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The Nine Circles of Hell! -  all the news that gives you fits in print – for Friday, August 27, 2010, are:

Black Katrina victims get far fewer housing grants than whites

Ex-FEMA chief says he should have told truth about Katrina relief

Hundreds of dead Greeks still getting government pension

US advisor says Israel can destroy Lebanon’s military in four hours

Banks created fake demand for mortgage backed-securities

British Iraq war inquiry criticized for ignoring civilian deaths

Transform prisons into welfare camps, says Tea Party candidate

‘Mutant offspring of right-wing paramilitaries’ terrorizing Colombia

Pakistan flood displaces over a million; it’s “getting from bad to worse”

Black Katrina victims get far fewer housing grants than whites
TIME
(8/27/10)

New Orleans’ Lower Ninth Ward: Still Recovering from Katrina

Five years after Katrina, the Lower Ninth remains a world of hurt. Predominantly African-American and working class, it was the district hardest hit by a storm whose biblical floods, it’s now agreed, resulted largely from negligence on the part of the U.S. Army Corps of Engineers, the agency that built and was supposed to maintain the surrounding levees. And yet, post-Katrina, the once thriving community is also the hardest hit by seeming government indifference. Only a fifth of the Lower Ninth’s 20,000 residents have returned to live since 2005, in no small part because of inadequate reconstruction funding compared to aid that homeowners in other New Orleans neighborhoods have received, and because of the slow pace of long-promised infrastructure and other community development projects.

That casts a long shadow over any celebration of the Big Easy’s revival. Even though New Orleans landmarks like the French Quarter may be humming again, Lower Ninth stalwarts insist that the city’s comeback has to be measured by how fully their two-square-mile (3.3 sq km) pocket returns to life. “Until the Lower Ninth Ward is back on its feet, the New Orleans recovery has failed,” says Patricia Jones, a resident and director of the Neighborhood Empowerment Network Association (NENA), a nonprofit working to restore the area.

To some, it’s a miracle that the Lower Ninth, home to famous New Orleans musicians like Fats Domino, is still making any noise at all. Katrina, possibly the worst natural disaster in U.S. history, wrecked the Gulf Coast from Louisiana to Florida, caused almost $100 billion in damage and killed 1,800 people. But one of its most enduring images is the Lower Ninth submerged by floodwaters — and the moonscape that was left when they finally subsided. Government officials strongly hinted that the community should not be rebuilt. The costs seemed too daunting and, just as important, “Lower” was an all too apt description of the area’s below-sea-level geography — a tract surrounded by the Mississippi River, the Industrial Canal and Lake Borgne — making it vulnerable to future deluges.

But new and stronger levees are nearing completion. And a determined core of residents argues that abandoning the Lower Ninth would be an even bigger betrayal of blue-collar New Orleans than the one suffered at the hands of the Army Corps and then the Federal Emergency Management Agency (FEMA), whose notorious dysfunction exacerbated the catastrophe. “You get the feeling they’re just waiting for all us so-called poor people to leave so they can turn the place into a resort area or something,” says resident Henry Holmes, 76, who owns a popular local restaurant, Holmes One Stop. “But you can’t have New Orleans without the Lower Ninth Ward. The neighborhood’s going to come back eventually.”

Advocates say the neighborhood isn’t getting its proper share of resources to pull that off. Groups like the Greater New Orleans Fair Housing Action Center estimate that homeowners in predominantly black communities like the Lower Ninth have received substantially lower house-reconstruction grants from local, state and federal agencies than white Katrina victims have, even though it usually costs as much to rebuild a house in the Lower Ninth as it does in more upscale districts. Officials “are essentially telling these people to make bricks without straw,” says Jones. At the same time, she argues, it’s taking an unusually long time to get neighborhood nexuses like parks, schools and community centers re-established. The city’s FEMA-funded replacement of one of the area’s larger recreation centers is still in just the design phase more than a year after the project started, and the Lower Ninth has only one operating school.

