NightBlogger

RUSSIA today won support from China and Central Asian states in its standoff with the West over the Georgia conflict as the European Union said it was weighing sanctions against Moscow. Russia’s President Dmitry Medvedev said he hoped the “united position” of a summit of Central Asian nations would “serve as a serious signal to those who try to turn black into white.” The West has strongly condemned Russia’s military offensive in Georgia this month and Medvedev’s decision to recognise the breakaway Georgian regions of Abkhazia and South Ossetia as independent states. Ratcheting up pressure on Russia, French Foreign Minister Bernard Kouchner, whose country holds the presidency of the European Union, said the 27-nation bloc was preparing sanctions on Moscow. More

Mr Mortgage
The smell of ‘bailout’ is in the air. Like Pavlov’s dog, stocks are keying off the potential collapse of the nation’s two largest mortgage players who control about 75% of the market currently, looking for a bailout and subsequent rally. At any other time in history, this sort of event would have caused ripples through the financial markets. But in this new age of ‘moral hazard’ brought about by Heli-Ben’s easy checkbook in which bailouts are great for stocks, anything goes and is a buying opportunity.

What will Paulson do? That is the question. Does he throw the US Government, tax payer and Treasury Bond yields under the bus with an open-ended, retroactive bailout? A bailout designed to save the debt holders and/or the MBS holders such as China, Russia, Bill Gross and other rich investors who knew what they were buying? Does he throw the investors under the bus in favor of the US Government’s and tax payer’s balance sheets? Or, does he do a combination of both?

It is of little question whether Fannie and Freddie will have to be bailed out. But, how do they do it? Many, including myself, think that nationalizing these firms and running them like FHA going forward is the least painful for everyone.

Arguably, the Agencies are making some of the best loans ever that should actually be profitable. Therefore, an ‘explicit’ guaranty going FORWARD would not be a horrible thing. With an explicit guaranty going forward and likely higher mortgage rates and spreads over Treasuries, investors should have no problem buying up the issues. They would be in such hot demand that it could conceivably make actual mortgage rates cheaper on the front end than they are today. This sounds great, right! Not so fast. The foreigners and rich investors want their bailout too.

It is not about how this will operate going forward so much as it is about the $5.2 TRILLION in debt and mortgage-backed debt outstanding that has everyone in a tizzy. The majority of outstanding Agency RMBS’s are owned by foreign governments such as China and Russia, investors such as PIMCO (Bill Gross), mutual funds, banks and pension funds. These are the smartest guys in the room and if they would have even glanced the way of an Agency RMBS prospectus, they would have seen it said this security is not backed by the US Government but rather the full faith and credit of two run-away, over-leveraged, quasi-Government, failing hedge funds.

Without an explicit RETROACTIVE bailout that saddles the US tax payer with $5.2 TRILLION in liability, people are worried that these players, especially foreigners, will quit buying US Treasuries. Well, that’s the risk you take. But at this point in time that is just speculation. Many of these investors have already significantly lightened their US Treasury exposure. Strangely enough, even more so around the time the news began to broke that the Government was considering retroactively backing $5.2 Trillion in Agency debt and RMBS’s.

What do you think happens to Treasuries if you do put the US at that great of a risk? US Treasuries will still get hit but by a much larger pupulation of owners and for a much longer period of time. If you saddle the US with an open ended, retroactive bailout of the Agencies for some of the worst loans ever made from 2002-2007, a disaster will ensue. We already know that GSE’s have significant subprime and Alt-A holding and much of their Prime paper is closer to Alt-A. Defaults are soaring across all paper types. Foreclosures could continue for years.

Just think about it for a minute. If we back all of this, much of it toxic, there is the chance that every time a negative piece of housing data comes out in the future, Treasuries could actually sell off vs. rally because that’s more bad paper that the US Gov’t must make good, guaranteeing payments to these investors. If we are in the early innings of this housing meltdown like many including myself think we are, then get ready for sky-high Bond yields because the only way to cover all of investors around the world will be through the sale of new Bonds.

