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August 05, 2011

Congratulations Tea Party!

Mission Accomplished! From the Wall Street Journal:

Standard & Poor’s took the unprecedented step of downgrading the U.S. government’s “AAA” sovereign credit rating Friday in a move that could send shock waves through global markets. The following is a press release from Standard & Poor’s:

– We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.

– We have also removed both the short- and long-term ratings from CreditWatch negative.

– The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

– More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

– Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.

– The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

TORONTO (Standard & Poor’s) Aug. 5, 2011–Standard & Poor’s Ratings Services said today that it lowered its long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’. Standard & Poor’s also said that the outlook on the long-term rating is negative. At the same time, Standard & Poor’s affirmed its ‘A-1+’ short-term rating on the U.S. In addition, Standard & Poor’s removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications.

The transfer and convertibility (T&C) assessment of the U.S.–our assessment of the likelihood of official interference in the ability of U.S.-based public- and private-sector issuers to secure foreign exchange for debt service–remains ‘AAA’.

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see “Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government’s other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government’s debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government’s ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population’s demographics and other age-related spending drivers closer at hand (see “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” June 21, 2011).

Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.

The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

The act further provides that if Congress does not enact the committee’s recommendations, cuts of $1.2 trillion will be implemented over the same time period. The reductions would mainly affect outlays for civilian discretionary spending, defense, and Medicare. We understand that this fall-back mechanism is designed to encourage Congress to embrace a more balanced mix of expenditure savings, as the committee might recommend.

We note that in a letter to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated total budgetary savings under the act to be at least $2.1 trillion over the next 10 years relative to its baseline assumptions. In updating our own fiscal projections, with certain modifications outlined below, we have relied on the CBO’s latest “Alternate Fiscal Scenario” of June 2011, updated to include the CBO assumptions contained in its Aug. 1 letter to Congress. In general, the CBO’s “Alternate Fiscal Scenario” assumes a continuation of recent Congressional action overriding existing law.

We view the act’s measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. Under our revised base case fiscal scenario–which we consider to be consistent with a ‘AA+’ long-term rating and a negative outlook–we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act’s revised policy settings.

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.

Our revised upside scenario–which, other things being equal, we view as consistent with the outlook on the ‘AA+’ long-term rating being revised to stable–retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.

Our revised downside scenario–which, other things being equal, we view as being consistent with a possible further downgrade to a ‘AA’ long-term rating–features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur. This scenario also assumes somewhat higher nominal interest rates for U.S. Treasuries. We still believe that the role of the U.S. dollar as the key reserve currency confers a government funding advantage, one that could change only slowly over time, and that Fed policy might lean toward continued loose monetary policy at a time of fiscal tightening. Nonetheless, it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021.

Our revised scenarios also take into account the significant negative revisions to historical GDP data that the Bureau of Economic Analysis announced on July 29. From our perspective, the effect of these revisions underscores two related points when evaluating the likely debt trajectory of the U.S. government. First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward.

When comparing the U.S. to sovereigns with ‘AAA’ long-term ratings that we view as relevant peers–Canada, France, Germany, and the U.K.–we also observe, based on our base case scenarios for each, that the trajectory of the U.S.’s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.

Standard & Poor’s transfer T&C assessment of the U.S. remains ‘AAA’. Our T&C assessment reflects our view of the likelihood of the sovereign restricting other public and private issuers’ access to foreign exchange needed to meet debt service. Although in our view the credit standing of the U.S. government has deteriorated modestly, we see little indication that official interference of this kind is entering onto the policy agenda of either Congress or the Administration. Consequently, we continue to view this risk as being highly remote.

The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction–independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners–lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government’s debt dynamics, the long-term rating could stabilize at ‘AA+’.

On Monday, we will issue separate releases concerning affected ratings in the funds, government-related entities, financial institutions, insurance, public finance, and structured finance sectors.

