Tag Archives: US

Chrysler shuts down all production

 Chrysler LLC announced late Wednesday that it is stopping all vehicle production in the United States for at least a month.

All 30 of the carmaker’s plants will close after the last shift on Friday, and employees will not be asked to return to work before Jan. 19.

Chrysler blamed the “continued lack of consumer credit for the American car buyer” for the slow-down in sales that forced the move.

Chrysler ordinarily shuts down operations between Dec. 24 and Jan. 5 for the holidays. This closure would add roughly two weeks to that shut-down.

Chrysler would not say how many fewer vehicles would be produced because this shut-down. A total of 46,000 employees will be effected by the shut down. Those employees will be paid during the shutdown through a combination of state unemployment benefits and Chrysler contributions, but they will not receive the full amount of their working pay, a Chrysler spokesman said.

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Pakistani Generals made deals with Taliban militants

Source – A Prominent Pakistan Based News Channel

As if the Mumbai attacks last month were not headache enough for the Pakistan Government and its military, a British Sunday paper has claimed that Major-General (R) Faisal Alavi, a former head of Pakistan’s special forces knew he would be killed by his own comrades because he “threatened to expose Pakistani generals who made deals with Taliban militants”.

Writing in a damning report for the daily, Carey Schofield, a British author said that Faisal Alavi was murdered last month after he threatened to “furnish all relevant proof” about the two Pakistan army generals, in a letter to a senior most general of the army. The letter can be seen on the newspaper’s website but the names of the concerned generals have been blackened to conceal the identity. The author claimed that the deceased general had given her a copy of the letter once he was sure that the military leadership was not going to respond positively to it. “Aware that he was risking his life, he gave a copy to me and asked me to publish it if he was killed,” the author wrote. She said that Alavi told her in their last meeting at an Islamabad restaurant that his letter was a waste and he feared for his life. “It hasn’t worked,” he said. “They’ll shoot me.” He was killed within four days of the meeting when he was driving through Islamabad, the report said.

Ms Schofield, whose book on the Pakistan Army is due next year, said that Alavi – the brother-in-law of VS Naipaul, the British novelist and Nobel laureate – believed his sacking from the army for “conduct unbecoming” was a “mischievous and deceitful plot” and his letter was a final attempt to have his honour restored. 

“Alavi believed he had been forced out because he was openly critical of deals that senior generals had done with the Taliban. He disparaged them for their failure to fight the war on terror wholeheartedly and for allowing Taliban forces based in Pakistan to operate with impunity against the British and other Nato troops across the border in Afghanistan,” the report said. “The entire purpose of this plot by these general officers was to hide their own involvement in a matter they knew I was privy to,” he wrote in the letter. He wanted an inquiry, at which “I will furnish all relevant proof/information, which is readily available with me”.

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Man Throws Shoes At Bush In Iraq [Video]

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Man Throws Shoes At Bush In Iraq

Baghdad, Iraq — A man threw his shoes at President George W. Bush and was dragged away by security officials during the president’s farewell trip to Iraq.

The incident occurred as Bush was appearing Sunday with Iraqi Prime Minister Nouri al-Maliki.

Bush ducked and wasn’t hit by either shoe. Bush joked, saying that all he can report was that it was a size 10 shoe. then calmly took questions.

President Bush says the work in Iraq has been hard, but is necessary for U.S. security and world peace. He says he’s grateful he had the chance to return to Iraq a final time before his presidency ends.

The president is celebrating a recent U.S.-Iraq security agreement that calls for U.S. troops to withdraw by the end of 2011.

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Credit Crisis demystified

When:

Seeds were sown way back in 1977. Known as Community Reinvestment Act  , is a United States federal law that requires banks and thrifts to offer credit throughout their entire market area and prohibits them from targeting only wealthier neighborhoods with their services. The bill encouraged the Federal National Mortgage Association, commonly known as Fannie Mae, to enable mortgage companies, savings and loans, commercial banks, credit unions, and state and local housing finance agencies to lend to home buyers.

Why

National grassroots pressure for affordable housing. Though there was considerable opposition from the mainstream banking community. Only one banker from ShoreBank in Chicago, testified in favor of the act.

Subprime Explained

Mr A seeks a housing loan to give shape to his dream home. But he doesn’t have good credit rating. This means that he is unable to clear all the stringent conditions that a bank imposes on an individual before it sanctions a loan. Since his credit is not good enough, no bank will give him a home loan as there is a fear that the chances of a default by him are high. Here enters , Mr B (a robust financial institution)who has good credit rating and is willing to take on some amount of risk and make profit.

 Given his good credit rating, the bank is willing to give Mr B a loan. The bank gives the loan at a certain rate of interest.Mr B then divides this loan into a lot of small portions and gives them out as home loans to lots of others like Mr A who do not have a great credit rating and to whom the bank would not have given a home loan in the first place.

