Japan's Banks Halt Lending as Bounced Checks Rise to Record

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Japanese Banks Halt Lending as Bounced Checks Rise to Record

By Finbarr Flynn


Aug. 19 (Bloomberg) -- Japanese banks halted transactions with 12 percent more companies in July than a year earlier, the biggest increase since May 2007, as the firms issued checks that bounced. The number of companies in the Tokyo area cut off by banks rose to a two-year high.


The banks stopped doing business with 475 companies, whose liabilities rose 35 percent to 143.8 billion yen ($1.3 billion), the Japanese Bankers Association said in a statement yesterday. Banks stop lending to and doing business with companies that bounce checks twice within a six-month period.


The construction industry accounted for the largest share of companies that couldn't meet their obligations, at 38 percent. More than half of borrowers that didn't have sufficient funds for checks issued blamed it on a decline in sales, the statement said.


Japan's two largest banks, Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc., said profit declined by more than half in the first quarter ended June 30 as bad loans swelled in a slowing economy.
Urban Corp., a Japanese property developer, filed for bankruptcy on Aug. 13, becoming the country's largest corporate collapse this year with 255.8 billion yen of debt, forcing at least nine Japanese banks to say they may not be able to recover loans.


About 122 companies in Tokyo and three surrounding prefectures had their accounts suspended after checks bounced, the statement said, a 25 percent increase. The figure for companies in the Tokyo area is the highest since July 2006, the earliest for which comparable data was available. Liabilities at the companies rose 33 percent to 42.1 billion yen.

Putin calls for restoring position in Cuba

Aug 4, 2008

MOSCOW (AP) — Prime Minister Vladimir Putin is calling for Russia to regain its influential position in former Cold War ally Cuba, Russian news reports said Monday.

The statement comes amid persistent speculation about whether Russia is seeking a military presence in a country just 90 miles (150 kilometers) from the United States in response to U.S. plans to place missile-defense elements in Poland and the Czech Republic.

"We should restore our position in Cuba and other countries," Putin was quoted as saying by the Interfax news agency.

Putin spoke Monday while hearing a report on a recent Russian delegation's trip to Cuba. Vice Premier Igor Sechin and others met with the Cuban leadership and discussed an array of cooperation projects.

"We agreed on the priority for the direction of cooperation — energy, mining, agriculture transport, health care and communications," Sechin said, according to the RIA-Novosti news agency.

Military issues were not mentioned in the reports. But separately RIA-Novosti quoted an influential analyst and former top defense official as saying Russia could make a military return to Cuba.

"It is not a secret that the West is creating a 'buffer zone' around Russia, involving countries in central Europe, the Caucasus, the Baltic states and Ukraine," the agency quoted Leonid Ivashov, the head of the Academy of Geopolitical Problems, as saying. "In response, we may expand our military presence abroad, including in Cuba."

Russia opposes U.S. plans to put missile-defense elements in eastern Europe, saying the facilities are aimed at undermining Russia's missile potential. Russia has threatened an unspecified "military technical" response if the plans go through.

Last month, the Defense Ministry denied a major Russian newspaper's report that the country was considering placing nuclear-capable bombers in Cuba — a move that would have echoed the 1962 Cuban Missile Crisis.

Soviet nuclear missiles stationed in Cuba during the height of the Cold War pushed the world to the brink of nuclear conflict on Oct. 22, 1962, after U.S. President John F. Kennedy announced their presence to the world.

After a tense week of diplomacy, Soviet leader Nikita Khrushchev removed the missiles.

Credit Cards Replace Small Business Loans

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Credit Cards Replace Small Business Loans


August 20, 2008, 11:14AM EST

Credit-card issuers are aggressively targeting the trillion-dollar market in small business spending as commercial loans become harder to find

by John Tozzi


The 30% interest rate on their small business credit card shocked James and Heather Hills enough to stop using it entirely in April. The couple had turned to credit cards in early 2006 to get their Elgin (Ill.) startup, mhn Internet Marketing and PR, off the ground, after three loan officers told them that they wouldn't qualify for a bank loan without capital equipment to put up as collateral. So the Hills, who have no outside employees, took out a $50,000 home equity line of credit and two personally guaranteed small business credit cards.
They had a handle on their debt until a partner abandoned a planned joint venture in March 2007 and the Hills were left with almost $10,000 for the project on their Advanta (ADVNA) card. Since then, they say they've been late on a couple of payments, and their interest rate has steadily increased from 11.74% to 30.99%. "It suddenly starts being several hundred dollars worth of interest charges," James Hills says. Even without new purchases, they don't expect to pay off the remaining debt, still over $6,000, before 2009. (Advanta, citing privacy laws, declined to comment.)
Expensive Seed Money

While data on small business borrowing is scattered, indications show that entrepreneurs are increasingly relying on credit cards to finance their businesses, especially early-stage companies. The percentage of firms using credit cards has jumped from 16% in 1993 to 44% today, according to surveys by the National Small Business Association, a trade group. In the same period, the proportion using bank loans dropped from 45% to 28%.


A Federal Reserve survey showed that the percentage of firms using business credit cards jumped from 34% in 1998 to 48% in 2003. And numbers from the NSBA and the Fed show that between 20% and 30% of all small businesses carry a revolving credit-card balance, rather than paying their bills in full each month.



"We don't have an alternative right now," says NSBA chair Marilyn Landis, a former bank executive who now runs Basic Business Concepts, a financial consulting business. "If there were alternatives, business owners would go there." It's a particular problem for service or information companies that don't have equipment or inventory to secure commercial loans. In testimony before the Senate Small Business Committee in April, Landis described applying for bank lines of credit and receiving credit cards instead. But relying on cards, rather than on fixed-rate loans or credit lines, can saddle small companies with unexpected and expensive debt.
A Growth Market for Credit

Over the last decade, credit-card companies have courted small business owners as issuers try to expand beyond the saturated consumer card market. Some 12% of the 6 billion credit-card offers mailed each year promote small business credit cards, according to Mercator Advisory Group, an industry researcher. That's 720 million offers, or roughly 26 for each small firm in the U.S. "As issuers have discovered the small business segment, they have become fairly aggressive about getting small business cards into the hands of some very early-stage businesses," says Mercator analyst Ken Paterson.



That's because credit-card companies see small business as a fertile growth market. Visa (V) estimates that total small business spending in the U.S. hit $4.


7 trillion in 2007, but the volume charged on small business payment cards (including debit) is just $283 billion, according to Mercator's estimates. "As the bank card networks are fond of pointing out, there is plenty of room for growth just in displacing check volume," Paterson wrote in his report.



