Make your own free website on Tripod.com
Impeach Bush

Menu
 Bush Concedes to UN
 Graham Seeks to Declassify Key Attack Data
 Embattled SEC Chairman Pitt Resigns
  Fed Seen Cutting Interest Rates as Economy Cools
 Odd Farm-Sector Surge Distorts Jobs Data
 The Economy--Blame Game or Politics
 Retail Execs Pessimistic
 Consumer Confidence Lowest Since 1993
 Violent Crime Rate Rises as Economy Sours
Bush Concedes to UN
Reuters.com
November 04, 2002

UNITED NATIONS (Reuters) - After weeks of delay, the Bush administration expects to submit a revised resolution on disarmament in Iraq to the U.N. Security Council this week in hopes of forging unanimity among the body's 15 nations.

Washington has refined some language, first proposed last week, that calls on U.N. arms inspectors to report any serious violation or "material breach" by Iraq to the Security Council before any military strike could be launched, diplomats said.

But the United States still opposes allowing the council to authorize the use force or to determine what would constitute a "further material breach" of U.N. resolutions.

"I would expect that we would submit an updated text to the council very soon," State Department Richard Boucher said in Washington on Monday. The new U.S. text is expected on Wednesday in hopes the 15-member council can vote by Friday.

He said the new text went "a long way" in taking into account the views of other council members but that the U.S. "bottom line" had not changed.

To this end, President Bush's top national security advisers met in Washington on Monday in an effort to review amendments in the resolution and decide which modifications are acceptable, U.S. officials and diplomats said.

The high-level meeting, called by national security adviser Condoleezza Rice, included Secretary of State Colin Powell, and other senior officials.

The proposed U.S.-British resolution warns that failure by Iraq to make a full declaration on its weapons of mass destruction and interference in the inspections could amount to "material breach" of the 1991 Gulf War cease-fire pact, a legal basis for war.

"hidden TRIGGERS"

France, backed by Russia, China and other nations, fears "hidden triggers" in the resolution that would allow the Bush administration to go to war, overthrow Saddam Hussein and then claim the United Nations had authorized it.

President Bush on Monday telephoned Mexican President Vicente Fox for the second time in less than two weeks to get his support of the resolution, White House spokesman Ari Fleischer said.

But Mexico, which had sided with France, appears to find the U.S. compromises sufficient to back the draft. Foreign Minister Jorge Castaneda told Radio Red that the amended U.S. draft would be backed by nearly all council members.

"This resolution ... is a text that reflects a large number of changes introduced by France, by Russia, by Mexico, that give diplomacy a last chance," Castaneda said.

To be adopted, a resolution needs nine votes in favor and no veto from its five permanent members -- the United States, Britain, France, Russia and China. The other 10 rotating council members are: Bulgaria, Cameroon, Colombia, Guinea, Ireland, Mauritius, Mexico, Norway, Singapore and Syria.

But the United States and Britain need more than the minimum to make a political point to Iraq that the council is united behind any future action.

"We are reaching the point of closure, I think," British Prime Minister Tony Blair told a news conference in London on Monday. "I don't want to prejudge the negotiations but they are proceeding satisfactorily.

In Baghdad, President Saddam Hussein said Monday Iraq would consider cooperating with the new U.N. resolution as long as it was not merely a pretext for U.S. military action.

He was quoted on Iraqi television as saying such a resolution would have to respect "Iraq's sovereignty, security and independence," concepts that in the past have included a variety of conditions for U.N. weapons inspections.

Commentary:
For months the UN has been tossing Bush around like a rag doll. The UN has relegated the US to a bit-part after losing it's resolutions and has become the weakest country in the Security Council. Having lost to France and Russia, the US decline in moral authority and leadership is becoming well established.


top

Graham Seeks to Declassify Key Attack Data
October 20, 2002
Reuters.com

WASHINGTON (Reuters) - U.S. Senate Intelligence Committee Chairman Bob Graham said on Sunday he is seeking to declassify "the most important information" obtained in a congressional probe of the Sept. 11 attacks.

The Florida Democrat described the material as a key toward better protecting the United States.

Graham's panel and the House Intelligence Committee have conducted a joint investigation of the Sept. 11 attacks, holding a series of open and closed hearings.

The committees are to issue a draft report by the end of this year, with a final report due in February. In the meantime, they are seeking to declassify much of what they learned.

"Frankly, there is a piece of information which is still classified which I consider to be the most important information that's come to the attention of the joint committee," Graham said on CBS's "Face the Nation."

"We hope that it will be declassified," Graham said. "I think it is an important part of our judgments as to where our greatest threats are and what steps we need to do to protect the American people here at home."

Graham said, "There's been a pattern in which information is provided on a classified basis, and then what is declassified are those sections of the report that are most advantageous to the administration."

