told his mother. "She says, 'Jack, that's not important; you don't have to do that. Your father isn't Jack Worthington. It's John Kennedy,'" Worthington recounts. Vanity Fair editor David Friend spent almost a year investigating Worthington's claim. "Well there was this notion that what sort of person would out their own parent unless there was something to back it up?," Friend told ABC News. "And secondly, it seemed sort of the holy grail of journalism." As Friend pointed out, JFK was known for his wandering eye. In fact, author Laurence Leamer, who has written three books on the Kennedys, said even he was surprised by the number of women that the former president bedded. "When I began my research, I thought all this stuff about JFK's sex life was exaggerated," Leamer said. "But I'm just amazed at how many women there were. He really was a sexual addict." Jack Worthington II was born on Nov. 22, 1961, ironically two years to the day that JFK would be assassinated. His birth date also means that he would have had to have been conceived during Kennedy's first few months in office. When asked if this was really credible, that JFK would have had an affair with a woman who lived in Texas during those crucial first months of his administration, Worthington said he hadn't considered it. "Oh, I don't know, I have no idea," he said. "We didn't talk about that," he added. But when ABC News went through the official daily appointment schedule of JFK's first three months in office, it is clear that JFK never visited Texas during that time, and he almost never left Washington, D.C. Worthington claims that he has no interest in a piece of the Kennedy estate or in fame or notoriety. "As far as fame, I don't really have any need for fame," he said. "I don't have that personal drive, desire in me." Yet in this month's Vanity Fair he appears in a photo spread shot by one of Jacqueline Kennedy's favorite photographers, Harry Benson, who has shot numerous past presidents and Caroline Kennedy's wedding. Worthington says he approached Vanity Fair under the conditions that he would go public if the magazine performed DNA testing. "From my perspective, that's really what I need out of this project," he said. The Kennedy family was not interested in cooperating with this project, but the magazine did obtain some hair samples believed to have been swept from the floor of Peter Lawson's home after JFK received a haircut there. They compared the samples to Worthington's; no match. While the tests are not definitive, they do suggest non-paternity, said Friend. And more troubling evidence. Friend soon discovered a yearbook picture of Jack Worthington Sr., who looked very similar to Jack Jr. Then following the ABC interview and on the eve of the Vanity Fair publication date, Worthington's family spoke out. They released a statement saying that Jack Worthington's claims are "unequivocally false and have been fabricated." But Worthington's own response is that he is telling the truth and that he will "proceed with criminal charges against her for willfully and maliciously misleading me regarding my paternity."

Jack Worthington's MySpace page: http://www.myspace.com/jackworthingtoncanada

I seriously doubt that the Kennedy family is in turmoil over the delusions of one Jack Worthington. This guy's DNA will match his parents DNA, and that's the reason he has jerked everyone around about his inability to allow his parents DNA to be compared to his own. It is Mr. Worthington's own family that is in turmoil tonight, God help them. The Kennedys are busy plotting Obama's takeover of the White House. Both Jack Worthington and David Friend, author of the Vanity Fair article, will be interviewed on Friday, March 7, on ABC's Good Morning America. Mr. Worthington will also appear that evening on 20/20.

Editorial from today's Washington Post: Mr. Buckley himself never posed as a heavyweight, though he loved to use words of many syllables and wrote incessantly -- books, columns, articles -- right up to his death yesterday at 82. His defining characteristic was that he was a man of good cheer who rarely got nasty in print or in person and who cultivated friends across the political spectrum, listened to them, and delighted in engaging one and all in civilized discourse, of which he was something of a master -- one who will be missed. http://www.washingtonpost.com/wp-dyn/conte...id=opinionsbox1 I am still waiting for someone to supply even a shred of credible EVIDENCE that the late William Buckley had anything whatsoever to do with the assassination of JFK Or, for that matter, that he committed a crime. [Note: David Franke was one of the founders of the modern conservative movement. He helped organize the National Student Committee for the Loyalty Oath and Youth for Goldwater in 1959 and Young Americans for Freedom in 1960. His Appreciation of William F. Buckley, Jr. provides an insight into those early years of the movement.] Thanks, Bill, for the memories--and for so much more 02-29-2008 By David Franke Editor UltimateRonPaul.com Friday, February 29, 2008 Bill Buckley died Wednesday, but his legacy lives on and thousands of his admirers are voicing their sorrow in eulogies and emails to their friends. This is also a time for refreshing our memories of how the founder of the conservative movement impacted our lives. I was one of the lucky few who worked for WFB, or WFB Jr., depending on which shorthand you preferred for William F. Buckley Jr. (And note, no comma before “Jr.”) If you are too young to have been present at the creation of the conservative movement—and most of you are—you may wonder what all the fuss is about. I invite you to go to www.ConservativeHQ.com and find out. You will find plenty there about Bill’s founding of National Review, his early books on Yale and Joe McCarthy, his unsurpassed (to this day) television show, “Firing Line”—all of which scandalized the Liberal Establishment, even as it gave a home to the thousands, then millions of Americans whose concerns and aspirations he was voicing. I also urge you to read Chapter 5, “The Birth of a Movement,” in America’s Right Turn (by Richard A. Viguerie and yours truly). I won’t duplicate that history here. Rather, I’d like to tell you how he affected the life of a 21-year-old Texas kid who reported for duty one day in 1960 to his office at 150 East 35th Street in Manhattan. Thousands of us have stories about our encounters with Bill Buckley. This is mine. Present at the creation Bill Buckley was my hero long before I met him. I had been converted to the cause of individual freedom and anti-communism, quite literally overnight, when I read John T. Flynn’s The Road Ahead while in junior high school. In high school I survived attempted brainwashing by devouring the pamphlets of the Intercollegiate Society of Individualists (ISI) and the two publications they sent me as student gift subscriptions—Human Events, at that time an eight-page Washington newsletter, and a fortnightly magazine, The Freeman. Those two publications