Martial law may be declared in Texas


Galveston County Judge Jim Yarbrough said today that the holdouts on Bolivar Peninsula will be required to leave in the next few days. Officials are prepared to impose martial law if needed to empty the barrier island scraped clean by Ike.


Ike-before and after

Photos of Bolivar Island…taken from

Before and after:

Continue reading

Fed takes over AIG – $85B loan

NEW YORK ( — In a stunning turn, the Federal Reserve Board is taking over crumbling insurer American International Group in an $85 billion rescue plan, officials announced Tuesday evening.

The Fed authorized the Federal Reserve Bank of New York to lend AIG (AIG, Fortune 500) up to $85 billion. In return, the federal government will receive a 79.9% stake in the company.

Officials decided they must act lest the nation’s largest insurer file bankruptcy. Such a move would roil world markets since AIG (AIG, Fortune 500) has $1.1 trillion in assets and 74 million clients in 130 countries.

“The Board determined that, in current circumstances, a disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance,” the Fed said in a statement.

A bailout of AIG would mark the most dramatic turn yet in an expanding crisis that started more than a year ago in the mortgage meltdown. The resulting credit crunch is now toppling not only mainstay Wall Street players, but others in the wider financial industry .

The line of credit, which is available for two years, is designed to help AIG meet its obligations, the Fed said. Interest will accrue at a steep rate of 3-month Libor plus 8.5%, which totals 11.31% at today’s rates. AIG will sell certain of its businesses with “the least possible disruption to the overall economy.”

Taxpayers will be protected, the Fed said, because the loan is backed by the assets of AIG and its subsidiaries. The loan is expected to be repaid from the proceeds of the asset sales.

The government had resisted throwing a lifeline to AIG, hoping to entice investment firms to set up a $75 billion rescue fund. Officials opted not to bail out Lehman Brothers, which filed for bankruptcy on Monday. But by Tuesday night, it became clearer that the private sector would not step in to help AIG, which has a greater reach into other financial companies and markets than Lehman does.

“We are working closely with the Federal Reserve, the SEC and other regulators to enhance the stability and orderliness of our financial markets and minimize the disruption to our economy,” said Treasury Secretary Henry Paulson. “I support the steps taken by the Federal Reserve tonight to assist AIG in continuing to meet its obligations, mitigate broader disruptions and at the same time protect the taxpayers.”

Without word from the government, the company’s options grew more limited as the day wore on. Its already-battered share price fell another 21% Tuesday with more than 1 billion shares trading hands, and plummeted another 46% in after-hours trading.

AIG did not immediately return calls for comment. The company issued a statement late Tuesday afternoon saying it “continues to pursue alternatives.”

The statement also told policyholders that its general and life insurance businesses, as well as its retirement services division, were adequately capitalized and operating normally.

The company was scrambling to raise capital to stay afloat after being hit with credit rating agencies downgrades that is forcing it to come up with billions of dollars in additional collateral fast.

New York State officials, who regulate the insurance titan, had urged the federal government to rescue AIG.

“I don’t think this country, with all we’ve been through right now, where our economy is, can afford it,” New York Gov. David Paterson told CNN.
New York State tried to help

The state attempted to help AIG on Monday by allowing it to tap into $20 billion in assets from its subsidiaries if the company could comes up with a comprehensive plan to get the much-needed capital, said a state Insurance Department spokesman.

“It has to be part of the solution to the problem,” said spokesman David Neustadt.

Paterson said AIG could transfer $20 billion in assets from its subsidiaries to use as collateral for daily operations. In exchange, the parent company would give the subsidiaries less-liquid assets of the same value. He stressed the company is financially sound and that no taxpayer dollars are involved.

Also Tuesday, former Chief Executive Maurice “Hank” Greenberg said in a regulatory filing that he is monitoring the situation. Among the moves he is considering: purchasing AIG assets, lending to the company, investing more in it, seeking board seats, acquiring the company or offering advice to management.

The funding became ever more crucial as the insurer was hit Monday night by a series of credit rating downgrades. The cuts could prove deadly to AIG (AIG, Fortune 500) and force it to post more than $13 billion in additional collateral. Shares were down 35% in mid-day trading after falling more than 70% in early morning trading and losing 61% of their value the day before.

Late Monday night, Moody’s Investors Service and Standard & Poor’s Ratings Services each said they had lowered their ratings. A few hours earlier, Fitch Rating had also downgraded AIG, saying the company’s ability to raise cash is “extremely limited” because of its plummeting stock price, widening yields on its debt, and difficult capital market conditions.

