Wednesday, August 31, 2011

ANALYSTS RECOMMEND BOEING ENGINE ANNOUNCEMENT!



Analysts recommend Boeing on engine announcement

Associated Press, 08.31.11, 02:04 PM EDT

NEW YORK -- Two analysts on Wednesday continued to recommend that investors buy up shares of Boeing Co. after the airplane maker said it will move ahead with a new engine for its 737.

Boeing ( BA - news - people ) is calling the 737 with the new engine the "MAX." It says the plane will be more fuel-efficient than its current 737 and rival Airbus' new A320neo. Boeing's decision has been expected since last month, when American Airlines ( AMR - news - people ) said it would buy 100 of the new-engine 737s, if Boeing builds them.

Boeing, based in Chicago, said five airlines have committed to buy 496 of the new planes.

THE OPINION: Wedbush analyst Kenneth Herbert said in a note to clients that he continues to see room for Boeing shares to grow as the risk of previous production problems and delays lessens. He put a $91 price target on the stock, implying growth of 38 percent from Tuesday's close.

Jefferies analyst Howard A. Rubel said he believes that with the new engine, "Boeing has addressed some fundamental weaknesses in its offerings." He predicts that that major customers like Southwest Airlines ( LUV - news - people ) and Continental will order the plane. He kept his earnings predictions steady, and reiterated his "Buy" rating on the stock.

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BOEING BIO-JET FUEL IS "CRITICAL TO AMERICA'S ENERGY INDEPENDENCE --- AMERICAN'S MUST END OUR ANTI-COMPETITORS' DIRTY TAR SAND ENTRAPMENTS!



Boeing: biojet fuel is 'critical'

Political support needed to jumpstart growth of domestic biofuels industry.

By Ron Kotrba | May 26, 2011

Sustainable Aviation Fuels Northwest announced yesterday it had completed a 10-month study on challenges and opportunities in developing a biojet fuel industry and commercial supply in the Northwest.

Boeing says it’s critical.

Alaska Airlines says efficiencies, while important, are only part of the answer. The other part is biojet fuel.

Below is the full release:

The Pacific Northwest has the diverse feedstocks, fuel-delivery infrastructure and political will needed to create a viable biofuels industry capable of reducing greenhouse gases and meeting the future fuel demands of the aviation industry. Creating an aviation biofuels industry, however, will depend upon securing early government policy support to prioritize the aviation industry in U.S. biofuel development.

That’s the conclusion announced today in a 10-month study by Sustainable Aviation Fuels Northwest, the nation’s first regional stakeholder effort to explore the feasibility, challenges and opportunities for creating an aviation biofuels industry in the Pacific Northwest. Boeing, Alaska Airlines, Portland International Airport, Seattle-Tacoma International Airport, Spokane International Airport and Washington State University partnered in a strategic initiative to identify the potential pathways and actions necessary to make safe, sustainable aviation biofuel commercially available to airline operators in the area.

“It is critical to the future of aviation that we develop a sustainable supply of aviation biofuels,” said Boeing Commercial Airplanes President and CEO Jim Albaugh. “Airlines are particularly vulnerable to oil price volatility, and the aviation community must address this issue to maintain economic growth and further mitigate the environmental impacts of our industry.”

Albaugh described the study as a critical, first step in identifying the regional specific actions—from biomass options, infrastructure and financing incentives—that should be taken to create a renewable fuels supply chain that meets rigorous fuel and safety standards.

To make a sustainable biofuels industry a reality, the study outlines an integrated approach recommending the use of many diverse feedstock and technology pathways, including oilseeds, forest residues, solid waste and algae. In addition, the study outlines the long-term importance of securing aviation biofuels as a top government priority and using the aviation industry to drive growth in domestic production.

The comprehensive study examined all phases of aviation biofuel development, including biomass production and harvest, refining, transport and airport infrastructure and actual use by airlines. However, as with any new energy supply, political support at the state and federal level is critical in the early stages of development. While the study does not advocate for permanent government support, it recognizes that focused public investments and parity with other biofuels programs will be needed to place the industry on an economically competitive basis.

Alaska Air Group Chairman and CEO Bill Ayer, said: “Alaska Airlines has made significant strides in reducing its environmental impact by enhancing the efficiency of its operations, including using satellite-based flying technology and investing in the most fuel-efficient airplanes in their class—but efficiency is only part of the answer. In order for the aviation sector to continue its impressive record of fuel efficiency and emissions reduction while continuing to grow, it is important that a sustainable supply of aviation biofuels is developed.”

Unlike other ground transportation sectors, the aviation industry has fewer energy alternatives. For at least the next 20 to 30 years, commercial and military jets will need liquid, high energy-density fuels with the same technical performance as petroleum-based fuels.

“We are proud to join our partners in biofuels research that will help the aviation sector to continue its record of reducing its carbon footprint,” said Steve Schreiber, Port of Portland aviation director. “The Northwest is uniquely positioned to serve as a blueprint for developing a U.S.-based, sustainable aviation biofuels industry.”

“Airports have been leaders for years in finding ways to reduce their environmental footprint, from clean fuel sources for taxis and shuttles to electrification of ground equipment and pre-conditioned air, but in order to take the next big step we have to address emissions from aircraft,” said Bill Bryant, Port of Seattle commission president. “We can’t get there without biofuels. It not only will help the sustainability of the Northwest but also the aviation industry.”

Dr. John Gardner, vice president for Advancement and External Affairs at Washington State University, said: “WSU will combine our world-class biofuel and agricultural researchers along with significant institutional assets to leverage the Northwest’s abundance of agricultural and natural resources necessary to create a dynamic new aviation fuels industry. The long-term payback will be a stateside industry that greatly enhances our traditional economic strengths; from farming and forestry to engineering and aerospace, creating new opportunities and new jobs for the Northwest.”

Launched in 2010, the SAFN initiative united more than 40 regional stakeholders ranging across aviation, biofuels production, environmental advocacy, agriculture, forestry, federal and state government agencies, academic research and technical consultancies. Climate Solutions, a Northwest clean-energy economy nonprofit, facilitated the stakeholder process and took the lead in researching and drafting the report.

“The course is clear that aviation biofuels are key to the future of sustainable air travel,” said Lawrence J. Krauter, chief executive officer, Spokane International Airport. “We can no longer base our future on imported petroleum, especially if the United States wants to remain an aviation leader. The SAFN study proves domestic biofuels are feasible and offers an economic opportunity for us to remain competitive as an industry and move toward a sustainable, domestic fuel supply.”

Additional Background:

For information on the specific recommendations made in the SAFN study, please visit: http://www.safnw.com/

THE "KITCHEN DEBATES" CONTINUES: GENERAL PETRAEUS LEAVING U.S. ARMY AFTER 37 YEARS TO LEAD THE CIA!



Petraeus Leaving Army After 37 Years to Lead CIA

Published August 31, 2011

In this July 18 file photo, Gen. David Petraeus salutes during a changing of command ceremony in Kabul, Afghanistan.



WASHINGTON -- U.S. Army Gen. David Petraeus on Wednesday said supporting the troops and their families must be the nation's "paramount objective" even as defense budgets are reduced.

Spending cuts also must not undercut the versatility and flexibility that the Army and other services have developed in fighting insurgencies in Iraq and Afghanistan, he told his retirement ceremony after 37 years in uniform on a sun-splashed military parade field near Washington.

"As our nation contemplates difficult budget decisions, I know that our leaders will remember that our people, our men and women in uniform, are our military," he said, "and that taking care of them and their families must be our paramount objective. Beyond that it will be imperative to maintain a force that not only capitalizes on the extraordinary experience and expertise in our ranks today but also maintains the versatility and flexibility that have been developed over the past decade."

The Pentagon already is preparing to reduce defense spending by upwards of $400 billion over the next 10 years, and Congress may demand even bigger cuts.

Petraeus looked back over his celebrated career, which began when he was commissioned a second lieutenant after graduating from the U.S. Military Academy in June 1974. He recalled the unease he felt on his first day at the academy and the pride he felt in soldiering for nearly four decades.

He will begin a new chapter next week when he takes over as director of the Central Intelligence Agency, succeeding Leon Panetta, who gave up the spy chief job to become defense secretary last month. Panetta, who is on vacation in California, did not attend the Petraeus ceremony.

Petraeus thanked those he has served with and said he leaves with confidence that the nation will avoid unwise decisions on defense spending cuts. He alluded to the difficulties the military faced at the outset of the Iraq and Afghan conflicts in adjusting to counterinsurgency warfare.

"We have relearned since 9/11 the timeless lesson that we don't always get to fight the wars for which we are most prepared or most inclined," he said, referring to the 2001 terrorist attacks against the United States. "Given that reality, we will need to maintain the full-spectrum capability that we have developed over this last decade of conflict."

The Petraeus ceremony was hosted by Deputy Defense Secretary William Lynn, who presented the general with a Distinguished Service Medal, and Navy Adm. Mike Mullen, who heaped praise on the man who many had expected to succeed Mullen as chairman of the Joint Chiefs of Staff. President Barack Obama instead chose to make Petraeus his next CIA chief.

Petraeus, 58, will take over at the spy agency next week. He has said he chose to serve there as a civilian in order not to blur the distinction between the military and the intelligence worlds.

In his remarks, Mullen called Petraeus a visionary and a "national treasure."