exposed me to a wide variety of exciting right-wing dissidents—including Bill Buckley in The Freeman. I was circulating petitions, writing letters-to-the-editor of the Houston Chronicle (and having them published—quite exciting for a high school student!), and communicating by snail mail (no email back then) with a vast nationwide network of fellow McCarthyites—Joe, not Gene, of course. Somehow one of my student petitions got published in The Freeman, and in the mail soon afterwards came a letter postmarked Sharon, Connecticut, with my name and address typed out in red ink. I asked myself, who do I know in Sharon, Connecticut? Well, the masthead of the letter inside read “Libertarians for…” something or another, or perhaps it was “The Libertarian International.” Whatever, this “organization” apparently was run by two brothers, Reid and William F. Buckley. They exhorted me, in red ink again, to keep up the fight, while warning me, “You will be called a fascist, a hate mongerer,” etc. etc. with lots of exclamation points. (I really do have to find that letter somewhere in my boxes of “files,” frame it, and place it above my desk.) I went off to a college by the beach in South Texas as a music major. But then, in my freshman year, Bill Buckley launches National Review. I had an ISI gift subscription and was so excited I changed my line of studies to history and political science, and became editor of my campus newspaper in my sophomore year. So Bill Buckley, long before I met him personally, was largely responsible for my becoming a professional writer rather than a professional musician. Under my editorship, The Foghorn of Del Mar College may have been the second conservative campus publication in America, though I have to admit that the Yale Daily News under Bill Buckley’s tutelage had more cachet (this is called understatement). We didn’t use the word “networking” back then, but that’s what I was doing, sending my editorials to Bill and the folks at Human Events and anyone else who wouldn’t send me a bomb in return. A year later, Human Events offered me a work-scholarship, and I became the first student in the very first Human Events journalism class led by M. Stanton Evans (Doug Caddy and Bill Schulz were the other students). It was during these years in Washington (1957-1960) that we first began hearing and sometimes using the term “conservative.” And this was when roommate Doug Caddy and I started the first nationwide conservative activist organization, the National Student Committee for the Loyalty Oath. Thanks to publicity in Human Events and National Review, we were amazed to hear from hundreds of conservative students across the country when we thought we were pretty much alone in the liberal wilderness. The National Student Committee begat Students for Goldwater for Vice President which begat Young Americans for Freedom…but I digress. Also during these years, Bill Buckley was launching his public persona as the scourge of the Liberal Establishment. The prototype conservative movement had plenty of good people doing good work, but none caught the public’s eye like Bill Buckley, with his wit and charm and eloquence. In him we finally had someone who could stand up at the lecture podium to the likes of John Kenneth Galbraith and make him look like the intellectual inferior he was! So I was elated beyond words when I was offered the position of Editorial Assistant to THE Man. At the center of the conservative universe You can imagine—no, you cannot imagine—how nervous I was to enter the inner sanctum of National Review and work directly for the Most Important Man in the Conservative Universe. Remember, I was only 21 and just a few years out of the sagebrush, plopped into the very heart of Gotham. But if anyone could put you at ease, it was Bill and his sister Priscilla, the managing editor of National Review. I was surprised when they introduced me to my work quarters. It would be an exaggeration to call it an office—more a cubbyhole, barely big enough for a small desk table with typewriter and some shelves. Any apprehension evaporated when I learned that my predecessor occupying these quarters was Whittaker Chambers. And I was a poster boy at that time for the World Hunger Campaign, so if rotund Chambers could work in there I should have no problem. As they soon told me, both Whittaker Chambers and I had an ability to pack more newspapers and assorted “files” into that cubbyhole than anyone thought possible. When a groundbreaking magazine makes history, as National Review in retrospect did, it’s a natural tendency to think you worked there during its Golden Age. And I do. Certainly it would have been exciting to work there at launch, but the early 60s were the buildup to the Goldwater campaign, when the new conservative movement was first beginning to think big and dream big. Bill Buckley’s National Review was the epicenter for both the intellectual side of the movement and the political strategy side of the movement. An editorial table in Bill’s office suite served as our gathering spot for handing out the next issue’s assignments, evaluating them before deadline, and engaging in general discussion during our weekly editorial luncheons. We were all equal in having our say, but naturally some were more equal than others in having their ideas accepted, and Bill was The Decider at that table. The intellectual giant at the table was James Burnham, really one of the three great political philosophers of that era, the others being Sidney Hook and George Orwell. (Frank Meyer’s editorial power was diminished by his being a nonresident, ensconced in the Catskills.) If there was divided opinion on an editorial matter, Bill would usually—but not always—side with Burnham. If you’re a fan of “The McLaughlin Group,” you know the routine. John McLoughlin will make the rounds of his TV panel, seeking their responses, and then pronounce, “The answer is…” And you never knew who might join us for lunch. One week I’d sit down and the person to my right, passing the sandwich platter, would be the comedian and TV host Steve Allen, making his case for disarmament. (Not accepted.) Another time it would be a couple of scientists employed by the tobacco industry, trying to convince us that our editorial position was wrong and there was no scientific evidence that nicotine was harmful. (This was a time when cigarette ads featured M.D.’s assuring you that one brand was better than the others.) Burnham carried the ball on that one, since he was the only one of us with a good scientific understanding, while Bill just sat at the head of the table, twirling his pencil, grinning his Cheshire cat grin, and enjoying the spectacle of the cancer-shrills being intellectually dismembered. The fun together didn’t always stop when the work was finished. We would often repair to The Brasserie or some other eatery after an issue was put to bed. At some point toward the end of my formal employment at National Review, Nicola Paone on 34th Street became “the National Review