‘The World As We Know It Is Going Down’

‘The World As We Know It Is Going Down’

By Marc Pitzke in New York

Panic is the word of the hour on Wall Street. Now even Morgan Stanley is fighting for survival. The commercial bank Wachovia and China’s Bank Citic are being discussed as possible rescuers. The crisis has led President Bush to cancel a trip.

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For traders, now might just be the worst of times.


For traders, now might just be the worst of times.

The original plan actually called for humor. On Wednesday evening, actress Christy Carlson Romano was supposed to ring the closing bell on the floor of the New York Stock Exchange (NYSE) to mark her debut in the Broadway musical “Avenue Q.” She plays two roles on stage — a romantic kindergarten assistant, and a slutty nightclub singer.

After that day on the floor, the stock traders could have used a bit of comic relief. But it was not to be. Instead of Christy Carlson Romano, a NYSE employee in a joyless gray suit stood on the balcony and silently pressed a button. The bell rang and he disappeared. No waving, no clapping, none of the usual jubilation.

By the end of Wednesday, no one here was in the mood for laughter. The bad news on Wall Street was coming thick and fast. All the US indexes were crashing again after Tuesday’s brief and deceptive breather. In its wild, rollercoaster ride, the Dow Jones lost about 450 points, which was almost as much as it lost on Monday, the most catastrophic day on US markets since 2001.

Investors were turning their back to the market in droves and fleeing to safer pastures. The price of gold broke its record for the highest increase in a one-day period.

Panic Is the Word of the Hour

Traders abandoned the NYSE temple visually defeated and immune to the TV crews waiting. The disastrous closing prices were flickering on the ticker above the NYSE entrance: American Express -8.4 percent; Citigroup -10.9 percent; JPMorgan Chase -12.2 percent. American icons, abused like stray dogs. Even Apple took a hit.

“I don’t know what else to say,” stammered one broker, who was consoling himself with white wine and beer along with some colleagues at an outdoor bar called Beckett’s. Ties and jackets were off, but despite the evening breeze, you could still make out the thin film of sweat on his forehead. His words captured the speechlessness of an industry.

Things got worse after the markets closed. Washington Mutual, America’s fourth-largest bank, announced that it had started the process of putting itself up for sale. The Wall Street Journal reported that both Wells Fargo and the banking giant Citigroup were interested in taking over the battered American savings bank.

And then came the announcement that would dominate all of Thursday’s market activities: Morgan Stanley — the venerable Wall Street institution and one of the last two US investment banks left standing — had lost massive amounts and was fighting for survival. Media reports were saying that it was even in talks about a possible bail-out or merger. Rumor had it that possible suitors might include Wachovia or China’s Bank Citic.


“Folks,” economist Larry Kudlow, a host on the business channel CNBC begged his viewers that evening, “don’t give up on this great country!”

End of an Era

In fact, it really does look as if the foundations of US capitalism have shattered. Since 1864, American banking has been split into commercial banks and investment banks. But now that’s changing. Bear Stearns, Lehman Brothers, Merrill Lynch — overnight, some of the biggest names on Wall Street have disappeared into thin air. Goldman Sachs and Morgan Stanley are the only giants left standing. Despite tolerable quarterly results, even they have been hurt by mysterious slumps in prices and — at least in Morgan Stanley’s case — have prepared themselves for the end.

“Nothing will be like it was before,” said James Allroy, a broker who was brooding over his chai latte at a Starbucks on Wall Street. “The world as we know it is going down.”

Many are drawing comparisons with the Great Depression, the national trauma that has been the benchmark for everything since. “I think it has the chance to be the worst period of time since 1929,” financing legend Donald Trump told CNN. And the Wall Street Journal seconds that opinion, giving one story the title: “Worst Crisis Since ’30s, With No End Yet in Sight.”

But what’s really happening? Experts have so far been unable to agree on any conclusions. Is this the beginning of the end? Or is it just a painful, but normal cycle correcting the excesses of recent years? Does responsibility lie with the ratings agencies, which have been overvaluing financial institutions for a long time? Or did dubious short sellers manipulate stock prices — after all, they were suspected of having caused the last stock market crisis in July.

