Sunday, July 24, 2011
US must reach debt deal in just 24 hours: Tim Geithner joins warnings of market meltdown as deal goes to the wire
Tensions were running high across Capitol Hill last night as the White House, as well as Republicans and Democrats in Congress, scrambled to reassure investors that the country’s $14.3 trillion (£8.8 trillion) debt ceiling will be lifted by August 2. After weeks of fruitless talks to raise the ceiling and reduce America’s long-term deficit, political leaders were waking up to the danger that investors may punish a divided Washington.
The acrimonious collapse of talks late on Friday between President Barack Obama and John Boehner, the top Republican in Congress, is likely to rattle markets that have so far voiced a breezy confidence in a deal. At the close of a frantic weekend that saw temperatures top 100 degrees, the Republican House of Representatives and the Democratic Senate seemed no closer to agreeing a deal that still needs the President’s signature.
"For us to get this done by August 2, which is critical, and that’s the deadline all the leaders accept, they need to start this process in the House Monday night," Mr Geithner said yesterday. "So they can demonstrate to the world we’re going to be on a path to get this done."
Hours later, Mr Boehner said that he and fellow House Republicans were now working on a two-stage plan that would see the debt ceiling raised until the end of the year, followed by a fresh vote before next year’s presidential election. Mr Geithner dismissed the idea of any delay, arguing that "we cannot leave the threat of default hanging over the American economy for a longer period".
President Obama and Congressional leaders from both parties have struggled for months to agree on how to cut up to $4 trillion from the US deficit over the next decade, a condition for lifting the debt ceiling. The talks have reached an impasse in Washington because they go to the heart of the competing visions of America. Republicans insist that major spending cuts are the way to help restore America’s economic vigour, while Democrats want the country’s wealthiest to pay more tax in an economy in which millions remain without work. (more)
Brandishing banners and slogans which read "We want justice, not charity" and "When the government is against the people, the people are against the government", demonstrators from all over Israel rallied in support of hundreds of people who have set up protest camps against the government's economic and social policies.
The movement has gathered steam in recent days with protesters pitching tent camps across Israel despite warnings from right-wing deputies who accuse the left-leaning opposition of manipulating the demonstrators.
Since 2004, Israel's economic growth rate has averaged 4.5 percent, while unemployment has fallen to around six percent from close to 11 percent over the same period.
But public disgruntlement is growing, fuelled by almost-daily revelations of social inequality, injustice and corruption.
A consumer boycott of cottage cheese launched recently on Facebook quickly led to a fall in prices of the Israeli staple.
The housing sector has been particularly hit.
"Today, it takes on average about one million shekels (200,000 euros, $295,000) to buy an apartment in Israel," estate agent Eli Melloul told AFP. (more)
They never wavered in their faith that EU states would yield sovereignty to save the euro if push came to shove, that monetary union would force the pace towards joint EU government.
So it proves to be, for now. But let us not forget that Europe's ideologues have achieved this only by pushing the world to the brink of catastrophe and holding parliaments to ransom with their great gamble, just as the West's financial elites held parliaments to ransom in the banking crash of October 2008.
Once yields on 10-year Spanish and Italian bonds had blown through 6pc, global leaders knew we risked a second and more dangerous Lehman-AIG debacle within days. You cannot let two world class sovereign states blow up together. "The situation was really grave," said Herman Van Rompuy, Europe's president.
It is why President Barack Obama telephoned German Chancellor Angela Merkel to plead urgency.
It is why Britain's well-briefed Chancellor George Osborne abjured the central credo of Tory policy on Europe for twenty years and more or less urged EMU leaders to embrace fiscal union, warning of "the potential for a set of economic events that could be as damaging as 2008." (more)
Ahead of the announcement of Britain's key gross domestic product (GDP) figure on Tuesday, Erik Britton, of Fathom Consulting and formerly a Bank of England economist, said the UK would have to become used to a "new normal" where growth would hover between zero and 1pc.
Fathom predicts UK growth at 1.2pc for 2011, a slowdown from last year's 1.3pc and in sharp contrast to previous years where growth has been between 2 and 3pc.
"We are definitely talking about the new normal," Mr Britton said. "It is very hard to pin the weakness of growth on austerity. Government spending has not fallen yet." Mr Britton said the UK had to stick to its austerity policy as the alternative to reining in both government and consumer spending would be an effective default by the nation.
In new forecasts which it is presenting at its forthcoming monetary policy forum, Fathom argues that markets would rapidly lose faith in the UK's debt position if a Greece-like crisis developed here. Households would experience widespread insolvencies and mortgages turning bad.
"[The current picture] is gloomy, it's grim, it's not terrible," said Mr Britton. (more)
More than 7,700 new bed spaces are under construction in London but this has been dwarfed by a 6pc increase in student numbers to 283,500 in the last academic year, according to Drivers Jonas Deloitte's Student Housing Crane Survey.
There is already a significant supply and demand imbalance in London, with the city offering just 55,000 purpose-built student bedspaces, enough for one-in-five students.
