Expecting Mothers That Take Probiotics Have Healthier Babies

July 22, 2010

Natural News

By: Ethan A. Huff

Researchers from the Norwegian University of Science and Technology (NTNU) recently conducted a study on the effects of probiotic supplementation during pregnancy. The team found that mothers who drank probiotic-supplemented milk during their pregnancies cut their children’s risk of developing eczema by 40 percent.

The study is part of a larger Norwegian research project being conducted by the university called “Prevention of Allergy Among Children in Trondheim”, or PACT. In this particular study, women were given either milk with probiotics or milk with a placebo, beginning at week 36 of their pregnancies. Neither group knew which formula they were drinking. Researchers evaluated the women and their children from pregnancy until the children were two years old before presenting their findings.

“The taste of both products was similar, and the milk was delivered in unmarked milk cartons. This means that neither the participants in the study or the researchers knew who had received probiotic milk or placebo milk,” explained Torbjorn Oien, one of the study researchers. “We can therefore say with great certainty that it was the probiotic bacteria alone that caused the difference in the incidence of eczema between the two groups.”

Probiotics have been studied quite heavily in recent years, and science continues to discover the many health-promoting benefits of this beneficial bacteria.

“Probiotic bacteria favorably alter the intestinal microflora balance, inhibit the growth of harmful bacteria (like Candida albicans, or “yeast”), promote good digestion, boost immune function, and increase resistance to infection. Probiotics also contain enzymes that help break down and digest dairy products like lactose in milk,” explains Jonny Bowden, Ph.D., C.N.S., in his book The Most Effective Natural Cures on Earth: The Surprising, Unbiased Truth about What Treatments Work and Why.

The Norwegian study is the first to identify a definitive link between probiotics and eczema prevention, particularly as the effects are passed down from mother to child. The team plans to conduct a follow-up study to evaluate the preventative effect of probiotics on allergies like asthma as well.

click here to read full article

Why Big Pharma Continues To Lie About Avandia

July 22, 2010

Natural News

By: Mike Adams

Sometimes the degree of fraud that takes place in the drug industry is so mind-boggling that it’s hard to determine whether drug regulators and the media are paying attention at all. For the past several months, drug giant GlaxoSmithKline (GSK) has been under scrutiny for tampering with clinical trial data for its diabetes drug, Avandia. Reports show that the company lied about Avandia’s safety in order to get the drug approved and keep it on the market. But despite numerous pieces of credible evidence and witness testimonies that have all come forward — all of which reveal GSK’s deception — an FDA advisory panel is still recommending that Avandia remain on the market.

Back in February, a Senate Finance Committee report revealed that not only is Avandia dangerous, but GSK knows this and has deliberately tried to hide this crucial information from the public. The report even goes so far as to openly name the FDA as a culprit in conspiring with GSK (and other drug companies) to deceive the public. (You can read the article I wrote about this report at: http://www.naturalnews.com/028233_G…)

Right after this extensive report was released, an FDA advisory panel voted 22 – 1 in favor of keeping the drug on the market. And just a few days ago, another FDA panel did the same thing following official hearings that showed even further that GSK committed fraud in getting Avandia approved. (It has since been revealed that at least one expert on the FDA panel voting for Avandia’s approval was on the take, receiving “speaking fees” from GSK. But no one seems to care about this disturbing fact…)

You can read the details of the report at the following link:
http://finance.senate.gov/newsroom/…

The lies and manipulation of GlaxoSmithKline

Pharmaceutical companies are notorious for skewing the truth in order to get their next blockbuster drug approved for sale. These companies are vicious, money-hungry, multi-national corporate monsters that will stop at nothing to make an obscene profit, even if it means exposing their customers to harm.

It’s one thing for a company that sells, say, televisions, to lie about the quality of its product. Nobody ultimately dies from false claims about a poor quality TV and, if found guilty, the company that produced the TV will likely be held liable for any crimes it committed through deceptive marketing. But when it comes to drug companies that peddle dangerous toxins as medicine, it’s a whole different story.