Government officials deny any bias against the Lower Ninth, though they acknowledge things have moved more slowly than they’d hoped. Community leaders like Jones are hoping to expedite recovery under New Orleans Mayor Mitch Landrieu, who in May replaced the controversial Ray Nagin, who’d been mayor since 2002 and whose administration was widely considered to be as feckless as FEMA.

Despite the desolate image the Lower Ninth has been saddled with since Katrina, there is certainly potential for rebirth. Its residents, contrary to media depiction, were not and are not just a destitute underclass; many are educated and middle class. The community is also home to some of the city’s more prized historical homes and sites, which still draw tourist buses — although locals say they’re tired of visitors ogling the post-Katrina blight as if it were part of the tour. Efforts like the one being led by actor Brad Pitt with Global Green and the Home Depot Foundation also prove the Lower Ninth can be fertile ground for solar-powered and other green housing.

Ex-FEMA chief says he should have told truth about Katrina relief
CNN
(8/27/10)

Brown says not giving context was ‘fatal mistake’ during Katrina

The Bush administration made a “fatal mistake” by talking up facts and figures without painting a broader picture of the obstacles in its widely criticized Hurricane Katrina response effort, ex-FEMA chief Michael Brown said Thursday.

Brown told CNN’s Anderson Cooper that the talking points he and other federal officials used at the time didn’t tell the whole story.

“They were factually correct, but weren’t in context. We’re moving all of this stuff in. We have teams here. Rescue teams are doing this,” he said. “But we never explained to the people that it’s not coming as fast as we want it to, and it’s not enough, because of the number of people that were left behind in the aftermath of the storm.”

Not making that clear was a “fatal mistake,” Brown said.

“Had I said that at the time, I probably would have gotten the old hook and been pulled off the stage anyway, but the truth would have been out,” he said.

Speaking five years after the storm hit, Brown sharply criticized former Secretary of Homeland Security Michael Chertoff’s handling of the situation. Chertoff had attended an avian flu convention amid the disaster.

“Here is why that’s so important. In the middle of any crisis,” Brown said, “whether it’s a natural disaster or man-made disaster, you need to have one person in charge. And that person needs to be on the ground with the team, understanding what’s going on.”

The former FEMA head told CNN that he winced when President George Bush said the now infamous line, “Brownie, you’re doing a heck of a job.”

“I knew the minute he said that, the media and everybody else would see a disconnect between what he was saying and what I was witnessing on the ground,” Brown said. “That’s the president’s style. His attitude and demeanor is always one of being a cheerleader and trying to encourage people to keep moving. It was just the wrong time and the wrong place.”

Hundreds of dead Greeks still getting government pension
BBC News
(8/26/10)

Greece paid pensions to the dead

Greece has discovered that it has been paying pensions to people who have passed away – in one case, more than a decade ago.

As part of efforts to cut spending and tackle waste, Greece discovered that 321 of the people over 100 years old to whom it pays pensions had died.

The country’s Deputy Labour Minister, George Koutroumanis, described the discovery as “incredible”.

He said they were now reviewing the circumstances of people under 100.

Mr Koutroumanis decribed the situation as a “Third World phenomenon” that could not be allowed to continue “in a country that wants to be called a European country”.

With help from the police, the government discovered money that had been paid into the bank accounts of the deceased.

Although the number is small, it is a significant proportion of the number of people over 100 in Greece. It is also an issue that senior ministers are taking very seriously, as they say it indicates the inefficiency of the country’s benefits system.

US advisor says Israel can destroy Lebanon’s military in four hours
Yedioth Ahronoth
(8/27/10)

‘IDF can destroy Lebanon army within 4 hours’

An senior advisor to US special envoy to the Middle East George Mitchell has threatened Lebanese army commander, Jean Kahwajim that should his army initiate additional fire exchanges with Israel, the IDF would annihilate his military within four hours, Lebanese newspaper al-Liwa reported Friday.

According to the report, Frederick Hof spoke to Kahwaji on August 9, following the deadly border skirmish between Israel and Lebanon and informed him of the IDF contingency plan.

The report further quotes Mitchell’s aide as telling the Lebanese commander that Israel had decided to carry out a plan “which would completely destroy the Lebanese army’s bases, centers and offices within four hours.”