restaurant.” I last ate there two years ago with Priscilla Buckley and my dear friend Tim Wheeler, another one-time editorial assistant at National Review, while Bill Buckley was celebrating his 80th birthday at the next table with friends. Now both Tim and Bill are gone, and I’m thinking I may want that to be my last memory of Paone’s. All in all, Bill was one of the most easygoing bosses I’ve ever had. But that made it all the more crushing when you weren’t doing your job and were reminded of that in his sonorous tones. He was also a demanding editor. In this pre-computer age, you could readily see all the changes he had made in your copy by the markings of his red pen. Sometimes there seemed to be more red ink than black typewriter copy on the pages I had submitted, but eventually that decreased some. Either I was becoming a better writer or he was giving up. Of course, when you work for someone as famous as Buckley, what you cherish most are the personal moments together, away from the crowd. I always thought he felt guilty about the peon’s pay I got from National Review, because so often he would go out of his way to augment my pay—but there probably was no guilt involved, just generous Bill. One time he asked me to walk with him to the small apartment he rented a couple of blocks away from the office. He opened the door to the foyer closet and asked me to try on one of his suits. Perfect fit—yes, I was that skinny back then. Bill had developed a wool allergy, and soon I was the new owner of five or six handsome Savile Row suits. Best of all were the times spent on his boat. Mind you, he was a world-class sailor and I only learned which side was which, starboard and port, by remembering that both “port” and “left” have four characters. So taking me aboard, instead of picking someone who could help him battle the elements in a raging sea, was an act of pure generosity on his part. Bill’s nautical generosity knew its sensible bounds, though, and I was never invited to join one of his cross-Atlantic sails. Instead, I would be invited on board to ply the calm waters of Long Island Sound. At night we’d anchor and, with the lights of some Long Island harbor village turning on, Bill would cook dinner and the two of us would consume several bottles of wine, of which he was most fond for as far back as I can remember. We’d have hours of lively talk before the wine took its toll—talk about politics and the conservative movement, to be sure, but mostly about everything else that interested us, which is to say, a lot. One time we were bringing his boat back from Stamford, Connecticut, where he had his home, to Manhattan. We pulled up at the East River pier on the East River where he normally docked, noticing some strange, rather large ship on the opposite side of the pier. No sooner had we hurled out our ropes than we were overtaken by Secret Service agents. We had forgotten that some Evil Empire potentate was in town, probably Khrushchev if I remember correctly, and no way were they going to allow America’s Mr. Anti-Communist to share that pier. That had a happy ending for me, though. Bill’s backup was a pier on the Hudson near the George Washington Bridge. He graciously let me take the helm as we sailed under the Brooklyn Bridge, then quickly took it back before I could capsize us. What a memory for a landlubber! The greatest memory of all You will notice a recurrent theme in the eulogies coming forth: his personal generosity. It really was his most prominent trait. When I get to know a man of power and influence, I judge his personal character by the way he treats those with less power, or no power, who depend on him for their well-being in some way. And I know that those people in Bill’s life worshipped him. I also look at how he handles a crisis in a friend’s life, a crisis of that friend’s making. Does he cut and run to avoid embarrassment by association, or does he stand with his friend even as he tries to set him on the right path? There never was any question which path Bill would take. He was generous of himself, of his time, and, yes, of his money. And all of this was with no publicity, no accolades, no expected payback. No wonder he died with thousands mourning him. Bill Buckley was no saint, and he made mistakes, but above all he was a man of character and endless energy and generosity. He taught me that you can have a goal-filled life full of accomplishment while enjoying the journey to the fullest. David Franke was Editorial Assistant to William F. Buckley Jr. (1960-1962), Washington editor (“Cato”) of National Review (1965-1967), and the compiler of Quotations from Chairman Bill: The Best of William F. Buckley Jr. (Arlington House). http://www.ultimateronpaul.com/blog/thanks...r_so_much_more/

ABC is calling the show: THE MAN WHO WOULD SELL HIS OWN MOTHER AND DISOWN HIS OWN FATHER (to guarantee his 15 minutes of fame) Cleaning out the skeletons in the family closet CARLY WEEKS From Tuesday's Toronto Globe and Mail February 19, 2008 John F. Kennedy hardly charted new territory if he fathered a child with a mistress in the early 1960s. History has no shortage of philandering husbands who have been forced to deal publicly with the consequences when the illegitimate child from an extramarital affair came calling. Former Toronto mayor Mel Lastman was embroiled in a scandal in 2000 when two men who claimed to be his children from a lengthy affair sued him for compensation. Rev. Jesse Jackson's reputation suffered a serious blow in 2001 when it emerged that he had fathered an illegitimate child. Prince Albert's ascent to the throne in Monaco in 2005 was overshadowed by the revelation that he fathered an illegitimate child with a flight attendant. A year later, he admitted he also had a teenaged daughter from an affair with another woman. While high-profile scandals like these make for great material at the water cooler, family members involved in such real-life dramas are often left struggling with the fallout when the past comes knocking, forced to question everything they believed and to confront memories that now seem tarnished by deception. "It's like finding out you're adopted at 23," said Mark Laing, a therapist at the Bayridge Family Center in Burlington, Ont. "The biggest difficulty is we remove that parent from the pedestal." The Kennedy family may be experiencing that kind of emotional turmoil after recent reported allegations that the former U.S. president conceived an illegitimate child during the early part of his presidency. The man claiming to be his son, Jack Worthington, is now living in British Columbia and seeking a DNA sample from the Kennedys to determine his parentage. Talk of affairs and dark secrets from the past can cause family members to rethink how well they really know one another, said Catherine Lee, a family psychologist and clinical psychology professor at the University of Ottawa. "It causes you to question what else you don't know and it causes you to question your relationship with your parents," said