Sadly, Big Pharma is one of the most protected industries on the planet. Big Pharma gets away with murder (literally), and nobody really seems to care. You and I would be hauled off to jail immediately for doing even a small fraction of what Big Pharma does, but when Big Pharma does it, the blinders go up because observers falsely believe that drugs are “science-based”, and that the wonderful drug companies would never do anything to harm us.

Such thinking is pure foolishness, of course, especially when you examine the plain facts in the GSK case.

Hiding the truth

First of all, internal documents reveal that GSK knew about the dangers of Avandia since the early days of its development, but didn’t disclose any of this information to the public or to the FDA. And why would they? The FDA, according to the same reports, has been in collusion with GSK since the beginning to hide the truth, so GSK has had no reason to disclose anything.

Think about it. GSK created a diabetes drug that, at its high point, was raking in more than $3 billion a year in profits. GSK spent millions of dollars for research and development of the drug, paid for the clinical trials, and purchased approval from the FDA for the several million dollars it costs to complete the FDA drug application. And GSK did all this knowing full well that the drug causes a substantial increase in the risk of heart attacks and death.

With all of this in mind, do you really think that the company is now going to simply own up to the fact that it lied, and willingly agree to have the drug pulled from the market?

Truth be told, drug companies like GSK practically never tell the truth. They don’t have to. Even when their racket gets exposed, it all gets glossed over and covered up by the bureaucrats in our government agencies.

GSK’s flawed safety studies

It’s amazing to me just how many people put their trust in the “safety studies” the drug companies conduct on their own drugs. That such studies are considered credible by anyone just goes to show you that critical thinking skills are severely lacking among both the public and members of the medical profession.

Drug companies spend millions of dollars on studies and clinical trials that are designed to show that their drug is safe, and with enough manipulation, they usually get the results they’re looking for. These studies have little or nothing to do with actual science or unbiased inquiry; it’s all about using “pretend science” to produce a result that will allow them to achieve FDA approval.

And this scenario is no different in GSK’s trials for Avandia which, according to reports, didn’t properly reflect the inherent dangers of the drug.

When challenged about her concerns over the quality of GSK’s safety data for Avandia, Dr. Nancy Geller, a member of the FDA advisory committee and director of the Office of Biostatistics Research at the National Heart, Lung, and Blood Institute, responded by explaining that clinical trial data is “not [reliable] if you report the wrong follow-up date and not if you withdraw someone from a trial just before their death.”

In other words, drug companies change all sorts of things during a trial in order to achieve a desired result (which makes them anything but trustworthy). This includes removing people from the clinical trial right before they die in order to avoid having a death statistic show up in the final data. Oh look, is Mary about to expire? Hurry, kick her out of the testing group before she ruins the safety record of our drug!

These are the types of things GSK was doing to hide the truth about Avandia. To call these clinical trials “scientific” is an affront to the entire science community. And yet, somehow, the scientists continue to go along with all this…

According to a leaked internal GSK email, study results from a 1999 trial of Avandia that found the drug to be dangerous were intentionally kept “under the radar”. Dr. Martine Freed, a GSK company executive, explained in that same email that none of the data from that particular study should “see the light of day to anyone outside of GSK.”

Bloomberg’s BusinessWeek has the full report on the FDA Panel’s evaluation prior to its Wednesday vote: http://www.businessweek.com/lifesty…

FDA orders GSK to do another trial

The funny thing about all this is that, in light of the concerns over GSK’s trial tampering, the FDA actually ordered the company to conduct another trial to reevaluate Avandia’s safety. How this was expected to accomplish anything productive is anyone’s guess, considering that GSK lied about the previous trials. What makes the FDA think that a new trial is going to be beneficial? (But remember, insanity is doing the same thing repeatedly and expecting different results, and the FDA isn’t anything if not insane…)

But that’s the way the game is played between the FDA and Big Pharma. It’s a never-ending circus of so-called investigations and busywork designed to fabricate the results they’re looking for. Nobody asks the tough questions, and nobody ever states the obvious which, in this case, is that GSK committed fraud and must be held criminally responsible. The two entities work hand-in-hand to fulfill an agenda that’s based on greed and nothing more. Science is abandoned from the start.