The downgrade could force AIG to post $13.3 billion of collateral, Fitch said in a statement, citing AIG’s July 31 estimates. Also, the moves will make it more expensive for AIG to issue debt and harder for it to regain the confidence of investors.

Analysts urged the company to unveil its restructuring plan.

“Management needs to address investor concerns now before the market sell-off becomes a self-fulfilling prophecy,” said Rob Haines, analyst at CreditSights.
Global ripples if firm were to fail

If AIG were to fail, the global ripple effects would be unprecedented, said Robert Bolton, managing director at Mendon Capital Advisors Corp. AIG is a major player in the credit default swaps market, an insurance-like contracts that guarantee against a company defaulting on its debt. Also, it is a huge provider of life insurance, property and casualty insurance and annuities.

“If AIG fails and can’t make good on its obligations, forget it,” Bolton said. “It’s as big a wave as you’re going to see.”

AIG has had a very tough year.

Rocked by the subprime crisis, the company has lost more than $18 billion in the past nine months and has seen its stock price fall more than 91% so far this year. It already raised $20 billion in fresh capital earlier this year.

Its troubles stem from its sales of credit default swaps and from its subprime mortgage-backed securities holdings.

AIG has written down the value of the credit default swaps by $14.7 billion, pretax, in the first two quarters of this year, and has had to write down the value of its mortgage-backed securities as the housing market soured.

The insurer could be forced to immediately come up with $18 billion to support its credit swap business if its ratings fall by as little as one notch, wrote John Hall, an analyst at Wachovia, on Monday.

This year’s results have also included $12.2 billion in pretax writedowns, primarily because of “severe, rapid declines” in certain mortgage-backed securities and other investments.

The company brought in new management to try to turn the company around. In June, the company tossed out its chief executive, Martin Sullivan and named AIG chairman Robert Willumstad, who joined AIG in 2006 after serving as president and chief operating officer of Citigroup (C, Fortune 500), in his place.

Liberal plane diverted to Montreal

*Hmmm…didn’t it happen to Obama recently???*

The Liberal campaign’s airplane was forced to make an unexpected landing in Montreal on Tuesday evening.

The CBC’s Susan Bonner, who was on the plane and is following the Liberal campaign, said the plane’s cabin lights went off shortly after taking off from Sherbrooke, Que.

One of the plane’s two on-board generators apparently lost power, said the CBC’s James Fitz-Morris.

All those aboard the plane will be spending the night in Montreal, he said, as the problem is fixed.

The Boeing 737, owned by Air Inuit, had been scheduled to land in southern Ontario.

Liberal Leader Stéphane Dion was in Sherbrooke to make a health-care announcement, promising a $420-million fund to boost the numbers of doctors and nurses across the country.

He is scheduled to speak at the University of Western Ontario in London, Ont., at 9:30 a.m. ET Wednesday.

Lockdowns lifted after Toronto school shooting

*The GTA is becoming the Chicago of Canada. Ugh.*

TORONTO – A 17-year-old high school student is fighting for his life in a Toronto hospital with his parents by his bedside after he was shot in the chest near his school’s parking lot Tuesday.

Toronto police Chief Bill Blair said at a news conference at Bendale Business and Technical School in the eastern part of the city that the boy was shot during a fight involving four other males outside the school just before noon. He was found bleeding in the school’s main corridor.

The identity of the victim has not been released by authorities, but friends say he is a Grade 12 student.

Friends also said he was shot multiple times, although, according to Blair, he was hit by only a single bullet to the upper left of his chest.

All four males – including the gunman – fled the scene before police arrived and, by mid-afternoon, remained the targets of an intense manhunt throughout the neighbourhood.

Two of the suspects are described as black males in their late teens who are between five feet eight and five feet 10 inches tall.

Police would not say what kind of gun was used in the shooting, even though witnesses reported seeing a suspect running with a rifle.

Amanda Ritchie, 15, said she was visiting a friend at the school when she saw a teenage boy, wearing a black ball cap and hoodie, running into the school holding his stomach. He headed for the school office before collapsing, she said.

A friend of the victim held the gym door open and yelled that his buddy had been shot.

By mid-afternoon, hundreds of students at Bendale were starting to be released after being locked inside the schools in the aftermath of the shooting.

Students at the four neighbouring schools were also starting to be sent home with their parents by 3 p.m. ET.

