The Michigan Daily - michigandaily.com
Friday, October 31, 2008 - 3
NEWS BRIEFS
WASHINGTON
GDP decreased at
annual rate of 0.3
percent last quarter
Scared and out of money, Ameri-
cans stopped buying everything
from cars to corn flakes in the
July-September quarter, ratchet-
ing back spending by the largest
amount in 28 years and joltingthe
national economy into what could
be the most painful recession in
decades.
With retailers bracing for a grim
holiday buying season, the econo-
my isn't just slowing; it's actually
shrinking, the government con-
firmed yesterday. It reported that
the nation's gross domestic prod-
uct declined at an annual rate of 0.3
percent in the year's third quarter
and consumers' disposable income
took its biggest drop on record.
In simpler words, "The train
went off the tracks," said Brian
Bethune, economist at IHS global
Insight.
Wall Street took comfort in the
fact that it wasn't even worse. The
Dow Jones industrials rose 190
points.
ERIE, Pa.
Paln: Obama
infomercial short
on specifics
Republican vice presidential
candidate Sarah Palin said yester-
day that Democrat Barack Obama
offered few national security spe-
cifics in the infomercial he broad-
cast the night before, accusing
him of trying to "soften the focus"
in the campaign's final days.
"In times of economic worry
and hardship - crisis that we're in
right now - someone is attempt-
ing to put those concerns aside on
Election Day - national security
issues," Palin told about 6,000 peo-
ple at a convention center rally.
The Alaska governor said
Obama had "wrapped his clos-
ing message in a warm and fuzzy
scripted infomercial intended to
soften the focus in these closing
days. He's hoping that your mind
won't wander to the real challeng-
es of national security, challenges
that he isn't capable of meeting."
BAGHDAD
Iraqi officials want
U.S. gone by 2011,
report says
Iraq wants to eliminate any
chance U.S. forces will stay here
after 2011 under a proposed secu-
rity pact and to expand Iraqi legal
jurisdiction over U.S. troops until
then, a close ally of the prime min-
ister said yesterday.
Those demands, which were
presented to U.S. officials this
week, could derail the deal -
delivering a diplomatic blow to
Washington in-the final weeks of
the Bush administration.
Failure to reach an agreement be-
fore year's end could force a suspen-
sionofAmericanmilitaryoperations,
and U.S. commanders have been
warning Iraqi officials that could en-
dangersecurityimprovements.
The current draft, hammered
out in months of tortuous nego-
tiations, would have U.S. soldiers
leave Iraq by Dec. 31, 2011, unless
the two governments agreed to an
extension for training and sup-
porting Iraqi security forces.
LANSING
Poll: Mich. voters
split on stem cell
ballot initiative
A new poll shows Michigan vot-
ers supporting a ballot proposal to
allow medical use of marijuana.
But there is a tighter race over
a measure to loosen the state's re-
strictions on embryonic stem cell
research.
Results released Thursday of
an EPIC-MRA poll conducted for
The Detroit News and TV stations
WXYZ, WILX, WOOD and WJRT
found 46 percent support the stem
cell proposal, 44 are against it and
10 percent are undecided.
The poll found 57 percent sup-
port the marijuana proposal, 36
percent oppose it and 7 percent
are undecided.
The telephone poll of 600 likely
Michigan voters was conducted
Sunday through Tuesday. It has a
margin of sampling error of plus
or minus 4 percentage points.
Both proposals are on the next
week's statewide ballot.
- Compiled from
Daily wire reports
6 governors ask feds for
help for US automakers
CANDIDATES SQUARE OFF
LANSING, Mich. (AP) - The the governors wrote. The letter,
governors of six states have sent Wednesday, was released
asked the treasury secretary and yesterday by Democratic Michi-
Federal Reserve chairman to gan, Gov. Jennifer Granholm's
take "immediate action" to help office.
the troubled domestic automak- White House spokeswoman
ers. Dana Perino said yesterday taat the
General Motors Corp. and secretaries of the Treasury, Com-
Chrysler LLC are in talks to com- merce and Energy departments
bine inorder to survive,but financ- are talking with the automakers.
ing is one of the biggest obstacles. "We understand that they've
GMislobbyingtheBushadmin- been facing tough times for a
istration and some members of while. They've made business
Congress for $10 billion to $15 bil- decisions that unfortunately
lion in aid to help keep the compa- have put them in this position.
ny going and possibly to make the But we also recognize how big
Chrysler deal work. GM could use the companies are, how many
some of the money to shut down families rely on these compa-
redundant Chrysler operations. nies, and what it would mean
In their letter, the governors for the overall economy," Perino
of Michigan, Delaware, Ken- said.
tucky, New York, Ohio and South Democratic presidential can-
Dakota reminded Treasury Sec- didate Barack Obama said if he's
retary Henry Paulson and Federal elected, he wants to meet imme-
Reserve Chairman Ben Bernanke diately with the heads of the
that the domestic automakers are domestic automakers and the
"particularly challenged" in the United Auto Workers union to
down economy and warn that, "as craft a strategy that will make
a result, the financial well-being of the U.S. industry competitive
other major industries and millions in the world again. He made the
of American citizens are at risk." remarks Thursday in an inter-
"The auto industry; their net- view on NBC's "Nightly News
work of suppliers, vendors, deal- with Brian Williams."