Dr. Lee, who is also president-elect of the Canadian Psychological Association. Many parents decide to keep past indiscretions, affairs and even the existence of another child a secret in order to protect their children. But Mr. Laing says this approach is exactly what causes so much hurt and anguish when the truth does emerge."Sometimes that can backfire," he said. "We all can make mistakes and when we can admit them, and apologize for them, families can work through it. When it's kept a secret, you're rolling the dice. You might get away with it, but often you don't." But even when parents are honest with their children about the nitty-gritty details of their past lives, finding out about the existence of another sibling can be difficult information for a child to process. It's an experience former Toronto New Democratic MPP Marilyn Churley experienced first hand when she decided to tell her nine-year-old daughter about the boy she had given up for adoption after an unplanned pregnancy years earlier. Although there were some issues at the beginning, Ms. Churley said, her daughter, an only child, was "delighted" by the news she had an older brother out there. But when Ms. Churley went on a mission to find her boy, eventually having a reunion with him 11 years ago, her daughter, who was by then in her early 20s, experienced some emotional stress coming to grips with the changes in her family. Ms. Churley said that even though her daughter was excited to meet her brother, she experienced severe headaches following the reunion that they now attribute to the roller coaster of emotions she was feeling. "I think it was difficult to share her mom for a while and to see her mom completely fixated on somebody else," Ms. Churley said. "It was very stressful for her for a while - being raised a beloved only child, having to share a spotlight with the long-lost boy." Even if an extramarital affair doesn't produce a child, finding out the truth can have significant consequences on the affected family members - particularly for the children involved. "It causes [children] to question their own judgment," Dr. Lee said. It's often much more difficult for grown children to deal with these types of family dramas, she said. Adults are less flexible than children and often have trouble facing the fact they were in the dark for so many years about a family bombshell. "The longer a secret goes on, the longer the deception is and potentially the more challenging it is," Dr. Lee said. But in situations where the parents involved have already died, their children are often left with many mixed feelings and unanswered questions that can haunt them. "If the parents are dead, they can't even talk to them about it. They can't express their anger, they can't ask questions," Mr. Laing said. Although it is possible to recover from such a devastating blow, psychology experts say it's difficult unless family members are willing to be open and honest and discuss how they feel. The best thing to do, according to Dr. Lee, is to tell the truth, regardless of how difficult it seems. "You're not doomed for life if you've discovered this," Dr. Lee said. "I think it poses a challenge, but yes, I've looked at families who are able to come to terms with it."

Jack Worthington is scheduled to be interviewed on ABC's 20/20 on Friday night, March 7.

MOTHER WILL NOT DISCUSS ALLEGED KENNEDY LIAISON Family in Texas say they are stunned to learn of the link made public by Jack Worthington, now living in British Columbia Jessica Leeder From Monday’s Toronto Globe and Mail February 18, 2008 at 5:00 AM EST Eagle Pass, Tex – The family link that connects the mother of a man who recently identified himself as John F. Kennedy’s son to the former president has its dusty roots in this scrubby town on the southern border of Texas. It was here, in the late 1930s, over country club visits and long lunches across the Rio Grande at the famous El Moderno restaurant, that Lyndon Johnson began his friendship with Robert Bibb, a fierce Democrat and county judge whose 22-year political career cemented his reputation as a local legend. Judge Bibb, who gave up his seat in 1964, kept strong ties to Mr. Johnson when he assumed the presidency after Mr. Kennedy’s assassination in 1963. It is well known that the judge even spent nights at the White House, his son Gravis told The Globe and Mail. However, family members of the late judge say they were stunned to learn this week that there might be a second connection between the Bibbs and the White House, one that runs deeper than the judge’s. [PHOTO: Mary Evelyn Bibb shown in a 1958 yearbook photo. ‘Hell, she was a beautiful woman,’ her cousin, Gravis Bibb, says. His father, a local judge, had strong ties to Lyndon Johnson and the White House. Ms. Worthington, a widow, now lives in Houston.] Jack R. Worthington, the secretive, B.C.-based Texas who has requested DNA testing to prove he is the son of Mr. Kennedy, hinted in a statement to The Globe last week that a key pillar of his story lies in the historical connections between his mother’s paternal relatives and Mr. Johnson. Mr. Worthington has been working with Vanity Fair magazine for the past 18 months on a story involving his claims, but publication was stalled after a member of the Kennedy family raised concerns, the New York Post recently wrote. In the wake of that coverage, Mr. Worthington approached The Globe to tell his story. Although he agreed to reveal his identity, Mr. Worthington has been cautious in interviews and is reluctant to answer the most glaring questions posed by his tale. He refuses to speak about his mother, Mary Evelyn Bibb Worthington, and will not discuss the details of her alleged encounter with Mr. Kennedy. Barr McClellan, a former Kennedy supporter and a Johnson-administration lawyer who recently published a conspiracy-theory book that posits an involvement of Mr. Johnson in Mr. Kennedy’s assassination, said the encounter is not beyond the realm of possibility. “In Washington, Johnson was very much a woman chaser. We knew that he could make women available and did for Jack [Kennedy]. JFK had a similar attraction to and for young women,” he said, adding: “Making the connection from Johnson and his allies or family friends rests with Jack.” Ms. Worthington, who was widowed last May when her husband, also named Jack R. Worthington, succumbed to emphysema, did not answer the door at her north Houston home this week. Her daughter, Houston socialite Nancy Littlejohn, threatened to call the police to her home in the post River Oaks district when approached by a reporter. The Globe has interviewed several family members and former classmates of Ms. Worthington as part of the ongoing investigation into her son’s claims. While all confirm the family’s political connections to Mr. Johnson – Ms. Worthington is Judge Bibb’s niece – no one can recall for certain whether Ms. Worthington, an only child born here in 1941, was specifically introduced to Mr. Johnson or Mr. Kennedy. “Lyndon Johnson spent