"Dave has, over the last decade, advised two presidents, changed the course of two wars, transformed our military, and perhaps most important of all, reminded Americans once again, that with the right ideas and the right leadership, almost anything is possible," Mullen said.

Petraeus will take over at the CIA less than a week before the 10th anniversary of the terrorist attacks that killed nearly 3,000 people in New York, Washington and Pennsylvania.

Close friends and colleagues of Petraeus say that when he realized the White House would not make him chairman of the Joint Chiefs, the top U.S. military position, he saw the CIA as the best alternative.

"I wanted this job," he told senators at his confirmation hearing, saying he had discussed the CIA post with the Obama administration for months.

Petraeus soared to public acclaim in 2007-08 with his surprising success in reversing an escalation of insurgent violence in Iraq.

He is credited with similarly solidifying gains against the Taliban in Afghanistan, though he himself says progress is "fragile and reversible."

Read more: http://www.foxnews.com/politics/2011/08/31/petraeus-leaving-army-after-37-years-to-lead-cia/#ixzz1WdzDVYVk

NASA ASTRONAUTS MAY HAVE TO ABANDON THE $100 BILLION ISS IN NOVEMBER!

NASA: Astronauts may have to abandon the $100 billion ISS in November

Aug. 31, 2011 (4:04 am) By: Jennifer Bergen

The International Space Station may be left empty in November if its astronaut inhabitants are forced to abandon it. According to NASA, Russian engineers are currently trying to figure out what caused a failure of a Soyuz rocket that crashed just after its August 24 launch intended to deliver 2.9 tons of supplies to the ISS. The unmanned rocket was attached to the Russian cargo ship Progress 44.

The main reason for concern is that Progress’ Soyuz rocket is very similar to the one that Russia uses to launch a vehicle that carries the crew to the station. There are currently six astronauts living on the ISS, and the problem isn’t the loss of supplies – the ISS has enough supplies to last them until next summer. The big issue is that until the Russian engineers figure out what went wrong with the Soyuz rocket, there isn’t any way to launch more astronauts before the current residents have to leave in mid-November.



NASA’s space station program manager Mike Suffredini said there are plenty of options. The last resort would be to abandon the $100 billion ISS altogether, but it’s not out of the questions. Astronauts have been living on the space station since 2000 and the goal was to have astronauts on the ISS until 2020. However, the deserted space station could be operated by flight controllers indefinitely, but without anyone onboard to make sure there are no problems, the risk of anything happening is much greater.

So if there are enough supplies to last until next summer, why don’t the six astronauts on board just stay there until the problem is smoothed out? Three of the six are scheduled to leave next month, and the other three are supposed to come back in mid-November. There are spacecraft and landing restrictions that can’t be broken, which means the astronauts can’t stay any longer than November. The three astronauts due to come back on September 8 have already been told that they will stay on for at least another week until the Soyuz can send up another three astronauts.



Two unmanned Soyuz launches are scheduled for October. One will be commercial, and the other will attempt to bring supplies again. These two runs will serve as test flights. The ISS crews need the Soyuz-launched capsules to get back, and the capsules are only certified for no more than 6.5 months in space, which is why the crew needs to regularly rotate. As one crew comes up, another goes down.

Lighting conditions at the Soyuz’s Kazakhstan landing site is also a big issue since the landings must happen at least one hour after dawn and one hour before dusk so that search and rescue operations can be performed easily if needed. According to Space.com, the “lighting window” closes for about five weeks on September 19 for the first crew and around November 19 for the second crew. If they wait past those dates, it would stretch the Soyuz’s 6.5-month lifespan past the point of safety.

This was the first accident out of 44 Russian supply hauls. A crew could have very likely survived the accident due to safety precautions built into the spacecraft, but nobody wants to risk that. Until Russian space officials have come up with a cause for the accident and a repair plan, the launch and landing dates will stay up in the air, so to speak.

Now that NASA’s Space Shuttle program has come to an end, it will have to rely on Russia to launch its astronauts to the ISS. Private American crew-carrying spaceships are in the works but won’t be ready until about 2015.

PGNIG TO GO TO COURT WITH RUSSIA'S GAZPROM!

PGNiG says likely to go to court with Gazprom

WARSAW | Wed Aug 31, 2011 8:01am EDT

WARSAW Aug 31 (Reuters) - Poland's gas monopoly PGNiG is likely to end up at an arbitrage court in its row with Gazprom over the price of its long term gas supply contracts, the monopoly's deputy head Przemyslaw Duczinski said on Wednesday.

The monopoly says it suffers from high import prices that under long term gas contracts with Gazprom which are tied to oil prices, as its European peers press for a discount.

"We have a contractual deadline for negotiations until October and if we fail in these then we will go to arbitrage court. Looking at Gazprom actions at the moment it is a likely scenario," Dudzinski said.

Dudzinski added PGNiG is seeking at least a 10 percent discount to current prices it pays and the discount, if it is awarded, would be implemented retroactively from April.

PGNiG imports from Russia about two thirds of its annual 14 billion cubic metres of gas sales. The gas prices it can charge its customers are set by a state regulator.

The watchdog URE allowed for a single-digit rise in prices starting from mid-July, nearly three months later than the monopoly originally sought one of the reasons why PGNiG reported a 20 million zloty net loss in the second quarter. (Reporting by Patryk Wasilewski)

U.S. OIL COMPANY INVOLVED IN LAWSUIT AGAINST THE AMERICAN PEOPLE TIES DEAL WITH RUSSIAN OIL GIANT, ROSNEFT FOR ARCTIC DRILLING!

Exxon, Rosneft tie up in Russian Arctic, U.S

By Darya Korsunskaya and Braden Reddall

SOCHI, Russia/SAN FRANCISCO | Wed Aug 31, 2011 6:24am EDT

SOCHI, Russia/SAN FRANCISCO (Reuters) - Exxon Mobil Corp and Rosneft signed an agreement to extract oil and gas from the Russian Arctic, in the most significant U.S.-Russian corporate deal since President Barack Obama began a push to improve ties.

The pact, which includes an option for Rosneft to invest in Gulf of Mexico and Texan properties, ended any hope of Britain's BP reviving its deal with state-owned Rosneft to develop the same Arctic territory. That deal was blocked in May by the billionaire partners in another BP Russian venture.

The pact gives Exxon, the biggest U.S. oil company, access to substantial reserves in Russia, the world's top oil producer. For Rosneft, it's about bringing in one of the few companies capable of drilling in the harsh, deep waters of the Arctic.

Russia has shown greater willingness in the past year to secure foreign partners, even if some deals later fell apart. The Exxon announcement comes only months after the demise of a Rosneft deal with Chevron Corp for a $1 billion investment in an estimated $32 billion Black Sea project.

Analysts cited differences between Chevron and Rosneft over the choice of contractor, the joint venture's domicile and the jurisdiction of arbitration for any business disputes.

Yet Chevron, like Royal Dutch Shell Plc, was also considered a potential partner for Rosneft's Arctic venture.

Russian Prime Minister Vladimir Putin attended the Tuesday signing -- in the Black Sea resort of Sochi -- by Exxon Chief Executive Rex Tillerson and Russia's top energy official, Deputy Prime Minister Igor Sechin.

"New horizons are opening up. One of the world's leading companies, Exxon Mobil, is starting to work on Russia's strategic shelf and deepwater continental shelf," Putin said.

Exxon and Rosneft agreed to invest $3.2 billion to develop East Prinovozemelsky Blocks 1, 2, and 3 in the Arctic Kara Sea and the Tuapse licensing block in the Black Sea.

Rosneft will own 66.7 percent and Exxon the rest of the joint venture to develop the blocks, which Exxon said were "among the most promising and least explored offshore areas globally, with high potential for liquids and gas."

"The fact that someone with the stature of Exxon Mobil is willing to give it a stab is very significant," said Amy Myers Jaffe, of the Baker Institute at Houston's Rice University.

While Rosneft will tap Exxon's expertise to open up one of the last unconquered drilling frontiers, it will also diversify further by getting a piece of some of Exxon's U.S. developments.

"To get into Russia offshore you give up some of your domestic offshore. I think it's a fair trade," said Brian Youngberg, senior energy analyst at brokerage Edward Jones in St. Louis, who has a "hold" rating on Exxon shares.

It marks a big move for Exxon after it spent a year swallowing XTO -- a much-criticized purchase that shifted its profile toward the depressed U.S. natural gas market. "Now Exxon Mobil is starting to look elsewhere for deals," Youngberg said.

Analysts also said the Rosneft-Exxon agreement indicates that the reset in relations Obama sought was working to reduce the political risk for U.S. businesses operating in Russia.

"Three years ago, American companies were being excluded. Here, an American company is at the center of a flagship announcement. This deal demonstrates that reset has had a positive effect on U.S.-Russia energy relations," said Cliff Kupchan, director of Eurasian Practice at Eurasia Group.

An Obama administration official said the deal was a result of the new cooperation between the United States and Russia.

"Today's announcement of a deal between Exxon-Mobil and Rosneft valued at $3.2 billion is another example of the expanding economic relationship and the potential for mutually beneficial collaboration between Russian and American businesses," the official said.

In explaining the deal's significance, Myers Jaffe pointed to previous failed efforts in the past decade to foster joint energy interests. "There was a lot of disappointment on both sides," she said. "The U.S. industry just gave up on Russia."