Chris Baldwin, head of student housing at property consultant DJD, said: "The fact remains we are still a long way from filling the supply gap and this level of undersupply looks unlikely to ease any time soon. This is only being exacerbated by the lack of bank finance and tougher planning policy for developers as they struggle to get approval for schemes."
The imbalance means the average rent on student beds in London increased 9pc to £145 per week over the past year and is now 55pc greater than the rest of the country. This means students in London face a major extra financial burden as universities prepare to crank fees up to £9,000 a year. (more)
Political parties opposing immigration and integration have done well in elections in recent years -- and beyond them, neo-fascist and "national socialist" groups have become well-established across the continent, including in Germany, Belgium, the Netherlands, Italy, Scandinavia, Hungary and the United Kingdom.
Most of those belonging to such groups would not contemplate the sort of carnage that occurred in Norway on Friday, but they would probably sympathize with what appears to have been the manifesto of the alleged assailant, Anders Behring Breivik.
Breivik claimed that "cultural Marxism" had morally degraded Europe, and purportedly wrote: "You cannot defeat Islamisation or halt/reverse the Islamic colonization of Western Europe without first removing the political doctrines manifested through multiculturalism/cultural Marxism." Elsewhere he said: "One of the most widespread manifestations of the craziness of our world is multiculturalism." (more)
The Israeli government forum of eight top ministers, headed by Prime Minister Benjamin Netanyahu, was expected to discuss the future of diplomatic relations with Turkey, once a close ally, according to Israeli media reports.
Israel's relations with Turkey reached rock bottom last summer, when nine activists on board the Mavi Marmara, a Turkish ship filled with aid and 700 activists from various countries, died in clashes with Israeli Navy commandos when attempting to break Israel's blockade of Gaza.
An independent Israeli commission found that Israeli commandos "acted professionally and in a measured manner in the face of unanticipated violence" and that members of a Turkish relief group on the ship "were direct participants in hostilities" who attacked the Israeli troops.
In his meeting at the Palestinian Ambassadors' Conference in Istanbul on Saturday, Turkish Prime Minister Tayyip Erdogan said, "Until Israel officially apologizes, pays compensation to the families of the people who died and lifts the embargo on Gaza, normalization of the relations between the two countries is unthinkable." (more)
The government recently sold its remaining 6% stake in the company to Italian automaker Fiat. It wrapped up the 2009 bailout that was part of the Troubled Asset Relief Program six years early.
"The fact that the company has done so well -- that they were able to go out and raise private capital to repay us the loan so quickly, is really the big story," said Tim Massad, Treasury assistant secretary for financial stability. (more)
"Congress writes the bills. The president just decides which ones to sign." -- Boehner Said to Seek $3 Trillion Cuts, Signal for Markets
Boehner wants at least $3 trillion in cuts in a two-step plan to accompany an increase in the U.S. debt limit, one of the aides said. Concern about Asian markets' reaction to the collapse of talks on a long-term deficit plan between Boehner and President Barack Obama was a subject in a meeting today among the president and congressional leaders, the aides said.
The markets could be tumultuous if a plan isn't negotiated over the weekend, said Christian Cooper, head of U.S. dollar derivatives trading in New York at Jefferies & Co.
"The markets will be under very real pressure at the open because the assumption will be there is really no resolution to this," Cooper said. "The breakdown in negotiations has crossed the line from the political posturing of the last few weeks to potentially a very real crisis.
"The Tea Party is effectively playing Russian roulette with the bond market and they will, with certainty, lose," Cooper said. Jefferies is one of 20 primary dealers that trade with the U.S. Federal Reserve. (more)
A crowd estimated at around 10,000 people set out from downtown Cairo's Tahrir Square but was stopped from reaching the military headquarters in the eastern Abbasiya neighborhood by a line of army barricades. Along the way, they chanted slogans against the military council's delay in implementing their demands.
Bands of men armed with knives and sticks set upon them from side roads, setting off pitched street battles in which both sides threw punches and hurled rocks. Gunfire was heard, but it was unclear who was shooting.
Riot police fired tear gas at protesters.
One petrol bomb landed near a protester, setting his clothes on fire, and dozens of injured were treated by ambulance crews on the scene.
The health ministry, in a statement carried by the official MENA news agency, said 55 people were injured in the clashes, including six who needed hospital treatment. Other unofficial reports put the number closer to 70-100.
It was not clear who the attackers were. Similar groups of men have tried to break up other protest rallies, and Mubarak's regime often used hired thugs to attack protesters. Some witnesses said they might have been residents or shopkeepers angry at the loss of business as a result of the protests. (more)
Germany had previously announced a loan of $10 million (7 million euros) for humanitarian aid to the Transitional National Council, the rebel movement that is battling to unseat longtime Libyan strongman Moammar Gadhafi.
"Because of Colonel Gadhafi's war against his own people, the situation in Libya is very difficult," German Foreign Minister Guido Westerwelle said in a statement announcing the loan. "There is a major lack of funds to build infrastructure, as well as a shortage of needed goods, ranging from medical supplies to food."