Posted by Mike at 09:02 PM | Comments (0) | TrackBack (0)

July 19, 2011

Bill Clinton advocates the constitutional option

From Yahoo News:

Former President Bill Clinton said Monday he wouldn't hesitate to raise the debt ceiling without congressional approval--a fraught political course that President Obama has been reluctant to follow as he seeks to broker a deal on spending with Republican leaders.

Clinton told The National Memo he would invoke the constitutional option "without hesitation, and force the courts to stop [him]" if Congress and the White House fail to reach an agreement to raise the debt ceiling by the Aug. 2 deadline when the U.S. Treasury says the government will begin to default on its debts.

That's much stronger language than anything we've heard from the sitting president during the grinding debate over whether and how the debt ceiling can be raised. Some legal thinkers--including, quite clearly, Clinton himself--take the view that the Constitution grants the president the authority to raise the limit by executive order without Congress's approval. The Fourteenth Amendment states: "the validity of the public debt of the United States ... shall not be questioned."

"I think the Constitution is clear," Clinton said.

Posted by Mike at 01:19 PM | Comments (0) | TrackBack (0)

July 10, 2011

What Obama should really do is

Agree on the $2 trillion deal, get the debt limit increased by enough to last through the presidential election without a default, then run on a promise to veto any extension of the Bush tax cuts for the wealthy, which would go a long way - okay maybe half way with the $250,000 cap - toward achieving his goal of $4 trillion.

Posted by Mike at 08:48 PM | Comments (0) | TrackBack (0)

June 27, 2011

Deficit will disappear if Congress does nothing

Interesting observation by Vyan at Daily Kos:

One would hope that Congress would have the same credo as the Medical Profression: Do NO HARM to the Country!

Unfortunately it's clear that that isn't the case with the Republicans, as they storm out of budget negotiations for the Debt Ceiling just when the subject of increasing taxes comes up because they rather TANK THE ECONOMY to damage Obama than reach a deal, meanwhile the CBO - yet again - has said that if we simply Let the Bush Tax Cuts Expire - the Budget would be balanced.

They even provided a handy, easy to read chart.

Posted by Mike at 08:19 PM | Comments (0) | TrackBack (0)

June 25, 2011

Something my state senator said

Yesterday night in Albany:

Sen. Steve Saland, R-Poughkeepsie, was a key vote in the passage of the Marriage Equality Act in the state Senate late Friday night. Below is the public statement he released about his reasons for voting for the bill.

In 2009 when the marriage equality bill came before the Senate for a vote, I struggled with the decision. This is an issue which a great many have a deep and passionate interest, both those for marriage equality and those who support the traditional view of marriage. In part, the difficulty in arriving at my decision is that I respect and understand the views coming from both sides of the issue.

In fact, my decision today is rooted in my upbringing. My parents taught us to be respectful, tolerant and accepting of others and to do the right thing. I’ve received thousands of calls, e-mails, post cards and letters. Many of them, whether they were from proponents or opponents, concluded by calling upon me to do the right thing. I want to do the right thing, but needless to say, that decision cannot be the “right thing” for both sides of the equation and, whatever my decision, there will be many who will be disappointed.

As a traditionalist, I have long viewed marriage as a union between a man and woman. As one who believes in equal rights, I understood that the State was denying marriage to those in same sex relationships. In 2009, I believed that civil unions for same sex couples would be a satisfactory conclusion.

Since that time, I have met with numerous groups and individuals on both sides of the issue, especially during the last few months. As I did, I anguished over the importance and significance of my vote.

My intellectual and emotional journey has at last ended. I must define doing the right thing as treating all persons with equality in the definition of law as it pertains to marriage. To do otherwise would fly in the face of my upbringing.

For me to support marriage equality, however, it was imperative that the legislation contain all the necessary religious exemptions, so as not to interfere with religious beliefs which I hold as important as equal rights. I believe this legislation satisfactorily resolves the religious exemptions.

I was part of a trio of Senators that negotiated with the Governor and his staff for greater religious protections in this legislation – vastly in excess of the prior defeated version and substantially more than this year’s earlier version. I would be remiss if I did not acknowledge the important and direct role of the Governor in these negotiations and his genuine sensitivity and concern to the importance of religious freedoms.

