TOON

Financial Zen

I woke up one morning late last week to the news that taxpayers, already $149 billion in the hole in the Treasury Department's TARP bailout program, are set to lose even more. As rescued banks now try to extricate themselves from the government's control, they must buy back stock warrants proffered at the time of the bailout, which, as the New York Times described it, offer "the right to purchase shares in each of the companies at roughly the price of their shares at the time of the deals."

As it happens, thanks largely to that taxpayer-funded bailout, bank stocks have risen since last fall's meltdown. Selling those warrants, then, should mean a tidy profit for taxpayers. But no such luck, it seems. Almost a dozen small banks have already bought back their warrants, and for a considerable discount -- a mere 66% of their value -- costing taxpayers upwards of $10 million. If this were to continue when giant firms like JPMorgan Chase, Goldman Sachs, and Morgan Stanley come up to bat, taxpayers could be out up to $2.1 billion. Think of that as a small potential thank-you note from the banking business to Americans for helping it out of a jam.

Right behind that bit of sprightly news was a report from the Associated Press that the giant insurance firm AIG, almost 80% owned by taxpayers, was now back in consultation with the Obama administration over just how much more it should pay out in further retention bonuses -- this after multi-millions in such bonuses were already paid -- including "about $235 million for employees at AIG's financial products unit." AIG's near collapse, added the AP, "was not due to its traditional insurance operations, but instead risky derivatives contracts written by the financial products division." In addition to those traders, for 40 top execs of the dismally failed company, there is to be a payout of a mere $9 million in further bonuses for 2008. What a comedown!

— from TomDispatch

CIA’s Lies About Secret Program Should Have Congress In Open Revolt

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July 10, 2009 - ThisCantBeHappening.net

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If this were the democracy that the Founding Fathers thought they were creating, word from CIA Director Leon Panetta that his agency had lied to Congress and specifically that it had lied repeatedly from 9-11-2001 through the end of 2008 concerning an as-yet undisclosed secret program, would have virtually every member of Congress in a state of rebellion, demanding answers.

After all, the CIA is required by law to report to at least the majority and minority leaders of the House and Senate Intelligence Committees and to the majority and minority leaders of both houses of Congress about such things.

But not only did the spy agency not report on what it was up to; it lied about what it was up to.

Now, given what we do know about the Bush/Cheney administration—that it initiated a massive campaign of spying on Americans by the Defense Department, the FBI, and the National Security Agency, as well as other intelligence agencies, that it initiated a campaign of torture of captives, including American citizens, while asserting that the President didn't even need to notify the courts or the public about the arrest, detention, torture or even execution of an American citizen if he, acting on his own, deemed that person to be an "enemy combatant," and given that we also know that Bush and Cheney lied repeatedly about the justification for their invasion of Iraq, and refused to be put under oath in their "interviews" by the 9-11 Commission, you would think the members of Congress, which was railroaded into supporting everything from the USA PATRIOT Act to the Iraq War invasion based on all these lies and deceptions, would be demanding answers
regarding this mysterious program.

Instead, we get vague expressions of concern, and promises of reform by congressional leaders like Rep. Steny Hoyer and House Speaker Nancy Pelosi, and by CIA Director Panetta.

And no explanation of the program in question, even though Panetta claims it was never actually implemented.

Why, we should be asking, would the CIA have lied for eight long years about the existence of a program that it never implemented?

Anyone who believes that nonsense should be a prime target of one of those Nigerian internet scammers. There's a lot of money to be made from such suckers.

My guess is that what is being hidden here was a massive spying campaign by the Agency against Americans and/or a dirty campaign of assassinations conducted on a national and international scale—one which would assuredly have led to many deaths of innocent people.

Given that we have learned, courtesy of the excellent reporting by New Yorker writer Seymour Hersh, is that Vice President Cheney personally oversaw the operation of a secret death squad operation, called the Joint Special Operations Command, allegedly led by Gen. Stanley McChrystal, now head of US operations in Afghanistan.

Given the timing of this big CIA lying campaign—it began immediately after 9-11, right when Cheney was saying that the US would need to turn to "the dark side"—it doesn't take much imagination to suspect that this is what it is all about.

Take a bunch of power-drunk people in the White House and the Pentagon, and a cowering Congress and an American public being deliberately frightened out of its wits, a new set of laws and executive orders that give the president and his subordinates dictatorial powers that would have made Saddam Hussein or Joseph Stalin envious, and it's a short step to a black campaign of terror, disappearances and executions.

All of this will eventually come to light, I am sure. But it is unlikely to come to light courtesy of the Congress, which is showing all the assertiveness of a field mouse. Nor is it likely to be exposed by the corporate media, which have long since thrown in the towel on serving as a Fourth Estate. And it sure won't come from the Obama administration, which is even opposing timid calls in Congress for a broader future requirement for notification of Congress about CIA activities and actions. When it comes to exposing the crimes and abuses of the Bush/Cheney years, the Obama administration has decided it likes what it saw, and wants to continue with the new executive powers and secrecy that it inherited.

So we'll have to wait for honest whistle-blowers and for the alternative media to find out the real story here.

Jefferson, Madison et all must be cringing in their coffins at the wreckage of their creation.

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Dave Lindorff is the author of Killing Time: an Investigation into the Death Row Case of Mumia Abu-Jamal. His new book of columns titled "This Can't be Happening!" is published by Common Courage Press. Lindorff's new book is "The Case for Impeachment," co-authored by Barbara Olshansky.

I've Seen 1,200 Torture Photos

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David Swanson
July 13, 2009 - The Smirking Chimp

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This moment, in which the Attorney General of the United States claims to be considering the possibility of allowing our laws against torture to be enforced seems a good one in which to reveal that I have seen over 1,200 torture photos and a dozen videos that are in the possession of the United States military. These are photographs depicting torture, the victims of torture, and other inhuman and degrading treatment. Several videos show a prisoner intentionally slamming his head face-first very hard into a metal door. Guards filmed this from several angles rather than stopping it.

The Special Broadcasting Service (SBS) of Australia revealed several of these photographs, video of the head slamming, and video of prisoners forced to masturbate, as part of a news report broadcast in 2006. But the full collection has not been made available to the public or to a special prosecutor, although it was shown to members of Congress in 2004. When these photos are eventually made public, I encourage you to take a good look at them. After you get over feeling ill, it might be appropriate to consider Congress' past 5 years of inaction. You'll be able to feel sick all over again.

In January 2004, the military seized photos and videos that were on computers and cell phones at Abu Ghraib prison in Iraq. Those related to the abuse of prisoners amounted, as far as I know, to those in the collection I've looked at. So, this collection does not include images of torture or mistreatment that may have taken place at Abu Ghraib after that date or at other locations at any time. I have reason to believe that such photos also exist in large quantity and depict types of abuses we have not yet seen.

Most people have seen fewer than 100 photographs from Abu Ghraib. I have posted online many of those that have been made public. These are not a bad representative sample of the whole, but they are far from complete. There are, among the more than 1,200 photos, images of prisoners and of military personnel that have not been published. There are gruesome scenes here that we have not publicly seen a single image of. And the images that we have seen are, in most cases, a single image or two from a long series of photos of an incident. In many cases, the collection includes multiple series of images from one event shot with multiple cameras. The public images have in many cases been cropped and/or censored to hide faces or genitals. In the uncropped versions there are, in some cases, additional people in the frame.