The only thing that is certain is that the era of the unbridled free-market economy in the US has passed — at least for now. The near nationalization of AIG, America’s largest insurance company, with an $85 billion cash infusion — a bill footed by taxpayers — was a staggering move. The sum is three times as high as the guarantee provided by the Federal Reserve when Bear Stearns was sold to JPMorgan Chase in March.

The most breathtaking aspect about this week’s crisis, though, is that the life raft — which Washington had only previously used to bail out the mortgage giants Fannie Mae and Freddie Mac — is being handed out by a government whose party usually fights against any form of government intervention. The policy is anchored in its party platform.

“I fear the government has passed the point of no return,” financial historian Ron Chernow told the New York Times. “We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have been doing in its wildest dreams.”

Bush Cancels Trip

The situation appears to be so serious that George W. Bush cancelled two domestic trips he had planned for Thursday on short notice. Instead, the president will remain in Washington to discuss the “serious challenges confronting US financial markets.” He said the president remained focused on “taking action to stabilize and strengthen the markets.” Bush had originally planned to travel to events in Florida and Alabama.

So far, the US presidential candidates have made few helpful remarks about the crisis other than the usual slogans. Both are vaguely calling for “regulation” and “reform” — bland catchphrases almost universally welcomed with applause.

Republican Party presidential candidate John McCain had the most to say. On Monday, he said “the foundation of our economy” was “strong,” adding that he opposed a government-led bailout of US insurer AIG. But now he’s promising further government steps “to prevent the kind of wild speculation that can put our markets at risk.” McCain’s explanation for the current crisis: “unbridled corruption and greed.”

But Democratic presidential hopeful Barack Obama didn’t move past superficialities, either. “We’re Americans. We’ve met tough challenges before and we can again.”

What else are they supposed to say? After all, US presidents have very little influence on stockmarkets. And Wall Street is expecting the status quo for the next president. On Wednesday an almost palpable mix of tension and melancholy filled the air above New York’s Financial District. The beloved trader bar Bull Run was half empty, and many tables were free at fine-dining establishments like Cipriani, Mangia and Bobby Van’s, which are normally booked days in advance.

At the side entrance to Goldman Sachs on Pearl Street, limo chauffeurs sat waiting for their customers, still above in their office towers cowering over the accounts. “If they go under,” said Rashid Amal, who works as a chauffeur for a firm called Excelsior, “then I will soon be out of a job, too.”


Think we’re tough? Think again

Think we’re tough? Think again

By Mark Drolette

Last month, in her article “Dear World,” Naomi Wolf appealed to the global community to save itself by confronting America.

A quote: “We Americans are either too incapable, or too dysfunctional, to help ourselves right now. Like drug addicts or the mentally ill who refuse treatment, we need our friends to intervene. So remember us as we were in our better moments, and take action to save us — and the world — from ourselves.”

Wimpy-sounding, eh? I thought so, too. And I should know, since I wrote something similar three years ago in a piece called, interestingly enough, “Dear Fellow Citizens of the World . . .”

Addressing our “non-American brothers and sisters,” I said, “[D]o not enable the U.S., for you know that wantonly destructive alcoholic relative who absolutely refused to get help until everyone in your family finally cut off all avenues of assistance? Well, just try thinking of America that way; you know, sort of like a big version of your drunken, out-of-control Aunt Lurline, except with a few more aircraft carriers and nuclear warheads and a pathological urge to use them every so often.”

This isn’t to point out I scooped the esteemed Wolf (though I guess I just now have). Rather, it’s to assert that the long-cherished self-image we Americans have of being self-sufficient, mega-brave world-savers is dead as a goose (step). Given, especially, our inability/unwillingness to stop the criminal Bush regime, we’ve forfeited all claims to having the right stuff. Sure, we have a lot of right-wing stuff, but that’s kinda not the same.

When did we change? Did we change? Believers in the righteous American typically cite the heroics of U.S. soldiers during World War II. Whether that really was the “good war,” I’ll defer. I do know, however, that when, years ago, I peered up at the bluffs overlooking Normandy’s Omaha Beach and saw remnants of the German guns right there, it was nearly impossible comprehending anyone surviving D-Day. Thousands didn’t, but more kept coming anyway until a beachhead was forged, the beginning of the end for Hitler and the Nazis.

