Court Backs Bush on Military Detentions

Jonathan L. Hafetz, a lawyer for Mr. Marri with the Brennan Center for Justice at the New York University School of Law, called the Fourth Circuit’s decision deeply disturbing.

“This decision means the president can pick up any person in the country — citizen or legal resident — and lock them up for years without the most basic safeguard in the Constitution, the right to a criminal trial,” Mr. Hafetz said.

It seems fear politics has completely overwhelmed all of our governmental "checks and balances"....they say this one may end up in the Supreme Court. It will be interesting to see if they will condone this blatantly illegal and unconstitutional insanity.

Is the Fourth Estate a Fifth Column? Corporate media colludes with democracy’s demise

Our media institutions, deeply embedded in the power structures of society, are not providing the information that we need to make our democracy work. To put it another way, corporate media consolidation is a corrosive social force. It robs people of their voice in public affairs and pollutes the political culture. And it turns the debates about profound issues into a shouting match of polarized views promulgated by partisan apologists who trivialize democracy while refusing to speak the truth about how our country is being plundered.

Our dominant media are ultimately accountable only to corporate boards whose mission is not life, liberty and the pursuit of happiness for the whole body of our republic, but the aggrandizement of corporate executives and shareholders.

These organizations’ self-styled mandate is not to hold public and private power accountable, but to aggregate their interlocking interests. Their reward is not to help fulfill the social compact embodied in the notion of “We, the people,” but to manufacture news and information as profitable consumer commodities.

Democracy without honest information creates the illusion of popular consent at the same time that it enhances the power of the state and the privileged interests that the state protects. And nothing characterizes corporate media today more than its disdain toward the fragile nature of modern life and its indifference toward the complex social debate required of a free and self-governing people.

Let’s look at what is happening with the Internet. This spring the cable giant Comcast tried to pack a Federal Communications Commission (FCC) hearing on network neutrality by hiring strangers off the street to ensure that advocates of net neutrality would not be able to get a seat in the hearing room.

SaveTheInternet.com — a bipartisan coalition — and its supporters helped expose the ruse. Soon after, there was a new hearing, this time without the gerrymandering seating by opponents of an open Internet.

Excellent article on the consequences of allowing a handful of big media corporations to decide what the people should know. The link to the entire story is in the title.

Bank Failures: Coming Soon to a Neighborhood Near You

FDIC Says At Least 90 US Banking institutions In Trouble

Several points of data indicate a rocky road for banks. According to the Federal Deposit Insurance Corp., the amount of non-current loans, those more than 90 days behind, on the portfolios of its institution has grown rapidly. In the last three months of 2007 and the first three months of 2008, the value of these loans rose by $53 billion to represent 1.71% of all loans from FDIC-insured institutions.

In the case of bank collapse, the FDIC has to step in to insure the value of deposits. Normally the FDIC attempts to maintain a fund at 1.25% of the value of its potential obligations. In recent months, however, this fund has slid to 1.19%, driven primarily by a rise in deposits, said Sheila Bair, chair of the FDIC. If this figure slides further to 1.15% it forces the FDIC to make moves to shore up the fund.

Bair said the FDIC is monitoring 90 institutions with assets of $26 billion that it has identified as troubled. The entire size of the FDIC reserve fund is $52 billion. As a precaution, the FDIC is running bank failure readiness exercises, she said.

Can Banking Shake The Crisis?

While Wall Street and Washington fret about how badly investment banks could damage the economy, Tuesday provided a fresh reminder that commercial banks could be a bigger problem as the second wave of the credit crisis begins its run.

National City (nyse: NCC - news - people ), the Cleveland bank that, in the end, might become the poster child for the credit crisis, confirmed it was under a memorandum of understanding with the Office of the Comptroller of the Currency, the Treasury Department arm regulating national banks. This is a form of heightened scrutiny, though informal and less severe than some other options, and looks at a bank's capital and risk management, loan quality and liquidity.

...Ominously, the Federal Deposit Insurance is staffing up in anticipation of bank failures. It's already tracking 90 troubled banks, 18% more than the end of last year. None of this is good news for the troubled industry, which has been hoping for a rebound.