While I understand that my vote will disappoint many, I also know that my vote is a vote of conscience. I have contemplated many difficult votes throughout my career and this is by far one of the most, if not the most difficult. Struggling with my traditionalist view of marriage and my deep rooted values to treat all people with respect and as equals, I believe after much deliberation, I am doing the right thing in voting to support marriage equality.

Posted by Mike at 11:43 AM | Comments (0) | TrackBack (0)

June 09, 2011

Rating agency warns of junk US bonds

Maybe this will convince them it is not imaginary?

Some Republican lawmakers have said a brief default, which would be inevitable in August if lawmakers fail to raise the nation's $14.3 trillion debt ceiling, might be acceptable if it forces the White House to deal with large budget deficits....

Fitch said it would first place ratings on "watch negative" if lawmakers failed to enact an increase in the debt ceiling by August 2, when the Treasury will have run out of extraordinary measures to avoid a default.

The first test for ratings will come two days later, when $30 billion worth of Treasury bills mature. If the government fails to repay them in full, Fitch will lower the rating on those specific securities to B-plus, four notches into junk territory.

But the real deadline comes on August 15, when $27 billion in Treasury notes and $25 billion in coupon payments come due. If the government misses those, Fitch would downgrade the sovereign issuer ratings to "restricted default" and lower all Treasuries securities to B-plus.

"Though such an event (such as a short-lived Treasury bill default) may not permanently impair the capacity of the government to service its obligations, it is unlikely that its 'AAA' status would be retained in the short to medium term," Fitch said.

Coincidentally, the size of the limit increase is the same we will earn back in the next decade by allowing the Bush tax cuts to expire in 2012, if no action is taken. A move the same Republicans oppose.

Posted by Mike at 05:23 PM | Comments (0) | TrackBack (0)

April 25, 2011

Watch out for outube.com scam from videorewardcenter.com

I almost fell for this one. If you type in outube.com instead of youtube.com by mistake, it redirects you to videorewardcenter.com which claims to offer you a change to win a prize in exchange for a simple three question survey plus providing your contact information, which I'm sure they will use to spam you if yoo give it to them. This is a really tricky one. It looks just like a YouTube page. Only figured it out by noticing I typed outube.com in my history.

Posted by Mike at 12:13 PM | Comments (0) | TrackBack (0)

April 22, 2011

Town halls turn hostile for Republicans

Looks like they might have misjudged the American people:

It's August, 2009 again. Except this time the disgruntled town meeting attendees aren't teabaggers, they're everybody. And the targets are now Republicans. Here's Rep. Pat Meehan (R-PA), at a town hall meeting facing constituents over a broken campaign promise to not privatize Medicare. An angry constituent confronts him: "If you voted to abolish Medicare, how would you explain that to people in their 50′s out of a job?!"

It's not just Meehan, or the most prominent example so far, Medicare abolishment plan author, Rep. Paul Ryan who was booed by his constituents at a town meeting for defending tax breaks for the wealthy. Turns out, it's happening in districts all over the country. HuffPo's Jason Linkins has a round-up of all the GOP members facing major hostility at home for their vote to end Medicare.

Rep. Robert Dold, (R-Ill.):

Fresh off voting for the so-called Paul Ryan budget plan on Friday, newly-elected Congressman Robert Dold returned to Buffalo Grove Saturday where constituents questioned him about several elements of the Republican budget....

But Dold couldn't even get to the end of the presentation before audience members began peppering him with questions about the Ryan budget, named after House Budget Committee Chairman Paul Ryan, a Republican from Wisconsin. It began with audience members telling Dold they don't believe chopping 10 percentage points off the highest corporate tax rate will create jobs. A handful of people in the audience identified themselves as business owners and accountants who said their effective corporate income tax rate is already lower than the lowest rates proposed in the Ryan plan. They pointed to companies such as GE that pay almost no taxes despite billions in profits as evidence.