PLAN B FOR ROSNEFT

Rosneft said the Kara Sea blocks contain an estimated 36 billion barrels of recoverable oil resources. Total resources are estimated at 110 billion barrels of oil equivalent -- more than four times Exxon's proven worldwide reserves.

The Black Sea block is estimated to hold 9 billion barrels of oil reserves. First drilling is planned to start in 2015, with Exxon shouldering most of the costs.

"The Russians very quickly had a Plan B, and Plan B was Exxon," said Fadel Gheit, energy analyst at Oppenheimer & Co, referring to the quick switch to Exxon from BP.

The deal marks a turnaround in Russia for Exxon, which was widely thought to be on the verge of taking over Yukos, then Russia's largest oil company, before Yukos's boss, Mikhail Khodorkovsky, was arrested in 2003.

Khodorkovsky was subsequently jailed for fraud and tax evasion and Yukos's prime assets were bought at bankruptcy auctions by Rosneft, now Russia's industry leader and with enough reserves to cover 27 years of production.

Uncertainty persists over whether Putin or President Dmitry Medvedev will seek the presidency next March. Putin can now show off the deal as a success if he decides to run.

The transaction also marks a comeback for Sechin, who was ousted as Rosneft chairman earlier this year in a purge of state company boards ordered by Medvedev. Sechin estimated total investment in the project at $200 billion-$300 billion.

In anticipation of all the money flowing there, oilfield services companies including Schlumberger Ltd, Baker Hughes Inc and Weatherford International Ltd WFT.N> have been picking up assets in Russia.

Environmental concerns are unlikely to create barriers to oil extraction in Russia's remote Arctic regions, if moves this year by the country's Natural Resources Ministry to shift nature reserve boundaries are any guide.

U.S. UPSTREAM

Rosneft will be offered an equity interest in Exxon exploration projects in North America, including deepwater Gulf of Mexico and fields in Texas, as well as in other countries.

The deal thus fulfills a demand for reciprocity often made by Putin, helping Rosneft, which already works with Exxon offshore Russia's Sakhalin island, toward its long-term goal of being a global energy major.

It was not clear whether any such investments by Rosneft would need approval from the Committee on Foreign Investment in the United States. An Exxon spokesman declined to comment.

There is no exchange of equity in the agreement, while the BP deal called for a $16 billion share swap in which BP would have exchanged a 5 percent stake for 9.4 percent in Rosneft.

"Exxon is double or triple the size and market value of BP," said Gheit at Oppenheimer. "So, obviously, this would be much more important for a BP than it is for Exxon."

While Rosneft shares rose 1.4 percent in Moscow, Exxon fell slightly on the New York Stock Exchange on Tuesday.

(Additional reporting by Vladimir Soldatkin, Katya Golubkova, Michael Erman and Ernest Scheyder; Writing by Douglas Busvine and Braden Reddall; Editing by Dan Lalor, Tiffany Wu, John Wallace, Steve Orlofsky and Phil Berlowitz)

RUSSIAN ARMED FORCES RAID BP'S MOSCOW OFFICES!

Armed forces raid BP’s Moscow offices

By Charles Clover in Moscow and Sylvia Pfeifer in London

A Federal Bailiff Service car is parked in front of the office building housing a trading unit of British oil company BP in Moscow

BP defended itself against a raid by bailiffs and armed special forces troopers on its Moscow office on Wednesday, describing it as “part of a pressure campaign against BP’s business in Russia”.

Speaking in Moscow, Jeremy Huck, President of BP Russia, added that the company believed the actions were “without merit”. The raid, ordered Tuesday by a court in west Siberia, compounded the UK oil major’s woes in Russia a day after ExxonMobil stole a march on it by signing a historic Arctic exploration deal with Russian oil major Rosneft.

BP faces a lawsuit by minority shareholders in TNK-BP, its existing Russian joint venture, who are suing for Rs87bn ($3bn) over the collapse of a similar proposed tie-up between BP and Rosneft which fell apart this year.

Andrei Prokhorov, a Russian businessman who filed the suit in July, alleged that two BP executives who sit on the board of TNK-BP must have known about the UK group’s negotiations with Rosneft, and their failure to inform TNK-BP caused damage to the company. The lawsuit was upheld by a court in Siberia’s Tyumen region in July.

Vladimir Buyanov, BP’s first secretary in Russia, said the court’s decision “had no legal basis” and that BP would vigorously contest.

On Wednesday morning, at least 15 men appeared at the offices of BP Exploration Operating Company. They were bailiffs accompanied, according to Mr Buyanov, by special forces soldiers with machine guns, police, and representatives of Mr Prokhorov. BP EOC is a subsidiary which “has no connection with the process in Tyumen and is not engaged in any shareholder dispute” according to BP.

Guzel Galieva of law firm Liniya Prava, which represents five minority shareholders in the lawsuit against BP, said that the search order was issued after BP ignored an earlier order by the same court to turn over documents relating to the BP-Rosneft negotiations in July. Ms Galieva insisted the timing of the court order, coming the same day as the Rosneft deal was announced, was a coincidence.

Mr Prokhorov owns a tiny stake in TNK-BP and is widely believed to be representing the interests of AAR, the Russian shareholders in TNK-BP. However, Ms Galieva said the lawsuit was in no way related to AAR. AAR also denied any relationship with the lawsuit. An AAR representative said: “We regret that this raid happened as it was disruptive and unnecessary for a company of BP’s stature.”

For many experts the raid was a reminder of the perils of doing business in Russia, even in the afterglow of the ExxonMobil deal, which was praised as a vote of confidence in Russia’s shaky business environment.

“The ExxonMobil deal was a big step forward” said Cliff Kupchan, a Russia specialist at Eurasian Group consultancy in Washington. But the BP raid, he said “reminds us of the continuing, often capricious, non rule of law based business environment that frequently impairs business in Russia.”

News of the raid had little impact on BP’s shares which closed up 0.2 per cent to 398.39p in London.

The Russian stock market on Wednesday also largely shrugged off the news and rose, with the Micex index closing up 2.4 per cent.

“It's a sign that people are getting used to these sorts of events and take the view that its an isolated instance, and is not supported from a higher political level, that were not going back to the events of 2008,” said Chris Weafer, chief strategist at Troika Dialog, the Russian investment bank. He was referring to the protracted struggle between BP and the Russian shareholders in TNK-BP which ultimately saw Bob Dudley, TNK BPs chairman who now heads BP, flee the country citing official harassment.

Separately, BP said it had another incident at its Valhall platform in the Norwegian part of the North Sea on August 19 following a mid-July fire that prompted the site to be shut down.

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JUDGE IN BP OIL SPILL CASE SELLS HIS ENERGY STOCKS@

Judge in oil spill case sells energy stocks

Feldman struck down government's moratorium on deepwater drilling

By LARRY MARGASAK

WASHINGTON — The Louisiana federal judge who struck down a six-month ban on deepwater oil drilling has sold many of his energy investments, a financial disclosure report released Friday reveals.

U.S. District Judge Martin Feldman's disclosure report, which covers investments for 2009, shows he owned eight energy-related investments including stock in Exxon Mobil Corp.

However, in an attachment to the report, the judge said he sold his Exxon Mobil stock this June when he was hearing the oil spill case.

In last year's disclosure report, Feldman owned up to 16 energy-related investments.

Among the assets sold was stock in Transocean, the Switzerland-based company that owned the drilling rig operated by BP that is now spewing oil into the Gulf.

Feldman, a 1983 nominee of President Ronald Reagan, struck down the Obama administration's six-month moratorium on deepwater oil drilling in the Gulf of Mexico, disputing what he said was the government assumption that because one rig exploded, others posed an imminent danger.

On Thursday, Feldman refused to place his ruling on hold while the government appeals.

Feldman's Exxon Mobil stock in 2009 was valued at $15,000 or less and produced an income of less than $1,000.

The judge has an investment in Ocean Energy valued between $15,001 and $50,000, which produces interest valued between $1,001 and $2,500.

Other holdings include investments in Provident Energy Trust, El Paso Corp., Energy Transfer Equity, Basic Energy Services, Valero Energy Corp., Crosstex Energy LP and BlackRock, one of BP’s largest shareholders.

Values of investments and income are expressed in ranges rather than precise amounts.

An Associated Press analysis has found that more than half of the federal judges in districts where the bulk of Gulf oil spill-related lawsuits are pending have financial connections to the oil and gas industry. This could complicate the task of finding judges without conflicts to hear the cases.

Federal judicial rules require judges to disqualify themselves from hearing cases involving a company in which they have a direct financial interest.

However, financial conflict rules have some leeway. For example, a judge does not have to step aside if investments are part of a mutual fund over which they have no management control.

Further, mere ties to companies or entities in the same industry, no matter how extensive, do not require disqualification.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

BLACKROCK INVESTMENT FIRM DISCLOSES SHAREHOLDERS LAWSUIT!

