Saturday, March 8, 2008

A life or death decision

A gay teenager who sought sanctuary in Britain when his boyfriend was executed by the Iranian authorities now faces the same fate after losing his legal battle for asylum.

Mehdi Kazemi, 19, came to London to study English in 2004 but later discovered that his boyfriend had been arrested by the Iranian police, charged with sodomy and hanged.

In a telephone conversation with his father in Tehran, Mr Kazemi was told that before the execution in April 2006, his boyfriend had been questioned about sexual relations he had with other men and under interrogation had named Mr Kazemi as his partner.

Fearing for his own life if he returned to Iran, Mr Kazemi claimed asylum in Britain. But late in 2007 his case was refused. Terror-stricken at the prospect of deportation the young Iranian made a desperate attempt to evade deportation and fled Britain for Holland where he is now being detained amid a growing outcry from campaigners.

He appeared before a Dutch court yesterday to plead with the authorities not to return him to Britain where he is almost certain to be sent back to Iran.

In a letter to the British Government, Mr Kazemi has told the Home Secretary, Jacqui Smith: "I wish to inform the Secretary of State that I did not come to the UK to claim asylum. I came here to study and return to my country. But in the past few months my situation back home has changed. The Iranian authorities have found out that I am a homosexual and they are looking for me." He added: "I cannot stop my attraction towards men. This is something that I will have to live with the rest of my life. I was born with the feeling and cannot change this fact but it is unfortunate that I cannot express my feeling in Iran. If I return to Iran I will be arrested and executed like my former boyfriend."

Mr Kazemi's future will now be decided by a Dutch appeal court, which will rule whether to grant him permission to apply for asylum in Holland, which offers special protection to gay Iranians, or whether he will be deported to Britain. His case has attracted support from leading gay rights groups across Europe who are campaigning to allow him to live in Britain.

Omar Kuddus, from Gay Asylum UK, said that Britain must do more to protect homosexual asylum-seekers such as Mr Kazemi: "The challenge and legality under question and debate in the Dutch court is if he can or should be deported back to the UK under the Dublin Treaty which compels EU states to send asylum-seekers to the first European country they claim asylum."

Peter Tatchell, of the gay rights campaign group Outrage, described the Government's policy as "outrageous and shameful". He said: "If Mehdi is sent back to Iran he will be at risk of execution because of his homosexuality. This is a flagrant violation of Britain's obligations under the refugee convention.

"It is just the latest example of the Government putting the aims of cutting asylum numbers before the merits of individual cases. The whole world knows that Iran hangs young, gay men and uses a particularly barbaric method of slow strangulation. In a bid to fulfil its target to cut asylum numbers the Government is prepared to send this young man to his possible death. It is a heartless, cruel mercenary anti-refugee policy."

Emma Ginn, of the National Coalition of Anti-Deportation Campaigns, met Mr Kazemi at the Tinsley House removal centre, near Gatwick airport, while he was being detained by the Home Office. She recalls: "Mehdi was very anxious when I visited him in Tinsley. The Home Office planned to deport him two days later to Iran where he risked being executed like his boyfriend had been. I'm not surprised he fled the UK."

According to Iranian human rights campaigners, more than 4,000 gay men and lesbians have been executed since the Ayatollahs seized power in 1979. The last reported case of the death penalty imposed against a gay man was that of Makwan Moloudzadeh, 21, who was executed in December after being convicted for sodomy, or lavat, a capital offence under Iranian law.

Last year, the Foreign Office released correspondence sent between embassies throughout the EU dating back to May 2005. They refer specifically to the case of two gay youths, Mahmoud Asqari, under 18 at the time of his execution, and Ayad Marhouni, who were hanged in public.

The Home Office's own guidance issued to immigration officers concedes that Iran executes homosexual men but, unaccountably, rejects the claim that there is a systematic repression of gay men and lesbians.

The Government has a policy of not commenting on individual cases but a Home Office spokeswoman said: "The UK Government is committed to providing protection for those individuals found to be genuinely in need, in accordance with our commitments under international law. If an application is refused, there is a right of appeal to an independent judge, and we only return those who have been found by the asylum decision-making process and the independent courts not to need international protection.

"We examine with great care each individual case before removal and we will not remove anyone who we believe is at risk on their return. However, in order to maintain the integrity of our asylum system and prevent unfounded applications it is important that we are able to enforce returns of those who do not need protection." She added: "The Dublin Regulation states that an asylum applicant should make an application for protection in the first 'safe' country they reach having left their own country. If they do not do so, the Regulation permits the return of asylum applicants to the third country where the substantive asylum claim was made."

Original here

UNC Chapel Hill Student Body President Found Shot to Death Near Campus

Chapel Hill Police identified the victim of a shooting Tuesday near the University of North Carolina at Chapel Hill campus as 22-year-old senior Eve Marie Carson, the student body president.