Commentary:
Instead of being President for the past year, Bush chose to run an endless political campaign. Obviously, it was an imperative that "what he knew and when he knew it," about a possible attack never become known. The republican congress will bury Bush's 9/11 failures. Nothing new there.


top

Embattled SEC Chairman Pitt Resigns
Reuters.com
November 06, 2002

WASHINGTON (Reuters) - U.S. Securities and Exchange Commission Chairman Harvey Pitt resigned on Tuesday night amid turmoil inside his markets-policing agency and a chorus of demands in Congress for his ouster, immediately prompting speculation about a successor.

Pitt served as top U.S. markets regulator for 15 tumultuous months, witnessing the Sept. 11 attacks that shuttered Wall Street, a rash of corporate scandals, a stubborn bear market and a massive securities law overhaul in Congress.

Last week, Pitt came under pressure to step aside for failing to tell SEC commissioners and the White House that his choice to head a new accounting oversight board, ex-FBI chief William Webster, had chaired the audit committee of a company facing fraud accusations.

"It is with deep regret that I have decided to tender my resignation to you as chairman, and a member, of the Securities and Exchange Commission, effective as soon as I can help your staff ensure a smooth transition of leadership," Pitt said in a letter sent to President Bush on Election Day.

White House spokeswoman Claire Buchan said Bush accepted Pitt's resignation. "We did have indications he was considering this over the last couple of days," Buchan said.

White House officials said Pitt made the decision on his own and was not pushed. "We did not ask him to step aside," an official said.

In his letter, the burly, Brooklyn-born lawyer wrote: "Unfortunately the turmoil surrounding my chairmanship and the agency makes it very difficult for the commissioners and dedicated SEC staffers to perform their critical assignments. Rather than be a burden to you or the agency, I feel it is in everyone's best interest if I step aside now, to allow the agency to continue the important efforts we have started."

SEC spokeswoman Christi Harlan said Pitt would stay on through a transition period. No interim chairman has been named to replace him, she added.

Possible successors to Pitt could include former top SEC lawyer James Doty, corporate lawyer Gary Lynch or former federal judge Stanley Sporkin, sources said earlier this week.

However, sources also said a replacement would not be needed right away, and an interim chairman might be appointed from among two remaining Republican commissioners -- Paul Atkins and Cynthia Glassman. Both have refused to comment on that possibility and could not be reached Tuesday.

Sen. Paul Sarbanes, the Maryland Democrat who co-authored landmark legislation passed in July that ordered the creation of the accounting board and many other reforms, said he had twice called for Pitt's resignation.

"I am pleased we are moving forward, and we hope the White House will nominate a top reformer, who will enforce the provisions of Sarbanes-Oxley," he said through a spokesman.

SERIES OF STUMBLES

The accounting board episode was just the latest in a series of stumbles by Pitt. He angered the White House last summer by suggesting to Congress, without first consulting the Bush administration, that the SEC be promoted in the government and he be made the equal of Fed Chairman Alan Greenspan.

Pitt was hounded by his past as an elite Wall Street lawyer, although he had started his career at the SEC and said he had a deep loyalty to the agency.

Democratic lawmakers criticized the chairman for meeting privately with executives from former clients, such as investment bank Goldman Sachs and accounting giant KPMG. In July, Arizona Republican Sen. John McCain also called on Pitt to resign.

Massachusetts Democratic Rep. Edward Markey, a frequent Pitt detractor, said, "With Harvey Pitt's resignation tonight, I am hopeful that the Bush administration will aggressively pursue qualified, experienced, and impartial candidates to lead the SEC at this critical and historic moment."

The announcement that Pitt would step down came as Bush was watching Election Day television returns.

Senate Majority Leader Tom Daschle, a South Dakota Democrat, told CBS: "I'm not surprised that he resigned. I am a little surprised that he chose tonight to do it. I think I know why. I think they wanted to minimize the news. They were hoping you'd be so consumed by the election, that you wouldn't want to be talking about Harvey Pitt tonight."

Pitt's resignation came after White House officials lost confidence in him amid the flap over the accounting board, set up by the SEC to crack down on auditors and bolster market confidence after a rash of business scandals that started last fall with energy trader Enron Corp.

On Oct. 25, with the support of Pitt and two other Republican SEC commissioners, the 78-year-old Webster won a bitterly divided, 3-2 party-line SEC vote to become the first chairman of the Public Company Accounting Oversight Board.

Six days after the vote, it emerged that Webster had been the audit committee chairman of U.S. Technologies Inc, a small, Washington-based company facing accusations of fraud.

ELECTION NIGHT SURPRISE

Sen. Richard Shelby, who is expected to be the new Senate Banking Committee chairman if the Republicans succeed in taking control of the Senate, said he had expected Pitt to go, but the timing had taken everyone -- apparently even the White House -- by surprise. "I thought it was coming, even last Friday," Shelby, an Alabama Republican, told Reuters.

"I thought then that the fact that he did not divulge relevant information to his fellow commissioners, was more than troubling, it brings about, I think, a tainted situation."