We are in a ‘damned if we do and damned if we don’t’ situation. But, I see signs of hope. Take the New FHA Bailout law for example. It requires banks to significantly write down the value of their mortgage notes to 90% of the new value and get nothing in return. That is the investor sharing the responsibility.

The same thing should happen here. These wealthy, global investors knew what they were buying and taking a haircut on their Agency MBS holdings is not the end of the world. The US Gov’t and tax payer retroactively backing mortgage paper that never had a guaranty in the first place without any idea of when this housing and credit crisis will be over would do much long-term damage and force higher mortgage rates in the US and interest rates across the globe.

If we leave older vintage Agency securities to trade without a guaranty, investors would take losses because all older mortgage-backed debt has fallen in value given what has happened to the housing and credit markets over the past year and a half. But, these losses would not be massive and could be mitigated with ownership or warrants in the new and improved Fannie Mae and Freddie Mac that would be very valuable in the future, as the companies did well.

Activist hedge fund manager Bill Ackman talked about the bailout and a plan he has for the GSE’s. I like it. Below are the links. -Best, Mr Mortgage

The United States is in a huge foreign policy muddle in the Middle East. It wants to dominate and control Iran but requires the support of the world community to accomplish its aims. Diplomacy and sanctions require only a low level of support. On the other hand, to launch a military attack or green-light one by Israel, the United States needs far more backing. This support does not appear to exist, and recent U.S. foreign policy actions are eroding that support even further. The Israeli newspaper Haaretz reported on August 13 that the United States refused to give the go-ahead to Israeli attacks on Iran’s nuclear facilities in talks between Secretary of Defense Robert Gates and Israeli Defense Minister Ehud Barak. Could it be that the Bush administration finally knows when it is licked?

Israeli officials acknowledge that it would be difficult to launch such an attack without approval from Russia, China, and India, something that the United States would have to lobby those nations to achieve. The chances at present are extremely slim that any of the three will acquiesce. U.S. condemnation of Russia’s military action to defend the breakaway region of South Ossetia, combined with the determination of the Bush administration to install missile systems in Poland and the Czech Republic, virtually guarantee that Russia will not do anything to help the United States foment more violence in its neighborhood.

Beijing owns much of the U.S. debt, continues to be one of Tehran’s largest trade partners, and is not about to be dictated to by Washington. India has defied the United States by entering into a pipeline deal with Iran. Exhaustive three-year nuclear treaty negotiations between the United States and India are utterly stalled. If the treaty is not presented to Congress in September, it will be dead. More

JAY: Minqi, can you give us some examples of what you say are a rising disparity or these social tensions? Give us some facts, some statistics on them, that give us a picture of what’s happening in general.

LI: Between 1 percent or 5 percent of Chinese population controlling about 70 percent of all of the financial wealth, as far as I can recall correctly. And it’s also interesting that a few days earlier I read a commentary article on The Financial Times, which says why China’s middle class does not like democracy. Now, it’s written by an American who—basically, he is arguing that the Chinese middle class—. The middle class actually a misnomer in the Chinese context. It’s actually about the most privileged 15 percent of population. And they would, in fact quite be concerned, given China’s context, that if you do have democracy in China, they would be outvoted by the lower classes in China. So that’s the—you know, give you some idea about the situation in China today. More

What’s at stake is what former National Security advisor Zbigniew Brzezinski described in his 1997 book “The Grand Chessboard.” He called Eurasia the “center of world power extending from Germany and Poland in the East through Russia and China to the Pacific and including the Middle East and the Indian subcontinent.” He continued: “The most immediate (US) task is to make certain that no state or combination of states gains the capacity to expel the United States from Eurasia or even to diminish significantly its decisive arbitration role.” Dominating that part of the world and its vast energy and other resources is Washington’s goal with NATO and Israel its principal tools to do it: More

Credit Writedowns
The Financial Times Deutschland is reporting that China and Iraq want to revive a Saddam-era oil contract between the two nation that is worth billions of dollars. The contract, an obvious economic coup for China, secures Beijing exploration and development in the south of Baghdad situated Ahdab oil field.