Monday, New York Fed chief Timothy Geithner, the architect of JPMorgan Chase's (nyse: JPM - people ) rescue of Bear Stearns in March, was drumming up support for greater regulation of Wall Street firms to lessen the risks of systemic meltdown. news -

And.in case you missed it..more news for IndyMac customers:

Deposits are insured up to $100,000 per depositor. As of March 31, IndyMac had total deposits of $19.06 billion. Some 10,000 depositors had funds in excess of the insured limit, for a total of $1 billion in potentially uninsured funds, the FDIC said.

Well, you can pretty much figure that the problems they are actually admitting to are just the tip of the iceberg. Things are bound to get pretty interesting over the next few months.

Recession: With War or Without It?...by Gary North

Americans have steadily stopped saving over the last 28 years. In 1981, they saved over 11% of their discretionary income. Today, they save nothing. They are now in full spending mode. They have borrowed money against their future income, against their home equity, and on simple promises to pay (signature loans: credit cards). They have stretched themselves thin with respect to debt.

If oil goes to $400 a barrel, or $500 a barrel, and stays there for a year, American consumers will be in panic mode. They will have to cut their budgets, and they have forgotten how to cut their budgets. They have forgotten how to save.

The strategy of the optimists is to tell us that the worst is over economically. This is the government's official position. Chairman Ben Bernanke does not say this. He keeps hinting of more trouble to come. He keeps telling us that the Federal Reserve System is monitoring events. He keeps implying that there is some sort of rabbit still remaining in the Federal Reserve System's hat which they can pull out if the banking system moves into paralysis mode. But he doesn't tell us what these rabbits are, or under what conditions the FED will pull them out of its hat.

The official government position on the economy is pure propaganda.

Dow Falls Below 11,000 for First Time in Two Years

Stocks finish volatile week by ending down more than 128 points on Fannie, Freddie worries

Wall Street's angst over the ongoing fallout from the credit crisis made for a turbulent end to a volatile week Friday -- stocks tumbled, soared and then turned south again as investors tried to assess the dangers faced by the country's biggest mortgage financiers, Fannie Mae and Freddie Mac.

The Dow Jones industrial average, which traded down more than 250 points in the session, briefly moved into positive territory Friday before ending down more than 128 points. The blue chips also traded below 11,000 for the first time in two years. And all the major indexes ended with another losing week.

A new high for oil prices above $147 a barrel also weighed on stocks.

Not sure they're going to be able to prop up the economy much longer...I hope Americans are preparing for the crash.

The First Domino Falls

IndyMac Bank seized by federal regulators

The federal government took control of Pasadena-based IndyMac Bank on Friday in what regulators called the second-largest bank failure in U.S. history.

Citing a massive run on deposits at the $32-billion bank, regulators shut its main branch three hours early, leaving customers stunned and upset. One woman leaned on the locked doors, pleading with an employee inside: "Please, please, I want to take out a portion." All she could do was read a two-page notice taped to the door.

Federal authorities said, based on a preliminary analysis, the takeover of IndyMac would cost the FDIC between $4 billion and $8 billion. Regulators said all deposits of up to $100,000 were safe and insured by the FDIC.

I think it's time to start using the good old mattress bank...no interest but your savings will surely be safer...FDIC is as broke as the rest of the government, you wouldn't want to hold your breath waiting for them to return your money if a few more banks go belly up.

Economic Headlines

Fannie, Freddie `Insolvent' After Losses, Poole Says

July 10 (Bloomberg) -- Borrowing at Fannie Mae, the U.S. government-sponsored mortgage company, has never been so expensive and it may not get better any time soon.

Fannie Mae paid a record yield relative to Treasuries on the sale of $3 billion in two-year notes yesterday amid concern the biggest provider of financing for U.S. home loans won't have enough capital to weather the worst housing slump since the Great Depression. The company's credit-default swaps show traders are treating the AAA rated debt as if it were five steps lower. Fannie Mae shares tumbled 13 percent yesterday in New York to the lowest level in almost 14 years.

Chances are increasing that the U.S. may need to bail out Fannie Mae and the smaller Freddie Mac, former St. Louis Federal Reserve President William Poole said in an interview. Freddie Mac owed $5.2 billion more than its assets were worth in the first quarter, making it insolvent under fair value accounting rules, he said. The fair value of Fannie Mae's assets fell 66 percent to $12.2 billion, data provided by the Washington-based company show, and may be negative next quarter, Poole said.