Toronto police have set up a command post inside Bendale and yellow tape has been strung around the perimeter as uniformed officers, emergency task force members and search dogs scour the area for the suspects.

Blair described the school as having a good working relationship with the police.

“Violence is unacceptable to all of us,” he said. “It is a great concern to us and we are doing everything in our power to apprehend (the suspects).”

The police chief said that there are surveillance cameras in and around the high school. He was confident that the teen suspects will be caught.

“They escaped in the moment but they have not escaped justice,” Blair said.

Prime Minister Stephen Harper, making a campaign stop in the Greater Toronto Area Tuesday, vowed that no changes to his crime legislation will be made even if he wins a minority government.

“You can’t get tough on crime without cracking down on criminals,” Harper said at a round table here with reporters from the ethnic press. “When we put down (in the House of Commons) tough-on-crime measures we ran on, they will go through.”

When asked specifically about Tuesday’s high school shooting, he replied: “I’m not going to comment on the shooting in the school today,” he said. “We don’t know all the facts.”

Speaking in front of the school, Gerry Connelly, the director of the Toronto District School Board, said it was unfortunate the incident happened at Bendale, where the students always co-operate with police.

“Our schools are safe. They are safe havens,” she said. “We cannot guarantee 100 per cent that things won’t happen, but we are doing everything we can.”

Toronto police Const. Wendy Drummond said the shooting occurred “in a residential and industrial location so there were several people in the area. We are appealing to anyone who saw anything suspicious to call police.”

Parents could be seen milling around the high school, but police urged any adults with children attending Bendale or other schools in the area to stay home.

Drummond said parents should call the schools instead, so as not to interfere with the police investigation.

Vera Kusakovski, 44, with two sons aged 16 and 17 attending Bendale, thought the worst when she heard a 17-year-old had been shot.

“I’m quite shocked at how the school system has changed,” she said. “Yes, you had your beliefs. . . but it was, ‘I’m going to meet you in the back.’ Now, they’re pulling out knives. They’re pulling out guns.”

Cindy Taylor, 46, graduated from Bendale and now has a 14-year-old daughter attending the school.

Kaitlynn is in Grade 10, and informed her mom about the shooting in a text message.

“We never had lockdowns when I went to school. You never think it’s going to happen to your kids’ school,” she said.

Along with Bendale, Donwood Park Junior High School, Highbrook Learning Centre, and David and Mary Thomson Collegiate Institute were also placed under lockdown.

Another elementary school in the area was also placed under partial lockdown, Drummond said.

On the school’s website, Bendale is described as an alternative school that provides students with a curriculum to pursue business and technical careers. There are 572 students registered.

This shooting happened within the same week a new program was launched by Toronto police that puts armed officers inside 27 high-risk public and catholic schools.

Bendale is not one of the schools participating in the program.

The School Resource Officer’s program, announced on Sept. 8, also happened on the same day as five other Toronto schools were locked down.

The following is a list of school violence incidents in Canada:

. A 17-year-old youth is shot in the abdomen at Bendale Business and Technical School in Toronto.

. A 16-year-old is stabbed by another student during a fight at T.R. Leger Alternative School in Cornwall, Ont. A 17-year-old has been charged with first degree murder.

. 15-year-old Jordan Manners is found shot in the hallway of C.W. Jeffreys Collegiate in Toronto. Two 17-year-olds are charged in connection with his murder.

. Anastasia De Sousa, 18, is killed when Kimveer Gill entered Dawson College in Montreal with a collection of guns and opened fire. Gill, 25, injured another 16 people before killing himself.

. A 16-year-old male stabbed classmate Samer Jaber, 17, during a confrontation inside Lester B. Pearson High School in Calgary. The youth received a seven-year sentence.

. A 14-year-old sawed off the barrel of his stepfather’s .22-calibre rifle and opened fire at W.R. Myers High School in Taber, Alta. One student was killed.

. Valery Fabrikant shot four colleagues in Concordia University’s faculty of engineering when he was denied tenure. Fabrikant was overpowered and later sentenced to life in prison with no parole for 25 years.

. David Andrew Fraser, 15, stabbed Ryan Garrioch, 13, during a bullying incident in the schoolyard at Thomas B. Riley in Bowness, Alta. Fraser was prosecuted as an adult and is serving a life sentence for first-degree murder.

. Marc Lepine went on a shooting rampage at Montreal’s Ecole Polytechnique engineering school. Fourteen women were killed, and 13 injured before he killed himself.