FDA panel refuses to support pulling Avandia from the market, let alone prosecute GSK

So after witness testimonies (one of which you can read about here: http://www.businessweek.com/news/20… ) and a pile of credible evidence presented as part of the mounting case against GSK, an FDA advisory panel voted last Wednesday to recommend that Avandia remain on the market, according to a Wall Street Journal report. Twenty of the 33 members ultimately voted against pulling Avandia from the market, and the FDA is expected to make its final decision about the drug soon, based on this recommendation.

You can read the full Wall Street Journal article here: http://online.wsj.com/article/BT-CO…

Members of the panel who voted against pulling Avandia from the market explained to reporters that they believe there isn’t strong enough clinical data to show that Avandia is dangerous. But how much more evidence do these panel members need to conclude that there’s a problem?

If evidence of falsified study data and reports showing that Avandia is dangerous isn’t enough, it’s difficult to say whether any amount of evidence would ever be enough for these people. According to the BusinessWeek article, the FDA itself even posted official remarks on its website stating that GSK mishandled its earlier Avandia trials, but apparently even that isn’t enough for some of the FDA advisory panel members to put two and two together.

It seems that even if GSK came right out tomorrow and admitted that Avandia is dangerous (which the company’s leaked internal emails basically reveal on their own), some members of the FDA advisory panel would argue with the company itself, saying that there’s not enough evidence and that the drug should stay on the market.

And what about the potentially 100,000 heart attacks and deaths that may be linked to Avandia? Aw, just sweep that under the rug. Pretend it doesn’t exist. Dead people don’t talk, and they don’t sue corporations either, so that’s nothing to be concerned about.

All diabetes drugs are dangerous, Avandia is just more dangerous

Oddly enough, the primary issue with Avandia in this case isn’t just that it causes heart attacks or that the company lied about its research, but rather that Avandia trials show the drug appears to be more dangerous than competitor’s drugs like Actos. In fact, the main focus at the hearing was whether or not GSK had falsified study data to make it look as if Avandia isn’t any worse than Actos.

In reality, both Actos and Avandia can cause heart failure. They both come from the thiazolidinediones family of diabetes drugs, and they’re both potentially dangerous. In fact, both drugs bear the FDA’s “black box” warning label, which is the agency’s most extreme warning label.

So you’ve really got these two drug companies arguing over which of their drugs kills fewer people. And achieving that requires distorting a lot of clinical trials, burying other trials, spreading the money around to FDA panel experts and other similar criminal activities which now seem to typify Big Pharma.

What’s now obvious to us all is that GSK lied about the safety of Avandia, and it has harmed untold numbers of people as a result. According to a statistical analysis in the Senate Finance Committee report, more than 83,000 heart attacks have been caused by Avandia. Several hundred people reportedly die every month because of Avandia.

So removing Avandia from the market is only a very small part of the equation. True justice will be served when GSK is held criminally responsible for lying to the FDA and deceiving the public. GSK’s greed is harming and killing thousands of people every single year, and regulators are bickering over whether or not Avandia is a little more dangerous than Actos. Something is seriously wrong with this picture.

I’ve mentioned this before in previous articles, but there actually is a cure for diabetes, and it doesn’t involve either Avandia or Actos. You won’t hear about it from the mainstream media or the medical industrial complex, but we’ve got some great resources here on NaturalNews that talk all about it, and you can find those at: http://naturalnews.com/diabetes.html

The truth is no person needs to take Avandia or Actos. Both drugs are needless, irrelevant and entirely outmoded. Simple foods and nutrition can cure diabetes, especially when tied to small doses of regular physical exercise. Rather than pushing dangerous, deadly drugs onto patients, our nation’s doctors should be well versed in nutrition and exercise physiology. They should be recommending radical changes in the diets of diabetic patients to get them off all refined, dead foods and onto fresh, living foods and superfoods.

This is the true answer to our nation’s diabetes pandemic. But of course teaching patients how to take care of their own health never made a dime for Big Pharma. And sending a patient home with the knowledge they need to stay well and avoid hospitals and doctor visits never made any money for the doctors.

America’s health system isn’t designed to keep you well, or cure your disease, or even prevent disease. It’s designed to sucker you into a system of pharmaceutical dependency that’s fronted by drug-pushing physicians who for the most part believe that patients have virtually no role in their own health or disease — and only doctors know what they’re talking about.