So, yeah, that took some guts.

Contrast that with the video I saw recently of an American troop in Iraq calmly firing on a taxi, apparently after his buddies had just shot up another vehicle. The narrating soldier breathlessly counts at least five “kills,” gloating: “Yeah, that’s how we do things in the sniper world.” A background voice yells, “Fuck you, Haji!” Granted, I don’t know the incident’s specific context, but I certainly know the overall one: the war is illegal. Therefore, regardless the “provocation,” every person in Iraq who has been killed by a U.S. soldier, or died as a result of the occupation/invasion, has been murdered — with the blood squarely traceable to America’s hands.

So now, we just spill guts.

Nonetheless, I’m sure if you look really, really hard, you may find some folks who consider those troops, and tons more like ’em, to be real Americans, cut from the same cloth as the super-patriot archetype so frequently portrayed and firmly established decades ago by John Wayne. I wonder, though, how many of them would know Wayne never served in the military, receiving not one but two deferments during World War II.

In other words, his persona was an illusion. And so, apparently, is the one we Americans have collectively assigned ourselves since childhood, that of liberty’s uncompromising defender who, upon sensing the slightest hint of mortal danger to the Constitution, would, along with a nation full of equally aroused fellow citizens, do whatever necessary to right the ship.

Don’t look now, but that ship has sunk.

Where were we, the people, as it foundered? Certainly, some fought desperately to save it, but it wasn’t enough as myriad others — paralyzed by fear, anesthetized by American Idol, cowed by a metastasizing police state, divided by media demagogues or busy at the mall — remained immobile. Or, worse, taunted those who wouldn’t.

We Americans can proclaim our toughness all we want, but action speaks louder than, well, inaction. We are inert, impotent. Thus, whether via “targeted government-led sanctions against the U.S. by civilized countries,” as Wolf suggests, or a nation-sized noogie vigorously applied by fed-up lands until Uncle Sam cries uncle, we need assistance reclaiming America from its ruling thugs.

It’s bizarre thinking one need no longer wonder how Hitler could have methodically installed the murderous machinery that fueled his insane fascism while Germans just stood by and watched, a madness that America, and others, finally helped stop.

Now, can the world stop ours?

Copyright 2008 © Mark Drolette. All rights reserved.

Dear World, Please Confront America

Is it possible to fall out of love with your own country? For two years, I, like many Americans, have been focused intently on documenting, exposing, and alerting the nation to the Bush administration’s criminality and its assault on the Constitution and the rule of law – a story often marginalized at home. I was certain that when Americans knew what was being done in their name, they would react with horror and outrage.

Three months ago, the Bush administration still clung to its devil’s sound bite, “We don’t torture.” Now, Physicians for Human Rights has issued its report documenting American-held detainees’ traumas, and even lie detector tests confirm they have been tortured. The Red Cross report has leaked: torture and war crimes. Jane Mayer’s impeccably researched exposé The Dark Side just hit the stores: torture, crafted and directed from the top. The Washington Post gave readers actual video footage of the abusive interrogation of a Canadian minor, Omar Khadr, who was seen showing his still-bleeding abdominal wounds, weeping and pleading with his captors.

So the truth is out and freely available. And America is still napping, worrying about its weight, and hanging out at the mall.

I had thought that after so much exposure, thousands of Americans would be holding vigils on Capitol Hill, that religious leaders would be asking God’s forgiveness, and that a popular groundswell of revulsion, similar to the nineteenth-century anti-slavery movement, would emerge. To paraphrase Abraham Lincoln, if torture is not wrong, nothing is wrong.

And yet no such thing has occurred. There is no crisis in America’s churches and synagogues, no Christian and Jewish leaders crying out for justice in the name of Jesus, a tortured political prisoner, or of Yahweh, who demands righteousness. I asked a contact in the interfaith world why. He replied, “The mainstream churches don’t care, because they are Republican. And the synagogues don’t care, because the prisoners are Arabs.”

It was then that I realized that I could not be in love with my country right now. How can I care about the fate of people like that? If this is what Americans are feeling, if that is who we are, we don’t deserve our Constitution and Bill of Rights.