. A 17-year-old student shot a 16-year-old to death at Sturgeon Creek Regional Secondary School in Winnipeg, allegedly for ridiculing the rock group Kiss. He was found not guilty of first-degree murder by reason of insanity.

. 18-year-old Robert Poulin killed Mark Hough and injured five others at St. Pius X High School in Ottawa, before turning the sawed off shotgun on himself. Before he left for the school he raped and killed a girl at his house.

. Michael Slobodian 16, killed a teacher and student and wounded 13 others at Centennial Secondary School in Brampton, Ont., then killed himself.

IAEA info suggests Iran worked on nuclear missile

*Generals gathered in their masses
Just like witches at black masses
Evil minds that plot destruction
Sorcerers of deaths construction*
VIENNA, Austria (AP) — The U.N. nuclear monitoring agency shared new photos and documents purporting to show that Iran tried to refit its main long-distance missile to carry a nuclear payload, said diplomats who attended the meeting Tuesday.

Responding to the presentation to the 35-nation board of the International Atomic Energy Agency, a senior U.S. envoy said the information was compelling evidence against the Islamic Republic. His Iranian counterpart said the material shown was fabricated.

Other diplomats, who demanded anonymity because they were not authorized to comment on the closed meeting’s details, described the information as credible but unverified. The presentation relied on photos and documents pertaining to what U.S. intelligence says were Iranian efforts to work on nuclear weapons program up to 2003. After that year, according to a U.S. intelligence estimate, Iran apparently stopped such activity.

The briefing focused on an IAEA report circulated to the board members Monday that faulted Iran for blocking efforts to further investigate the alleged weapons program. The report also confirmed that Iran was expanding uranium enrichment activities — which can make both nuclear fuel and warhead payloads — despite three sets of U.N. Security Council sanctions.

Part of the report spoke of what appeared to be drawings and calculations by Iranian engineers on reconfiguring its Shahab-3 missile to be able to carry a nuclear payload, and the presentation Tuesday went into greater detail, the diplomats said.

Iranian officials say the missile has a range of 1,250 miles, enabling a strike on Israel and most of the Middle East.

The presentation “showed board members for the first time photographs and documents of work undertaken in Iran on the redesigning of the Shahab-3 missile to carry what would appear to be a nuclear weapon,” said Gregory L. Schulte, the chief U.S. representative to the IAEA. He said the senior IAEA official doing the briefing “told us that information they have is very credible.”

The Iranian envoy said the IAEA determined that the material shown could not verified.

“We have given clear information … (on) why this material is fabricated,” Ali Ashgar Soltanieh told reporters in separate comments. He called for “an end to this endless process” of probing Iran for evidence of an arms program he said never existed.

A diplomat inside the meeting said the truth lay somewhere between the U.S. and Iranian standpoints, telling The Associated Press board members were told “the information is credible but cannot be verified.”

Another said that while the information was compelling, most of it was known and what was new in the presentation “appeared to be only a few new photos and diagrams.”

With IAEA deputy Director General Olli Heinonen ill, the briefing was conducted by his aide, Hermann Naeckerts, who was “more cautious” than Heinonen had been at an earlier briefing, he said.

In Washington, the State Department said it would host a meeting of top negotiators from the five U.N. Security Council countries and Germany on Friday to discuss how to proceed in wake of Monday’s IAEA report, which was also send to the council. Officials said the meeting would be held to prepare for a gathering of the six foreign ministers expected next week on the sidelines of the annual U.N. General Assembly session in New York.

The U.S and its Western allies would like to see new U.N sanctions against Iran, but Russia and China traditionally oppose harsh Security Council action. China said Tuesday that further penalties will not resolve the nuclear impasse.

Still, White House spokesman Gordon Johdroe spoke Monday of “the possibility of new sanctions.” And on Tuesday, French Foreign Ministry spokesman Eric Chevallier told reporters that Paris had “no other choice than to work in the days and weeks to come toward a new Security Council sanctions resolution.”

The IAEA’s latest report suggested Iran has now amassed a third of the amount of enriched uranium it could reprocess into the material for the fissile core of a nuclear weapon should it choose to do so. But U.N officials familiar with the report emphasized that Iran — whose known nuclear programs are under IAEA supervision — has shown no indication it wanted to go that route.

The U.S. and its allies allege that Iran wants to develop its uranium enrichment program to make nuclear weapons. But oil-rich Iran insists it only wants to make nuclear energy, and IAEA oversight and inspections of its known enrichment program has not found any evidence that contradicts that.