ers and other businesses; and Some industry analysts have
the communities that rely on said a GM acquisition of Chrysler
those businesses face unimagi- couldcostupto 35,000 jobs nation-
nable challenges - challenges ally and up to 25,000 in Michigan.
we urge you to help address," A separate analysis released
Thursday by Grant Thornton LLP
predicted that a GM-Chrysler
combination would likely lead to
the closure of seven of Chrysler's
14 manufacturing plants, plus
the loss of 12,000 factory jobs
and 12,000 administrative ones,
some of which already have been
announced. An additional 50,000
auto supplier jobs could be lost, it
added.
Still, it sees GM's acquisition
of Chrysler' as the least painful
option, since "if one or the other
company were to fail, we would
face a much bigger calamity -
the collapse of the North Ameri-
can supply base and the potential
endangerment of all three Detroit
automakers and businesses that
depend on them."
Michigan's governor and senior
U.S. senator, speaking at separate
events yesterday, said job losses
from a merger would hurt the
area but would be far worse if
Chrysler is auctioned off in pieces
or allowed to go bankrupt.
"I certainly support the efforts
of tryingto get Secretary Paulson
to give some federal loans to Gen-
eral Motors so that they can sur-
vive," Granholm said.
Sen. Carl Levin said money
from the $700 billion set aside
to help the financial and credit
crunch could help foster a GM-
Chrysler deal.
Candidates for Ward Sof the Ann Arbor CityCouncil, Republican John Floyd and
Carsten Hohnke, answer questions from students duringa local election forum last
night. For more on the forum, go to michigandaily.com.
Blasts kill 61,ud.30
Report: More homeowners are
'underwater' on their mortgages
20 percent owe
more on mortgage
than what their
house is worth
(AP) - Here's a shocker: almost
half of Nevada homeowners with
a mortgage owe more to the bank
than their homes are worth.
Here's another: If you add in-
the homeowners like them in Cal-
ifornia, Arizona, Florida, Geor-
gia and Michigan, together they
account for nearly 60 percent of
all homeowners who are "under-
water" on their mortgages.
Nationwide, almost one out
of every five homeowners with
a mortgage owes more to their
lender than their properties are
worth. Bift if you subtract those
states, the rate drops to about
one in 10, according to a report
released Friday by First Ameri-
can CoreLogic.
The new data underscore the
staggeringscope of the U.S. hous-
ing recession, but also the chal-
lenges that government officials
face in designing a massive new
program to help homeowners
avoid foreclosure, with layoffs
soaring and the economy sinking.
Some experts predict the prob-
lem will get much worse.
Nationally, home prices are
already down about 20 percent
from their peak in mid-2006. By the
time the housing market hits bot-
tom,pricesmaybedown40percent
from the top, leaving 40 percent of
homeowners underwater, accord-
ing to Nouriel Roubini, economics
professor at New York University.
"There is a huge incentive to
walk away from your mortgage,"
said Roubini, who has attracted
attention for his gloomy - and
accurate - predictions of the U.S.
financial market meltdown. He
gave no forecast for when the real
estate market would bottom out.
Another pessimistic analyst,
Desmond Lachman of the Ameri-
can Enterprise Institute, said
that "unless there's government
intervention on a big scale...we're
really notgoingto bottom."
The problem is much worse in
far-flung suburban neighborhoods
where builders flooded the mar-
ket with new homes and buyers
put down small, or no, down pay-
ments, said Mark Fleming, First
American CoreLogic's chief econ-
omist. In desirable urban neigh-
borhoods and close-in suburbs, "a
lot of people bought their homes
years ago. It's much more difficult
for them to be in a negative equity
situation." Fleming said.
Rising mortgage rates are also
making matters worse for pro-
spective borrowers. The rate on
a 30-year, fixed-rate mortgage
averaged 6.46 percent this week,
up sharply from 6.04 percent last
week, Freddie Mac reported yes-
terday.
Higher rates coupled with
lower home values means fewer
people can tap their home equity.
The percentage of U.S. homeown-
ers who pulled cash out of their
homes remained at a four-year
low in the third quarter, Freddie
Mac said.
While some underwater bor-
rowers certainly will lose their
homes to foreclosure absent a
massive - and successful - gov-
ernment refinancing plan, many
will continue to make their pay-
ments and wait for values to
recover. And of course roughly 30
percent of Americans own their
homes outright.
Still, it remained unclear wheth-
er the government would be able
to do much for many borrowers in
trouble, especially giventhe amount
of time to startup anewprogram.
"Certainly it can't hurt," Ber-
nard Baumohl, chief economist at'
the Economic Outlook Group in
New Jersey. "How much it'sgoing
to help is an open question."
On Thursday, White House
press secretary Dana Perino tried
to dispel reports that the Bush
administration is near agreement
on a plan to help about 3 million
homeowners avoid foreclosure.