The Iraqi government looks to be doing everything it can to thumb its nose at the Bush government and define its sovereignty outside of the US sphere of influence. If the United States entered the war in Iraq to gain secure access to oil, spending over $1 trillion in the process, it has not been successful.

My translation:

“Iraq and China are working hard to demonstrate their cooperation through the conclusion of a development agreement for the Ahdab oil field,” it was noted in a statement by the Iraqi Oil Ministry. The agreement will have a value of approximately $ 1.2 billion. It was agreed to in 1997 under Saddam Hussein and was to enter into force after the end of the then-UN sanctions against Iraq.

The agreement would be the first oil contract from the Saddam regime, which the new government has upheld. Despite claims by foreign oil companies, Baghdad had so far refused to benefit firms with pre-war arrangements for the allocation of oil contracts. The contract with the state-owned Chinese oil group CNPC was closed, although UN sanctions forbid direct transactions with the Iraqi oil industry. It was worth about $700 million at that time. After its development, the Ahdab oil field development should yield approximately 90,000 barrels of oil per day.

Once every four years athletes from around the world come together to compete in the summer Olympics. This year they have traveled to Beijing, China, and with the games about to begin, we’ve gathered 25 sites to help you experience them and learn more. More

MISH’S
Global Economic
Karl Denninger wrote a scathing attack of Paulson’s maneuver in Now We Know - There WAS A Threat. My thoughts on the so-called “confidence building measures” of this scheme follow.

* How can anyone have confidence in the markets when the Fed, the SEC, or the Treasury Department has to intervene on a weekly basis?

* How can anyone have any confidence in earnings statements when level 3, market to fantasy assets rise every quarter?

* How can anyone have confidence in banks when Citigroup Holds $1.1 Trillion in Mysterious Off Balance Sheet Assets?

* How can anyone have any confidence when the FASB Postpones Off-Balance-Sheet Rules for a Year, at Citigroup’s request, because “It’s not practical” to implement the rules now. (Please see Not Practical To Tell The Truth for more on this story).

* How can anyone gave confidence in financial institutions when Deleveraging Risk Is High And Growing At Lehman and other broker dealers?

* How can anyone have any confidence in banks when there are 25 Rock Solid Reasons To Believe The Banking System Is Unsound.

* How can taxpayers have any confidence when Congress acts in the best interest of Fannie Mae executives, investors like Bill Gross who bet on a taxpayer funded bailout, and China, rather than the best interests of taxpayers and innocent citizens that had nothing to do with this housing mess?

* How can anyone have confidence in the system if there is even the remotest possibility that the US financial system was held hostage by China? More

(NaturalNews) China’s National Disease Authority has confirmed that a man whose 24-year-old son died of the H5N1 strain of bird flu is also infected with the disease, raising concerns about human transmission of the virus. H5N1 is a particularly virulent and lethal strain of the influenza virus that primarily infects domestic and wild birds. So far, it does not spread easily between birds and humans, but health officials fear that it could mutate into a form that is highly contagious from human to human. Given the intensely lethal nature of the disease, such a strain could easily lead to a global health crisis. Neither the infected man, identified only by his surname Lu, nor his son were known to have had contact with infected poultry. Health officials are carrying out an analysis on the DNA of the viruses that infected the two men to determine if they are the same strain, or whether the men contracted the virus from different sources. More

Webster G. Tarpley
…the United States and NATO now escalating the hopeless and unwinnable Afghan war, and is preparing to send US and NATO forces on the ground to seize parts of Pakistan, a country which is almost 3 times more populous than Iran, and possesses a nuclear arsenal and the means to deliver it. The Bush-Cheney-neocon era in foreign policy is over, and the Brzezinski-Trilateral-Rockefeller-Soros phase of aggression has begun; the US hit list now features Chinese allies like Sudan, Zimbabwe, and Pakistan. Brzezinski is striving to put together some huge provocation for the Beijing Olympics, to make the Chinese government lose face and begin disintegrating. The ultimate targets of the new Obama-Brzezinski foreign policy are Russia, China, and the other members and friends of the Shanghai Cooperation Organization, the main pole of resistance in the world to the designs of Washington and London. The stakes are now much higher than a mere conventional clash in the Persian Gulf. Brzezinski’s adventurism goes far beyond that of the neocons, and objectively places the danger of a thermonuclear exchange on the world agenda. Watch for the Polish-Czech-Lithuanian missile crisis, a Balkan crisis, and a crisis between Georgia and Russia to point the world in this ominous new direction.