Police responding to a report of gunshots in a residential neighborhood in the college town early Tuesday found Carson's body lying in the intersection of Hillcrest Drive and Hillcrest Circle.

This is the second murder of a female college student on a southern U.S. campus in as many days. Lauren Burk was shot near Alabama's Auburn University campus on Tuesday night. Both Carson and Burk are Georgia natives, from towns about one hour apart.

Police spokesman Lt. Kevin Gunter told the News & Observer of Raleigh that Carson had been shot several times, including at least once in the head. Officials said there were no suspects and no arrests had been made.

Police were asking people to be on the lookout for Carson's blue 2005 Toyota Highlander, with Georgia plate AIV-6690.

UNC Chapel Hill Chancellor James Moeser issued a statement on the university's Web site saying, "We are deeply saddened and numb with grief. I know how difficult it will be to begin to comprehend something so tragic. Please, as you gather your thoughts and prayers, think of Eve's parents, family and friends."

During a memorial on campus Thursday afternoon, Moeser said of Carson, "She has been taken from us suddenly in a terrible act of violence. We simply can’t fathom it or come to grips with reality. She was not only a great physical beauty, but truly beautiful to the core."

Moeser went on to speak of Carson's "Carolina way."

"The way she lived her life embodied the Carolina way — a commitment to others and an outreach of service to the community and to the world," Moeser said.

Investigation into the shooting was continuing. Anyone with information about the identity of the victim was being urged to call the Chapel Hill Police Department, the Winston-Salem Journal reports.

Chapel Hill Mayor Kevin Foy said that the community was shaken. "We've suffered a tragic loss today, and our community is in shock and grief," he told the News & Observer of Raleigh.

Carson was elected student body president at the University of North Carolina at Chapel Hill in February 2007 and was scheduled to graduate this spring. A native of Athens, Ga., Carson entered UNC in the fall of 2004 as the recipient of a prestigious Morehead Scholarship.

Carson was a pre-medicine student majoring in political science and biology.

The daughter of Bob Carson and Teresa Bethke, Carson also was the student body president of her high school, Clarke Central, in Georgia.

Original here

City May Ban Small Bags Used For Drugs

CHICAGO (STNG) ― Tiny plastic bags used to sell small quantities of heroin, crack cocaine, marijuana and other drugs would be banned in Chicago, under a crackdown advanced Tuesday by a City Council committee.

Ald. Robert Fioretti (2nd) persuaded the Health Committee to ban possession of "self-sealing plastic bags under two inches in either height or width," after picking up 15 of the bags on a recent Sunday afternoon stroll through a West Side park.

Lt. Kevin Navarro, commanding officer of the Chicago police Department's Narcotics and Gang Unit, said the ordinance will be an "important tool" to go after grocery stores, health food stores and other businesses. The bags are used by the thousands to sell small quantities of drugs at $10 or $20 a bag.

Navarro referred to the plastic bags as "Marketing 101 for the drug dealers." Many of them have symbols, allowing drug users to ask for "Superman" or "Blue Dolphin" instead of the drug itself, he said.

Prior to the final vote, Ald. Walter Burnett (27th) expressed concern about arresting innocent people. He noted that extra buttons that come with suits, shirts and blouses -- and jewelry that's been repaired -- come in similar plastic bags.

Burnett was reassured by language that states "one reasonably should know that such items will be or are being used" to package, transfer, deliver or store a controlled substance. Violators would be punished by a $1,500 fine.

Health Committee Chairman Ed Smith (28th) said the ban is part of a desperate effort to stop what he called "the most destructive force" in Chicago neighborhoods.
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U.S. Unexpectedly Lost 63,000 Jobs in February (Update2)

By Shobhana Chandra

March 7 (Bloomberg) -- The U.S. unexpectedly lost jobs in February for the second consecutive month, adding to evidence the economy is in a recession.

Payrolls fell by 63,000, the biggest drop since March 2003, after a decline of 22,000 in January that was larger than initially estimated, the Labor Department said today in Washington. The jobless rate declined to 4.8 percent, reflecting a shrinking labor force as some people gave up looking for work.

A weakening job market, combined with lower home values, higher fuel bills and stricter lending rules, raises the odds consumer spending will keep slowing. Falling employment is one reason Federal Reserve Chairman Ben S. Bernanke has signaled central bankers are prepared to lower interest rates again.

``All the lights are flashing red,'' said Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts, in an interview with Bloomberg Television. ``We're in a recession. I don't think there is any doubt about it at this point.''

Minutes before the figures were released, the Fed said it will expand two short-term auctions this month to $100 billion, from $60 billion, to address ``heightened liquidity pressures'' in markets. Treasury notes surged and the dollar weakened after the employment figures.

