News ArticlesExcerpts of Key News Articles in Major Media
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A bipartisan panel of senators has concluded that former defense secretary Donald H. Rumsfeld and other top Bush administration officials bear direct responsibility for the harsh treatment of detainees at Guantanamo Bay, and that their decisions led to more serious abuses in Iraq and elsewhere. In the most comprehensive critique by Congress of the military's interrogation practices, the Senate Armed Services Committee issued a report yesterday that accuses Rumsfeld and his deputies of being the authors and chief promoters of harsh interrogation policies that disgraced the nation and undermined U.S. security. "The abuse of detainees in U.S. custody cannot simply be attributed to the actions of 'a few bad apples' acting on their own," the report states. "The fact is that senior officials in the United States government solicited information on how to use aggressive techniques, redefined the law to create the appearance of their legality, and authorized their use against detainees." Human rights and constitutional law organizations have urged further action, ranging from an independent commission to prosecutions of those involved in authorizing the interrogations. Michael Ratner, president of the Center for Constitutional Rights, which has helped defend detainees at Guantanamo, said the committee report is valuable because "it's official, it's bipartisan. It's open and explicit, going right to Rumsfeld and having Rice involved," Ratner said. "It breaks new ground in saying that the [torture] techniques basically don't work . . . that they're actually designed to elicit false confessions."
Note: To read the full report, click here. For many key reports from major media sources detailing US torture and war crimes in Iraq and Afghanistan, click here.
To friends in the protest movement, Lucy was an eager 20-something who attended their events and sent encouraging e-mails to support their causes. Only one thing seemed strange. "At one demonstration, I remember her showing up with a laptop computer and typing away," said Mike Stark, who helped lead the anti-death-penalty march in Baltimore that day. "We all thought that was odd." Not really. The woman was an undercover Maryland State Police trooper who between 2005 and 2007 infiltrated more than two dozen rallies and meetings of nonviolent groups. Maryland officials now concede that, based on information gathered by "Lucy" and others, state police wrongly listed at least 53 Americans as terrorists in a criminal intelligence database -- and shared some information about them with half a dozen state and federal agencies, including the National Security Agency. Among those labeled as terrorists: two Catholic nuns, a former Democratic congressional candidate, a lifelong pacifist and a registered lobbyist. One suspect's file warned that she was "involved in puppet making and allows anarchists to utilize her property for meetings." "There wasn't a scintilla of illegal activity" going on, said David Rocah, an attorney for the American Civil Liberties Union, which filed a lawsuit and in July obtained the first surveillance files. State police have released other heavily redacted documents. Investigators, the files show, targeted groups that advocated against abortion, global warming, nuclear arms, military recruiting in high schools and biodefense research, among other issues.
Note: For lots more on increasing threats to civil liberties, click here.
Take a walk down the street or through the park and you'll see them – people of all ages toting bottles of water. Last year, Americans drank nine billion gallons out of those little plastic bottles. Sure, it's healthier than soda, but all that plastic is just as bad for the environment, creating an estimated 1.5 million tons of waste each year. So, more and more places are banning bottled water. Washington University in St. Louis will end almost all sales by the end of this semester. San Francisco declared it a no-no in city offices last year. Other local governments may do the same. Some brands, including Coca-Cola's Dasani and Pepsi's Aquafina, come from the tap – and supporters of these measures argue you're better off just filling a reusable container at the water fountain for free. A cheap, calorie-free alternative that doesn't hurt the environment. Now, I'll drink to that.
Note: For a powerful six-minute trailer to the movie "Tapped," which exposes the many scams around bottled water, click here. For more on this, click here.
Neuroscientists have shown that they can [create] a “body swapping” illusion that could have a profound effect on a range of therapeutic techniques. At the annual meeting of the Society for Neuroscience last month, Swedish researchers presented evidence that the brain, when tricked by optical and sensory illusions, can quickly adopt any other human form, no matter how different, as its own. “You can see the possibilities, putting a male in a female body, young in old, white in black and vice versa,” said Dr. Henrik Ehrsson of the Karolinska Institute in Stockholm. The technique is simple. A subject stands or sits opposite the scientist, as if engaged in an interview. Both are wearing headsets, with special goggles, the scientist’s containing small film cameras. The goggles are rigged so the subject sees what the scientist sees: to the right and left are the scientist’s arms, and below is the scientist’s body. To add a physical element, the researchers have each person squeeze the other’s hand, as if in a handshake. Now the subject can see and “feel” the new body. In a matter of seconds, the illusion is complete. In a series of studies, using mannequins and stroking both bodies’ bellies simultaneously, the Karolinska researchers have found that men and women say they not only feel they have taken on the new body, but also unconsciously cringe when it is poked or threatened. In previous work, neuroscientists have induced various kinds of out-of-body experiences using similar techniques. The brain is so easily tricked, they say, precisely because it has spent a lifetime in its own body.