Pitt canceled a speech in New York earlier on Tuesday, and was slated to speak at the Securities Industry Association annual meeting on Friday. Pitt also was slated to preside over an open meeting at the SEC on Wednesday to consider new rules for corporate attorneys.

Commentary:
Pitt was a bad choice from day one. The fact that Bush didn't demand his resignation in public for lying to fellow commissoners proves Bush isn't capable of firing bad employees. Another serious flaw in his character.

No one can blame Pitt for what happened. Bush knew he has friendly to accounting firms, knew the SEC was underfunded and understaffed and he didn't care. Recall how Bush refused to increase funding for the SEC until Democrats forced him to. It also doesn't help that Bush now supports cutting those increases that are needed for the new accounting board. If I were looking for a really bad manager, I'd pick GW.


top

Fed Seen Cutting Interest Rates as Economy Cools
Reuters.com
November 06, 2002

WASHINGTON (Reuters) - In a bid to ward off some of the chill settling over the slow-moving U.S. economic recovery, Federal Reserve policymakers were widely predicted to cut U.S. interest rates to fresh four-decade lows on Wednesday.

An overwhelming majority of Wall Street analysts expect the U.S. central bank's Federal Open Market Committee, set to begin meeting at 9 a.m., to lower rates for the first time this year in the face of evidence showing the economy's pace is rapidly cooling. A decision was expected to be announced around 2:15 p.m.

The meeting was delayed by a day because of U.S. congressional elections.

"No monetary policymaker wants to see this economy slide back into another recession," said economist Lynn Reaser of Banc of America Capital Management Inc. in St. Louis, Mo. "It now appears that monetary policy is facing a significant loss of confidence and that is likely to make the Fed inclined to provide some offset," Reaser said, adding the most likely FOMC outcome seemed to be a quarter-percentage-point cut in the trend-setting federal funds rate to 1.50 percent.

A poll by Reuters on Friday of primary dealers -- Wall Street firms that deal directly with the Fed -- found fully 19 out of 20 predict the Fed will try to energize the sluggish recovery with a jolt of cheaper credit.

PUMP UP CONSUMERS

Fourteen saw a quarter-percentage-point reduction, while five foresaw a more aggressive half-point slash.

At the last meeting of the FOMC on Sept. 24, policymakers opted to keep rates unchanged, but two voting members of the committee broke ranks and urged an immediate rate cut.

The U.S. economy completed four quarters of expansion through this year's third quarter, averaging about a 3 percent annual rate of growth after contracting for three straight quarters at the beginning of 1991.

But the recovery has hinged on consumers' willingness to keep spending on new cars, homes and other goods, while businesses have been reluctant to step up the plate by boosting investment -- and in fact have helped undercut consumers through vigorous cost-cutting, layoffs and delayed hiring.

Labor Department figures issued last Friday showed 5,000 fewer U.S. jobs in October, a second straight month of sliding payrolls. And on Monday, the outplacement firm Challenger, Gray and Christmas Inc. said the number of planned job cuts announced by U.S. companies shot up to 176,010 last month -- about 7,600 jobs lost every business day.

FOG OF UNCERTAINTY

Not surprisingly, the fog of uncertainty about the economy's future has weighed on consumers. The Conference Board's Consumer Confidence Index slumped in October to a nine-year low -- 79.4 from 93.7 in September.

On the horizon looms the crucial holiday shopping season, the weeks between Thanksgiving and Christmas when many retailers do the bulk of their annual business, so plummeting confidence figures were seen as a red flag for policymakers.

"If consumers rein in their spending to any degree at all, we will be in recession," analyst Mark Zandi of Economy.com said.

Many economists believe the nation's manufacturing sector already has slipped back into recession. The Commerce Department reported on Monday that orders for costly manufactured goods weakened 2.3 percent in September to $318.06 billion after dipping 0.4 percent in August.

According to last Friday's payrolls report from the Labor Department, factory jobs tumbled by 49,000 in October, while the private Institute for Supply Management reported a drop to 48.5 in its factory index from September's 49.5. A reading below 50 shows the sector is shrinking.

The nation's financial markets already were preparing on Tuesday for a rate cut, with the blue-chip Dow Jones industrial average adding 106.67 points, or 1.24 percent, to close at 8,678.27 and the tech-laden Nasdaq Composite up 4.63 points, or 0.33 percent, to close at 1,401.17.

Prices for bonds were weaker, but bond markets were preoccupied with Treasury's quarterly refinancing sales and with absorbing the increased supply of securities.

Commentary:
I don't know how the press is going to play this, but I have a good idea. The economy is in serious trouble, I think we all agree on that. By cutting rates the day after a republican electoral victory, the FED knows the markets will surge, thus giving the press and the American people the impression that "all is well." Truth be told, we're in a world of hurt and the press has failed to report how bad things are and instead spent endless hours talking about a war that will never happen. Each story about Iraq was a campaign ad for the republican party and every network and news channel ran these endless ads (stories).