Worse Than Anticipated

Economists had projected payrolls would rise by 23,000 following a previously reported 17,000 drop in January, according to the median of 76 forecasts in a Bloomberg News survey. Estimates ranged from a decline of 110,000 to a gain of 70,000.

The jobless rate was forecast to rise to 5 percent from January's 4.9 percent, with projections ranging from 4.8 percent to 5.2 percent.

Revisions reduced by half the 82,000 increase in payrolls previously reported for December.

Service industries, which include banks, insurance companies, restaurants and retailers, added 26,000 workers last month. Retail payrolls fell by 34,100, the biggest drop in more than five years.

Payrolls at builders fell 39,000, the eighth consecutive month of cutbacks.

Homebuilders are trimming staff as the biggest housing slump in a quarter century deepens. To make matters worse, commercial construction projects are now also on the decline, indicating firings at non-residential builders are likely to increase.

Housing Meltdown

The real estate recession and meltdown in financial markets have led to growing dismissals at banks, mortgage and management companies.

``There's significant weakness in the job market because of construction declines,'' said David Berson, chief economist at Walnut Creek, California-based PMI Group Inc., the second- largest U.S. mortgage insurer. ``For the next six months or so, we may get small negative numbers on payrolls.''

Manufacturing payrolls dropped by 52,000, the biggest decline since July 2003, after falling 31,000 a month earlier. Economists had forecast a drop of 25,000.

Government payrolls increased by 38,000. That means the total decline in private payrolls for the month was 101,000, the biggest drop since March 2003.

Working Week

The average work week was unchanged at 33.7 hours. The average factory work week and overtime hours were unchanged. Average weekly earnings rose $1.68 to $599.86.

Workers' average hourly wages rose 5 cents, or 0.3 percent, to $17.80, in line with forecasts. Hourly earnings were up 3.7 percent from February 2007. Economists surveyed by Bloomberg had forecast a 3.6 percent gain for the 12-month period.

Americans, whose spending accounts for more than two-thirds of the economy, are less upbeat about finding work, a Conference Board report showed last week. The share of consumers who said jobs are plentiful fell and the proportion who said jobs are hard to get jumped, pushing consumer confidence down to a five- year low in February.

``The economic situation has become distinctly less favorable,'' Bernanke said in testimony to Congress last week.

The Fed chairman referred to ``downside'' risks for the economy four times, including ``the possibilities that the housing market or the labor market may deteriorate more than is currently anticipated and that credit conditions may tighten substantially further.''

Investors project the Fed will lower the benchmark interest rate by at least half a point between now and its next meeting on March 18, futures prices show.

Fed Outlook

The central bank's regional economic survey this week said ``the hiring pace slowed in various sectors and labor markets loosened somewhat in many districts,'' as economic growth cooled in eight of 12 regions since the start of 2008.

Adecco SA, the world's biggest temporary-employment company, said this week that fourth-quarter profit declined as hiring slowed in the U.S. The Swiss company also said it may miss its long-term goal of sales growth of 7 percent to 9 percent.

Original here

Credit Market Meltdown - Part 2

As this new era of easy money and massive leverage emerged, the thought that risk is limited and easily manageable permeated investors’ mindsets. Hedge fund managers, mortgage bankers, and Wall Street leaders were earning unprecedented amounts of money. Arrogance, and the feeling that an investor could do no wrong, as it was with Tech stocks in the 90’s, was once again a dominant trait of many an investor. Investors, in markets such as real estate, stock/bond markets, private equity and LBO’s, thought they found the holy grail of investing. The chalice in this case is superior returns with little risk.

Arrogance and invincibility are traits that have proven deadly in the past and once again are currently a death wish. As I write this I am hearing rumors that Goldman Sach’s, aka the smartest and most arrogant guys in the market, may be looking at an $11 billion dollar write down. That’s funny; I thought the guys at Long Term Capital were also the smartest?

Like other bubbles preceding this one, everyone from main street to Wall Street got roped in to the phenomena. For example, Joe Blow on main street was buying and selling condo’s in Miami Beach raking in one hundred thousand per deal, private equity firms were bidding ridiculous sums of borrowed money for entities with average returns and financiers like Goldman Sachs and other big players in these markets saw their stocks triple over the last 3-4 years.

As goes all previous bubbles, this one too, must POP. As discussed in part one: Credit markets meltdown, I recognize the bubble as the easy availability of cheap credit. This air in this bubble was easy to borrow, cheap money, be it mortgages, hedge fund leverage, or many instances of institutions or individuals overextending themselves.