And more than other small business lending, the business credit-card market belongs to big banks. In 2005 the top 10 U.S. banks controlled 83% of the small business credit-card market, according to a report by research firm TowerGroup (which is owned by MasterCard (MA)). The same banks had just 32% of the Small Business Administration loan market (BusinessWeek.com, 5/14/0 and 14% of other small business lending. The shift has become more pronounced over the past year as banks battered by risky mortgage loans tighten lending standards.
In Lieu of Traditional Bank Loans

For some business owners, the easy access to credit-card debt does indeed provide crucial funding. Chris Mauzy applied for a bank loan last fall to start Zip Express Installation, a home electronics installation service. But the bank turned down the Minneapolis entrepreneur because he had no capital equipment to secure the loan, even though the loan officer was impressed by his business plan and experience as director of business development for Best Buy (BBY). "They were looking to fund a farm or a machine shop or something that is more traditional," he says.



So Mauzy got two American Express (AXP) business cards with no preset spending limit and began charging up to $30,000 to advertise and build a Web site. He paid the full balance each month as sales rolled in, and by the end of the year he had convinced an angel investor to fund him. In July, Zip Express closed a deal to provide installations nationwide for Target (TGT), and Mauzy expects to do $5.5 million worth of business in his first year. In retrospect, he says he's glad the bank turned him down, because doesn't have to pay the interest on a big loan.
Unstable Terms

While Mauzy is a success story, business owners who depend on credit cards for longer periods can get caught in the cards' slippery terms. "Credit-card contracts are not [traditional loan] contracts," says Landis, because unlike bank loans or lines of credit that are governed by loan agreements, credit-card issuers reserve the right to change the terms at any time. According to the NSBA's survey, a third of businesses using credit cards carried monthly balances of more than $10,000.



Landis says unpredictable interest rates on large balances make it impossible for business owners to finance growth with credit cards. She saw rates on one of her cards go from 4% to 28% and another card reduced her credit line, even though she didn't miss minimum payments or exceed her limit. "It's like trying to build a house with blocks that keep changing shape," says Landis.



Those carrying revolving balances also pay more to borrow. David Walker, a Georgetown professor researching the cost of credit for small businesses, found that smaller firms typically pay two or three times the prime rate, largely because they depend so heavily on credit cards. "They're shut out of all the markets that are lower cost," he says.



That makes sense to a certain extent. Small businesses are risky, and lending through credit cards allows banks to cover their risk by adjusting interest rates as the borrowers' credit profile changes. "This is the riskiest form of loan a bank can make. They have to charge money to get a return on that risk," says Ken Clayton, senior vice-president for card policy at the American Bankers Association, the industry trade group. "If this were a traditional loan that had collateral that backs it, it would be a lot easier to lock in rates."
Reining in Abuses

Regulations proposed by the Fed would rein in some of the most aggressive credit-card practices, including changing rates on existing balances and applying payments in ways that maximize interest charges. But the changes would apply only to personal credit cards, not the growing number of small business cards, even though they often function the same way.



James Hills says he is still shocked when he looks at his books to see how much credit-card debt has cost his business. "Even though we pay quite a bit, they keep raising the interest rates, which makes it even harder to pay off," he says. "Virtually tripling the interest rate from the starting rate to now, that's just amazing that they're able to do that."

FEMA phones hacked; calls made to Mideast, Asia

By EILEEN SULLIVAN, Associated Press WriterWed Aug 20, 6:58 PM ET

A hacker broke into a Homeland Security Department telephone system over the weekend and racked up about $12,000 in calls to the Middle East and Asia.

The hacker made more than 400 calls on a Federal Emergency Management Agency voicemail system in Emmitsburg, Md., on Saturday and Sunday, according to FEMA spokesman Tom Olshanski.

FEMA is part of Homeland Security, which in 2003 put out a warning about this very vulnerability.

The voicemail system is new and recently was installed. It is a Private Branch Exchange, or PBX, a traditional corporate phone network that is used in thousands of companies and government offices. Many companies are moving to a higher tech version, known as Voice Over Internet Telephony.

This type of hacking is very low-tech and "old school," said John Jackson, a St. Louis-based security consultant. It was popular 10 to 15 years ago. Telecommunications security administrators now know to configure security settings, such as having individual users create unique passwords and not continue to use the password assigned to users in the initial setup.

"In this case it's sort of embarrassing that it happened to FEMA themselves — FEMA being a child of DHS, with calls going to the Middle East," Johnson said.

Afghanistan, Saudi Arabia, India and Yemen are among the countries calls were made to, Olshanski said. Most of the calls were about three minutes long, but some were as long as 10 minutes.

Sprint caught the fraud over the weekend and halted all outgoing long-distance calls from FEMA's National Emergency Training Center in Emmitsburg.

FEMA's chief information officer is investigating who hacked into the system and where exactly the calls were placed to. At this point it appears a "hole" was left open by the contractor when the voicemail system was being upgraded, Olshanski said. Olshanski did not know who the contractor was or what hole specifically was left open, but he assured the hole has since been closed.

In 2003, Homeland Security and the FBI investigated multiple reports about private industry being breached by these types of hackers.

"This illegal activity enables unauthorized individuals anywhere in the world to communicate via compromised U.S. phone systems in a way that is difficult to trace," according to a department information bulletin from June 3, 2003.

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Associated Press writer Ted Bridis contributed to this report.

Heineken Discovers Flickr Isn’t Full Of Free Photography


The incident below can serve as an important warning to corporations that mistakenly think Flickr photographers won’t jump your shit if you infringe upon their copyright. Also, they should keep in mind, the cc license is virtually worthless in protecting you, if you mistakenly believe those photos can be used for free, because it can be revoked at any time (Dan Heller explains here).


One of the photographers who’s work was stolen, Richard Sharman, sent me the following:


A website run by brewing giant Heineken was leeching hundreds, if not thousands of copyright photos through the flickr API and posting them to promote the Oxegen music festival in Ireland.


The website at, www.heinekenmusic.ie was pulled after Heineken Music Ireland started receiving demands for payment from photographers for the unauthorized commercial use of copyright material.


There is active discussion about this at several flickr groups including (here) that was set up specifically to discuss the matter. There are a number of screenshots there of the website and the use of copyright images.


There was a comment on their blog which appears to come from within the company about the problem with the heinekenmusic.ie website:


Normally our player should’ve only display photos with commercial CC license, he’re gone something terribly wrong and we’ve currently disabled the flickr photos module on the player. We’re currently looking into the thread on Flickr and see what we can do for the photographers …
I’m sorry if we’ve offended photographers …


Finally, it appears that Heineken is sending settlement emails to the photographers who contacted them with the following offer: “Accordingly, we would be willing to pay in full and final settlement an amount of €15 per image allegedly used” which might get a few to go away but no those who make a living shooting pictures.


You have been warned.

Rain Rain go away, come on back another day!....

From a trip to Houston I made over the weekend....

VANCOUVER, B.C. – The U.S. financial crisis has cut so deep – and the government has taken on so much debt in misguided attempts to bail out such companies as Fannie Mae ( FNM ) and Freddie Mac ( FRE ) – that even larger financial shocks are still to come, global investing guru Jim Rogers said in an exclusive interview with Money Morning .
Indeed, the U.S. financial debacle is now so ingrained – and a so-called “Super Crash” so likely – that most Americans alive today won't be around by the time the last of this credit-market mess is finally cleared away – if it ever is, Rogers said.