We have to give republicans credit for gaining complete control of the media.


top

Odd Farm-Sector Surge Distorts Jobs Data
yahoonews/reuters.com
Tuesday November 5, 2002

NEW YORK (Reuters) - An inexplicable surge in farm jobs has played a major part in keeping the U.S. unemployment rate down in recent months, despite persistent weakness in other labor market indicators.

Without the jump in farm-based employment since June, the jobless rate would have climbed steadily to reach 6.0 percent in October. Instead the jobless rate fell in September and then inched back to 5.7 percent last month.

If it had topped 6.0 percent, consumer confidence might have suffered far more, bond yields tumbled and the case for an interest rate cut -- now expected on Wednesday from the Federal Reserve -- might be that much clearer.

The strength baffles analysts and statisticians alike and could reinforce financial market skepticism of the unemployment figures as a reliable indicator of the economy.

"The massive surge in farm jobs has been an important factor depressing the published unemployment rate at a time of little or no growth in nonfarm payroll employment," said Rory Robertson, an interest rate strategist who covers the U.S. economy for Australian house Macquarie Equities.

"Of course, the rapid growth in farm jobs -- the fastest in more than 50 years of data -- seems implausible, to say the least," he added.

The Department of Labor uses a monthly survey of 60,000 households to compile the unemployment series, in contrast with the monthly payrolls figures, which come from an established survey of around 350,000 businesses.

In recent months the unemployment rate has diverged from the trend in payrolls, dipping from 5.9 percent in June to 5.6 percent in September before edging up to 5.7 percent last month.

At the same time, payrolls growth has been muted at best, running at levels which typically would be associated with a rise in the jobless rate.

The dichotomy has stirred a major debate among economists -- some of whom claim that the unemployment survey is flawed, while others argue that it is actually more representative of the economy as a whole and the payrolls survey is at fault for overlooking hundreds of thousands of small firms.

The odd behavior of the farm sector would seem to support critics of the unemployment survey and suggests that the true jobless rate is higher than the figures suggest.

UP ON THE FARM

The stellar performance of the usually laggard farm sector certainly sits at odds with the sluggish state of the broad economy.

Since June some 415,000 jobs have been created in agriculture, excluding forestry and fishing -- a rise of 13 percent and easily the fastest growth in decades.

While the farm sector makes up only 2.6 percent of total employment, its surge has accounted for almost fully half of the 861,000 new civilian jobs generated since June.

"It's certainly an unusual occurrence, but we haven't looked into it as such," said a spokesperson at the Department of Labor.

She noted that much of the jump came in October and that the figures were volatile from month to month, suggesting farm employment could easily fall sharply in November.

Farm jobs climbed 227,000, seasonally adjusted, in October to 3.525 million, having risen 110,000 the month before. In June total farm sector employment was reported at 3.110 million.

The strength of farm jobs also came as a surprise to the Department of Agriculture, where an economist said there had been no developments in the industry to account for such an astounding pickup.

"Is anything real going on here?" asked Robertson at Macquarie. "Or is it best just to walk away with the conclusion that the household survey data -- including the published unemployment rate -- are too erratic to be taken seriously?"

Commentary:
"Of course, the rapid growth in farm jobs -- the fastest in more than 50 years of data -- seems implausible, to say the least." Enough said.


top

The Economy--Blame Game or Politics
Reuters.com
November 03, 2002

WASHINGTON (Reuters) - Since the Bush administration took office in January 2001, U.S. stock markets have tumbled, the job market has shrunk and budget deficits have returned.

The economy is now limping -- not roaring -- back to health after enduring, in the first few months of George W. Bush's new presidency, the first recession it has faced since his father was in power.

Despite all this, economists say Democrat and Republican economic finger-pointing ahead of Tuesday's elections is best looked at with some skepticism.

The Bush administration says it has done the best it could with an economy hung over from the excesses of the late 1990s stock boom and dealing with aftershocks of Sept. 11. Democrats charge the economy's weakness is due to the administration's economic policies, including a $1.35 trillion 10-year tax cut.

In fact, the blame game is a pointless one to some degree because economists say there's little the occupant of the White House Oval Office can do to directly affect the $10 trillion U.S. economy.

Some policies may help at the edges, they say, but the world's mightiest economy faces a slew of other variables, such as consumer sentiment, businesses' willingness to invest and interest rates, that have little to do with government.

Friday's Labor Department report that the number of nonfarm jobs dipped by 5,000 in October, a second straight monthly decline, set off a new round of partisan sniping.

While President Bush called the figures "a problem," he repeated an oft-repeated matara: "The foundation for growth is strong," citing low interest rates and tame inflation.

But Rep. John Spratt, a South Carolina Democrat and the ranking member of the House Budget Committee, jumped on the numbers and said the job market was in a "dismal state."

BY THE NUMBERS

Looking solely at the economic numbers, the first 22 months have not been kind to Bush. Aside from inflation, most major indicators in the first half of his term have deteriorated. In some respects, his first-half months have stood in stark contrast to his predecessor Bill Clinton's first term.