Banks created fake demand for mortgage backed-securities
ProPublica
(8/26/10)

Banks’ Self-Dealing Super-Charged Financial Crisis

Over the last two years of the housing bubble, Wall Street bankers perpetrated one of the greatest episodes of self-dealing in financial history.

Faced with increasing difficulty in selling the mortgage-backed securities that had been among their most lucrative products, the banks hit on a solution that preserved their quarterly earnings and huge bonuses:

They created fake demand.

A ProPublica analysis shows for the first time the extent to which banks — primarily Merrill Lynch, but also Citigroup, UBS and others — bought their own products and cranked up an assembly line that otherwise should have flagged.

The products they were buying and selling were at the heart of the 2008 meltdown — collections of mortgage bonds known as collateralized debt obligations, or CDOs.

As the housing boom began to slow in mid-2006, investors became skittish about the riskier parts of those investments. So the banks created — and ultimately provided most of the money for — new CDOs. Those new CDOs bought the hard-to-sell pieces of the original CDOs. The result was a daisy chain that solved one problem but created another: Each new CDO had its own risky pieces. Banks created yet other CDOs to buy those.

Individual instances of these questionable trades have been reported before, but ProPublica’s investigation, done in partnership with NPR’s Planet Money, shows that by late 2006 they became a common industry practice.

An analysis by research firm Thetica Systems, commissioned by ProPublica, shows that in the last years of the boom, CDOs had become the dominant purchaser of key, risky parts of other CDOs, largely replacing real investors like pension funds. By 2007, 67 percent of those slices were bought by other CDOs, up from 36 percent just three years earlier. The banks often orchestrated these purchases. In the last two years of the boom, nearly half of all CDOs sponsored by market leader Merrill Lynch bought significant portions of other Merrill CDOs.

ProPublica also found 85 instances during 2006 and 2007 in which two CDOs bought pieces of each other’s unsold inventory. These trades, which involved $107 billion worth of CDOs, underscore the extent to which the market lacked real buyers. Often the CDOs that swapped purchases closed within days of each other, the analysis shows.

There were supposed to be protections against this sort of abuse. While banks provided the blueprint for the CDOs and marketed them, they typically selected independent managers who chose the specific bonds to go inside them. The managers had a legal obligation to do what was best for the CDO. They were paid by the CDO, not the bank, and were supposed to serve as a bulwark against self-dealing by the banks, which had the fullest understanding of the complex and lightly regulated mortgage bonds.

It rarely worked out that way. The managers were beholden to the banks that sent them the business. On a billion-dollar deal, managers could earn a million dollars in fees, with little risk. Some small firms did several billion dollars of CDOs in a matter of months …

Keeping the assembly line going had a wealth of short-term advantages for the banks. Fees rolled in. A typical CDO could net the bank that created it between $5 million and $10 million — about half of which usually ended up as employee bonuses. Indeed, Wall Street awarded record bonuses in 2006, a hefty chunk of which came from the CDO business.

The self-dealing super-charged the market for CDOs, enticing some less-savvy investors to try their luck. Crucially, such deals maintained the value of mortgage bonds at a time when the lack of buyers should have driven their prices down.

But the strategy of speeding up the assembly line had devastating consequences for homeowners, the banks themselves and, ultimately, the global economy. Because of Wall Street’s machinations, more mortgages had been granted to ever-shakier borrowers. The results can now be seen in foreclosed houses across America.

The incestuous trading also made the CDOs more intertwined and thus fragile, accelerating their decline in value that began in the fall of 2007 and deepened over the next year. Most are now worth pennies on the dollar. Nearly half of the nearly trillion dollars in losses to the global banking system came from CDOs, losses ultimately absorbed by taxpayers and investors around the world. The banks’ troubles sent the world’s economies into a tailspin from which they have yet to recover.

It remains unclear whether any of this violated laws. The SEC has said that it is actively looking at as many as 50 CDO managers as part of its broad examination of the CDO business’ role in the financial crisis. In particular, the agency is focusing on the relationship between the banks and the managers. The SEC is exploring how deals were structured, if any quid pro quo arrangements existed, and whether banks pressured managers to take bad assets.