Were these Abu Ghraib photos all made public, but those from other times and places kept hidden, and were we unaware of the executive orders, Justice Department memos, presidential signing statements, congressional reports, Red Cross reports, presidential and vice presidential televised confessions, and so forth, the military could still claim this was the isolated work of a few "bad apples". But we would have a better understanding of what that work was. And making these images available to the public, or merely to a special prosecutor, would suggest an interest in seeking accountability for those responsible but not present in the photographs. On the other hand, hiding the evidence while prosecuting the soldiers who posed in some of the photos looks increasingly like scapegoating for the benefit of the Military Intelligence, CIA, and contractors who instructed the soldiers, as well as the commanders all the way up to the Secretary of Defense who
encouraged torture, the lawyers who sought to provide immunity, and the president and vice president who gave the authorizations. Remember, for Attorney General Eric Holder to decide that our laws against torture can be enforced, he does not need to wait until each new piece of evidence is revealed and then respond appropriately. He already has all of this evidence and much more that we know about but have not seen.

The over 1,200 images that I've seen add to some stories we've seen sketched out before. We've seen the body of murdered prisoner Manadel al-Jamadi packed in ice. We've seen Spc. Charles Graner posing with it, and Spc. Sabrina Harman doing the same. But the fuller collection shows the process of cleaning the body up. A giant gash in the top of the man's head is stitched up, his eye patched, etc. Photos, some of which have been made public, show floors covered with the blood of this victim.

We've also seen a few images (one, two, three) of a man attacked and bitten by dogs. But the larger series of photos shows us much more of the wounds on his legs and arms, as well as his identification number: 153863.

Another prisoner with an ID (153399) is shown missing a good portion of his head. This is one of a number of dead bodies shown in the photographs. SBS (the Australian news outlet) found an Army report on his death and concluded that these dead prisoners had likely been shot by guards during a riot or murdered by guards in other circumstances. Others have claimed mortar attacks from outside the prison are to blame.

Charles Graner and Sabrina Harman appear quite a bit in these photos, posing and smiling, but also tending to wounds. Private Lynndie England appears in a relative few, the ones we've seen with a thumbs up and pointing at masturbating prisoners. Other photos show additional military personnel. In one shot, Graner and two other male soldiers are putting a bag on a prisoner's head. In one shot a possible private contractor wears an ID badge.

There are lots of photos among the over 1,200 showing naked prisoners, sometimes chained to bunk beds or with their legs stuck through bars. There's a naked prisoner face-down on the ground with blood beside him, and with an MP on his back and two more watching.

We have previously seen and heard about a prisoner who had lost his sanity and covered himself with feces, earning the moniker "shit boy." In the larger collection, we see him naked in the shower from the front, wearing white latex gloves. We see him pinned between stretchers but also standing, sandwiched between foam mattresses chained on him like a robe, with bags tied over his hands, and in other positions. And he is reportedly the same man shown slamming his head against a door.

We see a naked, hooded prisoner standing on two MRE boxes and bent over. We see photos shot from a balcony of two prisoners sitting or squatting with their hands behind their heads, one of them on the floor and the other on an MRE box. We see a prisoner with his ID number written across his naked chest in red marker, and red marker smiley faces drawn on his nipples. (His number, obscured by his hood, is 200_ _ 4, where the first missing number is 1 or 7 and the second is 9 or 4.)

Of course, we also see the simulated electrocution photos of a hooded prisoner standing on an MRE box with wires attached to him. And we see a prisoner apparently forced to stick a banana in his anus. We see this young woman lifting her shirt up, but without the cropping, fuzzing, and blacked-out eyes. We see her together with another young woman. We see a bunch of photos of these young women posing, fully clothed. We see the first one clothed and posing with Spc. Sabrina Harman, both smiling. According to SBS the story is that the two prisoners were picked up on the charge of prostitution.

There are three photos of a little boy, naked, in a robe, and fully dressed. While it is very disturbing to see this little child's photos in the middle of this revolting collection, I have no idea what they are doing there or whether he was mistreated, or whether anyone was threatened with his mistreatment. But I do know that the leading lawyer who facilitated our national torture campaign and famously said that a U.S. president has the right to crush a child's testicles is a professor at a prestigious university, while his boss is sitting as a life-time judge in the Ninth Circuit because Congress refuses to impeach him. The current excuse for delay is that the Justice Department plans to release its internal report (from the Office of Professional Responsibility) very soon, just as it has been promising for many months. If Holder finally releases the report and simultaneously announces the appointment of a special prosecutor, two things must happen.

1. We must not allow Congress to delay impeachment of Bybee any longer with the new excuse that a criminal investigation is underway.

2. We must pressure the special prosecutor to act without delay and without considering anyone to be above the laws written by Congress.

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David Swanson is the author of the upcoming book "Daybreak: Undoing the Imperial Presidency and Forming a More Perfect Union" by Seven Stories Press and of the introduction to "The 35 Articles of Impeachment and the Case for Prosecuting George W. Bush" published by Feral House and available at Amazon.com. Swanson holds a master's degree in philosophy from the University of Virginia. He has worked as a newspaper reporter and as a communications director, with jobs including press secretary for Dennis Kucinich's 2004 presidential campaign, media coordinator for the International Labor Communications Association, and three years as communications coordinator for ACORN, the Association of Community Organizations for Reform Now. Swanson is Co-Founder of AfterDowningStreet.org, creator of ConvictBushCheney.org and Washington Director of Democrats.com, a board member of Progressive Democrats of America, the Backbone Campaign, and Voters for Peace, a member of
the legislative working group of United for Peace and Justice, and convener of the accountability and prosecution working group of United for Peace and Justice.

TOONS

Nano-Biotechnology

Nano means billionth, so a nanometer is a billionth of a meter. That is clearly very small: on this scale, a human hair is enormous at 100 000 nm across and even red blood cells are thousands of nanometers in diameter. But a DNA molecule, for example, is 2 nm wide. At this level, the properties of materials (electronic, optical, magnetic, etc.) can differ significantly from those at a larger scale, leading to many new possible applications. Nanotechnology is the design and production of materials, devices, and systems at this fundamental, molecular scale.

Nano Today

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Now, let's turn to the Guardian and its article, "Research on tiny particles could damage brain, scientists warn."

"It's too early to be alarmed, because we don't yet know what the particles might do in humans. We shouldn't stop working with them, we should just look for what adverse effects these particles might cause," said Oberdorster. The report is due to appear in the journal Inhalation Toxicology.

"This is the first documented evidence that an innocent particle like carbon, if it's small enough, can find its way into the brain," said Professor Ken Donaldson, a toxicologist at Edinburgh University. "The worry would be if the nanotechnology business designs nanoparticles which are fundamentally different from the ones which we are already exposed to, and seem to cope with reasonably well. If very different nanoparticles are manufactured, there's a concern that they might have a different effect in the body."

Nature is also concerned.

Little is known about what effect nanoparticles will have when they reach the brain. The toxicity of the nanoparticles that are currently being used to build prototype nanosized electronic circuits -- such as carbon nanotubes, which are produced in labs around the world -- has not been thoroughly assessed.

But Donaldson says that there is a growing feeling that other nanoparticles, such as those produced by diesel exhausts, may be damaging to some parts of our body. He estimates that people in cities take in about 25 million nanoparticles with every breath. These particles are believed to increase respiratory and cardiac problems, probably by triggering an inflammatory reaction in the lungs.

Now, more experiments are needed to determine how nanoparticles can enter our brains. In the mean time, let's hope that nanotechnology research will continue and will not be harmed by a moratorium.

Hooray!!!

While larger ills persist unabated, take heart that one small indignity of modern life may soon fade away: TV ads that scream BUY NOW! This week Congress will consider the Commercial Advertisement Loudness Mitigation Act, aka CALM, which would limit ads to the average decibel level of a show. An advertising spokesman says they've received enough complaints the industry might act on its own to bring the volume down.