The end of this crisis “is a long way away,” Rogers said. “In fact, it may not be in our lifetimes.”
During a 40-minute interview during a wealth-management conference in this West Coast Canadian city last month, Rogers also said that:

• U.S. Federal Reserve Chairman Ben S. Bernanke should “resign” for the bailout deals he's handed out as he's tried to battle this credit crisis.
• That the U.S. national debt – the roughly $5 trillion held by the public– essentially doubled in the course of a single weekend because of the Fed-led credit crisis bailout deals.
• That U.S. consumers and investors can expect much-higher interest rates – noting that if the Fed doesn't raise borrowing costs, market forces will make that happen.
• And that the average American has no idea just how bad this financial crisis is going to get.

“The next shock is going to be bigger and bigger, still,” Rogers said. “The shocks keep getting bigger because we keep propping things up … [and] bailing everyone out.”
Rogers first made a name for himself with The Quantum Fund, a hedge fund that's often described as the first real global investment fund, which he and partner George Soros founded in 1970. Over the next decade, Quantum gained 4,200%, while the Standard & Poor's 500 Index climbed about 50%.
It was after Rogers "retired" in 1980 that the investing masses got to see him in action. Rogers traveled the world (several times), and penned such bestsellers as "Investment Biker" and the recently released " A Bull in China ." And he made some historic market calls: Rogers predicted China's meteoric growth a good decade before it became apparent and he subsequently foretold of the powerful updraft in global commodities prices that's fueled a year-long bull market in the agriculture, energy and mining sectors.
Rogers' candor has made him a popular figure with individual investors, meaning his pronouncements are always closely watched. Here are some of the highlights from the exclusive interview we had with the author and investor, who now makes his home in Singapore:
Keith Fitz-Gerald (Q): Looks like the financial train wreck we talked about earlier this year is happening.
Jim Rogers: There was a train wreck, yes. Two or three – more than one, as you know. [U.S. Federal Reserve Chairman Ben S.] Bernanke and his boys both came to the rescue. Which is going to cover things up for a while. And then I don't know how long the rally will last and then we'll be off to the races again. Whether the rally lasts six days or six weeks, I don't know. I wish I did know that sort of thing, but I never do.
(Q): What would Chairman Bernanke have to do to “get it right?”
Rogers : Resign.
(Q): Is there anything else that you think he could do that would be correct other than let these things fail?
Rogers: Well, at this stage, it doesn't seem like he can do it. He could raise interest rates – which he should do, anyway. Somebody should. The market's going to do it whether he does it or not, eventually.
The problem is that he's got all that garbage on his balance sheet now. He has $400 billion of questionable assets owing to the feds on his balance sheet. I mean, he could try to reverse that. He could raise interest rates. Yeah, that's what he could do. That would help. It would cause a shock to the system, but if we don't have the shock now, the shock's going to be much worse later on. Every shock, so far, has been worse than the last shock. Bear-Stearns [now part of JP Morgan Chase & Co. ( JPM )] was one thing and then it's Fannie Mae ( FNM ), you know, and now Freddie Mac ( FRE ).
The next shock's going to be even bigger still. So the shocks keep getting bigger because we kept propping things up and this has been going on at least since Long-Term Capital Management . They've been bailing everyone out and [former Fed Chairman Alan] Greenspan took interest rates down and then he took them down again after the “ dot-com bubble ” shock, so I guess Bernanke could try to start reversing some of this stuff.
But he has to not just reverse it – he'd have to increase interest rates a lot to make up for it and that's not going to solve the problem either, because the basic problems are that America's got a horrible tax system, it's got litigation right, left, and center, it's got horrible education system, you know, and it's got many, many, many [other] problems that are going to take a while to resolve. If he did at least turn things around – turn some of these policies around – we would have a sharp drop, but at least it would clean out some of the excesses and the system could turn around and start doing better.
But this is academic – he's not going to do it. But again the best thing for him would be to abolish the Federal Reserve and resign. That'll be the best solution. Is he going to do that? No, of course not. He still thinks he knows what he's doing.
(Q): Earlier this year, when we talked in Singapore, you made the observation that the average American still doesn't know anything's wrong – that anything's happening. Is that still the case?
Rogers: Yes.
(Q): What would you tell the “Average Joe” in no-nonsense terms?
Rogers: I would say that for the last 200 years, America's elected politicians and scoundrels have built up $5 trillion in debt. In the last few weekends, some un-elected officials added another $5 trillion to America's national debt.
Suddenly we're on the hook for another $5 trillion. There have been attempts to explain this to the public, about what's happening with the debt, and with the fact that America's situation is deteriorating in the world.
I don't know why it doesn't sink in. People have other things on their minds, or don't want to be bothered. Too complicated, or whatever.
I'm sure when the [ British Empire ] declined there were many people who rang the bell and said: “Guys, we're making too many mistakes here in the U.K.” And nobody listened until it was too late.
When Spain was in decline, when Rome was in decline, I'm sure there were people who noticed that things were going wrong.
(Q): Many experts don't agree with – at the very least don't understand – the Fed's current strategies. How can our leaders think they're making the right choices? What do you think?
Rogers: Bernanke is a very-narrow-gauged guy. He's spent his whole intellectual career studying the printing of money and we have now given him the keys to the printing presses. All he knows how to do is run them.
Bernanke was [on the record as saying] that there is no problem with housing in America. There's no problem in housing finance. I mean this was like in 2006 or 2005.
(Q): Right.
Rogers: He is the Federal Reserve and the Federal Reserve more than anybody is supposed to be regulating these [financial institutions], so they should have the inside scoop, if nothing else.
(Q): That's problematic.
Rogers : It's mind-boggling. Here's a man who doesn't understand the market, who doesn't understand economics – basic economics. His intellectual career's been spent on the narrow-gauge study of printing money. That's all he knows.
Yes, he's got a PhD, which says economics on it, but economics can be one of 200 different narrow fields. And his is printing money, which he's good at, we know. We've learned that he's ready, willing and able to step in and bail out everybody.
There's this worry [whenever you have a major financial institution that looks ready to fail] that, “Oh my God, we're going to go down, and if we go down, the whole system goes down.”
This is nothing new. Whole systems have been taken down before. We've had it happen plenty of times.
(Q): History is littered with failed financial institutions.
Rogers: I know. It's not as though this is the first time it's ever happened. But since [Chairman Bernanke's] whole career is about printing money and studying the Depression , he says: “Okay, got to print some more money. Got to save the day.” And, of course, that's when he gets himself in deeper, because the first time you print it, you prop up Institution X, [but] then you got to worry about institution Y and Z.
(Q): And now we've got a dangerous precedent.
Rogers: That's exactly right. And when the next guy calls him up, he's going to bail him out, too.
(Q): What do you think [former Fed Chairman] Paul Volcker thinks about all this?
Rogers: Well, Volcker has said it's certainly beyond the scope of central banking, as he understands central banking.
(Q): That's pretty darn clear.
Rogers: Volcker's been very clear – very clear to me, anyway – about what he thinks of it, and Volcker was the last decent American central banker. We've had couple in our history: Volcker and William McChesney Martin were two.
You know, McChesney Martin was the guy who said the job of a good central banker was to take away the punchbowl when the party starts getting good. Now [the Fed] – when the party starts getting out of control – pours more moonshine in. McChesney Martin would always pull the bowl away when people started getting a little giggly. Now the party's out of control.
(Q): This could be the end of the Federal Reserve, which we talked about in Singapore. This would be the third failure – correct?
Rogers: Yes. We had two central banks that disappeared for whatever reason. This one's going to disappear, too, I say.
(Q): Throughout your career you've had a much-fabled ability to spot unique points in history – inflection points, if you will. Points when, as you put it, somebody puts money in the corner at which you then simply pick up.
Rogers: That's the way to invest, as far as I'm concerned.
(Q): So conceivably, history would show that the highest returns go to those who invest when there's blood in the streets, even if it's their own.
Rogers: Right.
(Q): Is there a point in time or something you're looking for that will signal that the U.S. economy has reached the inflection point in this crisis?
Rogers: Well, yeah, but it's a long way away. In fact, it may not be in our lifetimes. Of course I covered my shorts – my financial shorts. Not all of them, but most of them last week.
So, if you're talking about a temporary inflection point, we may have hit it.
If you look back at previous countries that have declined, you almost always see exchange controls – all sorts of controls – before failure. America is already doing some of that. America, for example, wouldn't let the Chinese buy the oil company , wouldn't let the [Dubai firm] buy the ports , et cetera.
But I'm really talking about full-fledged, all-out exchange controls. That would certainly be a sign, but usually exchange controls are not the end of the story. Historically, they're somewhere during the decline. Then the politicians bring in exchange controls and then things get worse from there before they bottom.
Before World War II, Japan's yen was two to the dollar. After they lost the war, the yen was 500 to the dollar. That's a collapse. That was also a bottom.
These are not predictions for the U.S., but I'm just saying that things have to usually get pretty, pretty, pretty, pretty bad.
It was similar in the United Kingdom. In 1918, the U.K. was the richest, most powerful country in the world. It had just won the First World War, et cetera. By 1939, it had exchange controls and this is in just one generation. And strict exchange controls. They in fact made it an act of treason for people to use anything except the pound sterling in settling debts.
(Q): Treason? Wow, I didn't know that .
Rogers: Yes…an act of treason. It used to be that people could use anything they wanted as money. Gold or other metals. Banks would issue their own currencies. Anything. You could even use other people's currencies.
Things were so bad in the U.K. in the 1930s they made it an act of treason to use anything except sterling and then by '39 they had full-exchange controls. And then, of course, they had the war and that disaster. It was a disaster before the war. The war just exacerbated the problems. And by the mid-70s, the U.K. was bankrupt. They could not sell long-term government bonds. Remember, this is a country that two generations or three generations before had been the richest most powerful country in the world.
Now the only thing that saved the U.K. was the North Sea oil fields, even though Prime Minister Margaret Thatcher likes to take credit, but Margaret Thatcher has good PR. Margaret Thatcher came into office in 1979 and North Sea oil started flowing. And the U.K. suddenly had a huge balance-of-payment surplus.
You know, even if Mother Teresa had come in [as prime minister] in '79, or Joseph Stalin, or whomever had come in 1979 – you know, Jimmy Carter, George Bush, whomever – it still would've been great.
You give me the largest oil field in the world and I'll show you a good time, too. That's what happened.
(Q): What if Thatcher had never come to power?
Rogers: Who knows, because the U.K. was in such disastrous straits when she came in. And that's why she came to power…because it was such a disaster. I'm sure she would've made things better, but short of all that oil, the situation would've continued to decline.
So it may not be in our lifetimes that we'll see the bottom, just given the U.K.'s history, for instance.
(Q): That's going to be terrifying for individual investors to think about.
Rogers: Yeah. But remember that America had such a magnificent and gigantic position of dominance that deterioration will take time. You know, you don't just change that in a decade or two. It takes a lot of hard work by a lot of incompetent people to change the situation. The U.K. situation I just explained…that decline was over 40 or 50 years, but they had so much money they could have continued to spiral downward for a long time.
Even Zimbabwe, you know, took 10 or 15 years to really get going into it's collapse, but Robert Mugabe came into power in 1980 and, as recently as 1995, things still looked good for Zimbabwe. But now, of course, it's a major disaster.
That's one of the advantages of Singapore. The place has an astonishing amount of wealth and only 4 million people. So even if it started squandering it in 2008, which they may be, it's going to take them forever to do so.
(Q): Is there a specific signal that this is “over?”
Rogers: Sure…when our entire U.S. cabinet has Swiss bank accounts. Linked inside bank accounts. When that happens, we'll know we're getting close because they'll do it even after it's illegal – after America's put in the exchange controls.
(Q): They'll move their own money .
Rogers: Yeah, because you look at people like the Israelis and the Argentineans and people who have had exchange controls – the politicians usually figured it out and have taken care of themselves on the side.
(Q): We saw that in South Africa and other countries, for example, as people tried to get their money out.
Rogers: Everybody figures it out, eventually, including the politicians. They say: “You know, others can't do this, but it's alright for us.” Those days will come. I guess when all the congressmen have foreign bank accounts, we'll be at the bottom.
But we've got a long way to go, yet.