BlackRock discloses shareholder lawsuit

By John Letzing

SAN FRANCISCO (MarketWatch) -- BlackRock Advisors LLC /quotes/zigman/249424/quotes/nls/blk BLK +0.53% said Wednesday that a shareholder complaint was filed against the investment firm earlier this month in the Supreme Court of the State of New York. The lawsuit, filed Aug. 4, relates to four closed-end funds, and alleges that "BlackRock Parties breached their fiduciary duties to the common shareholders," BlackRock said. The four funds named in the suit are BlackRock MuniYield Insured Fund Inc. /quotes/zigman/431897/quotes/nls/myi MYI -0.39% , BlackRock MuniYield California Insured Fund Inc. /quotes/zigman/432050/quotes/nls/mca MCA +0.67% , BlackRock MuniYield Fund Inc. /quotes/zigman/431523/quotes/nls/myd MYD +0.71% and BlackRock MuniHoldings Insured Investment Fund /quotes/zigman/432069/quotes/nls/mfl MFL +0.29% . BlackRock said that, "The claims asserted in the complaint are without merit."

PPG DIRECTOR CHARGED WITH IEEPA & EAR VIOLATIONS!

Former Managing Director of PPG Paints Trading (Shanghai) Co., Ltd., Charged with IEEPA and EAR Violations

By Jennifer Kessinger, Esq., and Tammie Krauskopf, Esq.

On July 8, 2011, the Bureau of Security and Security (BIS) announced that Xun Wang, a former Managing Director of PPG Paints Trading (Shanghai) Co., Ltd., a wholly-owned Chinese subsidiary of U.S.-based PPG Industries, Inc., has been charged with conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Export Administration Regulations (EAR), and other related offenses.

A former Managing Director of PPG Paints Trading (Shanghai) Co., Ltd., a wholly-owned Chinese subsidiary of U.S.-based PPG Industries, Inc., has been charged with conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Export Administration Regulations (EAR),

Xun Wang, 51, is accused of conspiring to export and reexport, and exporting and reexporting specially designed, high-performance epoxy coatings to the Chashma 2 Nuclear Power Plant (Chashma II) in Pakistan, a nuclear reactor owned and/or operated by the Pakistan Atomic Energy Commission. This entity is on the list of prohibited end users under the EAR.

Wang was arrested on the indictment on June 16, 2011, at Atlanta Hartsfield-Jackson Airport and transferred to the District of Columbia. She is a Chinese national and lawful permanent resident of the United States. The United States is seeking to have her held without bond pending trial.

The indictment against Wang is related to the December 21, 2010, guilty plea of PPG Paints Trading (Shanghai) Co., Ltd. (PPG Paints Trading), to a four-count information in the U.S. District Court for the District of Columbia. Together, PPG Paints Trading and its parent company, PPG Industries, Inc., paid $3.75 million in criminal and administrative fines and over $32,000 in restitution. The combined amount of criminal and civil fines represented one of the largest monetary penalties for export violations in the BIS history.

According to the indictment against Wang, in January 2006, PPG Industries sought an export license for the shipments of coatings to Chashma II. In June 2006, the Department of Commerce (DOC) denied that license application. Following that denial, Wang and her co-conspirators agreed upon a scheme to export and reexport the high-performance epoxy coatings from the U.S. to Chashma II, via a third-party distributor in People’s Republic of China (PRC), without the required export license from the DOC.

The indictment further alleges that from June 2006 through March 2007, Wang and other co-conspirators intentionally concealed from PPG Industries that the paint would be delivered to Chashma II. Specifically, they falsely stated that the coatings were to be used at a nuclear power plant in China, the export of goods to which would not require a license from the DOC. The indictment alleges that, through these means, Wang and her co-conspirators took part in three shipments of coatings from the United States to Chashma 2 without the required license.

Source: Global Trader Newsletter

PNC FINANCIAL & NATIONAL CITY CORP. PLEAD GUILTY TO SUBPRIME-SECURITIES CRIMES IN CLASS-ACTION SETTLEMENT!

National City Corporation Subprime Securities Suit Settles for $168 Million

Posted on August 11, 2011 by Kevin LaCroix

In the latest eye-popping subprime-related securities class action lawsuit settlement, the parties to the National City Corporation securities class action lawsuit have agreed to settle the case for $168 million. The proposed settlement is subject to court approval. The August 8, 2011 press release of the New York Comptroller, acting on behalf of the New York State pension funds as lead plaintiff, can be found here.

The settlement papers are not yet available on PACER (indeed, that is the reason I waited for a day to publish a post about this settlement, in the hope that I might be able to run down copies of the papers. No luck so far – should I get my hands on them, I will post them to this site.) Jan Wolfe’s August 9, 2011 Am Law Litigation Daily article describing the settlement can be found here.

As detailed here, this case arises out of the financial woes that beset Cleveland-based National City as its portfolio of subprime related mortgages nearly dragged the bank down. In their 249-page consolidated amended complaint (here), the plaintiffs alleged that as the residential real estate market began to collapse in 2007, the bank’s residential mortgage and construction loan portfolio – which allegedly was of much lower quality than the bank had disclosed -- began to deteriorate much more rapidly than the company acknowledged publicly. The plaintiffs alleged further that the bank’s failure to recognize this deterioration rendered the bank’s financial statements and other disclosures materially misleading.

National City’s financial difficulties proved so severe that in October 2008, it was acquired at fire sale prices by PNC. The transaction was highly controversial at the time, and not just because it involved a takeover of a landmark Cleveland institution by a bank based in Pittsburgh. As discussed at greater length here, because PNC moved to acquire National City using TARP funds that PNC had only just received and only after TARP funds were withhold from National City. The PNC acquisition was itself the subject of separate litigation, which was later voluntarily dismissed. PNC’s acquisition of National City means that the likely source of funds for this settlement was PNC itself, to the extent not otherwise funded by D&O insurance – hence my interest in seeing the settlement papers.

The parties to the related-ERISA class action previously settled that action for $43 million, as discussed at greater length here.

The $168 million National City securities class action lawsuit settlement follows close on the heels of the announcement of the $627 million Wachovia bondholders’ settlement. I have long wondered when the overhang of subprime-related securities class action lawsuit would finally start to work itself off. With these settlements, it seems increasingly likely that the time may now be here.

There have been larger settlements announced in connection with the subprime-related securities class action litigation wave, but the National City settlement is still attention-grabbing. Among other things, the National City settlement, if approved, would be the 53rd largest all-time securities class action lawsuit settlement. As was the case with the Wachovia settlement, the National City settlement was not (prior to the settlement) one of the highest profile subprime-related cases. But while these two cases may not have been at the center of the radar screen, these two nine-figure settlements in quick succession undoubtedly have gotten everyone’s attention.

The problem for the parties in the remaining subprime cases is that these settlements -- and the recent $125 million settlement in the Wells Fargo mortgage-backed securities cases – create an even more challenging environment in which to try to work out a settlement. The plaintiffs in these other cases undoubtedly will by try to rely on these settlements as a way to try to argue that the price of poker is going up.

AMERICA'S COUNTY TREASURERS' ASSOCIATION INVOLVED IN EMBEZZLING FUNDS TO NIGERIA!

Embezzled Virginia funds funneled to Nigeria



Brenda Grubbs, a former Goochland County treasurer, embezzled nearly $200,000 and sent the money to a shadowy figure in Nigeria. (The Goochland Gazette)

By David Sherfinski

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The Washington Times

Monday, August 29, 2011

The former treasurer of Goochland County, Va., who has pleaded guilty to embezzling nearly $200,000 in public funds, funneled the money to a shadowy figure in Nigeria, according to a Virginia state audit released Monday and the prosecutor in the case.

Brenda Grubbs was arrested on Feb. 2 for attempted embezzlement and effectively resigned her position on Feb. 11. She pleaded guilty to a 20-count indictment earlier this month. Sentencing is scheduled for Dec. 13, and she faces life in prison.

The audit, conducted by the state Auditor of Public Accounts, said Grubbs stole the money through a series of fraudulent counter withdrawals, self-issued checks and wired funds.

Jeffrey Haislip, commonwealth’s attorney for Fluvanna County, told a Goochland Circuit Court judge that virtually all the money Grubbs took went to a man named “Bobby Johnson,” whom Grubbs had met on the online dating website, match.com. The man told her he was from Northern Virginia but working in Nigeria.

In one yarn, he apparently told Grubbs he was on his way to the airport with two of his employees, and they were killed and he was injured.

“I don’t believe there was a Bobby Johnson,” Mr. Haislip told The Washington Times on Monday. “She’s going to be ordered to pay restitution, but the money went to a number of different names in Nigeria, so there’s really no way, as far as I’m aware, to know who ended up with that money.”

So why did she keep sending money to a man she had never met in person?

“I have no way to answer that,” Mr. Haislip said. “We’ve looked at a number of her emails and texts. There were times where she was very suspicious … at more than one point, she indicated that she thought she was being misled, but she continued to send money.”

According to Mr. Haislip, Grubbs‘ lawyer is expected to make the argument at sentencing that she had been battling illness, including depression, which could have contributed to her actions. Her lawyer could not be reached for comment Monday.

The audit reveals that Grubbs used several techniques to embezzle the $180,000.

A majority of the funds were withdrawn from the county using direct counter withdrawals from a checking account from June 2010 through January 2011, where Grubbs made a payment to herself or the county and presented the check at a bank teller’s window to obtain an amount of cash.

There were a total of 33 counter withdrawals between June 23, 2010 and Jan. 28 totaling $143,349, according to the audit.

Investigators also found eight deposits between September 2010 and February that Grubbs tampered with before putting the money in the bank. There were also two checks that she had signed paid to the order of Brenda Grubbs and endorsed, embezzling about $3,200 by those means.