Even America’s vaunted judicial system has failed to constrain obvious abuses. A Federal court has ruled that the military tribunals system – Star Chambers where evidence derived from torture is used against the accused – can proceed. Another recently ruled that the president may call anyone anywhere an “enemy combatant” and detain him or her indefinitely.

So Americans are colluding with a criminal regime. We have become an outlaw nation – a clear and present danger to international law and global stability – among civilized countries that have been our allies. We are – rightly – on Canada’s list of rogue nations that torture.

Europe is still high from Barack Obama’s recent visit. Many Americans, too, hope that an Obama victory in November will roll back this nightmare. But this is no time to yield to delusions. Even if Obama wins, he may well be a radically weakened president. The Bush administration has created a transnational apparatus of lawlessness that he alone, without global intervention, can neither roll back nor control.

Private security firms – for example, Blackwater – will still be operating, accountable neither to him nor to Congress, and not bound, they have argued, by international treaties. Weapons manufacturers and the telecommunications industry, with billions at stake in maintaining a hyped “war on terror” and their new global surveillance market, will deploy a lavishly financed army of lobbyists to defend their interests.

Moreover, if elected, Obama will be constrained by his own Democratic Party. America’s political parties bear little resemblance to the disciplined organizations familiar in parliamentary democracies in Europe and elsewhere. And Democrats in Congress will be even more divided after November if, as many expect, conservative members defeat Republican incumbents damaged by their association with Bush.

To be sure, some Democrats have recently launched Congressional hearings into the Bush administration’s abuses of power. Unfortunately, with virtually no media coverage, there is little pressure to broaden official investigations and ensure genuine accountability.

But, while grassroots pressure has not worked, money still talks. We need targeted government-led sanctions against the US by civilized countries, including international divestment of capital. Many studies have shown that tying investment to democracy and human rights reform is effective in the developing world. There is no reason why it can’t be effective against the world’s superpower.

We also need an internationally coordinated strategy for prosecuting war criminals at the top and further down the chain of command – individual countries pressing charges, as Italy and France have done. Although the United States is not a signatory to the statute that established the International Criminal Court, violations of Common Article 3 of the Geneva Conventions are war crimes for which anyone – potentially even the US president – may be tried in any of the other 193 countries that are parties to the conventions. The whole world can hunt these criminals down.

An outlaw America is a global problem that threatens the rest of the international community. If this regime gets away with flouting international law, what is to prevent the next administration – or this administration, continuing under its secret succession plan in the event of an emergency – from going further and targeting its political opponents at home and abroad?

We Americans are either too incapable, or too dysfunctional, to help ourselves right now. Like drug addicts or the mentally ill who refuse treatment, we need our friends to intervene. So remember us as we were in our better moments, and take action to save us – and the world – from ourselves.

Maybe then I can fall in love with my country again.


Vested Interests Drove New Pakistan Policy

by Gareth Porter

The George W. Bush administration’s decision to launch commando raids and step up missiles strikes against Taliban and al-Qaeda figures in the tribal areas of Pakistan followed what appears to have been the most contentious policy process over the use of force in Bush’s eight-year presidency.

That decision has stirred such strong opposition from the Pakistani military and government that it is now being revisited. Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, arrived in Pakistan Tuesday for the second time in three weeks, and US officials and sources just told Reuters that any future raids would be approved on a mission-by-mission basis by a top US administration official.

The policy was the result of strong pressure from the US command in Afghanistan and lobbying by the Special Operations Command (SOCOM) and the CIA’s operations directorate (DO), both of which had direct institutional interests in operations that coincided with their mandate.

State Department and some Pentagon officials had managed to delay the proposed military escalation in Pakistan for a year by arguing that it would be based on nearly nonexistent intelligence and would only increase support for the Islamic extremists in that country.

But officials of SOCOM and the CIA prevailed in the end, apparently because Bush and Vice President Dick Cheney believed they could not afford to be seen as doing nothing about bin Laden and al-Qaeda in the administration’s final months.

SOCOM had a strong institutional interest in a major new operation in Pakistan.