That might carry some weight if the doctors themselves weren’t dying of cancer, heart attacks and strokes — all at a rate much higher than the general public. There are a lot of sick, dying conventional MDs out there. They’re all on pharmaceuticals. They all believe in the “science” of Big Pharma. And they’re all paying for that foolish gullibility with their lives.

Don’t you make the same mistake.

And just for the record, there are also some really good MDs who don’t buy into Big Pharma’s lies and who actually follow a more holistic, natural lifestyle. If you can find one of those, stick with them!

click here to read full article

PepsiCo Plans To Reduce Junk Food Risks By 2020

July 22, 2010

Natural News

David Gutierrez

PepsiCo has announced a worldwide plan to decrease its contribution to poor health through widespread changes to its product line, drawing both praise and skepticism.

The company has committed to reduce the sodium content of “key foods” by 25 percent by 2015, the saturated fat content of “key foods” by 15 percent by 2020, and the added sugar content in “key drinks” by 25 percent by 2020. It plans to incorporate more fruits, vegetables, nuts, whole grains and low-fat dairy into its product line and to develop new artificial salts and low- or no-calorie sweeteners. Pepsi also plans to expand and triple the sales of its healthier product lines, including Naked juice, Tazo tea, Tropicana and Quaker.

The announcement that drew the most attention, however, is the company’s commitment to stop selling full-sugar beverages in schools worldwide by 2012. The move is an expansion of a policy implemented in U.S. schools in 2006.

Under the new policy, Pepsi will sell only water, fat-free and low-fat milk, and sugar-free juice for general consumption in primary schools. Gatorade will be made available only “when physical activity is carried out — in special relation to sports, not for everyday use,” according to Derek Yach, the company’s senior vice president of global health policy. The same rules will be in force in secondary schools, except that low-calorie (diet) drinks may be sold in those schools.

Pepsi garnered praise for the move, with Kelly Brownell of Yale University comparing it favorably with country-specific pledges by the tobacco industry. Yet even the much-lauded school policy has its loopholes. Aside from the vague guidelines over when sugary sports drinks can be sold, the new policy still allows Pepsi to sell sugary fruit juices. In addition, Brownell noted, whether the policies will lead to an overall decrease in caloric consumption remains to be seen.

click here to read full article

Sunlight Exposure Is Good, Now Go Get It!

July 22, 2010

Natural News

By: Jonathan Benson

Exposure to sunlight, we are often told, is dangerous and can lead to melanoma, also known as skin cancer. But a group of U.K. researchers recently published a report in the British Journal of Dermatology decrying the scare campaigns put out by government and cancer societies that warn against the supposed dangers of sun exposure. Contrary to popular belief, sun exposure can actually decrease the likelihood of developing malignant melanomas.

Sam Shuster, one of the study researchers, and his colleagues are tired of hearing about the 84,000 “skin cancers” that appear each year from sun exposure, because almost all of them are harmless. Malignant melanomas are simply not caused by sun exposure, despite what the “experts” claim. In reality, malignant melanomas tend to shrink back from sun exposure, as do many other harmful cancers in the body.

But the myth that the sun causes malignant cancers continues to persist, even though it is patently false. Excess sun exposure, especially if you lack proper nutrients and fail to let your body grow accustomed to the sun, can cause harmful sunburns. But gradually and regularly exposing your skin to the sun without burning it will only help you, not hurt you.

According to the report, the reason why harmless sun melanomas have been classified as malignant ones is due to a “diagnostic drift which classifies benign lesions as … melanomas, [which is] driven by defensive medicine, an unsurprising response to its commercialization.”

The UV rays from sunlight are necessary for the body to produce vitamin D, maintain bone health and prevent disease. Sunscreen blocks these essential rays from penetrating your skin. So getting your body used to sun exposure apart from sunscreen is the best way to obtain the sun’s many health benefits.

click here to read full article

Antioxidants Help People Arteries Stay Healthy For People At Risk Of Heart Disease

July 22, 2010

Natural News

By: S. L. Baker

Antioxidants are substances that protect cells against the effects of free radicals — molecules produced when the body breaks down food or is exposed to environmental toxins and radiation. Free radicals are believed to play a role in heart disease, cancer and other disorders. So it makes sense that antioxidants could help protect or even treat many health problems.