British Iraq war inquiry criticized for ignoring civilian deaths
Guardian
(8/27/10)

Chilcot inquiry accused of fixating on west and ignoring real victims

Past This is Hell! guest Jonathan Steele writes …

The Chilcot inquiry has “fixated” on decision-making in Whitehall and Washington, obsessed over the ”war at home” and given “derisory” attention to the plight of the main victims, the Iraq Body Count (IBC) claims today.

Releasing correspondence with Sir John Chilcot, the IBC, which is widely considered as the most reliable database of Iraqi civilian deaths, says a proper “Iraq War Inquest” may be the only way to fill the gap his inquiry has left.

The inquiry closed its public hearings last month after seeing 140 witnesses but none dealt specifically with civilian casualties, which the IBC calculates as between 97,000 and 106,000.

Other groups have produced much higher estimates but the IBC, a UK-based organisation set up by volunteers to track deaths in Iraq, prides itself on working carefully with data drawn from cross-checked media reports, hospital, morgue, NGOs and official figures.

The five-person Chilcot inquiry team plans to visit Iraq briefly in the next few weeks but the IBC says this appears to be “an afterthought”. Looking at the inquiry’s focus so far, “one would almost think that the Iraq war largely took place in Britain”, it says.

“There are certainly a few instances of ‘home-grown terrorism’ on British soil which may well be inextricably linked to events in Iraq. But in the main, this war’s largest and most irrevocable effects are on Iraqis, not on British (or American) citizens.”

Transform prisons into welfare camps, says Tea Party candidate
The Week
(8/25/10)

Prison camps for welfare recipients?

Carl Paladino, a wealthy real estate developer and Republican candidate for New York governor, has suggested transforming former state prisons into voluntary work camps for people on welfare. Paladino said those who enrolled in his “Dignity Corps” would receive training in job hunting, “personal hygiene” and other skills typically lacking in people who “come from dysfunctional homes.” Even though the Tea Party-backed candidate said the program would be voluntary, anti-poverty groups reacted to the suggestion with disgust. “Being poor is not a crime,” one advocate for New York City’s low-income residents told the Associated Press. Is anyone getting behind this idea?

‘Mutant offspring of right-wing paramilitaries’ terrorizing Colombia
TIME
(8/26/10)

Colombia’s Facebook Hit List: Drug Gangs 2.0

The messages, spread via e-mail and Facebook, warned dozens of youths in the southern Colombian town of Puerto Asis to clear out within three days — or die. At first, residents thought it was a joke. But on Aug. 15, two of the blacklisted teenagers were gunned down while riding a motorcycle; a third was shot dead on Friday. Meanwhile, the number of people on the death list, believed to have been compiled by one of a new crop of drug trafficking gangs, expanded to 69.

Fear and paranoia are spreading through the town of 70,000. Several families have pulled their children out of school, put their houses up for sale, and fled, according to Andrés Verdugo, the No. 2 official in Puerto Asis, located in the remote jungle state of Putumayo on the Ecuadorian border. “These criminal groups want to sow panic and take advantage of the chaos,” Verdugo told TIME. “And that’s what they’ve achieved.”

They are also turning into a major headache for Colombia’s new president, Juan Manuel Santos, who was elected in June on a platform that included continuing the hard-line security policies of his predecessor, Álvaro Uribe. Uribe’s war strategy reduced kidnappings and severely weakened the Marxist guerrilla group known as the FARC. But amid the single-minded focus on crushing the rebels, a new set of bad guys has taken root.

Well, not exactly new.

With names like Black Eagles, Cobras and Los Rastrojos — the group that authorities believe is responsible for the deaths in Puerto Asis — many of these organizations are the mutant offspring of right-wing paramilitaries. Until recently, the paramilitaries worked in cahoots with government troops to battle FARC guerrillas — and along the way became heavily involved in the cocaine trade. Between 2003 and 2006, about 31,000 paramilitaries turned in their weapons in exchange for job training and other benefits. But the militias never really went away.