Germany has not participated in the NATO-led military effort in Libya and abstained from the U.N. Security Council vote that authorized military action to protect civilians from Gadhafi's forces. But German Chancellor Angela Merkel said in June that her country shares the hope "that this NATO mission is successful." (more)
1. Hello everyone, we hope you're all doing well and enjoying the week. The heat seems to have finally broke, at least where we are!
2. July dollar drive progress: So far just 16 very generous people have donated out a goal of 5000 for July, with our last contributor being Jason. If you haven't contributed a dollar yet, and would like to help us out on our mission to publish the truth, we encourage you to click on the picture above and read about what the money goes toward. Just a dollar from every person goes a long away!
3. Promo video: The Coming Crisis is trying to become 100% self-sustaining. That means more posts, more stories, books, reports, and tons of other awesome projects as we lift off the ground. We're looking to have a single advertising TV commercial stream on top of the post column to sponsor our website's activities, so if you're in the media and want to discuss this in more detail, get in touch with us.
4. Petitions and protests category: You might have noticed the new category on the left which at present contains Dan Insdorf's "Save our Students" petition. This category is for all of you who have petitions circulating or protests percolating -- let us know and we'll post the info to spread the word!
That's it for this week, guys and gals. Take care, and stay vigilant!
-- Matt & Lynsey
Boris Johnson and Lord Coe, the chairman of London 2012's organising committee, will mark one year to go to the opening ceremony on Wednesday at an event in Trafalgar Square. But planners are braced for widespread disruption to transport, security and the sporting events themselves by groups such as UK Uncut, which led the student-fees protests last year.
Olympics sources say the Games are a likely target for anarchists because of the heavy corporate sponsorship of the events – firms including Lloyds TSB, Adidas, British Airways, BT, Deloitte and EDF are paying a total of £1.4bn – and insiders fear that specially designated traffic lanes for dignitaries on roads leading into the Olympic Village at Stratford, east London, could be blocked by UK Uncut "flash mobs". (more)
Now it’s all come down to the Boehner-Reid-Pelosi-McConnell talks to solve the debt crisis. Notably absent? The president.
That’s not to say Saturday’s congressional takeover went well.
In a frantic bid to avoid causing a worldwide economic disruption, debt negotiations have shifted wholly to Capitol Hill, as a frustrated President Barack Obama has taken a step back and allowed House and Senate leaders to try to find a way out of the debt-ceiling debacle. After congressional leaders told Obama at the White House Saturday morning they would attempt to stave off the crisis before Asian markets open Sunday evening, leadership aides raced to put together a framework that both parties could support.
With the president staying out of the picture, congressional leaders struggled to make progress on a temporary two-step solution that raises the debt limit with some offsetting cuts.
In an extraordinary Saturday evening session in the Capitol, House Speaker John Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.) and House Minority Leader Nancy Pelosi (D-Calif.) sat around negotiating, on their own turf, without White House aides present.
The four smiled for the TV cameras during a photo-op at the top of their 50-minute meeting, but no one would say a word about whether they had made any progress.
“Bye,” Boehner told a reporter who asked about whether he could reassure the country a deal could be reached. (more)
JUAN GONZALEZ: President Obama and Republican House Speaker John Boehner are said to be close to a $3 trillion deficit-reduction package as part of a deal to raise the federal debt ceiling before an August 2nd deadline. But the deal is coming under fire from both congressional Democrats and Republicans.
According to the Washington Post, part of the deal calls for lowering personal and corporate income tax rates while eliminating or reducing an array of popular tax breaks, such as the deduction for home mortgage interest. Some Democratic lawmakers expressed outrage on Thursday because the Obama-Boehner agreement appears to violate their pledge not to cut Social Security and Medicare benefits, as well as Obama’s promise not to make deep cuts in programs for the poor without extracting some concessions from the rich.
AMY GOODMAN: Meanwhile, more details have emerged about the massive government bailout of the banking industry. On Thursday, the Government Accountability Office issued an audit of the Federal Reserve’s emergency lending programs. It revealed the Fed provided more than $16 trillion in secret loans to bail out American and foreign banks and businesses. Independent Senator Bernie Sanders responded to the audit by saying, quote, "This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else." (more)
The Times reports that the Gardens of Southgate filed the suit this month against Timothy and Jodi Burr, who have lived in the subdivision since 2006. The Burrs placed a large multicolored banner with a picture of their 20-year-old son, Marine Corps Lance Cpl. Corey Burr, and the phrase "Our son defends our freedom" in January after Corey Burr was deployed to Afghanistan.
Jodi Burr says her family will fight the suit and do not intend to remove the sign. (more)
Amy Winehouse had 'bought ecstasy, cocaine and ketamine' on the night before tragic death -- why is it that artists so often implode?
Although the exact cause of death has not yet been released by police, it is claimed she was seen buying drugs from a dealer in Camden just after 10:30pm on Friday.
The reports emerged as her family released an emotional statement in which they said they were 'bereft' by her early death.
'Our family has been left bereft by the loss of Amy, a wonderful daughter, sister, niece. She leaves a gaping hole in our lives,' they said.
'We are coming together to remember her and we would appreciate some privacy and space at this terrible time.'