However, some poorly designed studies have given antioxidants mixed results (http://www.naturalnews.com/023357_p…) and resulted in the mainstream media reporting that antioxidants are virtually worthless. But new research provides hard evidence that taking antioxidant supplements long-term produces dramatic benefits in people with multiple cardiovascular risk factors.

That’s the conclusion of a randomized, controlled trial of vitamin C, vitamin E, coenzyme Q10 and selenium capsules. The research results, just reported in BioMed Central’s journal Nutrition and Metabolism, show these dietary antioxidants produce multiple positive effects on sugar and fat metabolism, blood pressure and arterial flexibility (which allows blood to move freely through the body).

The study was conducted by scientist Reuven Zimlichman and his research team at Wolfson Medical Center in Israel. They randomly divided 70 high blood pressure patients into two groups. One group was given antioxidants supplements and the other took placebo capsules for six months. Those taking the antioxidants received vitamin C (1000 mg/day), vitamin E (400 i.u/day), coenzyme Q10 (120 mg/day) and selenium (200 mcg/day).

Tests at the beginning of the trial, after three months, and again after six months documented that patients in the antioxidant group had marked improvements in their cardiovascular health. They had more elastic arteries and better blood sugar levels. In addition, their cholesterol profiles were healthier with a significant increase in HDL, the so-called “good”, heart-protective cholesterol. In fact, the researchers concluded “antioxidant supplements have the potential to alleviate atherosclerotic damage..”

“Antioxidant supplementation significantly increased large and small artery elasticity in patients with multiple cardiovascular risk factors. This beneficial vascular effect was associated with an improvement in glucose and lipid metabolism as well as significant decrease in blood pressure,” Dr. Zimlichman said in a statement to the media. “The findings of the present study justify investigating the overall clinical impact of antioxidant treatment in patients with multiple cardiovascular risk factors.”

More hopeful news for heart patients: another study by Dr. Zimlichman and colleagues published in the June issue of the Journal of Cardiovascular Pharmacology, found that taking the amino acid L-arginine long-term also helped people with multiple cardiovascular risk factors. In this randomized, placebo-controlled trial, 90 patients were assigned to receive either oral L-arginine capsules or placebo capsules. After six months, tests indicated those taking L-arginine had improved vascular health — including a significant decrease in systolic blood pressure.

click here to read full article

Blago: ‘Government Proved My Case’

July 22, 2010

Ward Room

By: Steve Bryant

Speaking after court today, former governor Rod Blagojevich said that he did not testify because, ultimately, the government did not prove that he took any money in exchange for Obama’s former Senate seat.

Blagojevich’s defense team rested their case today after only two full days of testimony, mostly from Robert Blagojevich.

“I believed all along I would testify,” Blagojevich said in the lobby of the Dirksen Federal Court building. The government, he said, led his defense team to believe the trial would last four months and that several other witnesses would testify. “But the government proved my case, proved I was innocent, and there was nothing further for me to add.”

Adam Sr.’s son, Sam Adam Jr., disagreed with his father’s choice, but in a Q&A session with reporters after Blagojevich left, the two attorneys brushed away any conjecture that the legal team was compromised.

“The only thing we’ve ever agreed on in life is we both like The Honeymooners,” said Sam Adam Sr., of his son.

Defneding the decision to rest their case, Adam Sr. pointed out that the government said they were going to call all sorts of witnesses, from Stuart Levine to Tony Rezko, but in the end their case rested almost entirely on only a handful of Blagojevich’s advisors.

“Their entire case rested on two witnesses, Lon Monk and Harris, and these tapes,” he said. Adam Sr. said that Blagojevich ultimately didn’t need to explain the tapes because the tapes explained themselves.

Asked whether the team didn’t want Blagojevich on the stand because the government could bring Rezko and Levine as rebuttal witnesses, Adam grew agitated.