http://www.marketoracle.co.uk/Article5931.html

It just gets better and better...

Russia cancels all military cooperation with NATO

Russia, apparently stung by NATO's condemnation of its military action in Georgia, plans to cease all military exercises with Norway and other NATO members.
News organization Aftenposten has received confirmation that Russian authorities informed the Norwegian Foreign Ministry Wednesday afternoon that officials in Moscow were about to send a "note" to Norway and all other countries that are members of the NATO military alliance.

The note, according to Aftenposten, will advise NATO members that Russia was immediately halting, cancelling or postponing all planned military cooperation with NATO's members.

Russia's relation to NATO would then be evaluated, reported Aftenposten.

The warning from Russia signals a further deterioration in relations between Russia and western nations.

It comes a day after NATO members meeting at a summit in Brussels criticized Russia's military aggression in Georgian territory and voted to suspend cooperation with NATO’s Russian council.

http://www.aftenposten.no/english/lo...cle2605909.ece

Reuters
Large U.S. bank collapse seen ahead
Tuesday August 19, 1:07 am ET
By Jan Dahinten

SINGAPORE (Reuters) - The worst of the global financial crisis is yet to come and a large U.S. bank will fail in the next few months as the world's biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff said on Tuesday.

"The U.S. is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say 'the worst is to come'," he told a financial conference.

"We're not just going to see mid-sized banks go under in the next few months, we're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks," said Rogoff, who is an economics professor at Harvard University and was the International Monetary Fund's chief economist from 2001 to 2004.

"We have to see more consolidation in the financial sector before this is over," he said, when asked for early signs of an end to the crisis.