Auditor of Public Accounts Walter Kucharski said that the formal audit was “just our putting the bow on it and moving on.

“Somebody in this day and age — you just sit there amazed that somebody would do that,” he said.

© Copyright 2011 The Washington Times, LLC. Click here for reprint permission.

NIGERIA'S BOKO HARAM: AL-QAEDA'S NEW FRIENDS IN AFRICA!

Nigeria's Boko Haram: Al-Qaeda's New Friend in Africa?

By Karen Leigh Wednesday, Aug. 31, 2011

A 2010 screen grab of a video reportedly released by Nigeria's Boko Haram shows alleged members gathered in an undisclosed location.

When a suicide bomber drove into the U.N. building in Abuja's leafy diplomatic quarter on Friday, detonating his Honda Accord and killing at least 18 people, an Islamist terrorist group that was little known outside Nigeria violently thrust itself onto the international stage.

Until recently, the group Boko Haram has conducted attacks on Nigerian government targets in what most terrorism experts considered an indigenous campaign to further the organization's aim of installing Islamic law in West Africa's most volatile country. Friday's attack now has officials and experts worrying that a branch of al-Qaeda has spread its influence to Nigeria, Africa's most populous country and a key supplier of oil for the U.S. and the world market. Though no evidence of a partnership has been established, al-Qaeda in the Islamic Maghreb (AQIM), the terrorist giant's arm in northwest Africa, has previously issued statements in support of Boko Haram.

Even before the bombing, U.S. military officials were growing anxious about possible links between Boko and established Islamist terrorist groups. Carter Ham, the U.S. military's commander of operations in Africa, told the Associated Press on April 17 that multiple unnamed sources indicated that Boko Haram had made contact with operatives from AQIM and with the Somali terrorist group al-Shabab.

"I think it would be the most dangerous thing to happen not only to the Africans, but to us as well," Ham said. "What is most worrying at present is, at least in my view, a clearly stated intent by Boko Haram and by al-Qaeda in the Islamic Maghreb to coordinate and synchronize their efforts. I'm not so sure they're able to do that just yet, but it's clear to me they have the desire and intent to do that." Ham also touched on what he said could be a "loose" partnership with al-Shabab, which would mean Boko Haram's reach extends thousands of miles across the African continent.

A partnership between Boko Haram and AQIM, which operates in close proximity to Nigeria in Mauritania, Mali, Niger and Algeria, could explain the increased sophistication of recent Boko Haram attacks, including the use of Friday's car bomb. It could also mean an increase in cash flow for Boko Haram, which currently makes most of its money through taxes and by robbing banks throughout the Muslim northern half of the country. Heightened fear about an al-Qaeda link comes as religious tension explodes in already-tense central Nigeria. On Monday, Aug. 29, there were deadly clashes between bands of machete-wielding Christian and Muslim youths in the town of Jos, long a center of violence between northern Muslims and southern Christians.

The benefits for Boko Haram in teaming up with AQIM might be an influx of money and expertise — but also an international profile that would give it credibility as it attempts to recruit more followers and further scare a nervous Nigerian government. "AQIM sits on a fairly large supply of money, as well as explosives. There's a possibility that a relationship between them could open up access for the Boko," says Andrew Lebovich, a policy analyst for the National Security Studies Program at the New America Foundation, who specializes in studying AQIM. "People have been talking about [the U.N. attack] as a coming out, as a sign to al-Qaeda that they were looking for a merger," he says.

Despite a steady stream of attacks on Nigerian government targets since 2009 — including a June bombing of Abuja's police headquarters, which left five dead — "they staged an attack on the U.N. and they got more coverage than ever," says Lebovich. "So there's a logic."

An alliance would have a corresponding benefit for al-Qaeda, which has made the southern expansion of its African operation a priority since Algeria — its former major target — began cracking down on the group in 2008. A partnership with the efficient Boko Haram could perhaps give AQIM a foothold in one of Africa's most important, volatile countries. "They don't get as much recognition from international jihad groups because they haven't really engaged in large-scale operations, and because they haven't attacked Europe — so many are still suspicious of how effective they are," Lebovich says. "This would be a way of solidifying their place within al-Qaeda."

Although Boko Haram's exact size is hard to pinpoint, it likely has around several thousand supporters and at least 300 militant members who are available for armed actions, says Dr. Peter Lewis, director of the African-studies program at the School of Advanced International Studies at Johns Hopkins University. In 2009, Nigerian security forcefully destroyed the group's Maiduguri compound and killed its then leader Mohammed Yusuf. After months of dormancy, Boko Haram returned to the spotlight in September 2010, pledging to avenge Yusuf's death.

It's unlikely that even with an al-Qaeda tie, Boko Haram would take the fight against the government beyond Nigeria's borders. "They indicate they'll remain within Nigeria," Lebovich says. In a call to the BBC on Friday, a Boko Haram spokesman "justified the attack in part because he said the U.N. was one of the international organizations that supported the Nigerian government, so it's still a Nigeria-focused argument."

But the global terrorism community will now be watching the group's every move, especially for evidence that it might be morphing into a new branch of a terrorist group that has so far had little impact in non-Arab West Africa. If Nigerian security forces start seeing proterrorism propaganda and Boko Haram operatives working in neighboring countries like Mali and Mauritania, then what is currently fearful speculation would be replaced, Lebovich says, by "concrete evidence of a partnership." Nasser Weddady, outreach director at the American Islamic Congress, cautions that the speculation is not just idle chatter. Friday's bombing "is a wake-up call to Nigeria to get its act together."


Read more: http://www.time.com/time/world/article/0,8599,2091137,00.html#ixzz1WdsMKbAN

UNITED STATES SANCTIONS SYRIAN PRESIDENT & TOP AIDES!

U.S. slaps sanctions on Syrian president, top aides

Syrian people living in Jordan protest against Syria's President Bashar al-Assad in front of the Syrian embassy in Amman May 7, 2011.

By Arshad Mohammed and Andrew Quinn

WASHINGTON | Wed May 18, 2011 1:04pm EDT

WASHINGTON (Reuters) - The United States imposed sanctions on Syrian President Bashar al-Assad and six other top aides for human rights abuses on Wednesday in a dramatic escalation of pressure on Syria to cease its brutal crackdown on protesters.

Targeting Assad personally with sanctions, which the United States and European Union have so far avoided, is a significant slap at Damascus and raises questions about whether Washington and the West may ultimately seek Assad's removal from power.

Syrian activists say at least 700 civilians have been killed in two months of clashes between government forces and protesters seeking an end to his 11-year rule. The protests in Syria began after demonstrations toppled authoritarian leaders in Tunisia and Egypt.

The move, announced by the Treasury Department, freezes any assets of the Syrian officials that are in the United States or otherwise fall within U.S. jurisdiction and it generally bars U.S. individuals and companies from dealing with them.

In addition to Assad, the Treasury said the sanctions would target Vice President Farouq al-Shara, Prime Minister Adel Safar, Interior Minister Mohammad Ibrahim al-Shaar, Defense Minister Ali Habib as well as Abdul Fatah Qudsiya, the head of Syrian military intelligence, and Mohammed Dib Zaitoun, director of the political security directorate.

While it was not immediately clear what practical effect the sanctions would have or whether the seven had significant assets that would be captured by the U.S. move, the symbolic gesture was profound.

"The actions the administration has taken today send an unequivocal message to President Assad, the Syrian leadership, and regime insiders that they will be held accountable for the ongoing violence and repression in Syria," said Acting Under Secretary for Terrorism and Financial Intelligence David S. Cohen said in a written statement.

"President al-Assad and his regime must immediately end the use of violence, answer the calls of the Syrian people for a more representative government, and embark upon the path of meaningful democratic reform," he added.

European governments agreed on Tuesday to tighten sanctions against the Syrian leadership, but said they would decide next week about whether to include Assad on the list.

President Barack Obama last month signed an executive order imposing a first round of U.S. sanctions against Syria's intelligence agency and two relatives of Assad's for alleged human rights abuses.

The EU, for its part, put 13 Syrian officials on its sanctions list in what it described as a move to gradually increase pressure.

(Reporting by Arshad Mohammed and Andrew Quinn, editing by Sandra Maler)

EU TO SANCTION SYRIAN OIL!

EU to consider Syria oil sanctions

18.08.11 @ 08:55

By Andrew Rettman

EU diplomats will on Thursday debate imposing sanctions on Syrian oil firms, telecommunications companies and banks, Dow Jones Newswires reports. The UK is said to oppose the move on grounds it would hurt ordinary people. Two British firms - Royal Dutch Shell and Gulfsands Petroleum - are active in Syria.
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NTSB FAULTS PG&E PIPELINE FOR EXPLOSION, REGULATORS!

NTSB faults PG&E, regulators

By Joan Lowy /and Matthew Brown Associated Press

Posted: 08/31/2011 01:02:12 AM PDT

WASHINGTON -- A federal safety panel blamed a series of missteps by one of the nation's largest gas companies for the largest pipeline accident in a decade, a suburban San Francisco explosion that killed eight people and incinerated a neighborhood. The panel also warned there was no certainty that the problems that led to last year's accident don't exist elsewhere.