- Common Dreams

Nobody Knows What Nanoparticles Do - Yet They Are in Your Food, Cosmetics, and Toys

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Not even the world's leading nanoscientists know what nanoparticles do inside the body or the environment.

Carole Bass
July 11, 2009 - E Magazine

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It's a beautiful summer day. You pull on your stain-resistant cargo shorts and odor-resistant hiking socks, gulp down an energy-boosting supplement, slather yourself with sunscreen and head out for a ramble in the woods. Are you poisoning yourself? When you get home, you jump in the shower and toss your clothes in the wash. Are you poisoning the environment? Maybe.

Your sunscreen, energy drink and high-tech clothing may be among the 800-plus consumer products made with nanomaterials: those manufactured at the scale of atoms and molecules. Sunscreen that turns clear on the skin contains titanium dioxide, an ordinary UV-blocker in extraordinarily small particles. Odor-eating socks are made with atoms of germ-killing silver. Supplement makers boast of amazing health effects from swallowing nanosolutions that are completely untested for effectiveness or safety. And that stain-repellant clothing? The manufacturer won't even tell you what nanomaterials are in it.

The problem is not just that you, the consumer, don't know what's in the products you use. The much bigger problem is that at the nanoscale, common substances behave in uncommon ways. And nobody--not even the world's leading nanoscientists--knows what nanoparticles do inside the body or in the environment.

Nanotechnology, a fast-growing global industry, is essentially unregulated. Advocates and independent scientists agree that we need to get ahead of the risks before it's too late. Some call for a moratorium on the riskiest nanoproducts. Some say we just need more research, and more protection for workers in the meantime. All are worried about unleashing a powerful new technology that could have vast unintended consquences. Nanomaterials are in food, cosmetics, clothing, toys and scores of other everyday products. Yet when it comes to trying to get a handle on them, we can't answer the most basic questions. What companies are using nanomaterials, and where? What kinds, and in what amounts? How much of the potentially hazardous stuff is escaping into the air, water and soil? Into our food and drinks? Nobody knows.

At a February workshop on what research is needed to better understand nanorisks, speaker after speaker presented questions without answers. Rutgers University environmental scientist Paul Lioy, assigned to talk about human exposures to nanomaterials, was especially blunt.

"This is basically virgin territory," he said. "The fact that it's virgin territory is not good for the field, and it should be fixed really quick."

Big Benefits, Big Risks?

Nanomaterials are not new. Some exist naturally, and others result from combustion--like the ultrafine particles in diesel exhaust that have been linked to respiratory and heart diseases.

What's new is nanotechnology, the ability to manufacture and manipulate minuscule materials into forms such as quantum dots, spherical buckyballs, and cylindrical carbon nanotubes. These engineered nanomaterials take on unusual properties: changing color, for example, or becoming electrically conductive, or penetrating cell walls. And they have many uses. Carbon nanotubes, or CNTs--made by rolling up sheets of graphite just one atom thick--are extremely light and strong; they show up in high-end tennis rackets and bicycle frames. Nanosilver is used as an antimicrobial agent in everything from paint to toothpaste to teddy bears. Nanometal oxides are blended into ceramics and coatings, making them more durable.

While there's no universal definition, the "nano" moniker generally covers materials between one and 100 nanometers. A nanometer is one billionth of a meter, or between 50,000 and 100,000 times thinner than a human hair.

Nanotech offers enormous potential benefits. Medical researchers are investigating ways to use nanomaterials to target tumors and then deliver tiny amounts of drugs directly inside the cancer cells, sparing the healthy cells. Possible green tech applications include cheaper, more efficient solar panels and water-filtration systems, energy-saving batteries and lighter vehicles that use less fuel.

That's the upside. But exciting new wonder materials often reveal a dark side, too. Asbestos--now synonymous with bankrutpcy-inducing lawsuits and slow, painful death--was once seen as a miraculous fireproofing agent that would save millions of lives. Much of its damage could have been avoided if industry and government had heeded the ample danger signs. Now, early research on the potential hazards of nanotech is producing danger signs of its own. Workers handling nanomaterials face the biggest risks. But there are concerns for consumers, too, especially with products--like cosmetics, food and supplements--that go directly on or in the body. And with potentially toxic nanomaterials washing down the drain and into the water and soil, there's reason to worry about environmental damage as well.

Yet studies on nanotech's downside are a mere nanospeck compared to the research that's being done on how this technology can benefit humanity--and corporate profits. Of $1.5 billion in federal nano spending each year, only between 1% and 2.5% goes toward studying environmental, health and safety risks. Worse, there's no national strategy for deciding what questions need to be answered, or what to do with those answers as they arrive.

Occupational Hazards

Since the 17th century, when Italian physician Bernardino Ramazzini pioneered the field of occupational medicine, researchers have looked to the workplace for advance warning of new illnesses. From janitors blinded by ammonia fumes to chimney sweeps who absorbed cancer-causing soot through their skin, workers get sick first and most acutely because of their intense, daily toxic exposures. That's why much of the still-sparse nano health and safety research has focused on the possible hazards of working with nanomaterials. Scientists can't expose workers to potential toxins and watch to see if they keel over. But if employers cooperate, researchers can find out what materials workers are using, in what amounts and forms, and under what conditions. Then they can simulate those exposures with lab animals.

Some studies find little or no risk. Others are alarming. Last year, British researchers reported that when long, straight carbon nanotubes--shaped like asbestos fibers--were injected into mice, they caused the same kind of damage as asbestos. Of course, workers wouldn't ordinarily stick themselves with a needleful of CNTs. But a follow-up study this year, by the National Institute for Occupational Safety and Health (NIOSH), found that when mice inhaled CNTs, the tiny tubes migrated from their lungs to the surrounding tissue--the very spot where asbestos causes the rare cancer known as mesothelioma. One reason nanomaterials can cause trouble is that they are small enough to evade the body's defenses. In a University of Rochester study of the accidental nanoparticles known as ultrafine pollution, they bypassed the protective blood-brain barrier and slipped directly into the brain's olfactory bulb. Other research demonstrates that nanomaterials can
penetrate the deepest part of the lungs. From there, they cross into the bloodstream and various organs.

Based on evidence like this, the European Union's occupational health and safety agency issued an expert report in March, citing nanoparticles as the number-one emerging risk to workers. In the U.S., NIOSH has issued a guidance document urging employers to avoid exposing workers to nanomaterials--for example, by enclosing equipment and using ventilation to reduce dust and fumes. But NIOSH has no regulatory power; it can only suggest.

The Pig-Pen Effect

"You're producing a personal cloud of exposure," Paul Lioy warned. "Every time you breathe. Every time you move. If the materials you're wearing have [nano]materials that can be released, they will be released. It's basically the Pig-Pen effect.

Lioy, the Rutgers environmental scientist, was speaking theoretically. His audience was fellow scientists, gathered in Bethesda, Maryland, for a workshop sponsored by the federal government. The workshop's title: "Human & Environmental Exposure Assessment of Nanomaterials." Lioy's assignment: Talk about the need for research to "characterize exposure to the general population from industrial processes and industrial and consumer products containing nanomaterials." His message: There is no research on whether and how the general population is exposed to nanomaterials. Searching the scholarly literature, Lioy's associates "spent hours looking for data ... and found nothing," he said.

While workers are on the front lines of nanoexposure, Lioy cautioned against ignoring consumer exposures. "We are all in contact with it--300 million of us, if we use products that have nanoparticles," he declared. And while nanomaterials that are embedded in a hard surface like a computer keyboard are probably not a big worry, clothing and cosmetics might be a different story, he said. That's where his comparison to Pig-Pen, the Peanuts character forever surrounded by a cloud of dirt, comes in: the idea that every time we move, nanoparticles might come loose from our moisturizer or our stain-resistant togs.