Rep. Lou Barletta, (R-Pa.):

Reminiscent of the August 2009 town halls when members of Congress faced angry constituents over health care reforms, a public forum in Carbon County with Rep. Lou Barletta Wednesday night provided a glimpse of the strong emotions stirred by a Republican plan to alter Medicare benefits.
...While he was going through a slide projector presentation about the Medicare changes proposed by House Republican Paul Ryan, a woman raised her hand....

"Excuse me, I'd like to get something off my chest," she said, standing. "You seem to think that because I'm not effected I won't care if my niece, my grandson, my child is affected. I do care. What you're doing with this Ryan budget is you're taking Medicare and changing it from a guaranteed health care system to one that is a voucher system where you throw seniors on the mercy of for-profit insurance companies..."

"You said nothing in the campaign about I'm going to change Medicare, now you voted for a plan that will destroy Medicare," Linda Christman, 64, said. Christman is president of the Carbon County Democrats for Change, according to Barletta's office.

"I won't destroy Medicare, Medicare is going to be destroyed by itself," Barletta said.

Then it got ugly.

Rep. Charlie Bass, (R-N.H.):

Rep. Charlie Bass knew he was in for a rough night. The first question out of the gate during his Wednesday town hall in Hillsborough, NH was about his vote for Paul Ryan's budget. And the second. And the third and the fourth, fifth and sixth questions. "I enjoyed the discourse," he said, almost hopefully, afterward. "It's important to speak with people who disagree with me. Of course there was going to be backlash."

Yes, there will be backlash, which hopefully Democrats will pounce on as effectively and forcefully as the Republicans did with health reform. Opposition to the Republican plan to keep taxes for the rich low and Medicare out of reach for everyone else is broad and deep. If Dems can coalesce around that, and stop all the austerity, Social Security cutting bullshit, they've got their issue for 2012.

Posted by Mike at 12:51 PM | Comments (0) | TrackBack (0)

March 18, 2011

UN resolution passes

From the JPost:

The United Nations Security Council voted Thursday to authorize military force against Libyan leader Colonel Muammar Gadhafi’s forces.

“Today the Security Council has responded to the Libyan people's cry for help,” US Ambassador to the UN Susan Rice said. “This Council's purpose is clear: to protect innocent civilians.”

The resolution demands the "immediate establishment of a cease-fire and a complete end to violence and all attacks, and abuses, of civilians." The resolution stipulates that member states, upon notification to UN Secretary General Ban Ki-Moon and Arab League Secretary General Amr Moussa, can “take all necessary measures...to protect civilians and civilian populated areas, including Benghazi, while excluding a foreign occupation force of any form on any part of Libyan territory."

The Security Council’s authorization of the use of force also includes the enforcement of a no-fly zone to protect civilians, as well as an enforcement of the arms embargo, banning all international flights by Libyan owned or operated aircraft. The resolution also freezes the assets of certain individuals and five entities including critical state-owned Libyan companies. A newly established Libyan Sanctions Committee is empowered by the resolution to impose
sanctions on those who violate the arms embargo, including by providing Gadhafi with mercenaries.

“The future of Libya should be decided by the people of Libya,” Rice said in her remarks to the Security Council. “The United States stands with the Libyan people in support of their universal rights.”

The resolution was backed strongly by France, the United Kingdom and Lebanon. Ten countries voted in favor of the resolution. Russia, China, Germany, India and Brazil abstained.

Posted by Mike at 04:17 AM | Comments (0) | TrackBack (0)

March 12, 2011

Arab League Supports No Fly Zone

From the AP:

Two diplomats say the Arab League has agreed to ask the U.N. Security Council to impose a no-fly zone over Libya.

The 22-member organization, which held a foreign ministers' meeting Saturday in Cairo, can't impose a no-fly zone itself. But its approval would give the U.S. and other Western powers crucial regional backing they say they need before doing so.