It turns out that many of the paramilitaries who disarmed were bottom-rung fighters or impoverished civilians outfitted with weapons at the last minute to fool the government. True, more than a dozen top paramilitary chieftains were extradited to the United States on drug charges. However, many mid-level commanders remained in hiding and allied themselves with traffickers — and even some guerrilla units — to expand their drug-smuggling networks. These new criminal organizations “are the product of a demobilization process that was full of lies,” according to one police officer quoted in a recent Human Rights Watch report on Colombia. “Those guys tricked all of us… The ones who killed did not demobilize.”

Today, these gangs are made up of anywhere from 4,000 to 9,000 members and operate in 24 of Colombia’s 32 states. At times they cooperate with each other but more often they clash over smuggling routes. The resulting combat is one of the main reasons why more than 548 Colombians per day have been uprooted from their homes this year, according to United Nations Office for the Coordination of Humanitarian Affairs. By bribing police officers, bullying politicians, and threatening homeowners, these groups have also penetrated urban areas, like the slums surrounding Medellín. “These groups have a lot of money so it’s very easy for them to buy people off,” says Ariel Ávila of Nuevo Arco Iris, a Bogotá think tank.

Once in place they demand protection payments from business owners and residents and take over local drug sales, prostitution and gambling rings. They often try to add a political sheen to their criminal ventures by targeting demobilized rebels and undertaking campaigns of social cleansing. In the cattle ranching town of Caucasia in northern Colombia, for example, a drug-trafficking group called Los Paisas has targeted thieves and declared a curfew. “Parents: do not allow your children on the streets after 10 p.m,” says one of the group’s leaflets. “We will not be responsible for the deaths of innocents.”

Dotted with fields of coca — the raw material for cocaine — the state of Putumayo has long been an epicenter of the cocaine trade and a coveted base of operations for both the FARC and the paramilitaries. But the rebels are in retreat due to a long-running military offensive while paramilitary units were left in disarray following the demobilization process. That’s allowed gunmen for Los Rastrojos to establish themselves in Puerto Asis. According to Bogotá security analyst César Restrepo, the wave of threats and attacks was a way of announcing they’re now open for business.

That they did so through Facebook and e-mail rather than phone calls and leaflets was surprising because Internet penetration in the area is relatively low. Still, threats via social media have increased dramatically in Colombia over the past two years, Ávila says. The most brazen case targeted the son of former President Uribe. Last year, a Facebook group appeared called “I will kill Jerónimo Uribe.” It’s alleged creator, a university art student, was arrested but released in March after the legal deadline for his trial expired.

Pakistan flood displaces over a million; it’s “getting from bad to worse”
DAWN
(8/27/10)

One million more displaced in floods

Hundreds of thousands of Pakistanis were fleeing the Thatta district Friday after the bloated Indus River crushed a levee and flooded new areas, officials said. The UN said as many as one million people have been displaced in the south since midweek.

More than eight million people are need in of emergency assistance across the country.

In Thatta city, around 175,000 people — nearly 70 per cent of the city’s population — were believed to have packed up and left overnight, said Manzoor Sheikh, a senior government official. Authorities were trying to repair the broken levee and arranging transport for people trying to leave.

UN spokesman Maurizio Giuliano said according to reports received by the world body, around one million people were displaced in Thatta and Qambar-Shahdadkot districts since Wednesday.

It is difficult to verify figures given by the authorities, however, partly because of poor or old census data and partly because of the difficulty of tracking migrations over such wide swaths of territory. Many of the areas are hard to reach because of the water, and people may have left their homes well before the evacuation orders.

UN aid agencies along with a host of other relief groups have been rushing people and supplies to affected regions as the flooding has lashed Pakistan over the past month.

The situation in Sindh ”is getting from bad to worse,” Giuliano said. ”We are delivering (aid) faster and faster, but the floods seemed determined to outrun our response.”

Also at risk in Sindh province are many historic graves, tombs and other sites linked to the Mughal Empire that once ruled the subcontinent.