The Army’s Delta Force and Navy SEALS had been allowed by the Pakistani military to accompany its forces on raids in the tribal area in 2002 and 2003 but not to operate on their own. And even that extremely limited role was ended by Pakistani President Pervez Musharraf in 2003, which frustrated SOCOM officials.

Defense Secretary Donald Rumsfeld, whose antagonism toward the CIA was legendary, had wanted SOCOM to take over the hunt for bin Laden. And in 2006, SOCOM’s Joint Special Operations Command branch in Afghanistan pressed Rumsfeld to approve a commando operation in Pakistan aimed at capturing a high-ranking al-Qaeda operative.

SOCOM had the support of the US command in Afghanistan, which was arguing that the war in Afghanistan could not be won as long as the Taliban had a safe haven in Pakistan from which to launch attacks. The top US commander, Lt. Gen. Karl Eikenberry, worked with SOCOM and DO officers in Afghanistan to assemble the evidence of Pakistan’s cooperation with the Taliban. .

Despite concerns that such an operation could cause a massive reaction in Pakistan against the US war on al-Qaeda, Rumsfeld gave in to the pressure in early November 2006 and approved the operation, according to an account in the New York Times Jun. 30. But within days, Rumsfeld was out as defense secretary, and the operation was put on hold.

Nevertheless Bush and Cheney, who had been repeating that Musharraf had things under control in the frontier area, soon realized that they would be politically vulnerable to charges that they weren’t doing anything about bin Laden.

The July 2007 National Intelligence Estimate (NIE) was the signal for the CIA’s DO to step up its own lobbying for control over a Pakistan operation, based on the Afghan model – CIA officers training and arming a local militia while identifying targets for strikes from the air.

In a Washington Post column only two weeks after the NIE’s conclusions were made public, David Ignatius quoted former CIA official Hank Crumpton, who had run the CIA operation in Afghanistan after the Sep. 11, 2001 attacks, on the proposed DO operation: “We either do it now, or we do it after the next attack.”

That either-or logic and the sense of political vulnerability in the White House was the key advantage of the advocates of a new war in Pakistan. Last November, the New York Times reported that the Defense Department had drafted an order based on the SOCOM proposal for training of local tribal forces and for new authority for “covert” commando operations in Pakistan’s frontier provinces.

But the previous experience with missile strikes against al-Qaeda targets using predator drones and the facts on the ground provided plenty of ammunition to those who opposed the escalation. It showed that the proposed actions would have little or no impact on either the Taliban or al-Qaeda in Pakistan, and would bring destabilizing political blowback.

In January 2006, the CIA had launched a missile strike on a residential compound in Damadola, near the Afghan border, on the basis of erroneous intelligence that Ayman al-Zawahiri would be there. The destruction killed as many 25 people, according to local residents interviewed by The Telegraph, including 14 members of one family.

Some 8,000 tribesmen in the Damadola area protested the killing, and in Karachi tens of thousands more rallied against the United States, shouting “Death to America!”

Musharraf later claimed that the dead included four high-ranking al-Qaeda officials, including al-Zawahiri’s son-in-law. The Washington Post‘s Craig Whitlock reported last week, however, that US and Pakistani officials now admit that only local villagers were killed in the strike.

It was well known within the counterterrorism community that the US search for al-Qaeda leaders in Pakistan was severely limited by the absence of actionable intelligence. For years, the US military had depended almost entirely on Pakistan’s Inter-Services Intelligence Directorate, despite its well-established ties with the Taliban and even al-Qaeda.

One of the counterterrorism officials without a direct organizational stake in the issue, State Department counterterrorism chief Gen. Dell L. Dailey, bluntly summed up the situation to reporters last January. “We don’t have enough information about what’s going on there,” he said. “Not on al-Qaeda, not on foreign fighters, not on the Taliban.”

A senior US official quoted by the Post last February was even more scathing on that subject, saying “Even a blind squirrel finds a nut now and then.”

Meanwhile, the Pakistani military, reacting to the US aim of a more aggressive US military role in the tribal areas, repeatedly rejected the US military proposal for training Frontier Corps units.