The U.S. credit-card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said. The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted. "In other words, we expect available consumer liquidity in the form of credit-card lines to decline by 45 percent." Closing millions of accounts, cutting credit lines and raising interest rates are just some of the moves credit card issuers are using to try to inoculate themselves from a tsunami of expected consumer defaults. A consolidated U.S. lending market that is pulling back on credit is also posing a risk to the overall consumer liquidity, Whitney said. Mortgages and credit cards are now dominated by five players who are all pulling back liquidity, making reductions in consumer liquidity seem unavoidable, she said. "We are now beginning to see evidence of broad-based declines in overall consumer liquidity. Already, we have witnessed the entire mortgage market hit a wall, and we believe it will, for the first time ever, show actual shrinkage over the next few months," she wrote. "In a country that offers hundreds of cereal and soda pop choices, the banking industry has become one that offers very few choices", Whitney wrote in a note dated November 30. "Pulling credit when job losses are increasing by over 50 percent year-over-year in most key states is a dangerous and unprecedented combination, in our view," the analyst said.
Note: This article, in pointing out that the banking industry offers few choices for consumers, fails to mention that the industry is rapidly becoming extremely concentrated, with major bank failures and takeovers accelerating due to the financial crisis on Wall Street. And the bailout from the Fed and Treasury has encouraged this concentration through huge tax breaks and risk protections. For many revealing reports on the Wall Street bailout from reliable sources, click here.
Over sandwiches and pizza, a group of high school students here debated the pros and cons of combating poverty in five desperate nations. They scrolled through Web sites, analyzed statistics and considered how much they knew about the economy, language and culture of each country. This was no mere academic exercise. The students, at the Meadows School, have real decisions to make and, they hope, real people to rescue. By the time they scattered after their lunch period, the group had deferred until next month the decision on where to spend the $25,000 they had raised, but seemed to be leaning toward Peru. That may seem like a lot of money for a student group, but it was the entry fee for the school to become investors in Pro Mujer, a nonprofit lending institution based in New York that issues small loans to poor women in foreign countries to use for buying tools to start or expand small businesses. In raising the money and investing it with Pro Mujer, the Meadows School is by all accounts the first high school to operate a microbank. The founder of the Meadows Microcredit Action Group, Justin Blau, 17, and its faculty adviser, Kirk Knutsen, have bigger plans for their endeavor. Pro Mujer will mete out the $25,000 to recipients in the country the students select and return to the school both regular status reports as well as a modest amount of earned interest. The group plans to use that interest and other money raised locally to invest in smaller, more specific projects through Kiva, another microfinance lender, with no minimum entry requirement.
Note: For lots more on the exciting, amazingly successful microlending movement, click here.
UFO enthusiasts are pressing Barack Obama to release classified documents about sightings of alien spacecraft, encouraged by support from within the President-Elect's own White House team. Desperate to see the US emulate the British Government and disclose reported "contact" with UFOs, the enthusiasts have written to Mr Obama to ask that his administration [come] clean about the contents of America's "X-Files". They believe they have good prospects of success after public statements of support from both John Podesta, who is running Mr Obama's White House transition team, and Bill Richardson, the Governor of New Mexico ... who is expected to secure a cabinet post. When he was the White House chief of staff under Bill Clinton, Mr Podesta led a project to declassify 800 million pages of intelligence documents. Gov Richardson, a former presidential candidate and fellow UFO aficionado, has written a forward to a book on the so-called Roswell Incident in New Mexico. He has called for full disclosure by the Pentagon of what really occurred. Only last week a US Air Force pilot, Milton Torres, whose testimony was released from the British archives, appeared on US television explaining how he was ordered to shoot down a large UFO over the UK in 1957 and then silenced by military officials, who told him never to speak of the incident.
Note: Podesta has also publicly called for a release of UFO records for years, alleging a cover-up. See the CNN article reporting this available here. For a concise summary of evidence on UFO sightings presented by highly-respected former military and government professionals, click here.
