News for October 11, 2005

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Scandal Rocks New York Brokerage Firm (October 11, 2005) - The esoteric world of derivatives was rocked by scandal yesterday when leading futures brokerage Refco, which has substantial operations in London and New York, said it had discovered that chief executive Phillip Bennett owed the company $430m (£250m) and that none of its accounts dating back to 2002 could be relied upon for their accuracy. The disclosure is likely to increase calls for tighter controls of the high risk and often arcane financial instruments that have seen phenomenal growth over recent years in the City and on Wall Street. Refco is one of the world’s largest and most powerful commodities dealers, but its interests also spread across most financial assets, such as currencies and bonds. It specialises in derivative brokerage services. Last year it was the biggest trader on the Chicago Mercantile Exchange, the largest derivatives exchange in the United States. more...

THE STARK REALITY OF AMERICA’S FINANCIAL MELTDOWN Part 2 of 2 (October 11, 2005) - “The bell tolls for the US Dollar because it is doomed. Like the Dodo bird, the US Dollar will, within the foreseeable future, disappear into the history books in the chapter on ‘Extinct Species.’” --Alf Field, Le Metropole Cafe

Here are a few items you may have missed due to a busy schedule.

August 12, 2005 Bush acknowledges the collapsing US economy The US administration aims to spend $286 billion on the development of the American transport system.

“US President George W. Bush released a remarkable statement a short time ago. The remark has not been highlighted in the world media yet, although there is every reason to do so. Bush virtually acknowledged that the USA was experiencing a serious economic crisis. Moreover, the US government was taking immense efforts to avoid a massive outbreak of social uneasiness, the American president believes...the White House is desperately looking for measures to find employment for crowds of unemployed American citizens and hungry migrants, which threaten to enrage the rest of the States.” more...

Spain gets first tropical storm -- Vince (October 11, 2005) - Vince, the 20th named tropical storm in the Atlantic this year, is the first storm of its type to reach Spain in recorded history, the National Hurricane Center said. “Vince is the first tropical cyclone on record to make landfall in Spain,” the NHC, a government body, said in a bulletin. “The historical record shows no tropical cyclone ever making landfall on the Iberian peninsula,” added NHC meterologist James Franklin. Tropical Storm Vince briefly was upgraded to hurricane status Sunday, making it the 11th hurricane of the 2005 Atlantic season, before it lost steam as it churned toward Portugal’s Madeira islands. In a sign of this year’s busy storm season, Vince has the distinction of being the first storm in the Atlantic Basin to begin with the letter “V” since storms began acquiring names in 1953, the NHC said. The US forecasters said that Vince was now a tropical storm, packing winds of 35 miles (56 kilometers) an hour and little rain. Vince formed Sunday between the Azores and Canary islands, in an area where water temperatures are between 73 and 75 degrees Fahrenheit (23-24 degrees Celsius), cooler than the ideal storm-generating temperatures of 80 degrees Fahrenheit. This latitude usually spawns subtropical storms, which are not fed by warm water and humidity but by clashing horizontal layers of cold and hot air in the upper atmosphere. The emergence of Vince made this year’s hurricane season the second busiest on record with 20 named storms. more...

Magnitude 6.0 - Earthquake NORTHERN SUMATRA, INDONESIA (October 11, 2005) - A strong earthquake occurred at 15:05:39 (UTC) on Tuesday, October 11, 2005. The magnitude 6.0 event has been located in NORTHERN SUMATRA, INDONESIA. (This event has been reviewed by a seismologist.)