The US government is now being run by the Principals’ Committee, an interagency cabal that includes Defense Secretary Gates, Secretary Of State Rice, Joint Chiefs Chairman Mullen, Secretary of the Treasury Paulson, and other operatives of the Trilateral Wall Street financier faction. It is clear that under the new policy, Iran will be able to continue to process uranium: ‘The Bush administration’s decision to send a senior American official to participate in international talks with “More news and information about Iran.” Iran this weekend reflects a double policy shift in the struggle to resolve the impasse over the country’s nuclear program. First, the Bush administration has decided to abandon its longstanding position that it would meet face to face with Iran only after that country suspended its uranium enrichment, as demanded by the “More articles about Security Council, U.N.” United Nations Security Council. Second, an American partner at the table injects new importance to the negotiating track of the six global powers confronting Iran - France, Britain, Germany, Russia, China and the United States - even though their official stance is that no substantive talks can begin until uranium enrichment stops. The increased engagement raised questions of whether the Bush administration would alter its stance toward Iran as radically as it did with North Korea, risking a fresh schism with conservatives who have accused the White House of granting concessions to so-called rogue states without extracting enough in return.’ (New York Times, July 17, 2008) This gambit of appeasing Iran is being done in the hopes of turning Iran against Russia and China ­ a project of incalculable folly. Brzezinski is glad to see the Iranians have nukes, because he thinks he can keep them, pointed at Moscow. More

Michael Hunter
London equities fell further Wednesday after initial support for the troubled financial sector proved unsustainable. The FTSE 100 gave up modest early gains to stand 70 points lower at 5,101.0 in afternoon trade, a loss of 1.4 per cent after closing at its lowest level since October 2005 in the previous session. Stubborn worries about the health of the wider financial system delivered more punishment for the banks, leading the wider market lower. Royal Bank of Scotland fell 9 per cent to 152.3p amid dealing room speculation, discussed on FT Alphaville’s Markets Live, about the potential consequences of its exposure to the US subprime mortgage sector. HBOS also lost 4.6 cent, to 248p, ahead of Friday’s deadline for its 275p rights issue and Barclays was 2.4 per cent lower at 254p. The decline in Barclays was prompted in part by a report that the Chinese government had barred China Development Bank from further investment in the bank, but people close to Barclays said the report was incorrect and CDB would go ahead with its investment as planned. More

Source: Market Watch – As politicians call for taxpayer bailouts and a government takeover of troubled mortgage lenders Freddie Mac and Fannie Mae, FreedomWorks would like to point out that a bailout is a transfer of possibly hundreds of billions of U.S. tax dollars to sophisticated investors and governments overseas.

The top five foreign holders of Freddie and Fannie long-term debt are China, Japan, the Cayman Islands, Luxembourg, and Belgium. In total foreign investors hold over $1.3 trillion in these agency bonds, according to the U.S. Treasury’s most recent “Report on Foreign Portfolio Holdings of U.S. Securities.”

FreedomWorks President Matt Kibbe commented, “The prospectus for every GSE bond clearly states that it is not backed by the United States government. That’s why investors holding agency bonds already receive a significant risk premium over Treasuries.”

“A bailout at this stage would be the worst possible outcome for American taxpayers and mortgage holders, who have been paying a risk premium to these foreign investors. It would change the rules of the game retroactively and would directly subsidize the risks taken by sophisticated foreign investors.”

“A bailout of GSE bondholders would be perhaps the greatest taxpayer rip-off in American history. It is bad economics and you can be sure it is terrible politics.”