With its decision last week to pump an additional $1 trillion into the financial crisis, the government eliminated any doubt that [it has] no hesitation in pledging to spend previously almost unimaginable sums of money and running up federal budget deficits on a scale not seen since World War II. Indeed, analysts warn that the nation's next financial crisis could come from the staggering cost of battling the current one. Just last week, new initiatives added $600 billion to lower mortgage rates, $200 billion to stimulate consumer loans and nearly $300 billion to steady Citigroup, the banking conglomerate. That pushed the potential long-term cost of the government's varied economic rescue initiatives, including direct loans and loan guarantees, to an estimated total of $8.5 trillion -- half of the entire economic output of the U.S. this year. The spending already has had a dramatic effect on the federal budget deficit, which soared to a record $455 billion last year and began the 2009 fiscal year with an amazing $237-billion deficit for October alone. Analysts say next year's budget deficit could easily bust the $1-trillion barrier. "I didn't think we'd see that for a long time," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. "There's a huge risk of another economic crisis, a debt crisis, once we get on the other side of this one." Once the financial crisis eases, higher interest rates and soaring inflation will be risks.
Note: For many revealing reports on the Wall Street bailout from reliable sources, click here.
The bailouts keep coming, and they seem to be getting worse for taxpayers. The deal worked out over the weekend to prevent the collapse of Citigroup "is a terrible deal for taxpayers," says Campbell Harvey, a Duke University global finance professor. "Some intervention was necessary. But the terms of the intervention basically shafted the U.S. taxpayer." Under the deal, the U.S. government will invest $20 billion in Citigroup preferred stock (on top of its previous $25 billion capital injection from the Troubled Asset Relief Program) and guarantee up to $306 billion in mortgage and other assets. Citigroup would absorb the first $29 billion in losses on that asset pool. Losses exceeding $29 billion would be shared 90 percent by the government and 10 percent by Citigroup. What do taxpayers get for taking on this risk? Citigroup will pay an 8 percent dividend on the preferred stock or $560 million a year. By comparison, when Warren Buffett's Berkshire Hathaway recently invested $5 billion in Goldman Sachs and $3 billion in General Electric, it got preferred stock that pays a 10 percent dividend. The government also gets warrants to purchase about $2.7 billion worth of Citigroup common stock at $10.61 per share. Citigroup's shares closed at $5.95 per share Monday, up $2.18 from Friday. For the warrants to become profitable, the common shares would have to nearly double.
Note: The answer to the question of what taxpayers get should be essentially nothing. Only Citigroup shareholders will see the benefits mentioned, and very few taxpayers are shareholders. Money is being thrown around like never before. For many revealing reports on the realities of the Wall Street bailout, click here.
Using technology originally developed for mass disasters, Boston disease trackers are embarking on a novel experiment - one of the first in the country - aimed at eventually creating a citywide registry of everyone who has had a flu vaccination. The resulting vaccination map would allow swift intervention in neighborhoods left vulnerable to the fast-moving respiratory illness. The trial starts this afternoon, when several hundred people are expected to queue up for immunizations at the headquarters of the Boston Public Health Commission. Each of them will get a bracelet printed with a unique identifier code. Information about the vaccine's recipients, and the shot, will be entered into handheld devices similar to those used by delivery truck drivers. Infectious disease specialists in Boston and elsewhere predicted that the registry approach could prove even more useful if something more sinister strikes: a bioterrorism attack or the long-feared arrival of a global flu epidemic. In such crises, the registry could be used to track who received a special vaccine or antidote to a deadly germ. "Anything you can do to better pinpoint who's vaccinated and who's not, that's absolutely vital," said Michael Osterholm, director of the Center for Infectious Disease Research & Policy at the University of Minnesota. "I wish more cities were doing this kind of thing." When people arrive for their shots, they will get an ID bracelet with a barcode. Next, basic information - name, age, gender, address - will be entered into the patient tracking database. There will be electronic records, too, of who gave the vaccine and whether it was injected into the right arm or the left, and time-stamped for that day.
Note: For more on the serious risks and dangers posed by vaccines, click here and here.