The National Transportation Safety Board wrapped up its yearlong investigation of the Sept. 9, 2010, accident in San Bruno, Calif., voting 5-0 that actions by Pacific Gas & Electric were the probable causes of the explosion. Lax regulations at the state and federal level also contributed to the accident.

"The aging pipelines, our oldest pipelines really are without a safety net," NTSB chairman Deborah Hersman said.

The board voted that substandard welds and other problems dating to the 1956 installation of a Pacific Gas & Electric Co. gas transmission line beneath San Bruno were the direct cause of the accident. The board also said the company's inadequate inspection program for pipelines, which allowed the bad welds and other weaknesses to go undetected, helped cause the accident.

Among the problems with government oversight was a lack of federal or state requirements for testing for older pipelines to detect defections, the board said.

The California Public Utilities Commission also failed to detect widespread internal problems with PG&E's safety regime, including a lack of automatic gas shut-off valves and shortcomings in the company's emergency response plan that contributed to the protracted duration of the accident, the board said.

"It was not a question of 'if this pipeline would burst,"' Hersman said. "It was a question of 'when."'

The board also made a series of safety recommendations to regulators and the gas industry before adjourning. The board has made nearly 40 safety recommendations as a result of the accident over the last year.

The board concluded the accident wasn't the result of a simple mechanical failure, but was an "organizational accident."

Among PG&E's problems were a failure to learn from past accidents, the loss of key personnel after the company's 2001 bankruptcy, poor internal communications and bad morale among company employees, board members said.

PG&E President Chris Johns said the company has spent the past year making fundamental changes to its operations and management that will "put the safety of the public, our customers and our employees first."

"We fully embrace the recommendations of the NTSB and will incorporate them into our plans," Johns said in a statement.

He also said the company's board was "deeply sorry that our pipeline was the cause" of the accident.

"We know that nothing we can say nor any action we can take will ever make up for the losses experienced by the victims of the accident and the San Bruno community," he said.

Longtime San Bruno resident Phil Piserchio had his house slightly damaged, but many neighbors had their homes destroyed by the blast. He believes the California Public Utilities Commission is as much to blame as PG&E.

"Maybe a larger responsibility falls on the overseers of public utility companies like CPUC because they're meant to be the watchdogs and the advocates for the consumer," he said. "I hope that this will just be a reminder that (PG&E) should invest in their infrastructure and invest in safety for the public."

NTSB chair Hersman said existing rules that allow operators to make determinations and decisions about pipeline safety are "a slippery slope" that leave regulators little recourse when something goes wrong.

About half the gas transmission lines -- roughly 150,000 miles -- were built prior to 1970 and so are exempt from many federal safety requirements, NTSB officials said.

"What we've seen in PG&E is hopefully the worst-case scenario," Hersman said.

ThE board was especially critical of PG&E's failure to provide investigators with critical records related to the source and installation of the section of the transmission line that ruptured.

Company records that were provided were also inaccurate on key points. They indicated the pipe that ran through San Bruno was seamless. But a laboratory examination later showed that the pipe was constructed with seam-welds that failed during the accident.

Also, company records showed the pipeline was of a uniform thickness in the San Bruno area. It was later found to be variable.

Such information is considered crucial to determining how much internal pressure a pipeline can be operated under, investigators said.

PG&E had set a maximum allowable pressure on the line of 400 pounds per square inch. It failed after reaching 396 pounds-per-square-inch in the hour before the explosion.

"The NTSB has been frustrated throughout the duration of this investigation by the inadequacy of PG&E's record-keeping," Hersman told reporters.

Investigators also faulted the company for understating threats to the pipeline from corrosion or manufacturing defects. The threat assessment was based on internal records that the NTSB said overstated the danger from ground movement or third-party damage caused by excavating near a pipeline.

PG&E said earlier this year that it could not find key safety records for 8 percent of its lines running through populated areas. That was after the company used documents showing historical pressure levels for many of its older pipelines, rather than pressure tests or engineering work. The utility could not turn up pressure tests for 69 percent of the transmission lines laid before 1961, including for some sections of the line that blew up in San Bruno.

Investigators identified a substandard seam weld that went only halfway through the pipe wall at the rupture point. The 30-inch circumference pipe had other substandard welds as well. Evidence indicates the pipe was composed of several short welded pieces that didn't meet any known specifications, investigators said.

G&E has said it didn't know of the welds because its records incorrectly listed the pipe as seamless. The utility also has been unable to produce other key records regarding the pipeline.

The explosion sent a giant plume of fire into the air that continued to burn for 95 minutes before PG&E employees were able to shut off the flow of gas. In addition to the eight deaths, dozens of people were injured and 55 homes destroyed or damaged.

The pipeline lacked automatic or remotely controlled shut-off valves. If valves on the line had closed immediately after the initial explosion, the gas-fed fire probably would have gone out in under 10 minutes, according to safety experts.

Last week, federal regulators proposed forcing utilities to step up testing of older transmission lines and install more automatic shut-off valves.

San Bruno mayor Jim Ruane said Tuesday he would join with lawmakers to push measures pending before Congress to replace aging pipe, require emergency shut-off valves and bolster inspections for the nation's underground pipeline system.

"They say out of sight out of mind. It's not out of sight anymore and we're going to keep it that way," Ruane said. "They heard loud and clear today that something has to be done."

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Brown reported from Billings, Mont. Associated Press writer Terence Chea contributed to this report from San Bruno, Calif.


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Online:


National Transportation Safety Board: http://www.ntsb.gov

NTSB chairman's briefing on San Bruno hearing http://www.youtube.com/ntsbgov

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Follow Joan Lowy on Twitter: http://twitter.com/(hash)!/AP--Joan--Lowy

Tuesday, August 30, 2011

PELOSI'S SNAP-FOR-TAR SCANDAL EXPOSED!



NASA SCIENTESTS & RELIGIOUS LEADERS ARRESTED IN TAR SANDS PROTEST!

NASA Scientist, Religious Leaders Arrested in Tar Sands Protest

WASHINGTON, DC, August 29, 2011 (ENS) - NASA climatologist Dr. James Hansen was arrested today in front of the White House where he was demonstrating in opposition to the proposed Keystone XL tar sands pipeline that would bring thick crude oil from Alberta to refineries in Oklahoma and Texas. Dr. Hansen heads the NASA Goddard Institute for Space Studies in New York City and is a climate research scientist at the Earth Institute, Columbia University.

Arrests are continuing at the White House, where about 140 people gathered on the sidewalk as part of a two-week long sit-in to protest TransCanada's proposed 1,700 mile pipeline.

Dr. James Hansen is arrested protesting the TransCanada Keystone XL pipeline in front of the White House, August 29, 2011 (Photo by Ben Powless)



The protest has led to the arrest of 521 people since August 20, when protestors began the Tar Sands Action sit-in at the White House. The protest will continue until September 3.

Because the proposed pipeline would cross the United States-Canada border, a Presidential Permit issued by the U.S. State Department is required for the project to proceed. The protestors are demanding that President Barack Obama decline to issue a permit for the pipeline because of the environmental damage it would cause.

"If the pipeline is to be built, you as president have to declare that it is 'in the national interest," wrote Dr. Hansen in an August 3 letter to President Obama along with 19 other scientists. "As scientists, speaking for ourselves and not for any of our institutions, we can say categorically that it's not only not in the national interest, it's also not in the planet's best interest."

Today, 60 religious leaders of many faiths were among the crowd, which also included CREDO Mobile president Michael Kieschnick, Greenpeace Director Phil Radford and 350.org Executive Director May Boeve.

"Climate change hurts the poor first," said Rose Berger, a Roman Catholic and lead Sojourners organizer for Tar Sands Action. "The tar sands development and the permitting the Keystone XL pipeline will worsen climate change and should be stopped."

Rabbi Fred Scherlinder Dobb of Adat Shalom Reconstructionist Congregation said, "We must turn up the heat in a sustained effort against the scourge of climate change, which harms not just our land and water but people here and now, our human future and all earthly Creation."

Religious leaders protest the pipeline as U.S. Park Police arrest United Church of Christ minister Rev. Mari Castellanos, August 29, 2011. (Photo by Justice and Witness Ministries)



"The stand against tar sand oil is basically about protecting God's creation and God's people," said United Church of Christ minister Rev. Mari Castellanos. "The process of extraction destroys the boreal forest and wetlands, leaves behind enormous lakes of toxic waste and causes high levels of greenhouse gas pollution. To engage in peaceful protest against it is sacramental."

In addition, the No Tar Sands Caravan arrived in Washington, DC today after seven days and over 3,300 miles traveled on the journey from California to Washington, DC to protest the Keystone XL pipeline.

On Friday, the U.S. State Department issued its Final Environmental Impact Statement on the pipeline, endorsing the pipeline as the "agency-preferred alternative."

The State Department considered three major alternative scenarios - a no action alternative; the use of other pipeline systems or methods of providing Canadian crude oil to the Gulf Coast market; and other potential pipeline routes for transporting heavy crude oil from the U.S./Canada border to the Gulf Coast market.

"There is an existing market demand for heavy crude oil in the Gulf Coast area," the FEIS states. "The demand for crude oil in the Gulf Coast area is projected to increase and refinery runs are projected to grow over the next 10 years, even under a low demand outlook."

"Whether or not the proposed Project is implemented, Canadian producers would seek alternative transportation systems to move oil to markets other than the U.S. Several projects have been proposed to transport crude oil out of the oil sands area of Alberta using pipelines to Canadian ports," the State Department concludes.