Rebels seeking to oust Moammar Gadhafi say they need a no-fly zone to protect them from airstrikes.

The Obama administration has said a no-fly zone may have limited impact, and the international community is divided over the issue.

The Arab diplomats say ministers agreed to the move during a closed session. They spoke on condition of anonymity because the final statement was still being drafted.

Posted by Mike at 12:42 PM | Comments (0) | TrackBack (0)

March 11, 2011

Now you know Gadhafi is finished

Gadhafi likely to survive revolt, U.S. intelligence chief says

National Intelligence Director James Clapper said Gadhafi's advantage in military force makes him likely to survive the revolt.

Clapper told the Senate Armed Services Committee that the rebels are "in for a tough row" against Gadhafi, who still commands warplanes, an air-defense network and loyal army brigades against the opposition forces. He cautioned that the situation is "very fluid," but added, "I think, longer term, the regime will prevail."

"I do believe Gadhafi is in this for the long haul," Clapper said. "I don't think he has any intention, despite some of the press speculation to the contrary, of leaving. From all evidence that we have -- which I'd be prepared to discuss in closed session -- he appears to be hunkering down for the duration."

The comment led to a call for Clapper's firing by a member of the committee, South Carolina Republican Lindsey Graham. In a statement issued after the hearing, Graham said the remarks were "not helpful to our national security interests."

But Clapper's assessment was backed up by Lt. Gen. Ronald Burgess, the head of the Defense Intelligence Agency. Burgess told senators that Gadhafi "seems to have staying power, unless some other dynamic changes at this time."

Posted by Mike at 02:04 PM | Comments (0) | TrackBack (0)

February 11, 2011

Freedom rings

Mubarak resigns, hands power to military

Egypt's Hosni Mubarak resigned as president and handed control to the military on Friday after 29 years in power, bowing to a historic 18-day wave of pro-democracy demonstrations by hundreds of thousands. "The people ousted the president," chanted a crowd of tens of thousands outside his presidential palace in Cairo.

Several hundred thousand protesters massed in Cairo's central Tahrir Square exploded into joy, cheering and waving Egyptian flags. Fireworks, car horns and celebratory shots in the air were heard around the city of 18 million in joy after Vice President Omar Suleiman made the announcement on national TV just after nightfall.

Mubarak had sought to cling to power, handing some of his authorities to Suleiman while keeping his title. But an explosion of protests Friday rejecting the move appeared to have pushed the military into forcing him out completely. Hundreds of thousands marched throughout the day in cities across the country as soliders stood by, besieging his palace in Cairo and Alexandria and the state TV building. A governor of a southern province was forced to flee to safety in the face of protests there.

It was the biggest day of protests yet in the upheaval that began Jan. 25, growing from youth activists working on the Internet into a mass movement that tapped into widespread discontent with Mubarak's authoritarian lock on power, corruption, economic woes and widespread disparities between rich and poor.

"In these grave circumstances that the country is passing through, President Hosni Mubarak has decided to leave his position as president of the republic," a grim-looking Suleiman said. "He has mandated the Armed Forces Supreme Council to run the state. God is our protector and succor."

Nobel Peace laureate Mohammed ElBaradei, whose young supporters were among the organizers of the protest movement, told The Associated Press, "This is the greatest day of my life."

Posted by Mike at 12:08 PM | Comments (0) | TrackBack (0)

February 09, 2011

Wael Ghonim

In his own words on Dream TV:

I want to tell every mother and father that lost a son, I'm sorry but it's not our fault. I swear to God it's not our fault! It's the fault of everyone who hung on to power and clung to it!

Posted by Mike at 10:01 PM | Comments (0) | TrackBack (0)

February 03, 2011

Propaganda in the information age

From the AP:

Menacing gangs backing President Hosni Mubarak attacked journalists and human rights activists Thursday in an ugly turn in Egypt's crisis as government opponents pushed supporters out of Cairo's main square in second day of battles. Organizers called for protesters trying to topple the regime to fill every square in the huge capital on Friday.