“Why not bring them in the first place,” he said. “We were prepared…you’re playing their game, we’re playing on our game, which is let them prove their case.”

As for Robert Blagojevich’s testimony, Adam said it only helped.

Adam also said that Blagojevich has no obligation to testify, and wondered aloud why nobody seems to have asked the government why they didn’t call all the witnesses they said they would.

“The foremost sought after witnesses in this case were not called after to testify,” added attorney Sheldon Sorosky. “That would be Mr. Rezko, Mr. Levin, Cnogressman Jackson, and Rahm Emanuel.”

All attorneys nodded in agreement.

“Some day,” Adam said, speaking to whether Blagojevich should have listened to Sr. or Jr., “we’ll know the answer as to who was right and who was wrong.”

More Doctored BP Photos Exposed

July 22, 2010

The Washington Post

By: Steven Mufson

The search for doctored BP photos is on. And it’s a bit like finding Waldo in the famous game.

On Wednesday, for the second time this week, a blog has identified an altered photograph about BP’s oil spill response on the company’s Web site.

(Article and Photos: The first BP photo scandal)

The Gawker Web site said it received a tip about a BP photo taken from inside a helicopter, that shows a panorama of vessels working on the sea surface near the damaged well. The view through the windows makes it appear as though the helicopter is in the air.

But the astute tipster noticed a small glimpse of a control tower in a corner of the photograph. A poor Photoshop job left some white space around the shoulder of one of the pilots next to a patch of sea that was a brighter shade of blue than other parts of the gulf. In addition, zooming in on the helicopter’s gauges reveals that the helicopter is not in the air at all; the dashboard indicates that the door and ramp are open and the parking brake engaged, Gawker noted. The pilot appears to be holding a pre-flight checklist.

(See the photos in question)

BP spokesman Scott Dean sent The Post the original photograph. The Waldos don’t jump out at you. The helicopter was actually on the deck of a vessel at the spill site so the panorama of ships in the distance was there in the original photo. But the photographer, who is working on contract to BP, pasted in blue sea where the edge of the landing pad was showing. He also adjusted colors and contrast so that the interior of the helicopter was brighter, Dean said.

While the changes were minor, the embarrassment was major, coming at a time when the oil giant is trying to convince the American public that it is being open and transparent about the oil spill.

(More photos: The spill’s animal victims and the cleanup effort)

The helicopter photo is the third doctored BP image outed by bloggers this week. Earlier, Americablog.com noticed that BP had altered an image of its crisis response center in Houston. The company’s photographer had clumsily filled in blank spaces on a wall of subsea video feeds with images taken by some of the remotely operated vehicles. It is normal for some of those ROVs to be idle and to have some blank feeds.

Americablog also exposed an altered image from the Houston office, showing a technical team in front of a large projection screen. The image on the projection screen had been enhanced using Photoshop.

BP’s Dean also provided the original of that photo to The Post. In the original, the screen appears to be entirely white because of the light contrast with the rest of the room. Dean said that the photographer used “the color saturation tool” to show “a clearer version of the same image on the projection screen.”

Dean said that the altered helicopter and headquarters photographs, like the doctored one of the Houston control room, would be promptly taken down from the BP Web site. The original and altered versions would be placed on BP’s Flickr site so people can compare them, Dean said.

click here to read full article

Congress Ranks Last In Confident Institutions

July 22, 2010

Gallup

Gallup’s 2010 Confidence in Institutions poll finds Congress ranking dead last out of the 16 institutions rated this year. Eleven percent of Americans say they have a great deal or quite a lot of confidence in Congress, down from 17% in 2009 and a percentage point lower than the previous low for Congress, recorded in 2008.

The Gallup poll was conducted July 8-11, shortly before Congress passed a major financial regulatory reform bill, which President Obama signed into law this week.

Underscoring Congress’ image problem, half of Americans now say they have “very little” or no confidence in Congress, up from 38% in 2009 — and the highest for any institution since Gallup first asked this question in 1973. Previous near-50% readings include 48% found for the presidency in 2008, and 49% for the criminal justice system in 1994.