Take a look at the stock market, for example.

From Jan. 20, 1993, Clinton's first day in office through Oct. 31, 1994, the Dow Jones industrial average rose from 3242.00 to 3908.10, a gain of some 20.5 percent. In the same period for Bush, it has fallen from 10578.20 on Jan. 22, 2001, to 8397.03 on Oct. 31, a decline of 20.6 percent.

From January 1993 to October 1994, nonfarm payrolls, seasonally adjusted, rose by 5.73 million, according to Labor Department data, while the unemployment rate dipped from 7.3 percent to 5.8 percent.

From January 2001 to October 2002, nonfarm payrolls have fallen by 1.49 million, as the jobless rate edged up 1.5-percentage points, from 4.2 percent to 5.7 percent.

Gross domestic product, the broadest measure of economic output in the U.S., averaged a 3.1 percent annual growth rate in the first seven quarters under Clinton, compared with a 1.4 percent average in the same period under Bush.

But there are two areas where Bush has fared better than Clinton. The rise in the seasonally adjusted Consumer Price Index totaled 4.8 percent in Clinton's first 22 months, but only 3.4 percent in Bush's first 21 months (October 2002 data won't be released until mid-November).

Perhaps surprisingly, given Democratic objections to the tax cut, Bush has also run up less red ink on the federal fiscal ledger, despite a return to deficit spending in the 2002 budget. In his first two budget years, the administration is $31.5 billion in the red. Clinton's first two budget years saw deficits totaling $458.4 billion.

LUCKY VS UNLUCKY

But analysts say much of an administration's economic record simply depends on when it enters office. Clinton came into the White House as the economy as already recovering from a short-lived recession in 1990 and 1991. Bush, on the other hand, saw three straight quarters of economic contraction between January and September 2001.

"Bill Clinton was one of the luckiest presidents and the Bushes are not very lucky," said Paul Kasriel, director of economic research with The Northern Trust Co. in Chicago.

Kasriel contends the blame for the current lackluster state of the economy lies with Fed Chairman Alan Greenspan, who he said let the stock bubble of the 1990s get out of hand.

This is a criticism the Fed chief has faced from several other quarters and has addressed in recent months by arguing that central banks face great difficulties identifying emerging asset price bubbles and also with safely deflating them.

The timing of Bush's tax cut proved "prescient," Kasriel said, and helped prop up the economy last year. But he criticized Bush's imposition of heavy tariffs on foreign steel products. Overall, the economist gave the Bush administration a B-minus grade for its efforts.

But Joel Naroff, president of Naroff Economic Advisors, said the Bush team merited only an "incomplete" grade, noting the war on terrorism has kept the administration from focusing on economic policy.

Naroff said Bush and Clinton pursued opposite tacks in their first two years, with Bush seeking a tax cut and Clinton a tax hike. Clinton's tax moves made sense over the long-term in helping bring down a chronic budget deficit, he said, and Bush's tax cuts were a good short-term way to boost the economy. But Naroff said it was too soon to see what the long-term consequences will be.

"We don't know yet if the tax cuts make sense," he said.

Commentary:
Bush's tax cut was first proposed when we had projections of surpluses for as far as the eye can see. Then when those surpluses vanished, he changed the reason for the cut to "stimulate the economy." Now that we've had a year and a half of tax cuts and the economy is still in the dumps, economists and the press are saying don't blame Bush.

Of course those same economists never gave President Clinton credit for balancing the budget (something no republican president will ever do) and they don't blame republican presidents for their massive deficits and debt which put a drag on the economy.

However, when the economy recovers the press and economist will give Bush credit just like they did with Reagan. Obviously they don't care that recoveries always follow recessions--to them, it's all about politics and truth has no meaning.


top

Lawyers Warned Bush Not to Sell Stock
bostonglobe.com
October 30, 2002

WASHINGTON - One week before George W. Bush's now-famous sale of stock in Harken Energy Corp. in 1990, Harken was warned by its lawyers that Bush and other members of the troubled oil company's board faced possible insider trading risks if they unloaded their shares.

The warning from Harken's lawyers came in a legal memorandum whose existence has been little noted until now, despite the many years of scrutiny of the Bush transaction. The memo was not received by the Securities and Exchange Commission until the day after the agency decided not to bring insider-trading charges against Bush, documents show.

The memo, a copy of which was obtained by the Globe, does not say directly whether Bush would face legal problems if he sold his stock. But it does lay out the potential for insider-trading violations by Bush and other members of the Harken board, and its existence raises questions about how thoroughly the SEC investigated Bush's unloading of $848,000 of his Harken stake to a buyer whose name has not been made public.

The SEC cleared Bush after looking into whether he had insider knowledge of an upcoming quarterly loss at Harken. But the SEC investigation apparently never examined a key issue raised in the memo: whether Bush's insider knowledge of a plan to rescue the company from financial collapse by spinning off two troubled units was a factor in his decision to sell.