Noting that "a lot of nanoparticle uses are terrific," Lioy said he doesn't want society to do without. As scientists do the necessary studies, "I think a lot of issues will go away," he said. "I just don't want unintended consequences."

Down the Drain

Cyndee Gruden is getting the poop on nano-pollution--literally.

One of the main environmental concerns about nanomaterials is what happens when they wash out of clothing, hair or skin and go down the drain. Do they harm aquatic life? Do they interfere with wastewater treatment?

Gruden, a civil engineering professor at the University of Toledo in Ohio, is tackling part of that last question by looking at the effects of two nanometals--titanium dioxide and zinc oxide, used in sunscreens, paint and other products--on bacteria.

Metals "can be toxic to microorganisms," she notes. "In fact, that's specifically what they're for" in consumer products: to inhibit mold, mildew and other nastiness. But when nanometals make their way to a sewage treatment plant, Gruden worries that they might harm the beneficial bacteria that break down what's delicately known in the business as "biosolids."

Her preliminary findings, which she presented at a meeting of the American Chemical Society (an academic group, not an industry organization) in March, are mixed. Nano-titanium dioxide damaged bacteria, causing cell walls to break at "relatively low concentrations," similar to what you might see at a sewage treatment plant, Gruden says in an interview. But "in terms of function, what does that mean? Are the bugs able to do what they're supposed to do?"

To answer that question, she added some biosolids to her test tubes and measured how much methane the bacteria produced as they digested for five days. The titanium dioxide didn't seem to slow the bugs down; in fact, methane production actually increased. But when Gruden added nano-zinc oxide, gas production slowed down. She's running more experiments this summer to see what happens when the bacteria are exposed to the bugs for a full 30 days.

"The take-home message for me is, the behavior of these particles is very complex," Gruden says. "When you take a nanoparticle and put it into the environment, you have to know how it's going to behave. And we don't."

One metal Gruden didn't look at is nanosilver, widely used as a microbe-killer. The Project on Emerging Nanotechnologies, a nonprofit research and advocacy organization funded by the Pew Charitable Trusts in Washington, D.C., maintains an inventory of more than 800 consumer products advertised as using nanotechnology. Silver is by far the most frequently identified material.

In an experiment publicized last year, Arizona State University graduate student Troy Benn bought nanosilver-containing socks off the Internet and simulated washing them in jars of water. He found that, for several brands, most or all of the silver disappeared in just a few washings. Silver has been used to kill bacteria since ancient times, when the Greeks found that wine stayed fresh longer in vessels lined with the precious metal. It's potent enough that the U.S. Environmental Protection Agency (EPA) regulates silver as a pesticide. Which raises the question: What does nanosilver do to the "good bugs" downstream, at the sewage treatment plant and elsewhere?

In 2006, a trade organization of wastewater treatment operators was concerned enough about a new silver-ion-emitting Samsung washing machine to pressure the EPA to include such equipment under its pesticide rules. The EPA responded by cracking down, not only on the washer but also on manufacturers of products advertised to contain nanosilver, including a line of supposedly sanitary computer peripherals. Separately, a coalition of consumer, health, and environmental groups filed a petition last year asking the EPA to impose a moratorium on nanosilver products until more safety research is done. In addition, the EPA has awarded a grant to Arizona State researchers to investigate interactions between various kinds of nanomaterials and wastewater biosolids.

Oversight or Overlooked?

In the U.S., the EPA has emerged as the lead agency on nano oversight. But that's not saying much. It is wrestling with the possible risks of nanomaterials, but so far has taken almost no action to regulate them.

In a voluntary Nanoscale Materials Stewardship Program, the EPA asked companies to submit information about what nanomaterials they're using. Very few did, and even the companies that participated withheld large amounts of data as business secrets. This March, the EPA began requiring manufacturers of carbon nanotubes to file pre-manufacturing notices under the Toxic Substances Control Act. California is requiring carbon nanotube makers to share their environmental, health and safety test data with the state, and is considering imposing the same mandate on makers of nanometal oxides, like the ones Gruden is testing.

But the EPA is not the only federal agency with responsibility for nanomaterials. Cosmetics, sunscreen, and food and beverages--which fall under the jurisdiction of the Food and Drug Administration (FDA)--make up roughly 30% of PEN's consumer products inventory. Yet the FDA is poorly equipped to ensure the safety of nano-containing dietary supplements, according to a 2008 report by two former agency officials. (Friends of the Earth has urged mandatory labeling of nanofoods and a moratorium on nano-containing cosmetics until they're shown to be safe.) The Occupational Safety and Health Administration, which is responsible for protecting workers, has not even begun to work on nano rules.

A former EPA official, J. Clarence Davies, proposes merging all these agencies and more into a new Department of Environmental and Consumer Protection. A "scientific agency with a strong oversight component," it would cover products, pollution, workplace health and safety, climate change and health effects of nanotechnology as well as other technologies, Davies writes in his April 2009 report, "Oversight of Next Generation Nanotechnology."

Outside the U. S., regulators are taking a somewhat more precautionary approach. Still, governments have adopted very few nano-specific rules to protect people or the environment. But there are bright spots. At Rice University in Houston, Texas, for example, Vicki Colvin and her colleagues are trying to engineer nanomaterials that are safe from the get-go, rather than looking for ways to minimize harm from nanotoxins.

But fears abound that the teeny genie is escaping from its bottle. The asbestos parallel causes particular concern--prompting the Australian Council of Trade Unions, for example, to call for that country to adopt nano regulations by year's end. At the Bethesda workshop in February, Harvard industrial hygienist Robert Herrick advocated an all-out effort to gather information about nano exposures and possible related illnesses. The asbestos industry could have undertaken a similar effort in the 1930s, he noted. Instead, industry execs decided to keep the subject quiet. If they had gone the other way, Herrick wondered, "how different would history be?"

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Carole Bass, a journalist, writes about the environment, workplace health, legal affairs and other subjects.

Exclusive: Robert McNamara deceived LBJ on Gulf of Tonkin

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Official government documents reveal new side of defense secretary's legacy

Gareth Porter
July 8, 2009 - Raw Story

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Robert S. McNamara, Secretary of Defense from 1961 to 1967, took many secrets with him when he died Monday at 93. But probably no secret was more sensitive politically than the one that would have changed fundamentally the public perception of his role in Vietnam policy had it been become widely known.

The secret was his deliberate deceit of President Lyndon B. Johnson on Aug. 4, 1964 regarding the alleged attack on US warships in the Gulf of Tonkin.

Documents which have been available for decades in the LBJ Library show clearly that McNamara failed to inform Johnson that the U.S. naval task group commander in the Tonkin Gulf, Captain John J. Herrick, had changed his mind about the alleged North Vietnamese torpedo attack on U.S. warships he had reported earlier that day.

By early afternoon Washington time, Herrick had reported to the Commander in Chief Pacific in Honolulu that "freak weather effects" on the ship's radar had made such an attack questionable. In fact, Herrick was now saying, in a message sent at 1:27 pm Washington time, that no North Vietnamese patrol boats had actually been sighted. Herrick now proposed a "complete evaluation before any further action taken."

These documents were reviewed by this reporter in researching my book, Perils of Dominance: Imbalance of Power and the Road to War in Vietnam.

McNamara later testified that he had read the message after his return to the Pentagon that afternoon. But he did not immediately call Johnson to tell him that the whole premise of his decision at lunch to approve McNamara's recommendation for retaliatory air strikes against North Vietnam was now highly questionable.