Given the speed at which the federal government is throwing money at the financial crisis, the average taxpayer, never mind member of Congress, might not be faulted for losing track. CNBC, however, has been paying very close attention and keeping a running tally of actual spending as well as the commitments involved. Try $4.28 trillion dollars. That's $4,284,500,000,000 and more than what was spent on WW II, if adjusted for inflation, based on our computations from a variety of estimates and sources. Not only is it an astronomical amount of money, it's a complicated cocktail of budgeted dollars, actual spending, guarantees, loans, swaps and other market mechanisms by the Federal Reserve, the Treasury and other offices of government taken over roughly the last year, based on government data and news releases. Strictly speaking, not every cent is a direct result of what's called the financial crisis, but it is arguably related to it. Some 68-percent of the sum falls under the Federal Reserve's umbrella, while another 16 percent is the under the Troubled Asset Relief Program, TARP, as defined under the Emergency Economic Stabilization Act, signed into law in early October. The TARP alone is bigger than virtually any other US government endeavor dating back to the Louisiana Purchase.
Note: That's over $10,000 per man, woman, and child in the U.S. Click on the link above to view a highly informative slideshow, the "Biggest Budget Items in US History," comparing the Wall Street bailout to famous historic government expenditures, and a chart, the "Financial Crisis Balance Sheet," detailing the many components of the bailout. For many key articles revealing the hidden realities of the bailout, click here.
In issuing a deliberately narrow ruling yesterday in a controversial case involving whales and the U.S. Navy, the Supreme Court strongly indicated that it intends to defer to the military in future disputes pitting national security against environmental concerns. The justices voted 6 to 3 to lift restrictions on the Navy's use of sonar off the Southern California coast, backing the military in a longstanding battle over whether anti-submarine training harms marine mammals. Environmentalists say the exercises disrupt habitats and leave the mammals with permanent hearing loss and decompression sickness. But the Navy argued that the training missions are essential to detecting a new generation of "quiet" submarines deployed by China, North Korea and other potential adversaries. "We do not discount the importance of plaintiffs' ecological, scientific, and recreational interests in marine mammals," Chief Justice John G. Roberts Jr. wrote in the first decision of the court's current term. "Those interests, however, are plainly outweighed by the Navy's need to conduct realistic training exercises to ensure that it is able to neutralize the threat posed by enemy submarines." Although the majority tailored its decision on narrow legal grounds and indicated that future environmental disputes will be decided on a case-by-case basis, the court made sweeping statements of deference to military judgments. Roberts unquestioningly accepted the assertion of top Navy officers that the exercises "are of utmost importance to the Navy and the Nation," writing that "the proper determination of where the public interest lies does not strike us as a close question."
Note: For key reports on threats to and abuse of marine mammals, click here. For a list of organizations dedicated to protecting marine wildlife, click here.
The United States military since 2004 has used broad, secret authority to carry out nearly a dozen previously undisclosed attacks against Al Qaeda and other militants in Syria, Pakistan and elsewhere. These military raids, typically carried out by Special Operations forces, were authorized by a classified order that Defense Secretary Donald H. Rumsfeld signed in the spring of 2004 with the approval of President Bush. The secret order gave the military new authority to attack the Qaeda terrorist network anywhere in the world, and a more sweeping mandate to conduct operations in countries not at war with the United States. In 2006, for example, a Navy Seal team raided a suspected militants’ compound in the Bajaur region of Pakistan. Some of the military missions have been conducted in close coordination with the C.I.A.. In others, like the Special Operations raid in Syria on Oct. 26 of this year, the military commandos acted in support of C.I.A.-directed operations. Apart from the 2006 raid into Pakistan, the American officials refused to describe in detail what they said had been nearly a dozen previously undisclosed attacks, except to say they had been carried out in Syria, Pakistan and other countries. The new authority was spelled out in a classified document called “Al Qaeda Network Exord,” or execute order. The 2004 order identifies 15 to 20 countries, including Syria, Pakistan, Yemen, Saudi Arabia and several other Persian Gulf states.
Note: For key reports on government secrecy from major media sources, click here.
Financial giants getting injections of federal cash owed their executives more than $40 billion for past years' pay and pensions as of the end of 2007, a Wall Street Journal analysis shows. The government is seeking to rein in executive pay at banks getting federal money. But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what they owe in pensions to their entire work forces. The sums are mostly for special executive pensions and deferred compensation, including bonuses, for prior years. Some examples: $11.8 billion at Goldman Sachs Group Inc., $8.5 billion at J.P. Morgan Chase & Co., and $10 billion to $12 billion at Morgan Stanley. Few firms report the size of these debts to their executives. In most cases, the Journal calculated them by extrapolating from figures that the firms do have to disclose. Most firms haven't set aside cash or stock for these IOUs. They are a drag on current earnings and when the executives depart, employers have to pay them out of corporate coffers. [Such] liabilities grew especially high in the financial industry, with its tradition of lavish pay. The liabilities are an essentially hidden obligation. Even when the debts to their executives total in the billions, most companies lump them into "other liabilities"; only a few then identify amounts attributable to deferred pay.