"Probably Fannie Mae and Freddie Mac -- despite what U.S. Treasury Secretary Hank Paulson said -- these giant mortgage guarantee agencies are not going to exist in their present form in a few years."

Rogoff's comments come as investors dumped shares of the largest U.S. home funding companies Fannie Mae and Freddie Mac on Monday after a newspaper report said government officials may have no choice but to effectively nationalize the U.S. housing finance titans.

A government move to recapitalize the two companies by injecting funds could wipe out existing common stock holders, the weekend Barron's story said. Preferred shareholders and even holders of the two government-sponsored entities' $19 billion of subordinated debt would also suffer losses.

Rogoff said multi-billion dollar investments by sovereign wealth funds from Asia and the Middle East in western financial firms may not necessarily result in large profits because they had not taken into account the broader market conditions that the industry faces.

"There was this view early on in the crisis that sovereign wealth funds could save everybody. Investment banks did something stupid, they lost money in the sub-prime, they're great buys, sovereign wealth funds come in and make a lot of money by buying them.

"That view neglects the point that the financial system has become very bloated in size and needed to shrink," Rogoff told the conference in Singapore, whose wealth funds GIC and Temasek have invested billions in Merrill Lynch and Citigroup

In response to the sharp U.S. housing retrenchment and turmoil in credit markets, the U.S. Federal Reserve has reduced interest rates by a cumulative 3.25 percentage points to 2 percent since mid-September.

Rogoff said the U.S. Federal Reserve was wrong to cut interest rates as "dramatically" as it did.

"Cutting interest rates is going to lead to a lot of inflation in the next few years in the United States."

(Editing by Neil Chatterjee)

Not shooting alot lately...just trying to learn some new Photoshop skilz...

Tropical Storm Fay advisory number   1
500 PM AST Fri Aug 15 2008
...Tropical Storm Fay forms...sixth Atlantic storm of the season...
Reports from NOAA and Air Force Reserve hurricane hunter aircraft
indicate that the low pressure area over the Mona Passage became a
tropical storm as it moved into the eastern Dominican Republic.

At 5 PM AST...2100 UTC...the government of the Dominican Republic
has issued a Tropical Storm Warning for the Dominican Republic for
the entire north coast of the Dominican Republic and for the South
Coast east of San Pedro de macoris. A Tropical Storm Warning is
also in effect for the north coast of Haiti from gonaives
northward.  A Tropical Storm Warning means that tropical storm
conditions are expected within the warning area within the next 24
hours.

At 5 PM AST...2100 UTC...the government of Cuba has issued a
Tropical Storm Warning for the provinces of Guantanamo...Santiago
de Cuba...and Granma.

At 5 PM AST...2100 UTC...the government of Cuba has issued a
tropical storm watch for the provinces of Holguin and Las Tunas.  A
tropical storm watch means that tropical storm conditions are
possible within the watch area...generally within 36 hours.

For storm information specific to your area...including possible
inland watches and warnings...please monitor products issued
by your local weather office.

At 500 PM AST...2100 UTC...the center of Tropical Storm Fay was
located near latitude 18.5 north...longitude 69.4 west or about 35
miles... 55 km...east of Santo Domingo in the Dominican Republic and
about 395 miles...635 km...east-southeast of Guantanamo Cuba.

Fay is moving toward the west near 14 mph...22 km/hr.  A general
motion toward the west-northwest is expected during the next day or
so.  On the forecast track...the center of Fay will cross
Hispaniola tonight and Saturday...and pass near or over eastern
Cuba Saturday night and Sunday.

Maximum sustained winds are near 40 mph...65 km/hr...with higher
gusts...mainly over water to the north and east of the center.
Little change in strength is forecast during the next 24 hours.

Tropical storm force winds extend outward up to 85 miles...140 km
from the center.

Estimated minimum central pressure is 1008 mb...29.77 inches.

Tides of 1 to 2 feet feet above normal can be expected in the
warning area in areas of onshore flow.
Fay is expected to produce total rainfall accumulations of 4 to 8
inches over Hispaniola and eastern Cuba...with isolated maximum
amounts of 12 inches.  These rains may produce life-threatening
flash floods and mudslides.

Repeating the 500 PM AST position...18.5 N...69.4 W.  Movement
toward...west near 14 mph.  Maximum sustained winds...40 mph.
Minimum central pressure...1008 mb.

An intermediate advisory will be issued by the National Hurricane
Center at 800 PM AST followed by the next complete advisory at 1100
PM AST.

$$
Forecaster Beven

More on Invest 92 this AM...will wanna watch this one as I am about to go on a short road trip..although it should not affect my trip at all...Ships intensity model calling for hurricane strength within 48 hrs...

Invest 92...is sort of looking promising now...

"Love is a temporary madness, it erupts like volcanoes and then subsides. And when it subsides you have to make a decision. You have to work out whether your roots have so entwined together that it is inconceivable that you should ever part. Because this is what love is. Love is not breathlessness, it is not excitement, it is not the promulgation of promises of eternal passion, it is not the desire to mate every second minute of the day, it is not laying awake at night imagining the he is kissing every cranny of your body. That is just 'being in love', which any fool can do. Love itself is what is left over when being in love has burned away, and this is both an art and a fortunate accident."

We could never do this...would immediately be labeled as "baby killers"....

Russia Fires SS-21 Ballistic Missiles at the Republic of Georgia, Poland Agrees to Have US Missile Defense

    WASHINGTON, Aug. 14 /PRNewswire-USNewswire/ -- Riki Ellison, President
of the Missile Defense Advocacy Alliance (http://www.missiledefenseadvocacy.org),
issued the following statements about the situation in Europe concerning
Russia, Poland and the Republic of Georgia.



  "Over the last few days Russia has fired over two dozen SS-21 Ballistic
Short Range Missiles into the country of Georgia, integrating ballistic
missile strikes with their conventional military forces. The SS-21 is a
road mobile, solid fuel, single stage ballistic missile, which is
maneuverable in flight and carries a high-explosive warhead weighing up to
1060lbs. with 150 meter accuracy. It has a range of 43 miles. These
missiles have been used by the Russians tactically for psychological and
military targets as the Georgians do not have the capability to defend
against or defeat ballistic missiles.



  "The use of ballistic missiles by Russia in this conflict sends an
endorsement to the international community that the use of ballistic
missiles has value, thus propelling countries and terrorist organizations
to develop, purchase and continue to proliferate ballistic missiles. Modern
warfare continues to integrate and use ballistic missiles as a tactic.



  "This outward military aggression with the use of ballistic missiles
from Russia on a former USSR country sends a very serious message to all
former members of the Soviet Block, especially Poland, who today made an
agreement with the United States to host 10 U.S. ground-based missiles that
will protect the United States of America and most of Europe from ballistic
missiles. This agreement will also provide Poland with U.S. Patriot Missile
Defense Batteries that have the capability to defeat and defend against
short range ballistic missiles. Deploying a United States Strategic asset
that protects the national security of the United States in the Country of
Poland further enhances the security and sovereignty of Poland. 72% of the
American public supports this missile defense agreement with Poland. To
view the most recent public survey regarding missile defense at

  http://www.missiledefenseadvocacy.org and click on surveys."