The FEIS recognizes the public's concern for how a pipeline spill might affect the Northern High Plains Aquifer System, which includes the Ogallala aquifer formation and the Sand Hills aquifer unit.



Pipe sections near Pilsen, Kansas staged for the TransCanada Keystone pipeline, June 17, 2010. (Photo by David Penner)

"The Northern High Plains Aquifer system supplies 78 percent of the public water supply and 83 percent of irrigation water in Nebraska and approximately 30 percent of water used in the U.S. for irrigation and agriculture," the FEIS states. "Of particular concern is the part of the aquifer which lies below the Sand Hills region. In that region, the aquifer is at or near the surface."

After its analysis, the State Department concludes that spill impacts "are typically limited to several hundred feet or less from a spill site." The FEIS states, "In no spill incident scenario would the entire Northern High Plains Aquifer system be adversely affected."

"This is not a decision document," said Assistant Secretary of State Dr. Kerri-Ann Jones of the Bureau of Oceans and International Environmental and Scientific Affairs. "The FEIS is not a decision regarding the permit. The FEIS is one piece of the information that will be considered. Much information will be needed to inform the decision regarding this required permit."

"This is not the rubberstamp for this project," said Dr. Jones. "The permit that is required for this process has not been approved or rejected at all."

Tar sands pipeline protestors were not deterred by Hurricane Irene, which lashed Washington, DC on Saturday, August 27, 2011.



(Photo by Rose Berger)

"This is a document that presents the analytical and the data information that we have regarding the environmental impacts," said Jones. "The process that was used to produce this impact statement looked to technical expertise across the U.S. Government and to engineering and technical experts outside of the U.S. Government, as well as extensive public feedback."

Environmental author Bill McKibben, who is organizing the protests at the White House, said that the release of the State Department FEIS would not dampen the spirits of the 2,000 Americans who have signed up to participate in the Tar Sands Action.

"We knew from past experience that State might do something like this, which is why we've always said it's going to be Obama's call," said McKibben. "They can't get the climate science right, but maybe they can get the politics right."

A State Department spokesperson said the agency is on track to make a determination about the pipeline by the end of this year.



Assistant Secretary of State Kerri-Ann Jones (Photo courtesy U.S. State Dept.)

Before a decision is final, the State Department is soliciting additional public input. The next step of the process, the national interest determination, is a 90-day period when State officials will consult with other federal government agencies to define the national interest regarding this project.

"We have also decided that during the first few days of this 90-day period, we will have sessions for more additional public comments," said Jones. "These are not required, but we feel that because this is such an important project, we need to have more interaction with the public and we want to get as much feedback as possible and have this be as transparent as possible."

The pipeline is supported by the National Association of Manufacturers, the largest manufacturing association in the United States, representing manufacturers in every industrial sector and in all 50 states.

NAM Vice President for Energy and Resources Policy Chip Yost said Friday, "Manufacturers are pleased the State Department has issued the final Environmental Impact Study. The country is now one step closer to construction of the pipeline, which will create thousands of jobs, generate economic growth and establish energy stability."

"This project is estimated to create 20,000 high-paying manufacturing and construction jobs and will provide access to affordable sources of energy," said Yost. "Manufacturers use nearly one third of our nation's energy supply, so reliable, affordable energy is critical to global competitiveness."


Suncor's tar sands processing facility near Fort McMurray, Alberta

(Photo by Jiri Rezac / Tarnished Earth / Greenpeace UK)



"We encourage action by the State Department and President Obama to avoid further delay or additional red tape. Our nation's economy is stalled and Americans need jobs. We hope the administration will act quickly and move this project forward."

The opinion of the environmental community is clear. On Thursday, leaders of some of the nation's largest environmental groups signed a letter urging the President to view this as a "watershed moment."

"Dear President Obama," they wrote, "Many of the organizations we head do not engage in civil disobedience; some do. Regardless, speaking as individuals, we want to let you know that there is not an inch of daylight between our policy position on the Keystone Pipeline and those of the very civil protesters being arrested daily outside the White House."

"This is a terrible project - many of the country's leading climate scientists have explained why in their letter last month to you. It risks many of our national treasures to leaks and spills. And it reduces incentives to make the transition to job - creating clean fuels," the letter states.

"You have a clear shot to deny the permit, without any interference from Congress. It's perhaps the biggest climate test you face between now and the election," they wrote. "If you block it, you will trigger a surge of enthusiasm from the green base that supported you so strongly in the last election. We expect nothing less."

Greenpeace activists protest Suncor operations in the tar sands north of Fort McMurray by deploying a floating banner on the Athabasca River, September 30, 2009.

(Photo by Jeremy Williams courtesy Greenpeace Denmark )




Signers were Fred Krupp, Environmental Defense Fund; Michael Brune, Sierra Club; Frances Beinecke, Natural Resources Defense Council; Phil Radford, Greenpeace; Larry Schweiger, National Wildlife Federation; Erich Pica, Friends of the Earth; Rebecca Tarbotton, Rainforest Action Network; May Boeve, 350.org, who was arrested at the White House today; Gene Karpinski, League of Conservation Voters; Margie Alt, Environment America; and Kieran Suckling, Center for Biological Diversity.

In Canada, too, there is opposition to the pipeline. On Saturday, a rally in Burnaby, British Columbia near the site of a 2007 oil spill was held to support the protesters in Washington, DC.

Protesters there said the Alberta tar sands are one the largest sources of climate-changing pollution left on Earth.

Greenpeace has been protesting the tar sands development for years. Greenpeace is calling on oil companies and the Canadian government to stop the tar sands and end the industrialization of a vast area of Indigenous territories, forests and wetlands in northern Alberta.

"The tar sands are huge deposits of bitumen, a tar-like substance that is turned into oil through complex and energy-intensive processes that cause widespread environmental damage - polluting the Athabasca River, lacing the air with toxins and turning farmland into wasteland," Greenpeace says. "Large areas of the boreal forest are being clearcut to make way for development in the tar sands, the fastest growing source of greenhouse gas emissions in Canada."

Greenpeace is also concerned with the social and health costs of tar sands development. First Nations communities in the tar sands report unusually high levels of rare cancers and autoimmune diseases, and their traditional way of life has been threatened.

On September 26 in Ottawa, the largest act of civil disobedience on the climate issue that Canada has ever seen will be staged by the Council of Canadians, Greenpeace Canada and the Indigenous Environmental Network. People will risk arrest in an action endorsed by McKibben and Hansen among hundreds of others.

Copyright Environment News Service (ENS) 2011. All rights reserved.

US NEWS & WORLD REPORT: NEWT MAY BE THE NEW "COMEBACK KID"!

US News & World Report: Newt May Be The New Comeback Kid



US News and World Report's "Washington Whispers" column notes that the Newt 2012 campaign is on the comeback trail, thanks to Newt's commanding performance in the Ames debate and his focus on new solutions.

Newt Gingrich, the 2012 GOP presidential candidate, shares a lot with Bill Clinton, his 1990s arch enemy. While he was House speaker, together they balanced the budget, reformed welfare, and almost crafted a deal to save Social Security. And now some are adding a fourth link: political revival, a la Clinton's status as the decade's "Comeback kid." Says Gingrich, "Well, I may be that, but I may be more like a comeback grandfather."

Either way, the big-thinking Republican, his supporters, and presidential political experts sense that Gingrich, left for dead by the political class weeks ago when his staff abruptly quit and stories surfaced about his big-dollar Tiffany's account, is on the way back. The reason for the emerging Newt 2.0? His effective performance in the last debate that inspired supporters to boost online donations after he assailed the deficit "super committee" while spelling out detailed solutions to fixing the economy.

"He moved out of the irrelevant category and now he has some standing," says a GOP analyst. "His strengths are his ideas and translating them at a debate. Given that there are lots more debates, he has a chance to win."

The Gingrich surge is seen in some polls. In Missouri and Louisiana, for example, he is fourth behind Texas Gov. Rick Perry, Mitt Romney, and Rep. Michele Bachmann.

"The general response to the campaign has gone up significantly since [the Iowa debate]," says Gingrich. "There's been somewhat of an uptick in polling numbers, not gigantic yet, but starting us back on the road to building a unique case. What I'm trying to do is show leadership now, show how you could actually solve problems and do it in a way that is totally compatible with conservative values but is also common sense and in some ways bipartisan," adds the Georgian.

"A number of people say that I'm just different and that they are glad to see somebody who isn't just articulating slogans without trying to develop solutions and my hope is that will grow," says Gingrich.

He feels he can come back and take the GOP nomination because the economy is so bad that voters more than ever are looking for new ideas.

Some suggest that his effort is similar to Sen. John McCain who in 2008 staged a comeback after being written off. Gingrich rejects that model. "I'm actually closer to [Barry] Goldwater and [Ronald] Reagan," he says. "They were arousing new groups, new organizations, using new issues and doing it new ways and it took a while to build momentum."

US CONGRESSMAN SMITH SAYS HILLARY SHOULD BE HELD ACCOUNTABLE WITH THE CHINESE FOR HER ONE-CHILD POLICY!

ANGLO-IRISH BANK ATTEMPT TO SHRINK LOSSES BEFORE JP MORGAN CHASE'S TERRORISTS & NUCLEAR PROLIFERATEORS TAKE-OVER TROUBLED LOANS!




