Note: For extensive coverage of continuing revelations about the Wall Street bailout, click here.
Gordon Brown and other European leaders are secretly preparing an unprecedented campaign to spread GM crops and foods in Britain and throughout the continent, confidential documents obtained by The Independent on Sunday reveal. The documents –- minutes of a series of private meetings of representatives of 27 governments –- disclose plans to "speed up" the introduction of the modified crops and foods and to "deal with" public resistance to them. The secret meetings were convened by Jose Manuel Barroso, the pro-GM President of the Commission, and chaired by his head of cabinet, Joao Vale de Almeida. The prime ministers of each of the EU's 27 member states were asked to nominate a special representative. Neither the membership of the group, nor its objectives, nor the outcomes of its meetings have been made public. But The IoS has obtained confidential documents, including an attendance list and the conclusions of the two meetings held so far – on 17 July and just two weeks ago on 10 October – written by the chairman. The list shows that President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany sent close aides. Britain was represented by Sonia Phippard, director for food and farming at the Department of Environment, Food and Rural Affairs. The conclusions reveal the discussions were mainly preoccupied with how to speed up the introduction of GM crops and food and how to persuade the public to accept them. The documents also make clear that Mr Barroso is going beyond mere exhortation by trying to get prime ministers to overrule their own agriculture and environment ministers in favour of GM.
Note: For an excellent summary of the many health risks posed by genetically modified foods, click here.
Despite the Wall Street meltdown, the nation's biggest banks are preparing to pay their workers as much as last year or more, including bonuses tied to personal and company performance. So far this year, nine of the largest U.S. banks, including some that have cut thousands of jobs, have seen total costs for salaries, benefits and bonuses grow by an average of 3 percent from a year ago, according to an Associated Press review. "Taxpayers have lost their life savings, and now they are being asked to bail out corporations," New York Attorney General Andrew Cuomo said of the AP findings. "It's adding insult to injury to continue to pay outsized bonuses and exorbitant compensation." That there is a rise in pay, or at least not a pronounced dropoff, from 2007 is surprising because many of the same companies were doing some of their best business ever, at least in the first half of last year. In 2008, each quarter has been weaker than the last. "There are, of course, expectations that the payouts should be going down," David Schmidt, a senior compensation consultant at James F. Reda & Associates. "But we haven't seen that show up yet." Some banks are setting aside large amounts. At Citigroup, which has cut 23,000 jobs this year amid the crisis, pay expenses for the first nine months of this year came to $25.9 billion, 4 percent more than the same period last year. Typically, about 60 percent of Wall Street pay goes to salary and benefits, while about 40 percent goes to end-of-the-year cash and stock bonuses that hinge on performance, both for the individual and the company.
Note: For lots more on the Wall Street bailout, click here.
Nat Rothschild, the financier at the centre of allegations that threaten to engulf the shadow Chancellor, George Osborne, is no stranger to laws which forbid politicians from accepting donations from abroad. Political donations from overseas are also illegal in the US, where John McCain's campaign team is under investigation for allegedly accepting a benefit in kind from two mega-rich British citizens, namely Nat Rothschild and his father, Jacob, the Fourth Baron Rothschild. In April, Mr McCain passed through London and spoke at a fund-raising dinner for expatriate Americans, where seats at the cheapest tables cost Ł500 a head. What caught the eye of Judicial Watch, a Washington-based foundation dedicated to combating corruption, was that the event was held "by kind permission of Lord Rothschild and Hon Nathaniel Rothschild" at the family home in Spencer House, St James's, the only privately owned 17th-century palace in central London. The Rothschild family and politics have been intertwined for generations, ever since Nathan Rothschild, who founded the English branch of the family business, financed Britain's war against Napoleon two centuries ago. Serena Rothschild, Nat Rothschild's mother, was one of the largest individual donors to the Conservative Party last year. She gave Ł190,000. She has also helped fund Mr Osborne's office. When another member of the clan, Sir Evelyn de Rothschild, married the New York businesswoman Lynn Forester, they spent the night of their wedding dinner in the White House as guests of Bill Clinton. Lady Rothschild was a fund-raiser for the Democrats. So it is nothing new for a Rothschild to be mixing with prominent politicians.