SOURCE Missile Defense Advocacy Alliance

A point of view:

Today the New York Times reports that Russia is escalating its war with Georgia, “moving tanks and troops through the separatist enclave of South Ossetia and advancing toward the city of Gori in central Georgia” and even bombing parts of Tibilisi, the Georgian captial.
Russia’s increasing aggression is putting a spark into American neoconservatives. Today on the Times op-ed page, one of their leaders, William Kristol, claims the U.S. must “defend” Georgia’s sovereignty as a reward for its participation in Iraq, while the conservative Washington Times is calling for “maximum pressure” on Russia:

Bill Kristol: [Georgia] has had the third-largest military presence — about 2,000 troops — fighting along with U.S. soldiers and marines in Iraq. For this reason alone, we owe Georgia a serious effort to defend its sovereignty. Surely we cannot simply stand by as an autocratic aggressor gobbles up part of — and perhaps destabilizes all of — a friendly democratic nation.
Washington Times: It is in America’s interest to exert maximum pressure on Russia to withdraw its troops and halt the interference in Georgian territory. This latest act shows the need for greater resolve in establishing a European security system that can be an effective check on Russian power

Writing in the Washington Post today, Robert Kagan goes even further, suggesting that the Georgia-Russia conflict may be the start of World War III:

Do you recall the precise details of the Sudeten Crisis that led to Nazi Germany’s invasion of Czechoslovakia? Of course not, because that morally ambiguous dispute is rightly remembered as a minor part of a much bigger drama. […]
The mood is reminiscent of Germany after World War I, when Germans complained about the “shameful Versailles diktat” imposed on a prostrate Germany by the victorious powers and about the corrupt politicians who stabbed the nation in the back.

Like a good neoconservative, Kagan also links the Western response to the conflict and its wider policy towards Russia as “appeasement.”
Matthew Yglesias asks of Kagan’s World War II analogy: “If we launch a war with Russia — which would seem to be the point of busting out the analogy — then how are we going to find the time to launch wars with Iran and China?”

http://thinkprogress.org/2008/08/11/neocon-russia-war/

Camera Man's Blog from Gori
Thought some of you may be interested in this.

Reporting from a War Zone: Behind the Scenes at Russia-Georgia Conflict
by Viewer Services
By Mal James
Fox News International Cameraman

Gori, Georgia — Covering a war like this one is honestly to a degree like rolling dice, hoping that snake eyes does not come out. You assess every risk and decision rapidly and logically. Just how far do you push the envelope to get a picture or story. All intel amongst the Press Corps was that the town of Gori was a no go zone this morning, eve one of the major agencies was reported to have decided that since their armored car took an attack yesterday that they were nit going to risk it today.

But events change so quickly that the line in the sand shifts and your assessment and gut feel is that, yes go for it.

We arrived at the gas station overlooking Gori and saw smoke rising but it looked more like fires than military operations and every now and then a team would bundle into a car and head into the town. We have been into Gori everyday for the past four days and had the feel of the geography and lay of the land. Seeing a bus of people returning after fleeing we jumped in the car and drove in following the bus. The bus stopped and people got out and we jumped into the bus to film faces and emotions plus a piece to camera, then having chosen a woman we decided to follow her home filming the return with all the heart ache and emotions associated. I only ever knew her as the woman in green, because of the shirt she was wearing.

She had to go to the hospital where she worked to say hello and check in on friends, by now there was probably twenty or so Press in the courtyard of the hospital. When all of a sudden a simple text came through from a fellow journalist somewhere else to a friend.

It simply said three words:

GET OUT NOW

The adrenaline kicks in at such speed that decisions that could be work shopped on merit for hours and made in a millisecond.

The options of why are not discussed but with camera rolling we ran for the car, the greatest threat is of an air strike coming in and from that there is no escape. You do not form up into convoys or wait for stragglers the moment we were half in the car we were driving out fast, not a crazy speed but enough to make distance fast and back to relative safety, like the gas station we were bombed at yesterday seemed very safe.

The streets were empty as we sped out of town and then face to face we met them.

As I sit in the front seat to film out the window, the first of the Russian Armored Personnel Carriers came into my viewfinder, then a second then for the foreseeable future we had run into the Russian Army storming into Gori. If they had wanted to shoot us we were dead but speeding cars going the other way are given usually the right of fleeing.

You do not stop to think you film and pray that it will be alright, Steve gave the commentary and I filmed this was a defining moment in our coverage to date.

We rounded a bend and came to the Gas Station, to an enormous mass of Press who had missed the Russians entering because they had come down a road out of sight of the long lens.

You stop for a few minutes, and then the emotions of risk kick in.

http://onthescene.blogs.foxnews.com/...rgia-conflict/

BP Shuts Down Georgian Pipeline
Associated Press
August 12, 2008 10:52 a.m.

LONDON -- BP PLC said it shut down an oil pipeline that runs through Georgia on Tuesday as a precautionary measure, but added that it is unaware of any Russian bombings on pipelines in the region.

BP said the 90,000-barrel-a-day pipeline to Supsa on Georgia's Black Sea coast from Baku in Azerbaijan will remain closed indefinitely.

• Putin Draws Line in the Sand1
• Vote: How would you gauge the U.S. response?2
• Timeline: Troubled Neighbors3
4 Another pipeline operated by the London-based oil company in the former Soviet Republic, the larger Baku-Tbilisi-Ceyhan pipeline, is already out of action after a fire last week on its Turkish stretch. The BTC pipeline usually provides around 1 million barrels of Caspian crude to international markets.

BP spokesman Robert Wine said that the Baku-Supsa line was closed because it runs through the center of Georgia, where there was greater risk of conflict. However, he added that BP had no reports of damage to pipelines in Georgia, despite claims from some officials there that Russian forces had attacked the lines. "I think those reports out there are inaccurate," he said.

Turkish President Abdullah Gul also said Tuesday that fighting in Georgia hadn't damaged the Baku-Tbilisi-Ceyhan pipeline.


Georgian ports on the Black Sea are a main shipping point of Caspian Sea crude from Azerbaijan, Turkmenistan and Kazakhstan. More than 500,000 barrels leave these ports daily, and plans are afoot to expand capacity by an additional 200,000 barrels a day.

The Baku-Supsa pipeline was only reopened a few weeks ago after 18 months of inaction. It has the capacity to pump up to 150,000 barrels a day, but has recently been pumping around 90,000 barrels a day.

BP said it still has no time frame on the potential reopening of the Baku-Tbilisi-Ceyhan pipeline after it was damaged by a fire late last Tuesday. Kurdish rebels took responsibility for sabotaging the pipeline.

Workers for Botas International Ltd, which operates the BTC line, put out the fire on Monday and are expected to carry out a closer inspection of the damage over the coming days.

A third pipeline that runs to the Russian Black Sea port of Novorossiysk, which BP uses to export oil, but doesn't operate, remains open.