Winehouse was found dead at her London home on Saturday afternoon.
A source told The People that she was seen buying substances, believed to be cocaine, heroin, ecstasy and ketamine leading up to the hours before her death.
She is also thought to have been drinking heavily, which may have been the trigger of a lethal concoction of drugs and alcohol. (more)
Those looking for some kind of a break from the heat of the last week got it overnight -- a rainstorm that dropped temperatures into the low 70s. But like the heat wave that preceded it, this rainstorm was anything but ordinary.
According to ChicagoWeatherCenter.com, the total rainfall at O'Hare -- 6.91 inches as of about 6:50 a.m. -- is the largest single-day rainfall since records began in 1871. The highest previous daily total was 6.64 inches on Sept. 12, 2008. And more rain is on the way.
There were rainfall totals as high as 7 inches as the storm moved noisily through the Chicago area after midnight, resulting in flash flood warnings from the National Weather Service and enough flooded roads and highways to make life miserable for passengers headed to or from O'Hare International Airport and make a mess of traffic overnight and into Saturday morning. (more)
One may question why Ethiopia? My answers are grounded in three main assumptions. The first is based on the failed Anglo-Ethiopia treaty in 1902 which never materialized. The second assumption is based on the exclusion of Ethiopia, since 1902 and the subsequent water agreement of 1929 between Britain and Egypt and the 1959 water agreement between Egypt and Sudan after the later became independent in 1956. The final assumption is the emergence of Ethiopia as a powerful and influential nation in the horn of Africa because of its military power in the sub region.
Ethiopia has pushed forward her demand to develop water resources through hydroelectric power along the Nile. However, for several decades, Egypt has denied other riparian countries complete access to water resources along the Nile, and for that matter has exercised her hegemonic powers over the development and control of the use of water resources in the Nile river basin for many decades. The Nile river basin has survived centuries, and for many years has served as Egypt’s economic hub, political power and growth since ancient times. The water resources in the Nile basins have also served as economic, political, social and cultural achievements of Egypt’s influence in the sub region. (more)
House Armed Services Committee Chair Buck McKeon has gone on record opposing the Gang of Six proposal on the grounds that it might cut $800 billion from the Pentagon’s budget over the next ten years. According to McKeon, such proposals raise “serious implications for defense and would not allow us to perform our constitutional responsibility to provide for the safety and security of our country or keep faith with men and women in uniform.”
Does McKeon have a point? Current projections call for the United States to spend $6.037 trillion on the military between 2012 and 2021. Would spending 13.2 percent less than that amount undermine American security?
So far, there haven't been any actual cuts at the Pentagon. The Department of Defense has enjoyed an unbroken streak of rising budgets since 1998. In real, inflation-adjusted terms, U.S. taxpayers now spend more on national security than at any time since the end of World War II. An effort led by South Carolina Republican Mick Mulvaney to hold the DoD base budget to last year's levels failed. Mulvaney’s amendment, which would have cut $17 billion from the budget voted out of committee, attracted support from more than a quarter of the House GOP caucus, but was ultimately defeated. So the DoD base budget that emerged from the House continues its growth. (more)
Illegal Chinese clothing imports threaten South Africa's economy (and just about every other economy in the world)
Research by the Apparel Manufacturers of South Africa (Amsa) indicates that there are an estimated 6 000 informal Chinese shops in the country.
Amsa executive director Johann Baard said that South African clothing retailers have between 200 and 1 000 shops around the country selling around 50% local and 50% imported products.
But this compares with 6 000 Chinese shops which are selling 99% Chinese products, he said.
According to Pep group commercial director Louis Brand, Pep, with more than 1 300 shops in South Africa, is well represented in rural areas.
Over the past seven years the group has however seen an increasing number of little Chinese shops mushrooming around its branches.
The group reckons that for every Pep store in a town there are at least six Chinese shops. Pep is in favour of commerce and competition, which is good for the economy, but then the playing field needs to be even, Brand said. (more)
Hawaii's Act 48: Don't want to pay for your mortgage? That's alright, we'll kick you out... in 7 years
Maui has already been classified as the island which has suffered the most since the recent recession and is currently the only island which does not show upward motion in the existing single family homes sales graph. Home sales did seem to be “smoothly converging to the low to mid 400,000s,” according to Paul Brewbaker, of TZ Economics. But how will the new foreclosure laws ultimately affect what seemed to be a flattening of the housing market?
Many folks living on outer islands such as we Mauians do not realize that Oahu has hardly been affected by the recession and due to this, Hawaii has actually fared better than 46 of our United States. Their private sector jobs are increasing and monthly unemployment rates are decreasing. (more)
European Union leaders saved Greece from financial collapse Thursday with a plan to pump €109-billion ($148-billion) into the country and bolster a European bailout fund.
For now, the deal appears to have encouraged investors and stopped a run on European sovereign bonds. Long-suffering Greek bonds soared Friday, while European stocks gained.