The plan engineered by one of the company's largest shareholders, the endowment fund of Harvard University, raised uncertainty about the value of Harken after the breakup. The question is, did Bush sell believing that the stock might soon dip?

"It would certainly have raised a question in the mind of a reasonable investigator," said Theresa Gabaldon, a professor at George Washington University and author of the textbook "Securities Regulation."

Gabaldon, who reviewed the documents at the request of the Globe, also examined company minutes related to the move to split up Harken through what is called a "rights offering" and concluded that they would have been worthy of further examination by securities regulators. But, she said, "I don't think [the SEC investigators] were looking at the rights offering at all."

The Globe contacted four former SEC officials who worked on the Bush case; none of them recalled seeing the memo in question. None would speak about the case on the record, but a July 1991 memo from the SEC investigators to their boss reveals that they were having difficulty securing documents from Bush, who was holding many items back, saying they were private correspondence between him and his lawyer.

"Bush has produced a small amount of additional documents, which provide little insight as to what Harken nonpublic information he knew and when he knew it," the memo said.

The SEC nevertheless cleared Bush on Aug. 21, 1991. One day later Bush's lawyer - Robert Jordan, now the US ambassador to Saudi Arabia - turned over the legal memorandum outlining concerns about insider trading. The nine-page memo, dated June 15, 1990, was titled "Liability for Insider Trading and Short-Term Swing Profits" and addressed the possibility that Harken board members might know more about the spinoff plan, which included a stock rights offering, than the general public did.

The memo, did not instruct the board members whether to sell. One week after the memo was written, Bush sold his stock. In the following six months, the stock price dropped from $4 per share to $1.25 per share, although the price later recovered.

White House spokesman Dan Bartlett said the memo does not suggest that Bush refrain from selling the stock. Bartlett also said that the memo was sent to the Harken board, of which Bush was a member, but did not mention Bush by name.

"This is a general memo that goes through the perfunctory guidelines of a rights offering," Bartlett said. "It was not specific to the transaction that the president was contemplating."

SEC reports on the case make it clear, however, that the memo was written in response to Bush asking Harken executives whether he could sell his shares. Bartlett said he did not believe that Bush had seen the memo, but instead thought that Bush was told about the advice by a company lawyer.

The memo raised a specific concern about the insiders' knowledge of the rights offering, which split Harken into three entities. The plan was recommended by Harken board member Michael Eisenson, the Harvard Management executive in charge of the university's Harken investment. Eisenson was trying to save the company from bankruptcy, according to board meeting minutes. Eisenson has declined to be interviewed.

In 1990, Harken, a small, Texas-based energy company, was Harvard Management's seventh-largest stock holding. The investment, made in 1986, had been part of an ill-timed plunge by the university endowment into the energy sector. There has been speculation that Bush's presence on the Harken board attracted Harvard to the company. But former Harvard executives and others with knowledge of the Harken investment said Bush had nothing to do with the fund's investment.

The crucial question is whether Bush was motivated to sell when he did by information he learned at the special meeting of Harken directors on May 17, five weeks before he sold his stock. The meeting was held at a moment of crisis for the company, which was expected to run out of cash within three days, according to internal documents. One Harken memo related to the rights offering says the company had "no other source of immediate financing" if the deal was not completed. Indeed, the offering was necessary to get leniency from Harken's two lenders, the former Bank of Boston (now part of FleetBoston Financial) and First City Bank of Texas. The major shareholders, led by Harvard, had to put up financial guarantees to seal the bargain.

Meanwhile, Bush was pondering the sale of most of his own Harken holding, which he came into in 1986 when Harken bought out his interest in another failing oil venture, called Spectrum 7. Bush has said that a Los Angeles stockbroker, Ralph Smith, called him in early June 1990 to ask if he would sell his Harken shares to one of Smith's clients. Bush said no, but said he might be interested in selling "in a few weeks," according to the SEC memo.

Shortly after the Smith call, Bush asked Harken's general counsel for advice. The counsel, in turn, asked Harken's law firm, Haynes and Boone, whose advice included this warning: "The act of trading, particularly if close in time to the receipt of the inside information, is strong evidence that the insider's investment decision was based on the inside information. ... Unless the favorable facts clearly are more important than the unfavorable, the insider should be advised not to sell."

The memo notes that in Harken's May 22 announcement, it "does not disclose the purchase price for which the rights will be offered and expressly states that `additional terms of the proposed rights offering are currently being formulated."'

The price would not be announced until Oct. 3; that's when investors would know how much they would have to pay to buy shares in spun-off companies. The Globe could not determine when Bush and other board members learned what the price would be.

One week after the memo was written, Bush sold his shares on June 22 via the broker, Smith. Smith could not be reached for comment, but has been quoted as saying the buyer was an institution that he would never reveal.