This year’s poll also finds a 15-point drop in high confidence in the presidency, to 36% from 51% in June 2009. Over the same period, President Barack Obama’s approval rating fell by 11 points, from 58% to 47%. However, confidence in the presidency remains higher than in 2008 — the last year of George W. Bush’s term — when the figure was 26%.

Military Still No. 1

The military continues its long-standing run as the highest-rated U.S. institution. Small business and the police occupy second and third places, respectively. These three top-tier institutions all earn high confidence from a majority of Americans, something no other institution achieves this year.

The military has been No. 1 in Gallup’s annual Confidence in Institutions list continuously since 1998, and has ranked No.1 or No. 2 almost every year since its initial 1975 measure.

The high level of confidence in small business contrasts with the low level of confidence in big business; the latter is tied with HMOs at 19% for next-to-last place. Confidence in organized religion is similar to where it has been since 2002, but is significantly lower than in prior years.

Forthcoming articles on Gallup.com will review the trends for these and other institutions in greater depth.

Bernanke: Economic Outlook Looks ‘Unusually Uncertain’

July 22, 2010

CNBC

By: AP

Federal Reserve Chairman Ben Bernanke told Congress Wednesday the economic outlook remains “unusually uncertain,” and the central bank is ready to take new steps to keep the recovery alive if the economy worsens.

Testifying before the Senate Banking Committee, Bernanke also said record low interest rates are still needed to bolster the economy. He repeated a pledge to keep them there for an “extended period.” Bernanke downplayed the odds that the economy will slide back into a “double-dip” recession. But he acknowledged the economy is fragile.

Given that, the Fed is “prepared to take further policy actions as needed” to keep the recovery on track, he said. Bernanke said Fed policymakers haven’t settled on “leading options” but they are being explored. Those options include lowering the rate the Fed pays banks to keep money parked at the Fed, strengthening the pledge to hold rates at record lows and reviving some crisis-era programs, Bernanke said.

“If the recovery seems to be faltering, we have to at least review our options,” Bernanke told lawmakers. However, he added later: “We are not prepared to take any specific steps in the near term” because the Fed is still evaluating the strength of the recovery.

• Watch Live: Bernanke Testifies on Monetary Policy

Bernanke is trying to send Congress, Wall Street and Main Street a positive message that the recovery will last in the face of growing threats. At the same time, he wants to assure Americans that the Fed will take new stimulative actions if necessary.

Wall Street wasn’t convinced. Shortly before Bernanke spoke, the Dow Jones industrial average was up about 20 points. Within minutes, stocks began falling and the Dow was down more than 145 points.

The recovery, which had been flashing signs of strengthening earlier this year, is losing momentum. And fears are growing that it could stall.

Consumers have cut spending. Businesses, uncertain about the strength of their own sales or the economic recovery, are sitting on cash, reluctant to beef up hiring and expand operations. A stalled housing market, near double-digit unemployment and an edgy Wall Street shaken by Europe’s debt crisis are other factors playing into the economic slowdown.

“In short, it look likes our economy is in need of additional help,” said the committee’s chairman, Sen. Chris Dodd, D-Conn. And, Sen. Richard Shelby of Alabama, the highest-ranking Republican on the panel, said the economic outlook has become a “bit more cloudy.”

With little appetite in Congress to provide a major new stimulus package, more pressure falls on Bernanke to keep the recovery going. Bernanke and his Fed colleagues have cut their forecasts for growth this year.

If the recovery were to flash serious signs of backsliding, the Fed could revive programs to buy mortgage securities or government debt. It could cut to zero the interest rate paid to banks on money left at the Fed or lower the rate banks pay for emergency Fed loans. The Fed also could create a new program to spark more lending to businesses and consumers in a bid to lure them to ratchet up spending and grow the economy.

Bernanke said the debt crisis in Europe, which has rattled Wall Street, played a role in the Fed’s “somewhat weaker outlook.” Although financial markets have improved considerably since the depth of the financial crisis in the fall of 2008, conditions have become “less supportive of economic growth in recent months,” he explained.

As a result, Bernanke said progress in reducing the nation’s unemployment rate, now at 9.5 percent, is now expected to be “somewhat slower” than thought. Unemployment is expect to stay high, in the 9 percent range, through the end of this year, under the Fed’s forecast.