Northeast Torrential Rains Leave 10 Dead (October 11, 2005) - Residents assessed the damage wrought by the weekend’s deadly floods across the Northeast, but the swollen rivers barely had a chance to recede Monday as more rain was forecast. At least 10 people died in the heavy downpours and about a half-dozen people remained unaccounted for, including a couple whose house was washed away by a surge of water over Warren Lake dam in Alstead. Floods tore up highways, tossed vehicles like toys, and knocked out electricity from North Carolina to Maine. “I’ve seen pictures of earthquakes that don’t look as bad as this road,” Alstead resident Glen Frank, 54, said Monday of Route 123 in southwestern New Hampshire. The most severe flooding in the state was in and around Keene, where some major roads were under as much as 4 to 6 feet of water, officials said. The city had no electricity and reverberated with the sounds of generators and pumps Monday when the governor visited. Gov. John Lynch returned from a business trip to Europe on Sunday to take charge of relief efforts in New Hampshire. He declared a state of emergency and called in 500 National Guardsmen. more...

Russia, India Start Joint Military Exercises (October 11, 2005) - Russian-Indian joint military exercises will take place in India on Oct. 10-20. Russia has already sent three transport planes carrying troops and materiel to India. Three Ilyushin planes took off from an airfield near the north-western city of Pskov carrying over 100 men from an airborne division, as well as three military vehicles and more than 20 tons of equipment and supplies, ITAR-TASS news agency reported, citing Air Force commander General Vladimir Mikhailov. The Indra-2005 exercises were set up by a protocol signed by the Russian and Indian defense ministries and by agreements concluded during a Russian military delegation’s visit to India in May. The exercises correspond with UN rules, international law and principles of respect for sovereignty, independence and territorial integrity of other countries, the agency reported. The exercises, with an anti-terror theme, will involve naval ships and airborne troops. Russian Defense Minister Sergei Ivanov said late last month that a nuclear submarine and a group of Pacific Fleet ships had left for the Indian Ocean. The manoeuvres will follow August exercises held by Russia jointly with China, which some analysts said appeared to be aimed at demonstrating the capabilities of Russian military equipment. more...

200 Christians detained in mass sweep (October 11, 2005) - The North African country Eritrea has detained more than 200 Christians in an operation said to be the worst of its kind. Eritrean security forces captured evangelicals and members of minority churches from the streets, their workplaces and homes Oct. 3, reported the British group Release Eritrea. The whereabouts of the Christians is unknown. Authorities also shut down a church’s development project and detained its entire staff. The project includes an extensive emergency aid and feeding program. Among the detainees are the general secretary of the project, identified only as Mr. Ukbay, and his administrator, Ghebre Michael. Release Eritrea said that in addition to the safety of the detainees, they are concerned about the well-being of the families left behind. Our source said, “Please remember that in many homes children and women are suffering and have also becomes victims of persecution. There will be no salary coming into many homes and their lives are in danger. Please pray for us.” Eritrea, which gained independence from Ethiopia in 1993 after a 30-year war, has been designated by the U.S. as a “country of particular concern” for severe and ongoing violations of religious freedom. As a result, the State Department notified Congress two weeks ago that the secretary of state banned commercial export of certain defense articles to Eritrea. more...

Storm Drops 20 Inches of Snow in Colo. (October 11, 2005) - The storm was blamed for at least three deaths, while an elderly man who got lost while snowshoeing was found safe after a night outdoors. Authorities said 150 miles of westbound Interstate 70 was closed from the Kansas line to Denver. The entire highway was closed for the 80 miles between Denver and Limon, where truck stop parking lots were overflowing. More than 70 people were staying overnight in four Red Cross shelters opened for drivers stranded along I-70, spokesman Robert Thompson said. The storm cut off power to 80,000 homes and businesses when power lines snapped and transformers failed, according to Xcel Energy. “You could hear them popping,” said Tom Hartman, who was shoveling snow outside the Schlessman Family YMCA in Denver when the transformers began to crackle and die. Some 12,000 homes and businesses, mostly in the Denver area, were still without electricity late Monday. Dozens of schools closed or were opening late, including three in the Denver area that closed because of power failures. Two children were hospitalized with minor injuries after a school bus slid backward down a steep embankment south of Denver, Douglas County schools spokeswoman Carol Kaness said. more...