Perino said several different
ideas are on the table, and that no
announcement is imminent.
The plan, widely expected to be
run by the Federal Deposit Insur-
ance Corp., would be the most
aggressive effort yet to limit dam-
age from the U.S. housing reces-
sion.
Despite all the pessimism,
even some bearish analysts see
modest signs of encouragement.
Home sales have stabilized this
fall as bottom-fishing buyers
snapped up bargain properties
in places like Las Vegas and
Southern California. New fore-
closures, currently flooding the
market, are likely to taper off
by the middle of next year, said
UBS mortgage securities ana-
lyst Thomas Zimmerman.
Series of coordinated
attacks rock
northeast India
GAUHATI, India (AP) - Bombs
planted in cars and rickshaws
ripped through crowded markets
in a coordinated attack yesterday in
India's volatile northeast, killing at
least 61 people and wounding more.
than 300.
The scale and planning -behind
the 13 blasts surprised authorities,
who struggled to determine who
was behind the attacks - among
the worst in a region plagued by
separatism, ethnic :violence and
Islamic militants.
The largest explosion took place
near the office of Assam state's top
government official, leaving bod-
ies and charred, mangled cars and
motorcycles strewn across the
road.
Bystanders dragged the wound-
ed and dead to cars that took them
to hospitals. Police officers covered
charred bodies with white sheets in
the street.
Later, dozens of people angry
over the blasts took to the streets
of the state capital, Gauhati, ston-
ing vehicles and torching at least.
two fire engines. Police imposed a
curfew on the city and closed roads
leading in and out of the area.
Sixty-one people were killed
in the blasts, including at least 31
who died in five explosions in the
state capital, said Subhash Das, a
senior official in the state's Home
Ministry. At least 19 people were
killed in the Kokrajhar district
and 11 others in the town of Bar-
peta, he said.
Some 300 people were wounded
by the bombs that went off within
minutes of each other just before
noon, he said.
Officials blamed the largest sep-
aratistgroup, the United Liberation
Front of Asom, for the blasts. "The
needle of 'suspicion is on ULFA,"
said Assam government spokesman
Himanta Biswa Sharma.
However, the group has never
carried out an attack of this size and
complexity, which closely resem-
bles bombings that have rocked
other Indian cities this year. Those
attacks were blamed on Islamic
militants.
"Going by the nature, planning
and magnitude of the blasts we
need to find out if ULFA has been
assisted by other terror groups... at
home or abroad," said Das.
Anjan Borehaur, a spokesman
for the United Liberation Front of
Asom, denied his group had any"
role in the attacks.
India's northeast - an isolated
region wedged between Bangla-
desh, Bhutan, China and Myanmar
with only a thin corridor connect-
ing it to the rest of India - is beset
by dozens of -conflicts. More than
10,000 people have died in separat-
ist violence over the past decade in
the region.
In July, at least 49 people were
killed ,in violence between mem-
bers of the Bodo tribe and recent
migrants to the area, most of whom
are Muslims.
The region is also home to dozens
of separatist groups who accuse the
government of exploiting the area's
natural resources while doing little
for the indigenous people - most
of whom are ethnically closer to
Burma and China than to the rest
of India.
U.S. Ambassador David Mulford
condemned the latest attack.
"I send condolences to the peo-
ple of India. Americans share their
sorrow and outrage at these hor-
rific attacks on innocent people,"
he said.
TV footage showed firefight-
ers spraying streams of water at
charred, twisted cars and motor-
cycles at the site of the largest
blast outside the secretariat, hous-
ing the offices of the state's chief
minister.
"I was shopping near the secre-
tariat when I heard three to four
loud explosions. Windowpanes in
the shops shattered and we fell to
the ground as the building started
shaking," said H.K. Dutt, who was
hit by shrapnel.
"I stood up and saw fire and
smoke billowing out, then I looked
down and saw blood on my shirt,"
he said.
[-
Socialist Equality Party Public Meeting
70th Anniversary of the Fourth International
ahd -e
F u t u reof
Humanit
Saturday, November 1, 1-6pm
The SEP and the 2008 US Elections The world economy is entering
Jerry White, Socialist Equality Party candidate for US President a period of crisis on a scale
not seen since the Great
Youth and the Struggle for Socialism Depression. An understanding
Andre Damon, international Students for Social Equality
of what .lies ahead requires
Political Impact of Economic Crisis an examination of the lessons
Joseph Kishore, national secretary of the Socialist Equality Party of the 20th century. At this
Why the Fourth Interoatonai was Founded: symposium commemorating the
T ty ndrth He ita eofndrd: . 70th anniversary of the Fourth
David North, chainma of the WSWS inernational editorial boar International, members of the
Socialist Equality Party will
Presentation and discussion will be followed by a special speak on the central questions
screening of Herman Axelbank's classic documentary, "Tsar to
Lenin," narrated by Max Eastman. Axelbank's work documents facing working people and
the Russian Revolution through footage unavailiable anywhere students all over the world.
else.
Sponsored by the International Students for Social Equality For more information write to isse@umich.edu
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