But the danger of renewed bouts of financial stress is expected to continue for months. And over the long haul, Europe’s still crippling debt problems will stunt economic growth as the poorer countries face years of painful austerity and the wealthier ones, such as Germany and France, pay the price of propping up their weaker neighbours. (more)
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law July 21, 2010, spanned more than 2,000 pages and targets everything from the stability of our banks to debit card fees to mortgages and credit cards to the mysterious investment derivatives market.
The potential scope of the law is almost overwhelming: According to a tally by the New York law firm Davis Polk & Wardwell, it requires regulators to create 243 rules and conduct 67 studies. While various points of the new law are being phased in, much of the effect is still to come. And some of it is uncertain because many of the specific rules haven't been written yet.
"We're talking about a process here - we're looking at a period of years here," said former banking regulator Kevin Jacques, who spent 14 years at the U.S. Treasury and now is an associate professor of finance at Baldwin-Wallace College in Berea.
Here's a look at some of the key issues that lie ahead for the average consumer:
• More banks will charge more fees.
Two parts of Dodd-Frank are particularly expensive for most banks: They must spend money to strengthen their systems, and they're being restricted on how much they can collect from retailers in debit card transactions. The limit, which starts Oct. 1, affects banks with more than $10 billion in assets -- roughly the size of Third Federal Savings in Cleveland. (more)
Despite the fact that a debt ceiling increase only provides temporary, superficial respite, many of those who favor such a move give too much weight to the impact of the debt ceiling. In a recent op-ed in the Washington Post, Virginia Senator Mark Warner argues, "Failing to raise the debt ceiling will increase interest rates, gut consumer confidence, and drag down business investment and job creation." The notion that changing an artificial construct like the debt ceiling will have such a massive impact on real economic conditions comes from viewing the economy in the abstract. Rather, the economy is comprised of people who engage in millions of exchanges every day. Because the economy is not an abstraction but is very real, it is unlikely that an arbitrary debt limit would dramatically affect real economic conditions. Some parts of the doomsday scenario posed by officials like Senator Warner, Treasury Secretary Tim Geithner, and the president may well come to pass: rising interest rates, consumer confidence falling, job creation declining. However, it is not likely to be the sole result of a failure to raise the debt ceiling, as we already see many of these symptoms occurring.
A good example is the case of interest rates. It is claimed that without increasing the debt ceiling, the U.S. would default on some of its loans and its credit rating would take a hit. As a result, interest rates would rise, as lenders charge a risk premium for the added possibility of default. Raising the debt ceiling does not remove this threat, and it will continue to be a threat if the debt and the government spending fueling it are not contained. By raising the debt ceiling and not addressing the debt problem, government borrowing continues to rise, the demand for money rises in the loanable funds market and interest rates rise, anyway. This is why Moody's has been widely cited for threatening to downgrade America's credit rating should the debt ceiling not be raised, yet they also say they may well do the same should the debt not be contained. (more)
China to Wall Street: The Side-Door Shuffle (and why does the People's Liberation Army own companies on our stock markets?)
And, like so many hot new things, it went cold fast.
Such was the fabulous stock-market flameout of a company called Rino International, an untested enterprise that, until recently, would have raised nary an eyebrow in the United States.
But over the last few years, Rino International and scores of other young Chinese companies slipped into the United States stock market through the back door. Rino’s American stockholders later lost hundreds of millions of dollars when accusations surfaced that the company had fudged its books. All told, investors’ losses on these Chinese ventures have stretched into the billions.
How companies like Rino wormed their way into the temples of American capitalism is a story for these financial times. Even amid the wreckage of the 2007-8 financial collapse, an ecosystem of Wall Street enablers — bankers, lawyers, entrepreneurs, auditors — spirited Chinese companies to the United States. With some deft financial maneuvers, these businesses essentially went public while sidestepping the usual rules. Before long, many were trading on the Nasdaq stock market, alongside the likes of Google.
It was all perfectly legal. With bankers’ help, the Chinese companies executed what are known as reverse mergers. They bought American companies that were merely shells and assumed those companies’ stock tickers — sort of the Wall Street equivalent of “Invasion of the Body Snatchers.” The strategy let them avoid reviews with state and federal regulators that are normally required for initial public stock offerings. (more)
The rescue plan announced Thursday by the European Union extends another $157 billion in loans to Greece to help it cover its debts, but also asks private Greek bondholders to take a haircut on their securities.
Imagine if you owned a U.S. Treasury note maturing in five years and the government asked you to turn it in for a lower-yielding security that would mature in 30 years.
That's the gist of what European leaders want Greek bondholders to do, to help the country dig out from nearly $500 billion in debt.
Ever since the extent of Greece's financial mess became evident in late 2009, many analysts have warned that the only sure way out was some level of debt forgiveness. In one of the formulas the EU has proposed for Greece's creditors, the equivalent of a $1,000 bond would become a new bond worth $800.
Debt forgiveness is default by any other name, of course. The bailout plan for Greece ought to at least remind small investors who continue to pour money into bonds that the idea of "safety" in debt securities is a relative term.
Meanwhile, the millions of U.S. homeowners who are underwater on their mortgages may look wistfully at debt forgiveness for Greece and wonder why it can't happen for them. (more)
We're talking, of course, about the great debt standoff of 1786: Shays' Rebellion.