Christopher King
As provocation, I would have thought that a much better example was the approval recently given by the US Congress for a USD 400 million package for clandestine operations against Iran. More an act of war, really. Clandestine operations apparently means supporting terrorist groups, subversion, sabotage, kidnapping and assassination within Iranian territory. What would be the USA’s reaction if, say, China were to openly allocate similar funds and undertake similar activities against the USA? After years of American intervention in its affairs, sponsored war against it together with current lies and threats, Iran’s missile test seems a very sensible and modest defensive measure.

This is reminiscent of the USA’s attitude to water-boarding. It’s merely “enhanced interrogation” when the USA does it but if anyone else waterboards a US citizen, President Bush will seek the death penalty. Surely, this says something about the president’s mentality and American ethics.

Still considering provocation, however, wasn’t Israel’s recent rehearsal of an attack on Iran provocative? No? Or the USA’s agreement with the Czech Republic for the installation of a missile system component on Russia’s border? Condoleeza Rice says that these missiles won’t be aimed at Russia and I think that she’s right. The purpose of this missile system is puzzling because Condoleeza’s statement that it protects the US and European Union from Iran and other rogue states is obviously nonsense. Militarily, it’s useless. However, if it can irritate Russia into retaliatory missile deployment and cold-war rhetoric, this gives multiple perceived benefits for the USA:

► Ability to blame Russia for more military spending, giving profits for firms such as Haliburton
► Ability to sour relations between the EU and Russia and disrupt further rapproachment
► Distract from US violence in the Middle East by giving Europeans problems nearer home to worry about
Read More

US aerospace giant Boeing has forecast a global marketplace for new aircraft worth $US3.2 trillion ($3.36 trillion) over the next two decades, with China overtaking North America by 2027. The world’s airlines and freight companies will need about 29,400 new aircraft over the next 20 years, including orders made since the start of 2008, Boeing said today in its Current Market Outlook for 2008. The company had forecast last year that the global market would be worth $US2.8 trillion ($2.94 trillion) up to 2026, with new orders totalling 28,600 aircraft. “The Chinese market today is very small but 20 years from now it will be bigger than today’s North American market,” said Randy Tinseth, vice president of marketing, unveiling Boeing’s 20-year outlook. More

MIANYANG, China (AP) - A 5.3 magnitude aftershock struck China’s quake-battered Sichuan province Thursday amid concerns over rising water levels in a lake formed by landslides from the massive May 12 temblor.

The U.S. Geological Survey reported the aftershock struck at 12:41 p.m. (12:41 a.m. EDT) just south of the town of Qingchuan at the relatively shallow depth of 6 miles.

There were no immediate reports of new damage or injuries. Authorities had earlier begun evacuating people downstream from Tangjiashan lake, formed above the devastated town of Beichuan, after water rose to within 6 feet of flooding its bank. More

China (AP) — Angry parents whose children were killed in an earthquake-stricken school shouted “Oh, my child!” and “Tell us something!” when police forcefully removed them Tuesday from a protest outside a courthouse.

The police action was the clearest signal yet that authorities are hardening their stance against the impromptu displays of public anger over the May 12 earthquake that collapsed schools and killed thousands of children.

The students’ deaths have become the focus for Chinese, both inside and outside the quake zone, fueling accusations about corruption in school construction. The brewing public anger has become a political challenge and threatens to turn popular sentiment against the authoritarian government as it copes with aiding millions displaced by the disaster. More

China Earthquake Footage of collapse from inside building

SHANGHAI—Chinese authorities have launched a nationwide public hygiene campaign in an effort to combat the spread of hand, foot and mouth disease (HFMD), which has killed 42 children and infected at least 30,000 youngsters throughout Asia since the end of April. The disease, caused by an unusually virulent strain of the intestinal flu known as enterovirus 71 (EV71), so far has spread from Mongolia to Vietnam, including most parts of eastern China, and health officials warn that the situation could get worse as the disease usually peaks during the summer heat of June and July. Already, Mongolia has shut all kindergartens and primary schools as a result of the spreading outbreak. More