The new vice president, widely considered the first successor Mubarak has ever designated, fueled anti-foreign sentiment by going on state television and blaming outsiders for fomenting unrest. The government has accused media outlets of being sympathetic to protesters who want the president to quit now rather than serve out his term, as he has vowed to do.

Mubarak, 82, told ABC television in an interview that he was fed up and wants to resign. But he said he can't for fear the country would sink into chaos. He said he was very unhappy about the two days of clashes in central Tahrir square.

"I do not want to see Egyptians fighting each other," he said.

The uncontrolled violence that had been concentrated in Tahrir spread around the city of 18 million, with a new wave of arson and looting.

A light contingent of soldiers and tanks, mainly protecting government buildings and important institutions, remained passive as it has since replacing police on the streets almost a week ago. Few uniformed police have been seen around the city since last Friday, and protesters allege many of them have stripped off their uniforms and mixed in with the gangs of marauding thugs.

"When there are demonstrations of this size, there will be foreigners who come and take advantage and they have an agenda to raise the energy of the protesters," Vice President Omar Suleiman said in an interview on state television.

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February 02, 2011

Obama tells Mubarak to step aside

About time:

A U.S. envoy in Cairo told Egyptian President Hosni Mubarak that he needed to step aside and allow a new government to take shape without him but was rebuffed, according to Middle East experts who have discussed the matter with the Obama administration.

Frank Wisner, a former ambassador to Egypt who has good relations with the Mubarak regime, traveled to Cairo at President Obama's behest to talk to the Egyptian leader about the country's future.

Wisner delivered a direct message that Mubarak should not be part of the "transition" that the U.S. had called for, according to Middle East experts who spoke on condition of anonymity.

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January 30, 2011

Muslim Brotherhood Backs ElBaradei Role

From the Wall Street Journal:

CAIRO - The Muslim Brotherhood, Egypt's venerable and controversial Islamic organization, says it has backed Mohamed ElBaradei as the lead spokesman for the country's opposition groups to negotiate further political reforms with the shaky Egyptian government.

The development marks the latest step by the Brotherhood to subordinate its religious goals to what opposition groups are describing as a battle for democracy, in a country run under a state of emergency by President Hosni Mubarak for more than 30 years. It also suggests that the group's once sidelined moderate wing is regaining strength at a time when the movement could emerge as a significant political actor in Egyptian politics.

The Brotherhood, founded in 1928, is thought to be Egypt's most popular unofficial political organization. It has a long fought to establish Sharia law in Egypt, an anathema to the military leaders that have run the country and a key reason given by Mr. Mubarak and his predecessors for soft-pedaling on political reform. The group's strict views on morality and religion also have traditionally alienated them from Egypt's other political movements, which are largely led by Western-leaning intellectuals.

One of the hallmarks of the massive national protests against Mr. Mubarak has been its secular tone. Supporters of the Brotherhood have joined the street demonstrations, but their footprint has been intentionally light, according to opposition leaders. Brotherhood members agreed with the umbrella of opposition groups organizing the protests to keep religious slogans out of the demonstration to minimize the risk that Mr. Mubarak's security agencies could discredit the movement, organizers said.

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January 23, 2011

Free is better and social means free

Social networking and internet dating sites rake in over $3 billion a year from internet advertising revenue or premium membership fees. This is at least 90% profit, since the costs of actually running an online social network or internet dating site are low. With social networks, the expectation is that it will be free to join the site. Within the next few years, I think the same will be true for dating, too. Think about it. What can dating sites really do that social networking sites can not do? The only difference is the audience, and the type of search functions and privacy settings on the site. Some claim they'll find your ideal match.

How lucky do you feel?

That is why, after about ten years, I finally launched my own site My Free Personals which runs on a free open source social networking platform called Elgg. In the future I'm hoping to launch a general social networking site, and a political networking site for supporters of political candidates. Social media is a big buzz word lately. What it really means is free.

Posted by Mike at 01:17 PM | Comments (0) | TrackBack (0)