``Congress ought to recognize that these firms are insolvent, that it is allowing these firms to continue to exist as bastions of privilege, financed by the taxpayer,'' Poole, 71, who left the Fed in March, said in the interview yesterday.

Foreclosures Rose 53% in June, Bank Seizures Tripled

July 10 (Bloomberg) -- U.S. foreclosure filings increased 53 percent in June from a year earlier and bank seizures rose the most on record as deteriorating property values and higher rates on adjustable mortgages forced more people to give up their homes.

More than 252,000 properties, or one in 501 U.S. households, entered a stage of the foreclosure process, RealtyTrac Inc., a seller of default data, said today in a statement. Bank seizures rose 171 percent, the most since the Irvine, California-based company began tracking statistics on default notices, warnings of a scheduled auction and repossessions in January 2005.

``The foreclosure problem is getting worse and will stay with us well into the next decade,'' Mark Zandi, chief economist for Moody's Economy.com in West Chester, Pennsylvania, said in an interview. ``The job market is eroding and homeowners have less equity. Lenders are much less willing to work with you if you've got negative equity, and you're more likely to give up your house if you're deeply underwater.''

Foreclosure activity is the highest since the Great Depression of the 1930s, said Rick Sharga, RealtyTrac's vice president of marketing. Home prices, which fell the most on record in April, according to the S&P/Case-Shiller index of 20 U.S. metropolitan areas, have created a cycle where shrinking equity drives homeowners into foreclosure, which in turn further pushes down home prices, Sharga said.

Bernanke, Paulson outline strategy to make working class pay for Wall Street crisis

Bernanke indicated that the Fed would extend its policy of offering unlimited loans to major Wall Street investment banks. The provision of Fed funds to non-commercial banks and brokerage firms, a departure from the Fed’s legal mandate without precedent since the Great Depression, is part of a policy of bailing out the banking system to the tune of hundreds of billions of dollars. The Fed announced its loan program for investment banks last March when it dispensed $29 billion to JPMorgan Chase as part of a rescue operation to prevent the collapse of Bear Stearns.

In his speech, Treasury Secretary Paulson acknowledged that home foreclosures in 2007 reached 1.5 million and predicted another 2.5 million homes would be foreclosed in 2008. But he made clear that nothing would be done to save the vast majority of distressed homeowners from being thrown onto the street.

Paulson, the former CEO of Goldman Sachs, said that “many of today’s unusually high number of foreclosures are not preventable.” With a callous indifference reminiscent of Marie Antoinette’s “Let them eat cake,” he went on to say that “some people took out mortgages they can’t possibly afford and they will lose their homes. There is little public policymakers can, or should, do to compensate for untenable financial decisions.”

In other words, low-income home owners who were lured into high-interest mortgages by predatory mortgage companies and banks are getting their just deserts! Of course, the Wall Street CEOs and big investors who made billions of dollars by speculating on these loans, creating a vast edifice of fictitious capital that was bound to collapse, are not to be held accountable for any “untenable financial decisions.” On the contrary, they are to be subsidized with hundreds of billions of dollars of credit, ultimately to be paid for by public funds.

Crisis wipes $1 trillion from financial stocks

NEW YORK - U.S. financial companies have lost more than $1 trillion in value this year, and yet another decline on Monday shows concerns aren't going away soon.

Banks and brokerages began the week lower on the same fears that have been proven toxic since last summer in the ongoing credit crisis. The financial sector was hit with a confluence of troubles on Monday: cautious remarks from a Federal Reserve official and new capital concerns at Freddie Mac and Fannie Mae .

The drop in names like Lehman Brothers , Morgan Stanley and Merrill Lynch caused the financial section of the Standard & Poor's 500 index to lose almost $150 billion in value on Monday, according to the rating agency. That means S&P 500's 85 financial components have lost some $1.3 trillion since the sector reached a high last October.

Even more startling is that shares of 35 of the companies, which include insurers, have lost more than half their value so far this year. The financial sector used to be the index's main driver, and many economists believe that the broader market will rise or fall on their health.