Under new regulations, flimsy bags under 0.025 millimeters thick are banned and shopkeepers must charge for carrier bags. Those found breaking the law face fines and could have their goods confiscated. Shoppers in downtown Beijing and in Internet chatrooms seemed largely sympathetic to the idea. China, which gets through three billion plastic bags a day, is increasingly aware of the damage to the environment caused by its breakneck growth. China, which consumes 37 million barrels of crude oil each year to manufacture more than one trillion plastic bags, is following in the footsteps of countries such as Ireland, Rwanda and Bangladesh. Italy is due to introduce a ban by 2010. More

A MILITARY helicopter carrying 19 people, many of them injured in China’s devastating earthquake, crashed in fog and turbulence, and authorities were searching for survivors, state media reported Sunday. The Russian-designed Mi-171 transport helicopter crashed Saturday afternoon in Wenchuan county in China’s southwest, the official Xinhua News Agency reported.

Xinhua said late Sunday that the aircraft was carrying 5 crew and 14 others, including people with quake injuries. There was no immediate word on any survivors or casualties. Xinhua said a search and rescue operation was under way. The confirmed death toll from the May 12 earthquake, China’s worst in three decades, was nearly 69,000, with another 18,000 still missing. More

DUJIANGYAN (AFP) China rushed Friday to remove radioactive and chemical materials sitting downstream from a “quake lake” that threatens to burst and send torrents of water into heavily populated areas. Nearly 100 unidentified radioactive sources were ordered to be removed…More than a million people risk being affected if the Tanjiashan lake empties onto towns and villages downstream, and many residents have been doing regular drills to move quickly to higher ground. By Saturday morning, close to 200,000 people were expected to have been evacuated from the area, the state-run China International Radio said Friday evening. The death toll from the quake has reached 68,558, with another 18,618 missing, the government said Friday. Some 15 million people have been displaced in the disaster. More
Will China’s Dams Hold? See photo slide show here

Photo Siebbi
CNN - The 50-year-old actress suggested last week that the devastating May 12 earthquake in China could have been the result of bad karma over the government’s treatment of Tibet. That prompted the founder of one of China’s biggest cinema chains to say his company would not show her films in his theaters, according to a story in The Hollywood Reporter.

Ng See-Yuen, founder of the UME Cineplex chain and the chairman of the Federation of Hong Kong Filmmakers, called Stone’s comments “inappropriate,” adding that actors should not bring personal politics to comments about a natural disaster that has left five million Chinese homeless, according to the Reporter. More

Photo babasteve
Jeffrey N. Wasserstrom
Two thousand and eight was to have been an auspicious year for China. But the year has been anything but. In January, a wave of polite demonstrations over planned urban development washed over Shanghai. Then freak snowstorms left 200,000 citizens stranded and angry over the government’s failure to deal with the emergency. Next, demonstrations and riots broke out in Lhasa, Tibet’s main city, and beyond. The flame of the Olympic torch relay was nearly doused by international protests and threats of a boycott. And now the catastrophic Sichuan earthquake has claimed as many as 80,000 lives, rendering millions homeless and raising fears of significant damage to the country’s infrastructure.

And it’s only May. No matter what happens next, 2008 is shaping up to be one of the most eventful and tragic years in recent Chinese history. And the way the Chinese people and the Communist Party leadership have risen to meet these unforeseen events challenges us in the West to rethink our often distorted view of China. Here are five lessons that are emerging: More

Two weeks after that devastating earthquake in China, and officials have risen the death toll to more than 65,000. The hardest hit parts of China are still feeling aftershocks and fighting floods. One on Sunday registered 6.0, destroying thousands of homes.

AUDRA ANG
On Monday, 1,800 soldiers arrived on foot at the new Tangjiashan lake in Beichuan county to fight the flood risk, each carrying 22 pounds of explosives to blast through the debris, the official Xinhua News Agency said. The lake is 2 miles upstream from the center of Beichuan county. Thousands of people who remained there after the initial earthquake have been evacuated in recent days as a precaution.