Mr B gives out these loans at a rate of interest that is much higher rate than the rate at which he borrowed money from the bank. This higher rate is referred to as the sub-prime rate and this home loan market is referred to as the sub-prime home loan market.

By giving loan to many Mr A’s , Mr B is expecting to make lot of profit.  Mr B does not wait for the principal and the interest on the sub-prime home loans to be repaid, so that it can repay its loan to the bank (the prime lender), which has given it the loan.

So what does Mr B do? He goes ahead and securitises’ these loans. Securitisation means converting these home loans into financial securities, which promise to pay a certain rate of interest. These financial securities are then sold to Mr C (Institutional Investors)

 

And how is Mr C repaid? The interest and the principal that is repaid by Mr A through equated monthly installments (EMIs) is passed onto Mr C.

This looks so simple so what went wrong

 

The sub-prime home loans were given out as floating rate home loans. A floating rate home loan as the name suggests is not fixed. As interest rates go up, the interest rate on floating rate home loans also go up. As interest rates to be paid on floating rate home loans go up, the EMIs that need to be paid to service these loans go up as well.

What happened next is that people started defaulting on their obligations. Once more and more sub-prime borrowers started defaulting, payments to the institutional investors who had bought the financial securities stopped, leading to huge losses.  The housing bubble collapsed and mortgage-backed securities (bought by Mr C) were almost worthless . As defaults kept rising, Mr B could not service their loans that they had taken from banks. So they turned to other financial firms to help them out, but after a while these firms too stopped extending credit realizing that the collateral backing this credit would soon lose value in the falling real estate market.

 

Now burdened with tons of debt and no money to pay it back, the back of these financial entities broke, leading to the current meltdown.

Ok this is an American problem , so why are markets around the world crashing

Mr C who had invested in securitised paper from the sub-prime home loan market in the US, saw his investments turning into losses. Most big investors have a certain fixed proportion of their total investments invested in various parts of the world.  Once investments in the US turned bad, more money had to be invested in the US, to maintain that fixed proportion. In order to invest more money in the US, money had to come in from somewhere. To make up their losses in the sub-prime market in the United States, they went out to sell their investments in emerging markets like India where their investments have been doing well. So these big institutional investors, to make good of their losses in the sub-prime market, began to sell their investments in India and other markets around the world.


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Pakistan – As you sow so shall you reap

Since Pakistan’s independence in 1947, a central goal of Pakistani governments has been bringing an end to India’s political control of the Muslim-dominated Kashmir region of India’s Jammu and Kashmir state . To achieve this they had gone to the extent of training terrorists , spread hatred . Has this strategy worked? Definitely No. 

Inflation has  hit a 30 year high(25.33%) and Zardari was recently looking for cash lifeline from the US . Foreign exchange reserves fell to $8.89 billion as of September 3, down from $9.13 billion on August 30. The central bank’s reserves shrunk to $5.5 billion from $5.76 billion . With missile strikes from the outside and terrorist’s bombing from the inside  , Pakistan is in a mess.

Rather than focusing on internal issues , their leaders are still focusing on Jammu and Kashmir , though they are showing a different face to the world.  Today common man in  pakistan still supports terrorism and Pakistan is home to many Islamist extremists, some with links to al-Qaeda and other terrorist groups.
Author of “DIVIDE PAKISTAN TO ELIMINATE TERRORISM” , Syed Jamaluddin is an active writer on issues concerning Pakistan’s involvement in various terrorist activities in the South Asian region. He liaised with political and religious parties of Pakistan as well as Government agencies. “DIVIDE PAKISTAN TO ELIMINATE TERRORISM” is Syed Jamaluddin’s vision to address issues related to combatting terrorism emanating from Pakistan which have dramatically transformed the entire region into a systematically controlled network having vicious effects to the grobal peace
 Click here for Syed’s Blog
Perhaps this is one option US should consider in its fight against terrorism.

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Fidel Castro has slept with 35,000 women

Read On…..

NEW YORK: Cuban revolutionary leader Fidel Castro has slept with 35,000 women in his 82 years of life, according to an upcoming documentary. 

“He slept with at least two women a day for more than four decades – one for lunch and one for supper,” The New York Post quoted an ex-Castro official named “Ramon” as telling filmmaker Ian Halperin. “Sometimes he even ordered one for breakfast,” the official said. 

“I don”t think he would have stayed on as long as he did if not for all the incredible women he had access to as president,” the official added. 

Fidel Alejandro Castro Ruz or Fidel Castro led his country from December 1959 until his resignation in February this year. Castro came to power as a result of the Cuban revolution that overthrew the dictator Fulgencio Batista, and shortly thereafter became Prime Minister of Cuba. 

Although the US has tried hard to get rid of him, Castro outlasted no fewer than nine American presidents since he took power.

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