Note: For more on secrecy in high places, see the deeply revealing reports from reliable major media sources available here.
The latest request from the Pentagon jars the senses. They are looking for contractors to provide a "Multi-Robot Pursuit System" that will let packs of robots "search for and detect a non-cooperative human". Given that iRobot last year struck a deal with Taser International to mount stun weapons on its military robots, how long before we see packs of droids hunting down pesky demonstrators with paralysing weapons? Or could the packs even be lethally armed? Steve Wright of Leeds Metropolitan University is an expert on police and military technologies. "The giveaway here is the phrase 'a non-cooperative human subject'," he told me: "What we have here are the beginnings of something designed to enable robots to hunt down humans like a pack of dogs. Once the software is perfected we can reasonably anticipate that they will become autonomous and become armed. We can also expect such systems to be equipped with human detection and tracking devices including sensors which detect human breath and the radio waves associated with a human heart beat. These are technologies already developed." Noel Sharkey, an AI and robotics engineer at the University of Sheffield, says "This is a clear step towards one of the main goals of the US Army's Future Combat Systems project, which aims to make a single soldier the nexus for a large scale robot attack. Independently, ground and aerial robots have been tested together and once the bits are joined, there will be a robot force under command of a single soldier with potentially dire consequences for innocents around the corner."
Note: For many revealing reports of new weaponry technologies in the planning and development stages, click here.
In a step that could accelerate a shakeout of the nation’s banks, the Treasury Department hopes to spur a new round of mergers by steering some of the money in its $250 billion rescue package to banks that are willing to buy weaker rivals, according to government officials. As the Treasury embarks on its unprecedented recapitalization, it is becoming clear that the government wants not only to stabilize the industry, but also to reshape it. Two senior officials said the selection criteria would include banks that need more capital to finance acquisitions. “Treasury doesn’t want to prop up weak banks,” said an official who spoke on condition of anonymity, because of the sensitivity of the matter. “One purpose of this plan is to drive consolidation.” With bankers traumatized by the credit crisis and the loss of investor confidence, officials said, there are plenty of banks open to selling themselves. The hurdle is a lack of well-capitalized buyers. Stable national players like Bank of America, JPMorgan Chase, and Wells Fargo are already digesting acquisitions. A second group of so-called super-regional banks are well positioned to take over their competitors, officials said, but have been reluctant to undertake or unable to complete deals. By offering capital at a favorable rate, the government may encourage them to expand.
Note: So the U.S. government is using billions of taxpayer dollars to support megamergers which create less competition and more monopolistic conditions. Hmmmm. Is that what the taxpayers really want? For lots more highly revealing reports on the Wall Street bailout, click here.
All of the combined profits that major banks earned in recent years have vanished. Since mid-2007, when the credit crisis erupted, the country’s nine largest banks have written down the value of their troubled assets by a combined $323 billion. The problems that began with home mortgages, analysts say, are migrating to auto, credit card and commercial real estate loans. The deepening red ink underscores a crucial question about the government’s plan: Will lenders deploy their new-found capital quickly, as the Treasury hopes, and unlock the flow of credit through the economy? Or will they hoard the money to protect themselves? John A. Thain, the chief executive of Merrill Lynch, said on Thursday that banks were unlikely to act swiftly. “We will have the opportunity to redeploy that,” Mr. Thain said of the new capital. “But at least for the next quarter, it’s just going to be a cushion." For every dollar the banks earned during the industry’s most prosperous years, they have now wiped out $1.06. [Treasury Secretary Henry M.] Paulson unveiled plans to provide $125 billion to nine banks on terms that were more favorable than they would have received in the marketplace. The government, however, has offered no written requirements about how or when the banks must use the money. “There is no express statutory requirement that says you must make this amount of loans,” said John C. Dugan, the comptroller of the currency. The banks could use the money from the government for any number of things. Some analysts say the banks may use it to acquire weaker competitors. Others say they might use it to avoid painful cost-cutting. And still others say the banks may sit on the capital.
Note: With no requirements placed on how the bailout money is to be used, what is to stop the banks from using taxpayers's money to inflate the bonuses to top executives, or to increase political campaign contributions to Congress members in return for future favorable legislation?
Important Note: Explore our full index to revealing excerpts of key major media news articles on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.