In fact, no call from McNamara to Johnson was recorded until 3:51 pm – 7 minutes after Johnson called him from his private quarters. Had Johnson been accurately informed about the Herrick message, he might have demanded fuller information before proceeding with a broadening of the war. Johnson had fended off proposals from McNamara and other advisers for a policy of bombing the North on four separate occasions since becoming President.

But when McNamara called Pacific Admiral Grant Sharp shortly after speaking with Johnson, it was not to order a full investigation or to seek more detailed information. In fact, McNamara didn't even bring up the Herrick report. Instead, he seemed determined to obtain a statement from Sharp that would make it unnecessary to wait for further investigation. "There isn't any possibility there was no attack, is there?" asked McNamara.

Sharp insisted, however, that the commander on the scene was saying "the situation's in doubt" and suggested that McNamara "hold this execute" – meaning the strike order to CINCPAC and Seventh Fleet — "until we have a definite indication that this happened…." Sharp said he believed he could get a "definite indication" that the event had occurred within two hours.

But McNamara rejected Sharp's proposal to wait for confirmation of the attack. Instead he said, "[I]t seems to me we ought to go ahead on that basis: get the pilots briefed, get the planes armed, get everything lined up to go. Continue the execute order in effect, but between now and 6 o'clock get a definite fix and you call me directly."

McNamara didn't claim that he had authority from Johnson to make that decision.

After the conversation with Sharp, McNamara didn't call LBJ to report on what Sharp had told him or what they had agreed on, according to White House phone logs. Instead he went ahead on his own to issue the execute order at 4:49 pm.

The next phone call, which came just one minute after that order was sent, did not come from McNamara but from LBJ. That brief phone conversation, which was not recorded, was followed moments later by a call from McNamara to Johnson in which he the Secretary said the story had already been broken by wire services that a meeting at the White House that night would brief congressional leaders about a second attack on U.S. warships.

McNamara urged Johnson to authorize a statement by the Pentagon about the attack. He'd somehow found the time during the previous hour to draft a statement reaffirming the attack, which he read to Johnson. It said two U.S. warships had been attacked by patrol boats, but that the North Vietnamese boats had been "driven off." It concluded, "We believe several of the patrol boats were sunk. Details won't be available till daylight."

Neither McNamara nor Johnson alluded in that conversation to Admiral Sharp's seeking confirmatory evidence – a matter that would surely have been on LBJ's mind if McNamara had told him about it.

The record of phone McNamara-Johnson conversations on the afternoon of Aug. 4, 1964 thus shows a President who was blissfully unaware that the original reports of an attack were now in doubt and that the Commander-in-Chief of Pacific forces was still seeking to obtain confirmation of the attack.

Ultimately, National Security Council documents declassified in 2005 (PDF) would reveal that no attack on US warships had taken place.

It "is not simply that there is a different story as to what happened; it is that no attack happened that night," they said. "In truth, Hanoi's navy was engaged in nothing that night but the salvage of two of the boats damaged on August 2."

Reporter confronted McNamara in 2004

This writer confronted McNamara with that record in a phone conversation with him on Feb. 24, 2004. His response was that telephone calls were not the only way he had to communicate with Johnson and that he could have told Johnson about the military's unresolved doubts at the National Security Council meeting which took place that night at 6:15 pm.

Unfortunately for McNamara's alibi, detailed official notes of that Council meeting taken by NSC staffer Bromley Smith, marked "Top Secret Sensitive, For the President's Eyes Only," show that McNamara again asserted unequivocally that the attack had indeed taken place.

After USIA Director Carl Rowan asked, "Do we know for a fact that the North Vietnamese provocation took place?" McNamara said, "We will know definitely in the morning."

When I read those quotes to McNamara over the phone, he suggested that the notes were "not complete." But McNamara was admitting, in effect, that he did not inform LBJ that afternoon about the Herrick report or about Sharp's plea to hold off the execute order until confirming evidence had been obtained.

The records of the Tonkin Gulf crisis in the LBJ library also include documentation showing LBJ wanted to get the truth about what McNamara knew and when he knew it.

Even before the Gulf of Tonkin resolution was approved by the Senate Aug. 7, LBJ ordered a full account of the communications between the commanders of U.S. Pacific forces and the Pentagon on Aug. 4 and 5. The requested study was referred to as the "inquiry," according to a handwritten note on a draft chronology prepared at the Pentagon. It was to be based on the original tapes of all such communications, which were tracked down and transcribed.

McNamara altered transcripts of calls

The clearest evidence that McNamara was afraid of what the inquiry would reveal about his maneuvering on Aug. 4 is that the chronology produced under his personal guidance — where numerous changes were made on previous drafts in McNamara's own handwriting — deliberately suppressed the most damning words from the transcript of his conversation with Sharp.

Not only did the official Defense Department chronology change the wording of McNamara's question to Sharp so that it was no longer obviously a leading question, it also failed to mention Sharp's revelation that Herrick considered the "whole situation" to be "in doubt" and was calling for "daylight recce" — or reconnaissance.

In addition, the McNamara's chronology portrayed him as agreeing with Sharp that the execute order should be delayed until definite evidence of an attack was obtained. It reports, "McNamara says that even if definite confirmation of an attack is not forthcoming for another 2 hours, an hour would still remain and the execute order could then be issued."

But McNamara had not said that the executive order could be issued after getting confirmation of an attack. He had said the opposite: "Continue the execute order in effect, but between now and 6 o'clock get a definite fix and you call me directly." So that crucial sentence was omitted from the chronology.

McNamara did not want LBJ to know that he had rejected Sharp's proposal to hold the execute order until the situation was clarified and had not even informed him.

There is more evidence in the presidential tapes at the LBJ Library that Johnson believed that McNamara had misinformed him about what had happened in the Tonkin Gulf. Six weeks later, McNamara and then-Secretary of State Dean Rusk went to Johnson with yet another claim that North Vietnamese boats had attacked a U.S. warship in the Tonkin Gulf and again urged a retaliatory bombing of the North.

This time Johnson expressed skepticism and complained about McNamara's claim of an attack on Aug. 4. "You just came in a few weeks ago and said they're launching an attack on us – they're firing at us," Johnson tells McNamara on the tape recording of the conversation, "and we got through with the firing and concluded maybe they hadn't fired at all."

Whether or not Johnson understood the seriousness of McNamara's deception Aug. 4, he seemed to become even more resistant to McNamara's views on Vietnam after the incident. That fall, during the presidential election campaign, Johnson began to challenge McNamara for his advocacy of bombing North Vietnam, even referring to his proposal as "your bombing bullshit," according to accounts given by Assistant Secretary of Defense John McNaughton to Daniel Ellsberg, his then-assistant (who later leaked what would be known as the Pentagon papers).

McNamara's deception was one of many maneuvers aimed at pulling Johnson into an escalated war in Vietnam. But it is perhaps the only one in which McNamara's role shifted from tough bureaucratic in-fighting to usurping presidential authority, in effect, on an issue involving the use of military force.

On the following audio file from The Lyndon Baines Johnson Library, Johnson can be heard telling McNamara that he had misinformed him about the alleged attack:

http://216.87.173.33/media/2009/0907/porter_johnson_mcnamara_090708a.mp3

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Gareth Porter is an investigative journalist and historian who covered the Vietnam War as Saigon Bureau Chief for Dispatch News Service International in 1970-71 and taught international studies at the City College of New York and American University from 1982 to 1990. His book Perils of Dominance: Imbalance of Power and the Road to War in Vietnam, documents US policymaking on Vietnam during the Eisenhower, Kennedy and Johnson administrations. He has a doctorate in Southeast Asian politics from Cornell University, and currently covers diplomatic and military affairs for Inter Press Service.