the night at our house and my father spent the night in the White House,” said Gravis Bibb, the judge’s son. “My father was a very, very good friend of LBJ. They were buddies going way back.” Mr. Bibb, a teacher in Eagle Pass, said he does not know whether Ms. Worthington encountered Mr. Kennedy – who never made an official visit to Eagle Pass – let alone via connections of Mr. Johnson. “She would have been someone Kennedy would have looked at,” he said. “I don’t know how they hell they could have met.” Mr. Bibb, who was close to Ms. Worthington growing up, escorted his cousin to the senior prom at Eagle Pass High School. “Her father wouldn’t let her go with anyone else. My uncle was overly protective,” he said, adding: “Hell, she was a beautiful woman.” In 1958 yearbook photos taken during her senior year, Ms. Worthington’s features, accented by long, wavy born hair and a petite waist, are reminiscent of Jacqueline Kennedy Onassis. Her popularity is evident: she was voted Homecoming Princess and was a runner-up for the school’s Most Beautiful Competition. She was also a band twirler, head majorette, and part of the Future Teachers of America Club. After graduation, Ms. Worthington enrolled in Southwest Texas State University in San Marcos to get her teaching degree, cousin Daisy Diaz said. She also kept up her extracurricular activities, joining the dance team. “Somewhere along the way, she met Jack [Worthington,]” Ms. Diaz said. “There was a lot of love there.” None of the family members interviewed could recall exactly when Ms. Worthington met her future husband, who was also pursuing an education degree and playing varsity basketball. It is unclear when the couple married. An obituary published last May after Mr. Worthington’s death said the couple had been married 47 years. If the younger Mr. Worthington’s revelations are correct – he was born on Nov. 22, 1961 – he would have been conceived after the Worthingtons were married. In interviews, the younger Mr. Worthington has refused to say outright whether he believes his mother had an extramarital affair with Mr. Kennedy. However, he referred to the elder Mr. Worthington as “the man who raised me,” not his father. Ms. Diaz, who went to high school with Ms. Worthington and married her first cousin, said Ms. Worthington “dedicated her whole life” to her husband, who suffered for years from emphysema. “Even if it is true, I don’t know what Jack is thinking,” Ms. Diaz said. She went on to say that the younger Mr. Worthington has been somewhat an enigma his entire life, having lived in Australia, Singapore, England, Thailand, Indonesia, Holland and Texas. “I have never been able to figure out what he really does,” she said. Mr. Worthington told The Globe that he is a businessman, but would not be more specific. Texas State University confirmed Mr. Worthington attended there in the early 1980s, and quit the varsity basketball team in 1983. The year before, at age 21, he married his first wife, whom he divorced after two years. His second marriage lasted longer, but crumbled after his wife, Alison, gave birth to their twin girls. “He left her when they were weeks old. He met some chick,” said Laurie Bentley, who lived next door to the couple on a neighbouring acreage for about five years. Alison Worthington and her daughter now live in Seattle, where the girls attend Kindergarten and were recently baptized, according to a neighbour. Ms. Worthington declined to speak to The Globe. Ms. Bentley said Mr. Worthington has always been a mystery to her. She recalls he assembled a stable of polo ponies and worked at an Internet startup, Agvortal.com, which he walked away from in 2003. Ms. Bentley said Mr. Worthington never mentioned a Kennedy link to her and suspects it’s a recent revelation. “If he even suspected this years ago, I don’t think Jack had the ability or the ego to keep quiet,” she said. With reports from Marsha Lederman in Vancouver and Marjan Farahbaksh in Toronto.

Mother denies Victoria man's claim he's son of JFK By Denise Ryan Vancouver Sun Friday, February 29, 2008 http://www.canada.com/vancouversun/news/st...b2b&k=80429 VANCOUVER - The family of Jack Worthington, the Victoria man who claims to be an illegitimate son of president John F. Kennedy, released a statement to Vanity Fair magazine today stating Worthington is not related to JFK. "It is our understanding that Jack R. Worthington, Jr. has made the statement that he is the son of John F. Kennedy and that his mother, Mary Evelyn Worthington, was introduced to president Kennedy by Lyndon B. Johnson." "It is the position of the family that the above statements are unequivocally false and have been fabricated by Jack R. Worthington Jr. for reasons unknown to his family." The statement also says that his mother, Mary Evelyn Worthington, never met either John F. Kennedy or Lyndon B. Johnson. "Jack R. Worthington Jr. is the natural-born son of Jack R. Worthington, Sr. and Mary Evelyn Worthington," said the statement. Worthington, who until today was unaware his family had released the statement, spoke to The Vancouver Sun within minutes of getting the news that his family had spoken out against his claims. Worthington, who stands by his story, said "my mother is not telling the truth. She has reservations. She just doesn't want to deal with it now, the publicity." Within hours of receiving the statement from Worthington's family, Vanity Fair circulated it to media, and published an article by David Friend on its website entitled "A Claim to Camelot," with the overline "The Man Who Would be Jack." Friend's article positions Worthington as a possible poser whose approach to the magazine through his lawyer Douglas Caddy immediately rang "alarm bells." "How many time had would-be Kennedy heirs come out of the woodwork? And how many tall tales had originated...in the dark heart of conspiracy country - vast, incorrigible Texas, where JFK was murdered, LBJ connived and thrived, and two presidents Bush catapulted from the oil business to the Oval Office?" Friend writes. News about the story of a possible JFK love child living in the wilds of British Columbia first surfaced when the New York Post ran an item in its well-read Page Six gossip column a few weeks ago. The report suggested Vanity Fair had spiked a politically hot-button item on the alleged JFK son, caving under pressure from Ted Kennedy. The item proved a source of fascination and Worthington immediately became the target of an international media hunt. He was reluctant to come forward, but did speak at length to The Vancouver Sun, alluding to himself as "a potential Rosetta Stone for a confusing time in American history," and suggesting the Vanity Fair article might provide some information that would solve the cloud of mystery that still hangs around the assassination of JFK. The article published on its website today does anything but, giving Worthington a starring role as a man of "conflicting assertions and motives and press conferences," a man whose mother denies him and