The US command in Afghanistan and SOCOM increased the pressure for escalation early last summer by enlisting visiting members of Congress in support of the plan. Texas Republican Congressmen Michael McCaul, who had visited Afghanistan and Pakistan, declared on his return that was “imperative that US forces be allowed to pursue the Taliban and al-Qaeda in tribal areas inside Pakistan.”

In late July, according to the Times of London, Bush signed a secret national security presidential directive (NSPD) which authorized operations by special operations forces without the permission of Pakistan.

The Bush decision ignored the disconnect between the aims of the new war and the realities on the ground in Pakistan. Commando raids and missile strikes against mid-level or low-level Taliban or al-Qaeda operatives, carried out in a sea of angry Pashtuns, will not stem the flow of fighters from Pakistan into Afghanistan or weaken al-Qaeda. But they will certainly provoke reactions from the tribal population that can tilt the affected areas even further toward the Islamic radicals.

At least some military leaders without an institutional interest in the outcome understood that the proposed escalation was likely to backfire. One senior military officer told the Los Angeles Times last month that he had been forced by the “fragility of the current government in Islamabad,” to ask whether “you do more long-term harm if you act very, very aggressively militarily.”

CIA Murders Innocent People and Calls It “Tickling”

CIA using missile strikes to `tickle’ terrorists

WASHINGTON (AP) — The Central Intelligence Agency is using strikes against enemy targets to learn how the groups respond when attacked, the agency’s director said Wednesday.

Speaking at the Air Force Association’s annual conference, Michael Hayden said the clandestine agency is trying to “tickle” enemy groups to provoke a reaction, often with missile strikes targeting just an individual.

“We use military operations to excite the enemy, prompting him to respond. In that response we learn so much,” said Hayden, a retired Air Force general who has led the CIA since 2006.

Hayden said the CIA is working closely with the military in places such as Iraq’s Anbar province, where American troops have fought Sunni insurgents. That experience helped CIA officers develop a strategy to engage Sunni tribal leaders, which Hayden said has contributed to a recent drop in violence in Iraq.

The agency “picked up insights we would not have had” by working with American forces, Hayden said.

Hayden’s speech came on the final day of the Air Force conference, an annual gathering of mostly Air Force officials and defense contractors that supply the service. Hayden retired in July from the Air Force, where he had been head of the service’s intelligence office before leading the National Security Agency for a six-year run that ended in April 2005.

The CIA flies Predator drones, unmanned planes that can hover for hours and carry missiles for precision strikes. While not confirming those tactics, Hayden said that U.S. forces are now able to make pinpoint attacks against specific targets.

“Our pilots are targeting not structures, but individuals,” Hayden said.

Many of those strikes are now conducted along the Pakistan-Afghanistan border, where U.S. forces are hunting insurgents and terrorist groups that are believed to be using the loosely governed area as a base. For example, a suspected missile attack from a drone Wednesday in Pakistan killed at least six people.

Hayden said the CIA also was focusing more on sending agents to immerse themselves overseas in duty locations for longer periods of time. More than half of agency analysts have been hired since the attacks of Sept. 11, 2001.

But the U.S. education system has not responded to the latest threats in the way that it focused on the Soviet Union during the Cold War. Hayden said the agency needs more experts in non-Western cultures and languages.

“We have not seen the shift in academia for the current war that we saw for the previous war,” he said.

Militants blew up key bridge in NWFP

Militants blew up key bridge in NWFP
Wed, 17 Sep 2008 23:57:33 GMT

Militants have blown up a bridge on the Indus Highway in Pakistan’s Darra Adam Khel, cutting off the southern regions from Peshawar city.

The militants blew up the fourth link bridge near Shania Klay area Darra Adam Khel in the frontier region of Kohat on Wednesday.

Most southern parts of the North Western Frontier Province were cut off from Peshawar city due to the damage to the bridge, police and local sources said.

The main Indus Highway and Kohat Tunnel remained closed since 20 days ago when militants blew up a bridge near Abbas chowk.

People belonging to Southern parts of the province are facing severe problems because of the closure of Kohat Tunnel and Indus Highway.

Darra Adam Khal, FR Kohat is situated around 45 kilometers away from Peshawar, the provincial capital of North West Frontier Province.