The headline grabber of this bubble has been the mortgage market. As you will also read below, the mortgage industry was driven by greed and investors to create mortgage products that made real estate more affordable. Many of these products involved loans with teaser rates, little to no down payments, and shoddy even fraudulent underwriting. People with poor credit could “state” their income without proof and borrow close to 100% of the value of the house with little more than a handshake and signature. The sub prime market and alt-A markets are monikers to describe this new class of weak borrowers. These descriptions are not worth diving into but important to understand that many real estate investors that emerged over the past five years would not have qualified for a mortgage in years past. In other words, they are NOT highly credit rated (high FICO)/ prime borrowers with 20% down. This housing market was a great gig for all involved as long as buyers kept buying and lenders kept lending. Despite the homeowners going over their heads to afford homes, consistently rising real estate values quickly put them in a profitable position. Leverage is an important concept here. When a borrower puts 5% ($5,000) down on a $100,000 house and the house rises to $200,000, the borrower in effect has made $100,000 on a $5,000 dollar investment. Not too shabby. The bank or lending institution is also happy. Mortgage fees for loans, as previously discussed, were high. Despite the bad underwriting, defaults were non-existent. If a homeowner cannot make a payment on a house whose value is more than the loan amount they can always sell the house, pay off the loan and walk away with money. The cherry on this pyramid is that banks and other lenders, such as Countrywide, could easily package the loans and sell them at a profit, as investor demand was rampant.

This is where the insatiable investor demand for higher yields and returns enters the equation. Central bankers, hedge funds, money managers and many others loved these securities. Returns were adequate and defaults were minimal and forecasted to be small as many pundits claimed house prices might slow but never drop. Reminiscent of the booming 90’s tech run up. Wall Street quickly seized on this great opportunity and made billions by pooling these securities and then slicing them in to more complex products. For example, Merrill Lynch could assemble a Collateralized Default Obligation (CDO). Essentially this is nothing more than a bunch of BB rated mortgages that are packaged, sliced and diced to create a security that is largely triple A rated. The rating agencies (Moody’s, S&P, and Fitch) enabled this and put their golden stamp of approval on this process. Without house price depreciation in their risk models, these securities looked unbreakable. They assigned low probabilities of default and thus allowed large percentages of these pools to be considered investment grade.

Investors rely heavily on rating agencies to quantify risk. When investors, especially those previously mentioned with large investment needs, realized they could get superior returns with AAA, AA or A rated mortgage securities they jumped at the opportunity. Investment grade securities (BBB- or better) typically have very low rates of default. More demand than supply for these “high”-rated securities drove yields down, which in turn drove borrowing costs for the homeowner down. This relentless circle pushed mortgage costs lower, made qualifying for a loan easier and ultimately drove house prices upwards. Mortgage lenders were rolling in money and determined to increase their market share and profitability by simply supplying the market with mortgages. Poor underwriting of mortgages, fraud and a host of ills that will plague the mortgage market for years to come was is the result of this greed. This dangerous circle of supply and demand was growing in size and could only be stopped by the decline of real estate values and the ultimate defaults of mortgages.

In 2006 and throughout 2007 home prices stopped rising and actually declined. Defaults and delinquencies increased. Despite the warning signs, investors kept buying these securities, lenders kept producing them and Wall Street kept securitizing them. The involved players could not break themselves from this harmful addiction.

The picture is now a lot clearer then it was. Hedge fund defaults, mortgage lender shut downs and massive credit write downs for Wall Street are the result of these once pristine mortgages defaulting. Making this bubble somewhat unique is the significant concentration of risk due to leverage. I previously gave an example of leverage from the homeowner’s perspective. To once again help you understand the leverage concept I will also explain it from the Hedge Funds viewpoint. On day one the hedge fund will raise $10 million of capital from willing investors and then turn around, call Morgan Stanley or other prime brokers and borrow $90 million using the original $10 million of securities or cash as collateral. The fund now has $100 million to purchase assets ($10 million of their own money and the borrowed $90 million). The day of reckoning comes and the $100 million of securities that were purchased at par (100%) are now worth 80 cents on the dollar. The hedge fund is now out of business because they are unable to pay back their $90 million loan. They have lost $20 million, $10mm more than their initial investment. The hedge fund investors walk away with nothing, as was the case with two Bear Stearns funds along with many others. The securities are then taken over by the bank which is also under water as it has $90 million loans that have been defaulted upon and only $80 million in securities to show for it. That my friend is a $10 million dollar write down.

Over the past few months, investors of all types are recognizing massive losses and being forced to liquidate these securities at significant losses. The de-leveraging process has begun and banks and brokers, who were also large mortgage investors, are unable to absorb the extra supply. We are now faced with massive supply of quickly deteriorating securities coupled with limited demand. It’s quite the opposite situation of just a few years ago.

This is the mortgage bubble in a nutshell. As you now are seeing play out massive amounts of cash chasing limited investment opportunities created a viscous circle that is now coming to fruition. I purposely ended the chapter without my thoughts on how this credit and mortgage crisis plays out. I prefer to save this for the conclusion as it is important to discuss the other credit bubbles that exist and what they mean collectively for the markets and economy.