who "was told [by Vanity Fair] that he was free to take his story elsewhere." Worthington admits he does not have a close relationship with his mother, but said he was surprised by her press release and shocked by the tone of the Vanity Fair article. He said David Friend had told him last week, before receiving contact with his mother, that Vanity Fair was "coming forward with the article, and that it would be fair and balanced." Worthington, who was in New York last week shooting a segment for ABC's 20/20, slated to air March 7, said he is particularly outraged by the article's assertion, supported by a letter they reproduce stating, effectively, that he approached Vanity Fair through his lawyer Douglas Caddy, offering them exclusive rights to his story. "Caddy was a personal friend. He knew my story. He talked to someone at Vanity Fair who passed it on to Friend, but I didn't know about it. Then he came back to me and said, Vanity Fair wants to help you." "That is untrue," said Vanity Fair spokesperson Beth Kseniak Friday in an interview with The Sun. "His lawyer approached us." Worthington did admit to The Sun that he retained Caddy as his lawyer when it came time to negotiate a confidentiality agreement with Vanity Fair. Worthington said "people somewhere influenced Vanity Fair to butcher me." He added that "in early January [Vanity Fair editor] Graydon Carter had a meeting or call with the Kennedys and after that was influenced to stop the publication. I think my family was influenced by the same people." Worthington said he isn't surprised that people have doubts about his story - but that the answers will come out in the end. "On 20/20 Brian Ross asks all the tough questions, questions the American public would want to know." Kseniak would not comment on whether the story was tweaked after receiving the statement from Worthington's family, or on the coincidental timing of its web publication. "We did hear from the family today. Our story is about Jack Worthington. It speaks for itself," she said. dryan@png.canwest.com

Typically interesting article from Vanity Fair. Especially the part about Worthington's attorney. Yes, the originator of this thread. Perhaps Douglas will give us further insights into Worthington's motives, as well as his own motives. I released this statement to the press today on the letterhead of Simoneaux & Frye, PLLC, the Houston law firm to which I serve Of Counsel: For Immediate Release STATEMENT OF DOUGLAS CADDY, ATTORNEY FOR JACK WORTHINGTON, ON THE VANITY FAIR ARTICLE THAT CLAIMS MR. WORTHINGTON MAY BE THE SON OF JOHN F. KENNEDY Soon after his mother informed him that he was JFK’s son, Mr. Worthington retained me in August 2006 to represent him in gathering DNA evidence to support the claim. He did so because of his knowledge of my prior legal representation of clients such as Howard Hunt, Gordon Liddy, Billie Sol Estes and Barr McClellan. We soon came to the conclusion that we would need strategic assistance in this effort. We decided to enlist Vanity Fair magazine. On October 3, 2006 I wrote to Graydon Carter, editor of Vanity Fair, on the letterhead of Simoneaux and Frye, the Houston law firm of which I am Of Counsel. Soon thereafter David Friend, Editor, Creative Development for Vanity Fair, responded. As a result, a meeting was held in November 2006 in the NYC at Vanity Fair. Present were Graydon Carter, David Friend, Sharon Bush (a close friend of Mr. Worthington), Jerry Simoneaux and myself. The Vanity Fair article is the end product that began with that meeting. On the evening preceding the meeting Jerry Simoneaux and I visited with Mr. Worthington at the Harvard Club. Afterwards Mr. Simoneaux and I agreed that seeing and talking to Mr. Worthington was an “electrifying” experience as his appearance and demeanor are indeed reminiscent of JFK. Mr. Worthington has had successful business career. Last year he took up residence in British Columbia. During the prior 20 years he lived in 8 countries and worked literally throughout the world in senior executive management roles where he enjoyed high credibility in mergers and acquisitions of international corporations. I wish to express my appreciation to two Houstonians who advised me in the preliminary interfacing with Vanity Fair. These are Ray Hill, a citizen activist, and Susan Bardwell, former crime reporter for the Houston Chronicle. I also want to call attention to an invaluable Internet source for information about the death of JFK. This is the “JFK Assassination Debate” that is administered by the distinguished British historian, John Simkin, which can be found at http://educationforum.ipbhost.com/

http://www.vanityfair.com/politics/feature...8/04/jack200804

Burke's Peerage: Queen Elizabeth II Descended from the Prophet Muhammad www.juancole.com February 29, 2008 I was surprised that the writers of comments over at Salon.com did not know the below. It is common knowledge to anyone interested in genealogy. I know that it is hard for people invested in a hard East/ West dichotomy to imagine that the icon of Western civilization, the British royal family, has Arab Muslim antecedents (along with a host of other nationalities of course.) But it does. The Greater Mediterranean got all mixed up over millennia. Most Sicilians (i.e. most Italian-Americans) also have Arab Muslim ancestors. It works the other way around, too. It is obvious that a lot of Egyptians, Lebanese and Jordanians have descent from the Christian European Crusaders. This is connected to just pointing out that having ancestors named Hussein is more common among Europeans and Americans than is usually realized. Elizabeth II can't be descended from the Prophet Muhammad without also being descended from his grandson, the original Husayn / Hussein, since that is the line of descent of the Sayyids. 'United Press International October 10, 1986 MOSLEMS IN BUCKINGHAM PALACE Mixed in with Queen Elizabeth's blue blood is the blood of the Moslem prophet Mohammed, according to Burke's Peerage, the geneological guide to royalty. The relation came out when Harold B. Brooks-Baker, publishing director of Burke's, wrote Prime Minister Margaret Thatcher to ask for better security for the royal family. ''The royal family's direct descent from the prophet Mohammed cannot be relied upon to protect the royal family forever from Moslem terrorists,'' he said. Probably realizing the connection would be a surprise to many, he added, ''It is little known by the British people that the blood of Mohammed flows in the veins of the queen. However, all Moslem religious leaders are proud of this fact.'' Brooks-Baker said the British royal family is descended from Mohammed through the Arab kings of Seville, who once ruled Spain. By marriage, their blood passed to the European kings of Portugal and Castille, and through them to England's 15th century King Edward IV. '