Nearly a year would go by before the SEC investigated the transaction, a delay caused in large measure because Bush was late in notifying the agency of his insider sale.

During the SEC investigation, Bush's lawyer was asked by the SEC what advice was given to Bush about selling. The Bush lawyer told the SEC that no objection to the sale was made by Harken's law firm. "Haynes and Boone informed [Bush] that they had met internally to consider the issue and, based upon the information they had, they saw no reason why Bush could not sell his shares," the SEC report said.

The summary was released a day before the agency received the legal memo in which Harken and Boone offered much more cautious advice to Bush and the board. Jordan could not be reached to discuss the apparent conflict. The SEC investigators also declined to comment.

Harken remains financially troubled, with its stock trading at 22 cents a share. It is currently in the middle of another effort to raise capital.

As for Bush, he has often said that he could not be faulted for insider trading because he was selling into good news; the prior January Harken had entered into a deal to drill for oil in the Persian Gulf nation of Bahrain.

Michael Aguirre, a California securities lawyer who filed the original Freedom of Information request that led to the release of some of the documents, said he is astonished that the SEC did not investigate the rights offering.

"It was something they either overlooked or consciously avoided," he said. "It appears that Mr. Bush had insider information, that he was told that such insider information could be considered material, [and] was given express warnings about what the consequences could be."

Thus, Aguirre said, it is "imperative" that Bush allow the buyer of his stock to be identified because that would clarify whether Bush knew the buyer and conveyed inside information to the buyer.

Commentary:
So the guy who sold the stock for Bush won't talk. That's cool. Why doesn't Bush tell us. Bush had to know who the person was. As usual, the rule of law was and is meaningless to Bush and his family. Clearly his father being president at the time had a lot to do with making sure he son got out of the SEC investigation without being questioned. How could the SEC say Bush didn't know any inside information when they never asked him?


top

Retail Execs Pessimistic
reuters.com
October 30, 2002

CHICAGO (Reuters) - U.S. retail executives were even more pessimistic about their business in October than they were a month ago, with worries about a war with Iraq and the effects of a port dispute overshadowing a weather-related boost in sales, a survey released on Wednesday showed.

Conducted by the National Retail Federation and Bank of Tokyo-Mitsubishi, the survey found 63.1 percent of retail executives expected 2002 holiday sales to be the same as or stronger than in 2001. However, if the United States goes to war with Iraq, only one in 10 surveyed thought sales would be the same or better than last year's.

The retail sector performance index -- which gauges overall opinions on monthly sales, customer traffic, average transaction per customer, employment, inventories and six-month sales outlook expectations -- fell to a below-normal reading of 39.5 percent for October, down from 40.9 percent in September.

The index can range from 0 percent to 100 percent, with 50 percent meaning conditions were unchanged from the prior period. A reading below 50 means deterioration.

Retailers had enjoyed a modest pickup in demand this month as the season's first cold snap spurred demand for winter clothing and seasonal merchandise, but sales still remain lackluster as a weak economy keeps consumers cost-conscious.

Worries about jobs and a possible Iraq war drove consumer confidence to its lowest level in nine years in October, a report issued on Tuesday said.

Consumer spending accounts for some two-thirds of U.S. economic activity, so any slowdown in shopping trends casts doubts on the health of the U.S. economy.

"There is a high degree of concern among the nation's retailers right now," said Michael Niemira, senior retail analyst with Bank of Tokyo-Mitsubishi.

"Retailers are acknowledging that they are facing many unknowns this holiday season including potential war with Iraq and the impact the West Coast port situation may have on inventories," he said.

Of those surveyed, 39 percent thought the labor dispute that stranded billions of dollars of merchandise at West Coast ports earlier this month would create shortages. Another 39 percent thought that it would not, while 22 percent were unsure of the impact.

The retail federation has said it expects 2002 holiday sales to rise 4 percent from last year's $201 billion, which would be the smallest increase in five years.

Commentary:
Another recession? It sure looks like it. If we have another recession it's a sure bet that Bush will wrap himself in 9/11 again, while party loyalist continue to blame Bill Clinton.


top

Consumer Confidence Lowest Since 1993
consumerresearchcenter.org
October 29, 2002

The Conference Board's Consumer Confidence Index, which has declined for four consecutive months, deteriorated even further in October. The Index now stands at 79.4 (1985=100), down from 93.7 in September.

The Present Situation Index fell to 77.5 from 88.5, and the Expectations Index declined to 80.7 from 97.2. Consumer Confidence is now at its lowest level since November 1993, when it stood at 71.9.

The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by NFO WorldGroup, a member of The Interpublic Group of Companies (NYSE: IPG).

"A weak labor market, the threat of military action in Iraq, and a prolonged decline in the financial markets have clearly dampened both consumers' confidence and their expectations for the near future," says Lynn Franco, Director of The Conference Board's Consumer Research Center. "The outlook for the holiday retail season is now fairly bleak. Without the likelihood of a pickup in consumer spending, an already weak economic recovery could weaken further."