Mr. Wine said that there was still some production in oil fields in the Caspian Sea, but it had been reduced because of the pipeline closures.

Copyright © 2008 Associated Press

Russia seizes Georgia base, opens second front

By MISHA DZHINDZHIKHASHVILI, Associated Press Writer 3 minutes ago

TBILISI, Georgia - Russia opened a second front of fighting in Georgia on Monday, sending armored vehicles beyond two breakaway provinces and seizing a military base in the country's west, Georgia's Defense Ministry and a Russian official said.


The development indicates that Russian troops have invaded Georgia proper from the separatist province of Abkhazia while most Georgian forces are locked up in fighting around another breakaway region of South Ossetia.

Nana Intskerveli, the Defense Ministry's spokeswoman, said Russian armored personnel carriers rolled into the base in Senaki, about 20 miles inland from the Black Sea port of Poti.

In Moscow, a government official who spoke on condition of anonymity because he was not authorized to give his name, confirmed the move into Senaki and said it was intended to prevent Georgian troops from concentrating.

The move followed Russia's warning to Georgian forces west of Abkhazia to lay down arms or face a Russian military action. Senaki is located about 30 miles east of the Inguri River, which separates Abkhazia from Georgia proper.

The Russian move is certain to draw a strong condemnation from the West which has sharply criticized Russia's military response to Georgia's attack on South Ossetia as disproportionate.

The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is
Rapidly fadin'.
And the first one now
Will later be last
For the times they are a-changin'.

tbilisi • Russian warplanes staged bombing raids across Georgia yesterday as the conflict over South Ossetia escalated and diplomatic efforts mounted to halt what Tbilisi called a policy of "annihilation."

"What they are doing is nothing to do with conflict, it is about annihilation of a democracy on their borders," Georgian President Mikheil Saakashvili said in an interview with the BBC.

Thats our guy:

"Meanwhile, George Bush had a busy Saturday in Beijing, biking the Olympic mountain bike course, volleying with beach volleyball players, and posing with the US softball team. Of the course, Bush called it "really, really difficult," adding, "That's why I'm an amateur and they're Olympians." In general, Bush seemed to be in his element, that is, among people who see it as their jobs to work out all day. He did take time out at one point to tell reporters that he's "deeply concerned" about "a dangerous escalation in the crisis" in Georgia."

Jonathan Kimbrell's work was showing at The Cameron Gallery last night...

Jr Clark and company were providing entertainment

And our "Hostess with the Mostess" was trying to see to it that everyone had a good time - and at the same time sell some art...its a cryin shame that no one stepped up to the plate to help Carrie when she needed the help after all she did for "Second Saturday" in McKinney...but McKinney's loss has become Dragon Street's gain...there is a lesson here somewhere...but likely it will take people a while to realize it!

Its a little early to tell...but...Invest 92 is on the move...

Statement as of 10:00 am CDT on August 04, 2008

...Tropical Storm Warning extended westward...
At 10 am CDT...1500 UTC...the Tropical Storm Warning is extended
westward to Port Oconnor Texas. A Tropical Storm Warning is now in
effect from the mouth of the Mississippi River westward to Port
Oconnor.

A Hurricane Watch remains in effect from west of Intracoastal City
Louisiana to Port O'Connor Texas.

For storm information specific to your area...including possible
inland watches and warnings...please monitor products issued
by your local weather office.

At 1000 am CDT...1500z...the center of Tropical Storm Edouard was
located near latitude 28.2 north...longitude 90.6 west or about 160
miles...260 km...south-southeast of Lafayette Louisiana and about
265 miles...425 km...east-southeast of Galveston Texas.

Edouard is moving toward the west near 8 mph...13 km/hr. A turn to
the west-northwest is expected later today...which would bring the
center of Edouard very near the Upper Texas coast or the coast of
southwestern Louisiana by Tuesday morning.

Maximum sustained winds are near 45 mph...75 km/hr...with higher
gusts.  Some increase in strength is expected during the next 24
hours...and Edouard could be nearing hurricane strength before
reaching the coastline.

Tropical storm force winds extend outward up to 35 miles...55 km
from the center.

Estimated minimum central pressure is 1002 mb...29.59 inches.

A storm surge of 2 to 4 ft above normal tide levels can be expected
in the warning area in areas of onshore winds.

Edouard is expected to produce total rain accumulations of 3 to 5
inches in some Louisiana coastal counties and southeastern Texas.
Isolated maximum amounts of 10 inches are possible over
southeastern Texas.
Isolated tornadoes are possible over portions of southern Louisiana
and the Upper Texas coast later today and tonight.

Repeating the 1000 am CDT position...28.2 N...90.6 W.  Movement
toward...west near 8 mph.  Maximum sustained winds...45 mph.
Minimum central pressure...1002 mb.

An intermediate advisory will be issued by the National Hurricane
Center at 100 PM CDT followed by the next complete advisory at 400
PM CDT.

$$
Forecaster Franklin
 

Bulletin Tropical Storm Edouard Advisory Number 3
Nws Tpc/national Hurricane Center Miami Fl
Al052008 1000 Pm Cdt Sun Aug 03 2008

...hurricane Watch Issued As Edouard Continues Slowly Westward... At 10 Pm Cdt...0300 Utc...the Tropical Storm Warning Is Extended Westward To Cameron Louisiana. A Tropical Storm Warning Is Now In Effect From The Mouth Of The Mississippi River Westward To Cameron. A Tropical Storm Warning Means That Tropical Storm Conditions Are Expected Within The Warning Area Within The Next 24 Hours.

At 10 Pm Cdt...0300 Utc...the Tropical Storm Watch From West Of Intracoastal City To Port Oconnor Texas Is Replaced By A Hurricane Watch. A Hurricane Watch Means That Hurricane Conditions Are Possible Within The Watch Area...generally Within 36 Hours. For Storm Information Specific To Your Area...including Possible Inland Watches And Warnings...please Monitor Products Issued By Your Local Weather Office. At 1000 Pm Cdt...0300z...the Center Of Tropical Storm Edouard Was Located Near Latitude 28.1 North...longitude 88.5 West Or About 80 Miles...125 Km...south-southeast Of The Mouth Of The Mississippi River And About 390 Miles...630 Km...east Of Galveston Texas. Edouard Is Moving Toward The West Near 5 Mph...7 Km/hr. A Turn To The West-northwest With Some Increase In Forward Speed Is Expected On Monday...with A West-northwestward Motion Expected To Continue On Tuesday. By Tuesday Morning The Center Of Edouard Is Expected To Be Very Near The Upper Texas Coast Or The Coast Of Southwestern Louisiana.

Maximum Sustained Winds Are Near 50 Mph...85 Km/hr...with Higher Gusts. Some Increase In Strength Is Expected Tomorrow...and Edouard Could Be Nearing Hurricane Strength Before Reaching The Coastline. Tropical Storm Force Winds Extend Outward Up To 35 Miles...55 Km From The Center. Estimated Minimum Central Pressure Is 1002 Mb...29.59 Inches. A Storm Surge Of 2 To 4 Ft Above Normal Tide Levels Can Be Expected In The Warning Area In Areas Of Onshore Flow.