Nervous Americans glancing at the upcoming August 2 deadline for raising the debt ceiling are being told that the nation is entering uncharted territory. But historians say they've seen this movie before.
Many of the same issues driving this modern-day standoff -- disagreement on how to handle the national debt, ineffective government and a populist citizen's revolt -- drove the 18th-century uprising that's been called America's first civil war.
Historians say the lesson that can be drawn from Shays' Rebellion and other transformative events in U.S. history is this: Protracted political gridlock is seldom resolved through compromise. It comes when one political party finally beats the other down.
Many Americans, however, have told pollsters that they want the political parties to work together to solve the debt ceiling crisis. Yet political stability doesn't always come through give-and-take, some historians say. (more)
NATO said it could only confirm 50 insurgents were killed in the fight.
The operation, which began Wednesday and spanned the night into Thursday, was fought in a "known Haqqani network" area.
The Haqqani network is an insurgent group loosely affiliated with the Taliban and is believed to be based in Pakistan's frontier territories.
The raid included Afghan special forces and engaged "multiple groups of insurgents" who were armed with rocket-propelled grenade launchers and heavy machine guns, NATO's International Security Assistance Force reported Friday.
Multiple insurgent groups were holed up in areas that included caves and fortified bunker positions, ISAF said.
Elsewhere, coalition raids on Sunday in Helmand province left five militants dead, including three Taliban commanders, according to provincial governor Dawood Ahmadi. Three others were captured, he said. (more)
ens Weidmann detailed his concerns in a statement issued after European leaders agreed the latest €159bn (£140bn) plan to stem Greece's debt crisis and contain it before it spreads to Italy and Spain.
"By transferring sizeable additional risks to aid-granting countries and their taxpayers, the euro area made a big step toward a collectivisation of risks in cases of unsolid public finances and economic mistakes," Mr Weidmann said.
"That's weakening the foundations of a monetary union founded on fiscal self-responsibility. In future, it will be even more difficult to maintain incentives for solid fiscal policies."
Mr Weidmann, a council member at the European Central Bank, added that it was "decisive for monetary policy" that additional risks were not transferred to the euro system and that the dividing line between monetary and fiscal policy was not "blurred any further".
His comments contrast with the views of the Chancellor, George Osborne, that last week's bail-out represents "a small step on the road to further fiscal integration for the eurozone". (more)
The 10 whirring ceiling fans made little impact on the humid air, which felt as sludgy as the bottom of an espresso cup. It was the live music that sliced through the torpor. The Casa de la Trova in Santiago de Cuba is steeped in the troubadour traditions that gave the world son – the infectious mixture of European and African rhythms popularised by the Buena Vista Social Club.
Right now a seven-piece called Los Jubilados – old guys, cool hats, big trumpets – were shaking the rafters. Drifting out to the balcony for air, I watched dudes in two-tone shoes dancing in the street below. Then a woman in a tight yellow top gained my immediate and undivided attention by jabbing me with one of her breasts.
"Are you solo?" she wanted to know. I pointed into the hall, at the back of my partner's head, to indicate I was spoken for. "Is that a problem?" she replied.
The jineteras – female hustlers – of Cuba have front, shall we say. Like their male counterparts they are on the make because they have so little. Desperate for dinero, the jineteros and jineteras will try to sell tourists anything from their bodies to their cousin's home-cooked food. But they are not bad or dangerous people, just symptoms of an ailing system that, like the old American cars you see, is now spluttering along from day to day. (more)
The epicenter was 284 km (176 miles) SSW from Hovd, Mongolia
No damage or injuries reported at this time
The epicenter was 79 km (49 miles) Southeast of Sendai, Honshu, Japan
No Tsunami alert Issued - No damage or injuries reported at this time
Caroline Jane Coyne was found dead in a Nottingham alleyway, police said her final hours remain a mystery - 24th July 2011
Detectives have launched a murder inquiry after mother-of-two Caroline Jane Coyne was found dead yesterday morning from head injuries.
The last hours of the 28-year-old’s life remain a mystery after she left a family gathering in Arnold, Nottingham.
Her body was found in between two houses in Thorneywood Mount and detectives have been scouring the streets for clues to the mother’s last hours.
Detective Chief Inspector Tony Heydon, who is leading the murder inquiry, said officers are now studying CCTV footage and appealing for sightings of Ms Coyne in a bid to piece together her movements in the hours leading up to her death.
DCI Heydon said: 'We know that Caroline had spent Friday evening at a small family party in Arnold.
'After leaving the party we believe she somehow made her way between Arnold and Thorneywood.
'It is important that we clearly establish what she did and where she went during the early hours of Saturday morning.'
Ms Coyne is described as white, with shoulder-length auburn hair, and was wearing blue jeans with a brown belt, a pink French Connection t-shirt with 'FCUK' printed in black on the front, and a pink-and-white trainers. Read More
The epicenter was 94 km (58 miles) Southwest from Valparaiso, Chile
No damage or injuries reported at the time
"There was supposed to be a police officer there," acting police chief Sveinung Sponheim told a news conference, adding that it is unclear where he was.