TOON

Non-Zen Moment for the Weekend

Citing dozens of personal profiles of U.S. military on a neo-Nazi website, the Southern Poverty Law Center today urged Congress to investigate extremist infiltration into armed forces that may be inadvertently training domestic terrorists. Having raised the issue in vain for years, the SPLC added one zinger – the discharge of over 12,500 military personnel for their sexual preference.

"It seems quite anomalous that the Pentagon would consider homosexuals more of a threat to the good order of the military than neo-Nazis and other white supremacists who reject our Constitution's most cherished principles."

- Abby Zimet, CommonDreams.org

A Farewell to Harms

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Palin was bad for the Republicans—and the republic.

Peggy Noonan
July 11, 2009 - The Wall Street Journal

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Sarah Palin's resignation gives Republicans a new opportunity to see her plain — to review the bidding, see her strengths, acknowledge her limits, and let go of her drama. It is an opportunity they should take. They mean to rebuild a great party. They need to do it on solid ground.

Her history does not need to be rehearsed at any length. Ten months ago she was embraced with friendliness by her party. The left and the media immediately overplayed their hand, with attacks on her children. The party rallied round, as a party should. She went on the trail a sensation but demonstrated in the ensuing months that she was not ready to go national and in fact never would be. She was hungry, loved politics, had charm and energy, loved walking onto the stage, waving and doing the stump speech. All good. But she was not thoughtful. She was a gifted retail politician who displayed the disadvantages of being born into a point of view (in her case a form of conservatism; elsewhere and in other circumstances, it could have been a form of liberalism) and swallowing it whole: She never learned how the other sides think, or why.

In television interviews she was out of her depth in a shallow pool. She was limited in her ability to explain and defend her positions, and sometimes in knowing them. She couldn't say what she read because she didn't read anything. She was utterly unconcerned by all this and seemed in fact rather proud of it: It was evidence of her authenticity. She experienced criticism as both partisan and cruel because she could see no truth in any of it. She wasn't thoughtful enough to know she wasn't thoughtful enough. Her presentation up to the end has been scattered, illogical, manipulative and self-referential to the point of self-reverence. "I'm not wired that way," "I'm not a quitter," "I'm standing up for our values." I'm, I'm, I'm.

In another age it might not have been terrible, but here and now it was actually rather horrifying.

McCain-Palin lost. Mrs. Palin has now stepped down, but she continues to poll high among some members of the Republican base, some of whom have taken to telling themselves Palin myths.

To wit, "I love her because she's so working-class." This is a favorite of some party intellectuals. She is not working class, never was, and even she, avid claimer of advantage that she is, never claimed to be and just lets others say it. Her father was a teacher and school track coach, her mother the school secretary. They were middle-class figures of respect, stability and local status. I think intellectuals call her working-class because they see the makeup, the hair, the heels and the sleds and think they're working class "tropes." Because, you know, that's what they teach in "Ways of the Working Class" at Yale and Dartmouth.

What she is, is a seemingly very nice middle-class girl with ambition, appetite and no sense of personal limits.

"She's not Ivy League, that's why her rise has been thwarted! She represented the democratic ideal that you don't have to go to Harvard or Brown to prosper, and her fall represents a failure of egalitarianism." This comes from intellectuals too. They need to be told something. Ronald Reagan went to Eureka College. Richard Nixon went to Whittier College, Joe Biden to the University of Delaware. Sarah Palin graduated in the end from the University of Idaho, a school that happily notes on its Web site that it's included in U.S. News & World Report's top national schools survey. They need to be told, too, that the first Republican president was named "Abe," and he went to Princeton and got a Fulbright. Oh wait, he was an impoverished backwoods autodidact!

America doesn't need Sarah Palin to prove it was, and is, a nation of unprecedented fluidity. Her rise and seeming fall do nothing to prove or refute this.

"The elites hate her." The elites made her. It was the elites of the party, the McCain campaign and the conservative media that picked her and pushed her. The base barely knew who she was. It was the elites, from party operatives to public intellectuals, who advanced her and attacked those who said she lacked heft. She is a complete elite confection. She might as well have been a bonbon.

"She makes the Republican Party look inclusive." She makes the party look stupid, a party of the easily manipulated.

"She shows our ingenuous interest in all classes." She shows your cynicism.

"Now she can prepare herself for higher office by studying up, reading in, boning up on the issues." Mrs. Palin's supporters have been ordering her to spend the next two years reflecting and pondering. But she is a ponder-free zone. She can memorize the names of the presidents of Pakistan, but she is not going to be able to know how to think about Pakistan. Why do her supporters not see this? Maybe they think "not thoughtful" is a working-class trope!

"The media did her in." Her lack of any appropriate modesty did her in. Actually, it's arguable that membership in the self-esteem generation harmed her. For 30 years the self-esteem movement told the young they're perfect in every way. It's yielding something new in history: an entire generation with no proper sense of inadequacy.

"Turning to others means the media won!" No, it means they lose. What the mainstream media wants is not to kill her but to keep her story going forever. She hurts, as they say, the Republican brand, with her mess and her rhetorical jabberwocky and her careless causing of division. Really, she is the most careless sower of discord since George W. Bush, who fractured the party and the movement that made him. Why wouldn't the media want to keep that going?

Here's why all this matters. The world is a dangerous place. It has never been more so, or more complicated, more straining of the reasoning powers of those with actual genius and true judgment. This is a time for conservative leaders who know how to think.

Here are a few examples of what we may face in the next 10 years: a profound and prolonged American crash, with the admission of bankruptcy and the spread of deep social unrest; one or more American cities getting hit with weapons of mass destruction from an unknown source; faint glimmers of actual secessionist movements as Americans for various reasons and in various areas decide the burdens and assumptions of the federal government are no longer attractive or legitimate.

The era we face, that is soon upon us, will require a great deal from our leaders. They had better be sturdy. They will have to be gifted. There will be many who cannot, and should not, make the cut. Now is the time to look for those who can. And so the Republican Party should get serious, as serious as the age, because that is what a grown-up, responsible party—a party that deserves to lead—would do.

It's not a time to be frivolous, or to feel the temptation of resentment, or the temptation of thinking next year will be more or less like last year, and the assumptions of our childhoods will more or less reign in our future. It won't be that way.

We are going to need the best.

Survey Shows Gap Between Scientists and the Public

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Cornelia Dean
July 10, 2009 - The New York Times

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When it comes to climate change, the teaching of evolution and the state of the nation's research enterprise, there is a large gap between what scientists think and the views of ordinary Americans, a new survey has found.

On the whole, scientists believe American research leads the world. But only 17 percent of the public agrees, and the proportion who name scientific advances as among the United States' most important achievements has fallen to 27 percent from nearly 50 percent in 1999, the survey found.

And while almost all of the scientists surveyed accept that human beings evolved by natural processes and that human activity, chiefly the burning of fossil fuels, is causing global warming, general public is far less sure.

Almost a third of ordinary Americans say human beings have existed in their current form since the beginning of time, a view held by only 2 percent of the scientists. Only about half of the public agrees that people are behind climate change, and 11 percent does not believe there is any warming at all.

According to the survey, about a third of Americans think there is lively scientific debate on both topics; in fact, there is no credible scientific challenge to the theory of evolution and there is little doubt that human activity is altering the chemistry of the atmosphere in ways that threaten global climate.

The survey, by the Pew Research Center for the People & the Press and the American Association for the Advancement of Science, the world's largest scientific organization, involved about 2,000 members of the public and 2,500 scientists drawn from the rolls of the science advancement association, which includes teachers, administrators and others involved in science as well as researchers.

The survey, made public Thursday, is available at people-press.org.

It found that at least two-thirds of Americans hold scientists and engineers in high regard, but the feeling is hardly mutual.