I believe that the Appreciation published on the editorial page of The New York Times strikes the right note concerning the life of William F. Buckley, Jr. That said, I cannot help but also believe that in his heart of hearts as his life drew to an end he was appalled that his/our conservative movement had been captured by sociopaths and opportunists whose evil actions have adversely affected to an degree beyond measurement the citizens in every country in the world. APPRECIATIONS William F. Buckley Jr. By ROBERT B. SEMPLE Jr. Editorial Page The New York Times February 28, 2008 When William F. Buckley Jr.’s “God and Man at Yale” appeared in 1951, the critic and conservative sage Peter Viereck dismissed it as jejune, a word much favored by Mr. Buckley in his later years to describe views he regarded as uninformed by experience. Mr. Buckley’s fierce denunciation of collectivism and atheism on the Yale faculty was all to the good, Mr. Viereck said, but it fell far short of the “profound” conservative manifesto that needed to be written. To do that, Mr. Buckley — who was one year out of Yale, where he had thundered away on the editorial pages of the Yale Daily News — would have to marinate in the paradoxes of the human condition and endure “the dark night of the soul.” Only then could he aspire to parity with great conservative thinkers like Edmund Burke, Benjamin Disraeli and Winston Churchill. When the news arrived Wednesday of Mr. Buckley’s death at the age of 82, the image that jumped to mind was not of dark nights of the soul (though for all I know he may have endured them) but of a witty and gracious man who enjoyed sailing, skiing, writing, good food and drink, Latinate constructions and strenuous debate. He had a mischievous sense of humor and must surely have laughed when he heard himself mentioned in the same sentence as Burke or Disraeli. His views — an amalgam of Friedrich Hayek’s free-market economics, Russell Kirk’s cultural conservatism and Whittaker Chambers’s anti-Communism — were hardly original. What was pioneering was his insistence on giving conservatism as he saw it a voice and a forum. That was National Review, the magazine that Mr. Buckley founded in 1955. There he fanned a very small flame that, over time, gave the country the Young Americans for Freedom, who gave it Barry Goldwater, who in turn laid the groundwork for Ronald Reagan. There are not many issues on which Mr. Buckley and this page agreed or would agree — except, perhaps, the war in Iraq, which Mr. Buckley regretted as “unrealistic” and “anything but conservative.” Yet despite his uncompromising beliefs, Mr. Buckley was firmly committed to civil discourse and showed little appetite for the shrillness that plagues far too much of today’s political discourse. For a time back in the 1960s and ’70s, Mr. Buckley and the liberal columnist Murray Kempton were something of a traveling road show. And they were friends. Yale’s angry young man turned out to be not so angry after all. He hated most of what the liberals stood for. He didn’t hate them. ROBERT B. SEMPLE JR.

What We Still Don't Know About That Minot Nuke Incident General Welch's Whitewash By DAVE LINDORFF February 25, 2008 www.counterpunch.org http://www.counterpunch.org/lindorff02252008.html A new report on the August 30 incident in which six nuclear-armed advanced cruise missiles were effectively "lost" for 36 hours, during which time they were, against all regulations, flown in launch position mounted on a pylon on the wing of a B-52H Stratofortress, from Minot AFB in North Dakota across the continental US to Barksdale AFB in Louisiana, has left unanswered some critical questions about the event. Directed by retired Air Force Gen. Larry D. Welch, the task force's Report on the Unauthorized Movement of Nuclear Weapons found plenty wrong with the way the US military handles its nuclear weapons, but appears to have dealt lightly with the specific incident that sparked the inquiry-only giving it a few paragraphs. According to the report, when nuclear-capable missiles are placed onto a pylon assembly (in the case of the B-52, these pylons can hold six missiles), procedures call for a clear distinction to be made as to whether they are armed with nuclear weapons or with dud warheads. In the storage bunker, pylons with dud warheads are supposed to be encircled with orange cones like those used by highway repair crews, and placards announcing that the warheads are duds are supposed to be hung on all four sides. This reportedly was not done, leaving no distinction between one pylon containing six nuclear-armed missiles, and two others that had missiles carrying nukes. A second failure was in record keeping. According to regulations for handling nuclear weapons, every step in moving a nuke requires written verification and manual checking. When the weapons were taken from storage racks and installed on the missiles, there should have been written records, including the serial numbers of each warhead. When a breakout crew moved the nuclear-armed missiles on the pylon and passed it to a convoy crew for removal from the storage bunker to the airfield for mounting on the plane, there was supposed to be a visual verification of the warheads by the convoy crew, and another written record of the transfer of ownership. When the convoy crew handed over the pylon to the crew chief for mounting on the plane, there was supposed to be another warhead verification check by the crew chief and another written record. Finally, the aircrew was required to verify the payload, warhead by warhead. Reportedly, none of these steps were taken. In other words, there was a failure to check the payloads of the missiles not just once but at every step of the way-an astounding breakdown in controls and procedures, which at a minimum suggests that the US nuclear arsenal is as vulnerable to theft, extortion and nefarious misuse as those in the former Soviet Union or in Pakistan-not a pleasant thought. A third failure, more systemic, which was identified in this latest report, was a general decline-even a breakdown-in the decades-long tradition of high standards and professionalism in the US nuclear force itself. The Strategic Air Command, which oversaw all nuclear equipment, has been eliminated, and command and control of nuclear weapons have been integrated into the regular forces, right down to the storage of nuclear devices themselves, which are now routinely kept together with conventional warheads-a recipe for disaster not just because of the kind of confusion that allegedly led to the Aug. 30 incident, but also because of the possibility of accidents in which a non-nuclear device could detonate, scattering nuclear debris. Furthermore, the report documents that the nuclear force, once a prime career choice for advancement-minded military professionals, has become a dumping ground for mediocrity-a place where military personnel go to be forgotten. Pilots of B-52s, for example, no longer even get nuclear certified-so unlikely is it that they will be called upon to fly nuclear missions, the report states. The report is a catalog of failure and ineptitude, and should lead to a complete