Consumers' assessment of the present situation turned notably more negative. Those rating current business conditions as "bad" increased to 27.6 percent from 23.8 percent. Those rating current conditions as "good" decreased to 15.6 percent from 18.5 percent. Consumers reporting jobs are hard to get rose to 27.3 percent from 25.4 percent last month. Those claiming jobs are plentiful declined to 14.8 percent from 15.9 percent in September.

Consumers' expectations for the next six months, which had improved last month, fell in October. The percent of respondents expecting a deterioration in business conditions in the next six months rose to 14.1 percent from 9.7 percent. Consumers expecting conditions to improve declined to 19.0 percent from 21.6 percent.

The employment outlook was also less favorable in October. Consumers anticipating more jobs to become available dropped to 15.0 percent from 17.3 percent, while those expecting fewer jobs in the coming months rose to 22.1 percent from 16.8 percent. Income expectations were also more pessimistic. Now, only 17.8 percent of consumers anticipate a rise in their income, down from 21.5 percent in September.

Commentary:
Consumer Confidence is usually a good sign of where an election is heading. The last time we saw numbers like this Republicans swept both Houses of congress. Today however, the media is fixated on the Bush agenda instead (ie: his endless wars) so it's hard to figure out what will happen.


top

Violent Crime Rate Rises as Economy Sours
foxnews.com
October 29, 2002

WASHINGTON — Murder, rape and every other violent criminal act except aggravated assault rose last year, the FBI said Monday in reporting the first year-to-year increase in overall crime in a decade.

The number of murders increased for the second straight year, following several years of decline, according to the FBI, which compiles its annual survey from crimes reported by 17,000 law enforcement agencies nationwide.

The 15,980 murders represented a 2.5 percent increase over 2000, while forcible rapes were up less than 1 percent and robberies rose 3.7 percent. Aggravated assaults fell by a half-percentage point, reaching its lowest level since 1987.

The FBI did not include the Sept. 11 deaths at the World Trade Center, the Pentagon and the plane crash in Pennsylvania. These deaths, the FBI said, "are different from the day-to-day crimes committed in this country."

The report listed the total number of Sept. 11 murder victims reported by law enforcement agencies as 3,047. Of those, 2,823 occurred at the World Trade Center, 184 at the Pentagon and 40 in Somerset County, Pa., the FBI reported.

The total number of crimes rose 2.1 percent last year, the first increase from year to year since 1991, the FBI said. But overall crime still is down 10 percent compared with 1997, according to the report.

Property crimes such as burglary, larceny and arson, with no threat of violence, rose 2.3 percent, to 10.4 million cases. The total value of stolen property was pegged at $17.1 billion, with motor vehicles and jewelry accounting for the most money. About a third of stolen property was recovered.

The FBI report differs from a survey done earlier this year by the Justice Department, which identified a drop in all violent crimes except murder in 2001, based on interviews with victims. Murder is not included in that survey, and the FBI cautions against comparing the two reports.

Despite the increase in murders, the FBI said the overall number still is down nearly 33 percent from 1992. Murder accounts for only about 1.1 percent of the nation's violent crime, with aggravated assault making up about two-thirds of the cases and robbery another 29 percent.

There were 6,750 white murder victims, 6,446 who were black, with the remainder a mix of other or unknown races. Men were far more likely than women to be murdered.

Firearms accounted for 8,719 slayings, or about two-thirds, followed by knives, "personal" weapons such as fists and feet, blunt objects and such methods as drugs, strangulation and drowning. There were 10 murders-by-poison in the United States last year, according to the FBI.

Police were able to make arrests in about 20 percent of all cases. They did better with violent crimes, solving 46 percent, including two-thirds of all murders. Burglaries remain the toughest cases to crack, with just 13 percent of offenses resulting in arrests.

There were more than 2.3 million arrests for crimes tracked by the FBI in 2001, down less than 1 percent from the year before.

Commentary:
Bush and Co. follow a simple pattern. Every piece of bad news is softened by using 9/11 as a backdrop. Deficits are up, 9/11, crime is up, 9/11. Consumer Confidence is down, 9/11, the economy is in serious trouble, 9/11, unemployment is up, 9/11. I have never seen a president use a tragedy to make himself look better or soften bad news more than GW.

Politics aside, crime rates almost always go up when the economy goes down because states and the federal government pull back on crime prevention programs as budget deficits loom. Also, Bush's endless war is harming confidence in the future, which harms the economy, which causes crime to go up.

Christian Science Monitor reported back in June 2002, the following; "On the federal level, the Bush administration is proposing to reduce by 80 percent the Community Oriented Policing Services program (COPS) that helped put 115,000 new police on the beat since 1994. At the same time, the FBI's traditional role is shifting from taking on gangs, mobsters, and kidnappers to focus more on the threat of terrorism."

Maybe Bush's need for war will work against him at some point but so far American's seem to be content with more crime, recession, deficits and falling markets.


top