Edouard Is Expected To Produce Total Rain Accumulations Of 2 To 4 Inches Along Portions Of The Louisiana Coast. Total Rain Accumulations Of 3 To 5 Inches...with Isolated Maximum Amounts Of 8 Inches Are Possible Over Southeastern Texas. Repeating The 1000 Pm Cdt Position...28.1 N...88.5 W. Movement Toward...west Near 5 Mph. Maximum Sustained Winds...50 Mph. Minimum Central Pressure...1002 Mb.

An Intermediate Advisory Will Be Issued By The National Hurricane Center At 100 Am Cdt Followed By The Next Complete Advisory At 400 Am Cdt.

$$ Forecaster Franklin

..Depression strengthens to a tropical storm...the fifth of the
season...
A Tropical Storm Warning remains in effect for the Louisiana coast
from the mouth of the Mississippi River westward to Intracoastal
City. A Tropical Storm Warning means that tropical storm conditions
are expected within the warning area within the next 24 hours.

A tropical storm watch remains in effect west of Intracoastal City
to Port Oconnor Texas. A tropical storm watch means that tropical
storm conditions are possible within the watch area...generally
within 36 hours.

For storm information specific to your area...including possible
inland watches and warnings...please monitor products issued
by your local weather office.

At 500 PM CDT...2200z...the center of Tropical Storm Edouard was
located near latitude 28.1 north...longitude 88.0 west or about 95
miles...155 km...southeast of the mouth of the Mississippi River and
about 420 miles...675 km...east of Galveston Texas.

Edouard is moving toward the west near 6 mph...9 km/hr...and
a general motion toward the west or west-northwest is forecast
during the next couple of days.  On the forecast track...the center
of the cyclone will move parallel to the Louisiana coast tonight
and Monday...and approach the Upper Texas coast on Tuesday.

Maximum sustained winds are near 45 mph...75 km/hr...with higher
gusts.  Some additional strengthening is forecast during the next 24
hours...and Edouard could be nearing hurricane strength before
landfall.

Tropical storm force winds extend outward up to 35 miles...55 km
from the center.

The latest minimum central pressure reported by reconnaissance
aircraft was 1002 mb...29.59 inches.

Tides of 2 to 4 ft above normal tide levels can be expected in the
warning area in areas of onshore flow.
Edouard is expected to produce total rain accumulations of 1 to 2
inches along the the Louisiana coast with possible isolated maximum
amounts of 3 inches. Once the system moves to the Upper Texas
coast...total rain accumulations of 2 to 4 inches with isolated
maximum amounts of 6 inches are possible over southeast Texas.

Repeating the 500 PM CDT position...28.1 N...88.0 W.  Movement
toward...west near 6 mph.  Maximum sustained winds...45 mph.
Minimum central pressure...1002 mb.

An intermediate advisory will be issued by the National Hurricane
Center at 700 PM CDT followed by the next complete advisory at 1000
PM CDT.

$$
Forecaster Franklin/Blake


 

FDIC warns four US banks over liquidity
By Sarah Mishkin in New York

Published: August 1 2008 23:42 | Last updated: August 1 2008 23:42

The Federal Deposit Insurance Corporation revealed on Friday that it had issued warnings to four small US banks that lacked sufficient reserves to cover potential loan losses.

The cease-and-desist orders issued in June said the four banks needed to raise more capital, expand their loss allowances and better oversee and diversify their loan portfolios. A fifth bank was cited for violating consumer protection laws.

Losses on mortages and other loans have helped bring down eight US banks this year, including one small Florida institution on Friday. Last month, Indymac, a California lender with $32bn in assets, became one of the largest banks to go under in US history. It filed for Chapter 7 bankruptcy protection on Friday.

The banks receiving cease-and-desist orders in June were MetroPacific Bank in Irvine, California; Bank Haven in Haven, Kansas; Clarkston State Bank in Clarkston, Michigan; and Hastings State Bank in Hastings, Nebraska.

Non-performing loans in Clarkston State’s portfolio nearly doubled to 4.6 per cent between the close of 2007 and the end of the first quarter of 2008, according to first-quarter earnings report released in April.

Clarkston State’s chief executive, J. Grant Smith, said in a statement accompanying first quarter earnings that ”business conditions remain weak and commercial loan demand is anemic.”

The FDIC instructed the banks to reevaluate their allowances for potential losses. MetroPacific in California was also told to stop issuing credit “for speculative construction and land development purposes.”

The fifth bank – Columbus Bank and Trust in Columbus, Georgia – received a cease-and-desist order because its credit card program violated consumer protection laws.

http://www.ft.com/cms/s/0/f52c86b4-6018-....

TROPICAL WEATHER OUTLOOK
NWS TPC/NATIONAL HURRICANE CENTER MIAMI FL 200 PM EDT SAT AUG 2 2008
style="font-family:verdana;"> FOR THE NORTH ATLANTIC...CARIBBEAN SEA AND THE GULF OF MEXICO...

1. A SURFACE TROUGH OF LOW PRESSURE ACCOMPANIED BY CLOUDINESS AND
SHOWERS HAS MOVED INTO THE NORTHEASTERN GULF OF MEXICO. LITTLE
MOTION IS ANTICIPATED TODAY OR SUNDAY...AND ENVIRONMENTAL
CONDITIONS APPEAR TO BE FAVORABLE FOR DEVELOPMENT DURING THE NEXT
DAY OR TWO. IF NECESSARY...A RECONNAISSANCE PLANE WILL INVESTIGATE
THE AREA ON SUNDAY.

2. THE AREA OF LOW PRESSURE OVER THE ATLANTIC LOCATED ABOUT ABOUT 1150 MILES EAST OF THE NORTHERN LEEWARD ISLANDS IS MOVING WESTWARD ABOUT 15 TO 20 MPH. THIS SYSTEM HAS BECOME A LITTLE BETTER ORGANIZED AND HAS THE POTENTIAL TO BECOME A TROPICAL DEPRESSION DURING THE NEXT DAY OR TWO BEFORE IT ENCOUNTERS UNFAVORABLE UPPER-LEVEL WINDS.

3. A SMALL AREA OF DISTURBED WEATHER ASSOCIATED WITH A TROPICAL WAVE IS CENTERED ABOUT 375 MILES SOUTHWEST OF THE SOUTHERNMOST CAPE VERDE ISLANDS. THERE ARE NO SIGNS OF A SURFACE CIRCULATION AT THIS TIME BUT THE ENVIRONMENT APPEARS TO BE CONDUCIVE FOR SLOW DEVELOPMENT DURING THE NEXT FEW DAYS AS THE DISTURBANCE MOVES WESTWARD AT 15 TO 20 MPH. ELSEWHERE...TROPICAL CYCLONE FORMATION IS NOT EXPECTED DURING THE NEXT 48 HOURS.

$$ FORECASTER AVILA