overhaul. But it is also failure itself. This is because as disastrous as the picture it paints of America's nuclear forces and handling procedures may be, the report also ignores the big questions that remain about the recent incident which led to the Welch investigation in the first place. Primary among these questions is why, if all the various teams that handled the six nuclear-tipped Advanced Cruise Missiles up at Minot, from the guards and handlers in the storage bunker to the pilots, failed to note that the warheads on the missiles were nukes, was the ground crew that went out onto the tarmac to service the plane after it landed at Barksdale able to spot them and identify them as nukes almost immediately upon arriving at the plane? After all, the personnel at Minot knew they were handling weapons in a bunker, and coming from a bunker, that stored nuclear weapons, and so should have been on alert to the possibility. The crew at Barksdale, however, had absolutely no reason to expect nuclear weapons. Not only was the delivery of these cruise missiles to Barksdale part of a long, on-going routine process of ferrying the obsolete weapons in for decommissioning and destruction. In addition, for the last 40 years, it has been against military rules to fly nuclear weapons over domestic airspace except in specially outfitted military cargo planes. That is to say, prior to this incident no B-52 or other bomber has carried a nuclear weapon in launch position over US territory since 1967! Given that history, one has to assume that the warheads on those six missiles on the pylon must have been literally screaming out that they were nukes, for the ground crew to have noticed. Surely Gen. Welch and his colleagues should have addressed the question of why those Barksdale workers were so easily able to spot the "mistake" while, allegedly, no one in the chain of possession of the weapons at Minot managed to do it. The position of the report was clearly, from the start, that this whole thing was a mistake. That is to say, it's conclusion was foreordained. But we should know from the incredible, bald-faced lie about the reason for shooting down a spy satellite last week-that it posed an environmental and health threat because of a relatively small 1000 lb. fuel tank containing toxic hydrazine fuel that allegedly could make it to earth and then pose a health threat-that Pentagon explanations are often dishonest, or deliberately confusing. (Hyrdazine is no more dangerous than many toxic chemicals, and for someone to seriously be put at risk, he or she would have to walk up to the smoking tank after it hit earth, and hang around the noxious vapours breathing them in for some time-something few people would be likely to do. Moreover, the probability of an explosive fuel tank making it through searing re-entry to ground without bursting and releasing the material harmlessly in the upper atmosphere was always negligeable. The explanation for the $60-million missile shot was clearly a cover-up of a Pentagon scheme to test its space-warfare capability without having to admit what it was doing.) Could the Minot nuke incident have been something other than a mistake? A careful reading of the Welch report-both what it says and what it fails to say-has to leave that question unanswered. Recall that back in August and September, the Bush/Cheney administration was, as it is now, ratcheting up the talk about an attack on Iran over its nuclear activities and over its alleged support for insurgent attacks on American troops in Iraq. While the military top brass, as well as the secretary of defense are known, for the most part, to oppose such plans, there certainly are some, particularly within the Air Force, who have a higher opinion of the effectiveness of airpower. Recall too that in the weeks and days prior to and immediately following the Aug. 30 Minot nuke incident, no fewer than six airmen associated with Minot, Barksdale and the B-52 fleet died either in vehicle accidents or alleged suicides. One of the two suicides involved a Minot airman whose job was guarding the base's nuclear weapons storage facilities. The Welch report doesn't even mention this strange cluster of deaths--none of which has even been investigated by the military, according to local police and medical examiners contacted. Could someone at the top level of government-perhaps the Vice President, who is particularly belligerent towards Iran-have attempted to set up an alternative chain of command to "spring" a few unaccounted for nukes for use in some kind of "false flag" or rogue operation that, were it to succeed, could set a war against Iran in motion? Barksdale AFB, it should be noted, bills itself as the main staging base for B-52s being sent overseas for Middle East duty. The way the Aug. 30 incident came to light, which was thanks to Air Force whistleblowers who contacted a reporter at the Military Times newspaper publishing office-makes such an idea seem at least plausible. Clearly, some uniformed personnel were so upset at what happened that they were willing to risk their military careers to go outside of the chain of command and alert the public in the only way they knew how. Clearly too, they were so distrustful of their superiors, right on up to the office of the Secretary of Defense, that they did not consider taking their information to anyone within the Pentagon. Maybe it's asking too much to expect a retired general, tasked to investigate this incident by the Secretary of Defense who himself was appointed by the White House, to look into such a theory, which after all if true would represent an act of treason. And yet, the failure of this report to at least explore the idea makes it into something of a cover-up. The obvious answer here is that Congress should be holding public hearings into the incident, and asking these tough questions. Incredibly, this has not happened. The Democratic-led Congress, here as in virtually every issue that has come before it (with the exception of steroids in professional sports!), has ducked its responsibility. In this case Congress has been content to let Air Force officials, behind closed doors, offer them information about the incident-which is a far cry from holding hearings where the officers would be grilled under oath about what they know. Given this gutless and irresponsible behavior by legislators who, I am sure, would be holding high-profile hearings had the same kind of incident occurred in Russia, China, or Pakistan, we are left having to hope that someone with real knowledge of what happened at Minot will come forward and tell the story to a reporter. For the record, I'm ready and waiting, pen in hand Dave Lindorff is the author of Killing Time: an Investigation into the Death Row Case of Mumia Abu-Jamal. His n book of CounterPunch columns titled "This Can't be Happening!" is published by Common Courage Press. Lindorff's newest book is "The Case for Impeachment", co-authored by Barbara Olshansky. He can be reached at: dlindorff@yahoo.com