With weather clearing that had prevented helicopter flights, heavy equipment was also lifted in the area to help remove debris, state media reported. But thunderstorms were forecast for parts of Sichuan later Monday and Tuesday, the China Meteorological Administration said, adding they “could increase the risks posed by river blockages in some quake-hit areas.” More

Malaysia Sun
Even when the deadly 7.9-magnitude earthquake wrecked havoc in China earlier this month, the Government censors in the country continued to monitor the Internet. “Reporters rushed to the scene, and there was general feeling that the government had lifted the restrictions on reporters,” Wired News quoted Robert Dietz, the Asia program coordinator for the U.S.-based Committee to Protect Journalists, as saying.

“But the central propaganda department never stopped handing down directives, never stopped telling people how much to report,” he added. For controlling the Internet, China uses its “Golden Shield” program which is also known in the West as the “great firewall”. More

Reuters
China has found what it termed 50 “hazardous sources of radiation” due to last week’s earthquake, a senior official said on Friday, though he insisted the situation was under control. “Thirty-five of the radiation sources have been recovered, and the location of another 15 has been confirmed, but they have not yet been recovered…Three are buried in rubble and another 12 are in dangerous buildings, which staff cannot go into….” The disaster area is home to China’s chief nuclear weapons research lab in Mianyang, as well as several secretive atomic sites, but no nuclear power stations. Read more

DIBYA SARKAR
Associated Press
A Cisco Systems Inc. executive told a Senate subcommittee Tuesday that comments in an internal document about China’s goal to “combat” a religious group did not reflect the company’s views on censorship. “In no case does the document propose that any Cisco products be provided to facilitate the political goals of the government and no reference to applications of our products to the goals of censorship or monitoring,” Cisco general counsel Mark Chandler told the Senate Judiciary subcommittee on human rights and the law.

However, Shiyu Zhou, deputy director of the humans rights group Global Internet Freedom Consortium, said Cisco’s presentation offered planning, construction, technical training and other services to help China improve law enforcement and security network operations.

“Cisco can no longer assure Congress that Cisco China had not been and is not now an accomplice in partnering with China’s Internet repression,” he said during the hearing. “And, whether directly or indirectly, in the persecution of Falun Gong practitioners and other peaceful citizens in China.”
Read more

Kitty Bu reports from Sichuan
In China many parents are mourning the loss of their only child, killed in the Sichuan earthquake. The country’s one-child birth control policy is having a devastating unintended consequence for many. As elsewhere in Sichuan, parents in the small town of Wufu have gathered to mourn the more than 100 children killed when their local school building collapsed in the quake of 12 May 2008.

ABC News
In a rare public protest in China, hundeds of bereaved parents in one town in Sichuan province have angrily demanded the punishment of those responsible for the shoddy construction of schools. More than 7,000 schools formed a disproportionately high percentage of the buildings flattened by last week’s earthquake, which has claimed more than 40,000 lives.

In Juyuan town, hundreds of parents demanded an annual memorial day for their dead children, compensation and the punishment of those responsible for substandard construction work. They demanded to know why nearby houses remained standing while so many schools did not. They said there must be criminal prosecution of those responsible, no matter who they are.

In the village of Wufu, parents wrote the names of their dead children in blood on banners to protest the same issue. The Chinese Government has promised an enquiry.

Dean Nelson
Times Online
CHINA has ordered its atomic weapons industry to be ready for an “environmental emergency” after last week’s earthquake struck nuclear weapons storage and research facilities. Officials have also dispatched a team of 21 experts to inspect sites.

The announcement followed growing international concern over the safety of nuclear installations in the earthquake zone. China stores some of its vast arsenal of warheads in Sichuan province, which is also home to several reactors and two plutonium plants. Last week a French nuclear monitoring agency claimed a number of Chinese nuclear sites had suffered minor damage in the quake, but praised China for taking precautionary measures.
Read more

Photo mandj98

The Tocqueville Connection
Chinese authorities have implemented an emergency nuclear safety plan following the giant quake in Sichuan province, French nuclear experts disclosed Friday. The French experts of the Institute for Radiological Protection and Nuclear Safety (IRSN) said several nuclear installations not used for electricity generation were located in the south-western province at the epicentre of the quake.