The report said 85 percent of science association members surveyed said public ignorance of science was a major problem. And by large margins they deride as only "fair" or "poor" the coverage of science by newspapers and television.

Only 3 percent of the scientists said they "often" spoke to reporters.

In a telephone news conference announcing the survey, Alan I. Leshner, chief executive of the science association, said scientists must find new ways to engage with the public.

"One cannot just exhort 'we all agree you should agree with us,' " Mr. Leshner said. "It's a much more interactive process that's involved. It's time consuming and can be tedious. But it's very important."

Seeing Obama as Norwegians See Him

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George Lakey
July 8, 2009 - CommonDreams.org

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I just returned from a research trip to Norway where the people I interviewed often brought up the topic of our new President. The first was Kristin Clemet, the director of a conservative think tank. "This spring on a delegation to Washington I was struck again," she said, "by how different the political spectrum is in Norway from your country. Here, Obama would be on the right wing." I checked her view with others -- academics, politicians, activists all over the Norwegian spectrum -- and all but one agreed. In Norwegian terms, our President's positions are very conservative.

When Norway hit a major financial crisis in the early '90s (from a real estate bubble and speculating banks), the Norwegians decided against bail-outs. Three of the biggest banks were simply taken by the government, their senior management fired, their stockholders sent packing. The government nursed the seized banks back to health over time while the economy made a quick recovery. The other troubled banks were left to declare bankruptcy or find new capital. Norway's action sent a clear message to the banks: mismanagement and greed don't pay. The result is that today its own financial sector is clean and only needs to deal with the impact of other countries' disasters. Norway's strategy was very far from Obama's bank-friendly game plan.

When Norwegian oil was discovered, the country decided not to risk putting their new treasure in private ownership. Norwegians were therefore able to lead the world in environmental responsibility and to avoid boom/bust impact on their seacoast cities. Most important, Norway has been stashing the oil profits in a public, socially responsible "Pension Fund" that will support the Norwegians' famously high living standard for many generations to come.

Half a century ago Norway already had a universal health care system that is simplicity itself. There's a single payer (the government) and minimum red tape, something like Medicare but for everyone and better. The entire political spectrum supports this. By contrast, Obama says he backs the failed U.S. private insurance scheme and his team is wobbling on his own modest proposal to add a public option. So I would have to say to thoughtful Republicans: even if you don't like the Nordic blend of capitalism and socialism, with its virtual abolition of poverty, free university education, and enlightened environmentalism, you're only confusing the issue when you try to label the President with the "S"-word. You may think his policies are wrong, but in Norway even conservatives would say the Democrats and Obama don't go nearly far enough.

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George Lakey, formerly Eugene M. Lang Visiting Professor for Issues in Social Change at Swarthmore College, is now directing a research project there.  Author of seven books, he founded Training for Change.

Sen. John Ensign Acknowledges Mistress Payment

Nevada Sen. John Ensign has acknowledged his parents gave his mistress nearly $100,000. AP Photo by Ron Edmonds

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Chris Cillizza 
July 9, 2009 - Washuington Post
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Nevada Sen. John Ensign(R) has acknowledged that his parents paid his mistress and her family $96,000 in April 2008, according to a statement made by his attorney moments ago.

"After the Senator told his parents about the affair, his parents decided to make the gifts out of concern for the well-being of long-time family friends during a difficult time," said Paul Coggins, counsel to Ensign.

Coggins added that Ensign never used official money or campaign funds to make the payments. "None of the gifts came from campaign or official funds nor were they related to any campaign or official duties," said Coggins. "Senator Ensign has complied with all applicable laws and Senate ethics rules."

Ensign's father, Mike, is a well-heeled casino executive, having left his post as chairman of the Mandalay Resort Group in 2005. Ensign's father took $29 million in stock options when he left in 2005 and two years earlier had cashed out $103 million worth of stock.

Ensign's acknowledgment comes less than 24 hours after Jon Ralston, the king of Nevada political reporters, sat down with Doug Hampton -- the husband of Ensign's mistress -- who made a string of allegations including that Oklahoma Sen. Tom Coburn had tried unsuccessfully to force Ensign to end the affair.

Ensign has insisted he has no plans to resign his office, telling the Las Vegas Sun today that "I always planned on serving and working hard -- working harder than I ever worked -- and I'm going to continue to do that."

As we have written before (in relation to one Mark Sanford), stories like this one often spiral out of control of the person at the center of the storm. Ensign had weathered the initial bad press surrounding his affair but this detail may be too much.

Much more to come....

Zen Spiritual Moment of the Week

Crowds are flocking to Limerick, Ireland's Holy Mary Parish Church to worship a tree stump after workmen who had been cutting down trees found her this week. Parish priest Willie Russell tried to throw a wet blanket over the growing vigil, saying:

"There's nothing there... it's just a tree. You can't worship a tree."

Craig Brown - Common Dreams

Are Our Markets Being Manipulated by 'Rogues' or Firms?

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There's New Evidence to Suggest That Crime in the Financial Markets Is Rife

Danny Schechter
July 9, 2009 - CommonDreams.org

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Everyone has heard of the Wikipedia but not everyone knows about the Investopedia, a Forbes website, that monitors finance for market players.  One of the issues it is concerned about is market manipulation, actions by rogue and not so rogue players who, working alone or together, unduly influence the way our supposed "free" markets function. 

It is a fascinating source of information for the uninitiated who hear the daily reports on the ups and downs of the Dow and believe that somehow it is all part of the natural order of the universe.   

It isn't.

Thanks to an even more informative web site, Gamingthemarket.com, we learn that in fact markets are subject to, prone to, and characterized by all sorts of manipulative practices. Here's one you may not have heard of. 

"Ghosting: An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. Ghosting is used by corrupt companies to affect stock prices so they can profit from the price movement.

This practice is illegal because market makers are required by law to act in competition with each other. It is known as 'ghosting' because, like a spectral image or a ghost, this collusion among market makers is difficult to detect. In developed markets, the consequences of ghosting can be severe." -Investopedia 

It looks like we have gone from the age of the trustbuster to the era of the ghost buster as fiction once again turns into "faction." 

Last week, the price of oil mysteriously shot up. There were reports of yet another "rogue" trader. The New York Times later reported:   

"Reacting to recent swings in oil prices, federal regulators said they were considering limits on 'speculative' traders in markets for oil and other energy products."  Of course, the big banks and Wall Street firms are expected to zealously oppose more oversight. 

Some things don't change. Anyone remember Nicholas Leeson, a one-man engine of speculation who lost over a billion dollars and brought down his own bank before going to jail? He later gloated on his website: "How could one trader bring down the banking empire that had funded the Napoleonic Wars?"   

On July 4th, Bloomberg News reported:   

"Sergey Aleynikov, an ex-Goldman Sachs computer programmer, was arrested July 3 after arriving at Liberty International Airport in Newark, New Jersey, U.S. officials said. Aleynikov, 39, who has dual American and Russian citizenship, is charged in a criminal complaint with stealing the trading software. At a court appearance July 4 in Manhattan, Assistant U.S. Attorney Joseph Facciponti told a federal judge that Aleynikov's alleged theft poses a risk to U.S. markets. Aleynikov transferred the code, which is worth millions of dollars, to a computer server in Germany, and others may have had access to it, Facciponti said, adding that New York-based Goldman Sachs may be harmed if the software is disseminated." 

The next sentence is particularly eye-opening: "The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways," Facciponti said.