He also said a British police expert is helping the investigation into Friday's twin attacks that killed at least 93 people as part of cooperation with foreign forces.
"We have received help from the Metropolitan police in London by a criminal technician expert," Mr Sponheim said.
The suspect accused of the killings has confessed to police that he carried out the attacks but said he did not break the law.
Police said 32-year-old Anders Behring Breivik is also adamant that he acted alone.
His confession came as police launched an operation in connection with Friday's massacre and raided a property in the east of Oslo, arresting six people.
Officers from the police's counter-terrorism force, known as Delta, swooped on the address and accessed two chemical containers but found no explosives.
The detainees were later released, with police saying they had no link to the attacks. Read More
The epicenter was 35 km (22 miles) WSW from Puquio, Peru
No damage or injuries reported at the time
UPDATE: This earthquake was upgraded from a 4.9 to 5.0 Magnitude
Both boats were traveling at speeds of more than 20 mph at the time of the Friday night crash that spun the speedboat and sent it washing ashore along the Chippewa River, authorities said.
The other boat was found about a half-mile away.
'It was a glancing, head-on (crash),' said John Andersen, chief of inspection for the Chippewa Fire District. None of the boaters was wearing life jackets, he said.
A 56-year-old Eau Claire man who was driving the larger boat, a flat-bed Princecraft, was arrested after the crash, said Chippewa County
Undersheriff Eugene Gutsch. Alcohol use is part of the crash investigation, he said.
Six people in a wedding party were aboard the Princecraft; two people were on the speedboat.
The wedding had been scheduled for Saturday, the sheriff's department said in a news release.
Matthew Overhauser, 27, who was in the wedding party, and Mark Michels, 50, of Eau Claire, who was driving the speedboat, were killed, according to the sheriff's department. Overhauser's hometown was not released. Read More
Tiffany Denise Allen a McDonald's manager who 'punched mother with service dog in the face' is charged - 24th July 2011
Tiffany Denise Allen is charged with simple battery, simple assault and disorderly conduct, according to an arrest warrant issued in Cobb County.
Jennifer Schwenker went into the McDonald's in Marietta with her sons Ben and Sam and their service dog Barkley to get some lunch on July 12.
Allen, who was off-duty at the time, became angry that the dog was inside and told the mother that it was not allowed, the warrant states.
Mrs Schwenker explained that it was a service dog that was allowed in public places by federal law and offered to show a permit for the dog.
But surveillance footage shows Allen then following the mother around the restaurant and down the hall to the restroom.
As Mrs Schwenker tried to leave the restaurant she dropped her drink on the floor, accidentally splashing Allen, as she looked for one of her sons.
The video shows McDonald's employees trying to restrain their co-worker as she appears to fly into a rage, before allegedly punching Mrs Schwenker in the face in the parking lot. Read More
Heather Dyer, 22, is believed to have been stabbed in the chest after she and other revellers were confronted by neighbours about music blaring out of a flat.
Emergency crews were called to the property in St. Helens where a 25-year-old man had also been repeatedly stabbed but Miss Dyer was declared dead at the scene.
The other victim who has not been named is in a serious but stable condition in Whiston Hospital.
Heather is thought to have attended the party held in apartment in a £90,000 terraced property when neighbours became enraged at the noise going on late into the night.
One neighbour said: 'The noise was going on until well in the early hours.
'There was lot of a laughing and cheering and this incessant bass drum beat going on.
'We believe some neighbours had gone to confront the party hosts about it but it seems no one took any notice and the party carried on going.
'The next thing we knew there was a lot of shouting and screaming.'
Another neighbour said they heard shouts of 'what are you doing' and 'he has got a knife' before all hell broke loose.
He said: 'There was a large crowd of people gathered outside when police arrived.
'It's such a terrible shock. Yes the noise was unbearable but it;'s not worth someone losing their life over.
'It must be a terrible tragedy for that poor girl's family.' Read More
'Little b*****r, ! I'll f*****g kill her!': What drunk mother said after toddler climbed out of window and fell off roof - 24th July 2011
The child used a toy box to climb out of the window, before falling from a sloping roof and cutting her face.
But when the 39-year-old mother was eventually told by police what had happened, her reply was 'Little b*****r, ! I'll f*****g kill her!'
St Albans crown court heard that the youngster had crawled out of the flat in Harpenden, Herts in the early hours of March 18 this year.
Her mother told police afterwards that she had downed three to four double measures of Bacardi and coke at 10.30pm after putting the girl to bed.
She fell asleep around on the sofa around midnight before her daughter toppled off the roof sustaining facial injuries, cuts and bruises.
The court was told on Friday that the child was found wandering in the street in temperatures of between -2C and -3C by a postman.
He discovered her at 3.50am on his way to work.and took her to the sorting office where police and an ambulance were alerted.
She was taken to Luton and Dunstable Hospital for treatment.
When police eventually managed to trace the mother they struggled to wake her.
She eventually opened the door and was told what had happened and her reply was 'Little b*****r, ! I'll f*****g kill her!'