High unemployment is a drag on household spending, Bernanke said, although he believed both consumers and businesses would spend enough to keep the recovery intact.

Bernanke also said it would take a “significant amount of time” to restore the nearly 8.5 million jobs wiped out over 2008 and 2009.

And, Bernanke said the housing market remains “weak” and noted that the overhang of vacant or foreclosed houses are weighing on home prices and home construction.

Given the weak recovery, inflation is not a problem, Bernanke said. However, Bernanke didn’t talk about deflation, a prolonged and destabilizing drop in prices for goods, the values of stocks and homes and in wages. Although most economists think the prospects of deflation are remote, some Fed officials have expressed concern about it.

To strengthen the economy, many economists predict the Fed will hold a key bank lending rate at a record low near zero well into 2011, or possibly into 2012. Doing so, would help nip any deflationary forces.

And keeping that bank rate at super low levels also would mean rates on certain credit cards, home equity loans, some adjustable-rate mortgages and other consumer loans would stay at their lowest point in decades.

Ultra-low lending rates, however, haven’t done much lately to rev up the economy. Consumers and businesses are cautious and aren’t showing an appetite to spend as lavishly as they usually do in the early stages of economic recoveries.

Bernanke, meanwhile, welcomed Congress’ new revamp of financial regulations signed into law by President Barack Obama on Wednesday. The new law, he said, “will place our financial system on a sounder foundation and minimize the risk of a repetition of the devastating events of the past three years.”

click here to read full article

US Spy Chief Warns Of Direct Attacks From North Korea

July 22, 2010

BBC News

James Clapper told a Senate hearing that Pyongyang might seek “to advance its internal and external political goals through direct attacks”.

President Barack Obama chose the retired general and under-secretary of defence to be the new DNI in June.

If confirmed, Mr Clapper will replace Adm Dennis Blair, who resigned the previous month after a series of national security failures, including the failure to detect the Christmas Day airline bomb plot.

The DNI is charged with overseeing the 16 agencies that make up the US intelligence community, including the CIA and the NSA.

‘Important lesson’

At his confirmation hearing on Tuesday, Mr Clapper chose to highlight the growing concerns within the agencies about North Korea’s recent actions.

He said the sinking of the South Korean corvette Cheonan in March, which a South Korean-led inquiry found was the result of a North Korean torpedo attack, and unsuccessful attempts to assassinate a senior North Korean defector reminded him of the bombing of Korean Airlines Flight 858 in 1987.

“The most important lesson for all of us in the intelligence community from this year’s provocations by Pyongyang is to realise that we may be entering a dangerous new period when North Korea will once again attempt to advance its internal and external political goals through direct attacks on our allies in the Republic of Korea.”

“Coupled with this is a renewed realisation that North Korea’s military forces still pose a threat that cannot be taken lightly,” he added.

Earlier, the US and South Korea said they would hold large-scale joint military exercises next weekend in a show of force intended to “send a clear message to North Korea that its aggressive behaviour must stop”.

Pyongyang has insisted it had nothing to do with the Cheonan’s sinking.

‘Hood ornament’

Testifying to the Senate Intelligence Committee, Mr Clapper also brushed aside suggestions that he would beholden to the Pentagon and reluctant to share information about intelligence activities with Congress.

“I would not have agreed to take this position on if I were to be a titular figurehead or a hood ornament,” he said.

He also noted that he had been out of uniform for almost 15 years and was once removed as director of the National Geospatial Agency by Donald Rumsfeld for being “too independent”.

Mr Clapper said his 46 years of experience working in intelligence made him uniquely qualified for the post of DNI and that he would be able to exercise effective oversight without “going through the trauma” of another reorganisation.

The DNI was created by Congress in 2004 in response to the 11 September 2001 attacks. Before Mr Blair’s departure, the president’s Intelligence Advisory Board reported that that the department was overstaffed and dysfunctional.

Some critics also say it is not clear whether the DNI has the authority to override decisions made by the individual intelligence agencies.

However, when asked whether he thought he had the power to overrule the CIA director in matters of intelligence, Mr Clapper answered: “I do.”

click here to read full article

« Previous Page — Next Page »