These included a manufacturing site for nuclear weapons which handles unstable chemical elements found in tritium, plutonium and uranium, as well as a nuclear reactor. The IRSN said that given the effects of Monday’s 7.9-magnitude quake, “it is not possible at this stage to exclude damage to these installations.” Read more

Herald Tribune
HANWANG, China:
For 50 agonizing hours, firefighters worked to free Zhang Xiaoyan, eight months pregnant, from under concrete slabs on the second floor of an earthquake-shattered building. They worked gingerly, fearing the rubble would shift and crush her.

Finally, a bulldozer raised its scoop 16 feet and the rescuers gently laid the 34-year-old woman inside and slowly lowered her to the ground — to the cheers and applause of a group of spectators made homeless by Monday’s quake. Read more

Rowan Callick and Zhang Yufei
theaustralian.news.com
A doctor, who had worked for two days without a break in the ruins of school buildings that entombed 900 students, lashed out yesterday at those responsible for sub-standard buildings that failed to protect victims of the earthquake. “It’s nothing but corruption - they must have used sub-standard cement and steel,” said Dr Tian, who was reluctant to give his other name.

Praise for the massive relief effort, in the face of severe aftershocks and heavy rains, is widespread. Air drops were able to begin yesterday, and troops started parachuting in to Wenchuan county, the quake’s epicentre.

But fingers are being pointed in two directions in pinning down responsibility for the extent of the disaster, in which more than 20,000 people are known to have died, with thousands more still trapped under debris. Read more

Also in: NewScientist
The people of Sichuan are now paying the price for living in buildings constructed to withstand an earthquake roughly one-fifth as powerful as the one that hit on Monday. Read more

McLEAN, Virginia - A New Orleans furniture salesman pleaded guilty Tuesday to spying for the Chinese government and providing Beijing with secret information on military relations between the U.S. and Taiwan.

Tai Shen Kuo, a naturalized U.S. citizen with prominent family connections in Taiwan, provided gambling money and promises of a job to a Defense Department analyst who gave him classified information in 2007. Taiwanese military officials have said the disclosures caused some damage but did not compromise key technology.

Kuo, 58, faces up to life in prison when he is sentenced Aug. 8. Lawyers for the Taiwan native said after the hearing they believe he faces a prison term up to nearly 16 years under federal sentencing guidelines. Read more

“Two days before the quake thousands of toads suddenly decided to move across a bridge in Taizhou. In the city of Mianzhu, 60 miles from the epicentre, bloggers pointed to reports just weeks before the earthquake of a mass migration of more than one million butterflies.” more

Mark Dulyanai
Tahoe Daily Tribune
Cal Orey, a South Lake Tahoe author, bases most of her book on the research and findings of “earthquake predictor”/geologist James Berkland. Orey gives us a brief sketch of Berkland from his childhood passion for science to his life as a “renegade geologist.”

Berkland has done many studies that have linked outbreaks of aberrant animal behavior occurring before major earthquakes. Orey documents these studies and their results in a way that is both readable and entertaining. “The Man Who Predicts Earthquakes” also touches on the subject of humans who are “earthquake sensitive,” as well as how other earthbound factors (tidal movements, moon phases, etc.) can also be indicators of incoming earthquakes. Read more

“Berkland claims that he can predict earthquakes with over 75% accuracy by calculating the number of lost pet ads in the newspaper, and observing the lunar-tide cycles. He has been meticulously saving and counting lost pet ads for many years, and he says that the number of missing dogs and cats goes up significantly for as long as two weeks prior to an earthquake.” more

Photo Tommy Mack

ABC News
“The World Health Organisation (WHO) says it is not surprised by recent reports out of China that the bird flu has been transmitted between people. The illness has killed more than 240 people worldwide, although most cases were caught from poultry. There have now been a handful of confirmed cases of human-to-human transmission. The WHO’s Dr Ian Barr has told a Canberra conference the virus is currently not considered risky for humans, [then why the warning] but it should be monitored in case it mutates into a more virulent form.

“It’s a very widespread virus currently and it’s quite a nasty virus,” he said. “I think in terms of ones that we’d like to keep an eye on most closely, it’s the one.” Australian governments are preparing for a flu pandemic, and some corporations are stockpiling anti-viral drugs for their employees.”