Andrew Sakarny prosecuting said a pool of blood was found at the point where the child had fallen onto the ground below
The child is now staying with her grandmother in a flat nearby in an arrangement approved by social services.
Her mother has daily access to her daughter and eventually hopes to have her back with her. Read More
Miracle of toddler plucked from wreckage of bullet train... 21 HOURS after it plunged off bridge killing 43 - 24th July 2011
The toddler has been taken to hospital and it is not clear if the youngster is a boy or a girl or the extent of the child's injuries.
A 'bullet' train was travelling south from the Zhejiang provincial capital of Hangzhou when it lost power in the lightning strike and was hit from behind by the second train, the official Xinhua News Agency said.
Rescuers found more bodies on Sunday afternoon, bringing the death toll to 43.
Almost 200 people remain in hospital, 12 of them in critical condition, the official Xinhua news agency said.
Two foreigners died in the accident, according to the semi-official China News Service, including a woman in her 20s.
One train had left Beijing and both trains were destined for Fuzhou in eastern Fujian province.
Authorities moved quickly to assuage public anger by sacking the head of the Shanghai railway bureau, his deputy and the bureau's Communist Party chief, the Railways Ministry said in a statement on its website. Read More
Police confirmed they are investigating the cause of the fire and would not rule out suspicious circumstances.
The blaze started just after 5am this morning at the property in Helensburgh, near Glasgow.
An off-duty policeman raised the alarm after seeing smoke and the man was found dead at the scene.
Three others were taken to the Royal Alexandria Hospital, where the young girl later died.
Both survivors are being treated for serious burns and their injuries are described as serious.
An investigation will be carried out into the cause of the blaze. Read More
The Deutsche Presse-Agentur news agency reported that the young boy was kidnapped by militants in the Greshk district of Helmand province last Tuesday.
He was hanged on Friday after they demanded his father give himself up or else the boy would be executed.
'The militants had warned his father to surrender with his police vehicle and weapons, otherwise they would kill his son,' provincial governor spokesman Daud Ahmadi told the agency.
While child executions by the Taliban are not common, children often fall victim to Taliban militants when they carry out attacks.
Youngsters have also been used by the Taliban as suicide bombers.
Two months ago, four civilians were killed and 12 others were injured when a 12-year-old suicide bomber blew himself up at a crowded market in eastern Afghanistan.
The Taliban have always denied using children to carry out their attacks. Read More
The stakes have risen dramatically in the last 48 hours after long-running talks between President Obama and John Boehner, the top Republican in Congress, collapsed in acrimony.
"It's very important that the leadership (in Congress) understands that Wall Street will be opening on Monday, and we'd better have some answers," President Obama warned.
Failure to strike a deal by August 2, when the government has said it will no longer be able to pay all its bills, will leave markets facing the prospect of the first ever major default by the US.
Both President Obama and Democrats and Republicans in Congress have insisted that an agreement on reducing America's long-term deficit is required to approve an increase in the debt ceiling. But weeks of increasingly fraught talks have delivered nothing. Having met in The White House yesterday, President Obama and the leaders from both parties in the Senate and House of Representatives are expected to meet again on Sunday as the pressure intensifies.
Although the US Treasury has set a deadline of August 2, observers say the outline of a deal is needed early next week to ensure there is time for Congress to vote it through. "The whole thing is semi ridiculous that they're at this point," said Launny Steffens, founder of investment firm Spring Mountain Capital. "Do I think there would be a massive market reaction with no deal? There very well could be." (more)
Thirteen new fires were detected Friday and more than 5,000 square kilometres of land, mostly in northwestern Ontario, are burning.
It is not necessary to declare a state of emergency right now to deal with forest fires that have driven thousands of people from their homes, Premier Dalton McGuinty said Friday.
McGuinty was in northwestern Ontario to survey the damage and talk with fire personnel, volunteers and evacuees, and said he would "leave that door open," but that for now the province was doing a lot already to help.
"We're listening to advice that we get, but it doesn't appear to us, certainly at this point in time, to be necessary," McGuinty said.
"I think if I was caught up in this, I have one question alone: That is, 'Are we doing everything necessary to protect me, my property, to get these fires out?' I think those are the big questions everyone's asking and the answer in all three cases is, yes we are."
The situation is an emergency as far as he is concerned and the province is treating it as such, McGuinty said. Help being provided includes aircraft and financial support for the effort, he said.
"I've also said to the folks I've met with here today, 'If there's anything else we need to do, you need to let us know,"' McGuinty said. "I'm confident we're doing what needs doing." (more)
Witnesses told China National Radio that a bullet train stopped on the tracks Saturday because of a power outage from a lightning strike.
Another bullet train traveling in the same direction rammed into the first train from behind and caused four of its cars to fall from an elevated bridge, the radio report said.
A rescue operation was under way. Some passengers told the radio network they had to smash windows and crawl out of the cars. Officials said some cars were severely twisted and it was hard to know how many people were still trapped inside.
The struck train was carrying 1,300 to 1,400 passengers, officials said. (more)