J.S. Kim who runs an independent investment research and wealth consultancy firm commented on the financial site, Seeking Alpha: 

"It's curious to note that Goldman Sachs has admitted that it has developed trading software that could be used to, in their own words, 'manipulate markets in unfair ways,' yet nobody in the mainstream media has questioned whether Goldman Sachs was / and is using its proprietary trading platform to manipulate markets in unfair ways. Only extremely naive investors with zero understanding of how global stock markets operate would deny that there has been continual and excessive intervention into US stock markets to prop them up over the past several months."

I spoke with Christian Angelich, the founder or Gaming the Market.com, a former airline pilot turned trader, who told me that in recent years efforts to manipulate markets have become pervasive and, yet, are mostly illegal.   

He too cited Goldman when I asked how it often works.

Without prodding, he came up with one possible scenario involving a firm like Goldman Sachs that had millions of shares of Intel it wanted to offload. So they issue a report predicting it will sell for $50 a share.  As a major player at the New York exchange where they do 1 out of every ten shares, and have become even more powerful now that competitors like Bear, Lehman and others are out of business, their recommendations are given lots of weight even though in this case they really want to just dump the shares.

"None of this is new," he told me, "it's been going on for years. Even the founding Fathers warned about it, but is more egregious today in part because of all the technology these firms have." He says it is illegal and has been winked at, citing one example: former Senator Phil Gramm attaching a plan to kill the Glass Steagall act as an amendment to a bill that then sailed through the Congress while his wife was on the Commodity Futures Trading Commission.

"We will only have a real bottom," he believes, when the masses are out in the streets like they are in parts of Europe. "For change, pressure from below is needed."

Sometimes unexpected events can take over markets too, as Michael Jackson's untimely demise's meteoric impact on the music market shows.  His sales went from nowhere to everywhere confirming one jaded pundit's cynical comment that "he was more valuable dead than alive."

In making a new film on the financial crisis as a crime story, I spoke with Moe Saceriby, a former lawyer and VP of Standard and Poors who went on to become a UN Ambassador. I knew him as a credible analyst of current affairs, an experienced professional. We spoke on Wall Street.

He told me:

"I think we had a transition from what truly was a free-market system to something now that is out of control and probably what I would define as a predatory system where we are not so much dealing anymore about the notion of fair prices, and the notion of markets that -- that work transparently an open late but in fact frequently markets that are manipulated for the end of maybe a few out there -- a few investors, mega-investors. It's even -- even that's very difficult to tell. " 

This was new to me -- the whole system being described as predatory, which smacks of criminal.   

He went on: 

"And these market movements may not be necessarily reflective of the underlying value of that real asset whether it be a commodity or whether it be in equity.  What I mean by that is frequently you see prices wildly fluctuating.  As an example: how could oil be at $147 in July of 2008 and all of a sudden fall to below $40 a barrel at the end of that same year?  We all knew that in fact the whole economic system was in trouble over a year ago.  But the price of oil kept rising sharply.  The price of foods kept rising sharply." 

Question: "Manipulated?" 

Answer: "I think it was manipulated. There is a lot of debate whether it's about speculation or manipulation but there is an old expression among traders which is 'the trend is your friend.' What that means is that in fact a few people can use significant resources, financial resources, freely as a weapon." 

Umm, weapons on Wall Street? Already credit default swaps have been compared to financial hydrogen bombs as financial terms merge with military language. Does anyone doubt that these Wall Street manipulations have become form of warfare and that, until now, the wrong side has been ahead.   

Surely, all this demands a serious investigation and serious regulation. Will it happen?

.....

Mediachannel.org's News Dissector Danny Schechter is producing a film on "the Crime of Our Time" as a follow-up to his book PLUNDER; Investigating Our Economic Calamity

TOON

Panetta Admits CIA Misled Congress on “Significant Actions”

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Tim Starks
July 9, 2009 – CQPolitics.com

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CIA Director Leon Panetta told the House Intelligence Committee that the agency had misled and "concealed significant actions from all members of Congress" dating back to 2001 and continuing until late June, according to a letter from seven Democrats on the panel.

The letter was dated June 26, two days after Panetta appeared before a closed door session with the committee and it asked that the CIA chief "correct" his statement from May 15 that "it is not our policy or practice to mislead Congress."

"Recently you testified that you have determined that top CIA officials have concealed significant actions from all members of Congress, and misled members for a number of years from 2001 to this week," states the letter to Panetta from Anna G. Eshoo of California, Alcee L. Hastings of Florida, Rush D. Holt of New Jersey, Jan Schakowsky of Illinois, Adam Smith of Washington, Mike Thompson of California and John F. Tierney of Massachusetts.

CIA spokesman George Little said Panetta stood by his May remarks and believes Congress must be kept fully informed and Little added, "it was the CIA itself that took the initiative to notify the oversight committees."

The disclosure came just as Democrats and Republicans were set to take up an intelligence authorization bill on the House floor on Thursday.

House Democrats have put a provision in the bill which would eliminate the executive branch's right to decide when to brief the full Intelligence panels, rather than just the top committee and congressional leaders, known as the "Gang of Eight," on the most sensitive intelligence activities. Congress would set the ground rules for the "Gang of Eight" briefings instead. The White House has threatened to veto the bill if it includes the provision.

The issue is politically sensitive because House Speaker Nancy Pelosi , D-Calif., found herself at the center of a firestorm in May when she accused the CIA of misleading Congress over the use of harsh interrogation methods during the Bush administration.

Pelosi had been enmeshed in a controversy over whether she had been briefed in 2002 over the use of the interrogation tactic of "waterboarding" suspected terrorists and but did not speak out about them until the use of the techniques became part of a heated public debate later. In 2002, Pelosi was the top Democratic on the intelligence committee making her one of the Gang of Eight.

House Intelligence Chairman Silvestre Reyes , D-Texas, this week sent to the panel's top Republican, Peter Hoekstra of Michigan, a letter saying new information led him to conclude that the CIA has misled and at least once "affirmatively lied to" the committee. Republicans disputed its contents and have said that the Democrats were trying to protect Pelosi.

Neither Democrats nor Republicans would discuss the subject of the recent congressional notifications that led Reyes to conclude that Congress had been lied to, saying it was highly classified.

The House Rules Committee approved procedures for floor debate that would exclude some GOP amendments explicitly delving into the controversy over whether Pelosi was briefed on the use of harsh techniques, although Republicans will have a chance to offer a motion to recommit and revisit the issue.

One amendment by Hoekstra, for instance, would have required the CIA to publicly release more records about congressional briefings on the use of "enhanced interrogation techniques."

Republicans said it was true, as Reyes wrote in his letter, that the classified subject about which the committee was notified was a subject of bipartisan concern. But they did not endorse Reyes' conclusions that the CIA had lied.

Hoekstra said, "Was it something where I thought there should be more follow-up? Yeah. But to go put me in a blanket statement based on one briefing?"

He said Democrats wanted to help validate Pelosi's prior claims by establishing other occasions in which the CIA may have misled Congress. Republicans had seized on those remarks, and Hoekstra said Democrats were trying to "make the men and women of the intelligence community public enemy No. 1."

Reyes expressed surprise at the Republicans' remarks about whether the controversy was legitimate and whether Democrats were trying to protect their leader, saying simply, "They know better."

Another committee Democrat, C.A. Dutch Ruppersberger of Maryland, said Democrats wanted to make the point that there will always be questions about who said what and when in congressional briefings. "Let's move beyond that," he urged, to focus on the authorization legislation.

Ruppersberger added that a proposed committee investigation that Reyes mentioned in his letter is still in the "developmental" stages, but "I think it probably will not find that anyone intentionally lied."

Hoekstra doubted an investigation would go anywhere, citing a long-overdue report on a probe into the CIA's destruction of videotapes of early Bush administration interrogations of suspected terrorists.