Anglo may be 'wound up by 2015'

By Laura Noonan

Tuesday, 30 August 2011

Anglo Irish chief executive Mike Aynsley

Anglo Irish Bank's management believe the nationalised Irish lender could be wound up in as little as three or four years.

The news comes days after its chief executive, Mike Aynsley, revealed that up to €4bn (£3.5bn) in capital could be handed back to the Irish state when Anglo pulls the shutters down for the final time.

The collapsed lender is due to be wound down over a 10-year period, but management now believe that the final phase of Anglo's life could be significantly shorter.

Successful bidders have been identified for Anglo's $9.5bn (£5.8bn) US loan book and newswire Bloomberg reports that Wells Fargo, JP Morgan and Lone Star Funds will buy the loans for 80% of their face value by the end of October.

That will leave Anglo with just €16bn (£14.17bn) of its own loans, plus about €2bn (£1.8bn) of loans from Irish Nationwide, meaning the bank is no longer "systemically important".

Last week, Anglo bosses confirmed that they had already been fielding inquiries about both the Irish and UK loan books, adding that the recent €1bn (£0.8bn) investment in Bank of Ireland would make it easier for Anglo to attract bidders for its Irish loan book.

Management stressed that the environment remained difficult in Ireland and that there would be "no fire-sales" since any sales would have to be "capital friendly".

It is now believed, however, that the sales process could be significantly swifter than originally anticipated - barring any major market calamities.

A faster wind-down means the Irish state gets back any surplus capital sooner.

It would also have profound implications for the 1,100 staff employed by Anglo, though some of them will keep their jobs if the businesses they're working in are sold intact.

Anglo last week confirmed that it continued to invest in staff training, with a view to preparing employees for getting jobs when the bank is finally shut.

Some 350 redundancies are already being pursued.

The Central Bank and the European Central Bank would welcome a faster wind-down, since an emergency liquidity assistance (ELA) programme could be wound down sooner.

The programme once had more than €70bn (£62bn) of cash out to Irish banks, all covered by an explicit guarantee from the Government, but Anglo is expected to be the only bank using that funding by the end of the year.

Read more: http://www.belfasttelegraph.co.uk/business/business-news/anglo-may-be-wound-up-by-2015-16042906.html#ixzz1WWcRXs2R

++++++++++++

JPMorgan Chase in $88.3 million settlement with Treasury

By Charles Riley @CNNMoney August 25, 2011

NEW YORK (CNNMoney) -- JPMorgan Chase has reached a settlement with the government that will cost the company $88.3 million over apparent violations of sanctions rules.

The JPMorgan Chase (JPM, Fortune 500) settlement covers a variety of apparent violations of international sanctions -- including ones against Iran, Sudan, and Liberia -- as well as "Weapons of Mass Destruction Proliferators" and global terrorism sanctions.

The settlement is the largest ever paid by a U.S.-based bank for sanctions violations, a Treasury Department official said.

The Treasury released details Thursday of an investigation by its Office of Foreign Asset Controls into apparent violations between 2005 and 2011, some of which it deemed "egregious."

For example, the Treasury found that the bank processed more than 1,700 wire transfers totaling around $178.5 million in late 2005 and early 2006 that involved Cuban nationals -- a violation of Cuban Assets Control Regulations.

According to Treasury, another financial institution tipped off JPMorgan Chase that it might be in violation. The bank conducted an investigation and reported the results to management, but the bank "failed to take adequate steps to prevent further transfers," or notify the Treasury Department.

JPMorgan spokeswoman Jennifer Zuccarelli said none of the allegations involved an intent to violate regulations.

"These rare incidents were unrelated and isolated from each other," she said. "The firm screens hundreds of millions of transactions and customer records per day and annual error rates are a tiny fraction of a percent."

Treasury says in 2009 the bank made a loan in which the underlying transaction involved a vessel that was off limits because of its affiliation with the Islamic Republic of Iran Shipping Lines.

In March of 2010, JPMorgan Chase self-reported this violation to Treasury, but did not mail the notice until three days before it was scheduled to receive payment on the loan.

According to the Treasury, since JPMorgan Chase is a "very large, commercially sophisticated financial institution," its managers "acted with knowledge of the conduct constituting the apparent violations" and "recklessly failed to exercise a minimal degree of caution or care."

US TREASURY FINES CMA FOR FRENCH SHIPPING OF NUCLEAR WEAPONS MATERIALS TO IRAN!

UNITED STATES TREASURY FINES CMA FOR FRENCH SHIPPING OF NUCLEAR MATERIAL TO IRAN!

REUTERS

Mon Aug 22, 2011 3:58pm EDT

UANI Applauds U.S. Treasury for Fining CMA CGM and Renews Call on CMA CGM to End its Business in Iran

United Against Nuclear Iran (UANI) condemned French shipping company CMA CGM, following the U.S. Treasury Department’s recent fine against it for its illegal shipments to and from Iran and other sanctioned nations. UANI has repeatedly called for an investigation into CMA CGM’s Iran business and highlighted the Iranian regime’s exploitation of the shipping industry.

UANI President, Ambassador Mark Wallace, issued the following statement:

The U.S. Treasury’s decision to fine CMA CGM for its work with Iran further confirms the legal lines CMA CGM risks violating in continuing to do business there. It is highly irresponsible for CMA CGM to maintain its business in Iran following multiple occasions of CMA CGM vessels being seized and found to contain weapons headed to or from Iran in violation of international law and UN Security Council Resolutions.

Until CMA CGM pulls out of Iran, it is continuing to facilitate Iran’s support for terrorism and its efforts to build nuclear weapons. CMA CGM should fully end its business in Iran now and show the world that it is a responsible corporation.

Last week, the U.S. Treasury Department fined CMA CGM for violating trade laws with Iran and other sanctioned nations.

At least three CMA CGM vessels have been seized recently and found to contain weapons headed to or from Iran.

On March 9, United Against Nuclear Iran first called on CMA CGM, the world’s third-largest container shipping company, to end its business in Iran.



United Against Nuclear Iran (UANI)
Nathan Carleton, 212-554-3296
press@uani.com

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FINLAND THREATENS TO WITHDRAW GREEK BAILOUT SUPPORT!



Finland threatens to withdraw Greek bailout support

Jyrki Katainen, the Finnish prime minister, has threatened to withdraw support for the Greek bailout in a move that could crush the fragile signs of recovery on global markets.

By Louise Armitstead

11:55PM BST 23 Aug 2011

Mr Katainen said that if Finland's bilateral agreement with Greece over collateral payments was overruled, the Nordic country could back out of the rescue programme.

He told reporters that the private collateral agreement, in which Greece agreed to give Finland €1bn (£875m) in cash in return for its suppport, was "our parliament's decision that we demand it as a condition for us joining in".

Stock markets around the world climbed on Tuesday as positive economic data in China and America convinced traders that recent fears have been overblown.

The euro gained ground against the dollar, oil prices rose and gold retreated from recent highs. The Stoxx Europe 600 rose 0.8pc; in Paris the CAC was up 1.1pc and Germany's DAX advanced 1.1pc. In London the FTSE100 rose 0.7pc to 5129. Even so, markets are still down as much as 15pc in August.

In America stock markets advanced as data showed that China's manufacturing sector was performing better than expected.

The Dow Jones Industrial Average closed up 3pc, the S&P500 ended the day up 3.4pc, while the Nasdaq surged 4.3pc.

Trading was disrupted by a 5.9-magnitude earthquake in Virgina that shook Washington, DC and New York City, causing many buildings to be evacuated.

Despite the rise on markets as a whole, there were still signs of jitters. The US Treasury sold $35bn of two-year notes at a record low yield of 0.22pc as investors continue to seek refuge.

There was worry in the US banking sector as Bank of America dropped 2pc on fears it may need to raise capital and the cost of insuring its debt against default reached a record high.

There was also a marked drop in German investor sentiment and signs of weakening demand in the US housing market.

Greek banks were also hit hard falling around 9pc amid fears that the €109bn (£95bn) bail-out might be delayed.

EUROPE SNUBS IMF --- NO MORE FORCE-FEEDING BANKS CAPITAL!




Mon, Aug 22 2011

Europe snubs IMF call to force-feed bank capital

By Jan Strupczewski and Edward Taylor

BRUSSELS/FRANKFURT | Mon Aug 29, 2011 10:55am EDT

BRUSSELS/FRANKFURT (Reuters) - Europe gave a cool reception to a demand from the International Monetary Fund's new head Christine Lagarde to force its banks to bulk up their capital, saying the continent had done enough already.

The European Commission said there was no need to recapitalize the banks over and above what had been agreed after a recent annual "stress test" check of their ability to withstand economic and financial market headwinds.

"I don't think so. This discussion has already taken place between the EU and the IMF, and the IMF is well aware of the results and the follow-up decided after the stress-tests," Commission spokesman Amadeu Altafaj said.

Lagarde, speaking at an annual meeting of central bankers in Jackson Hole, Wyoming, on Saturday urged politicians to "act now" or risk seeing the fragile recovery derailed.

"Banks need urgent recapitalization," Lagarde said. "The most efficient solution would be mandatory substantial recapitalization -- seeking private resources first, but using public funds if necessary.

The former French finance minister did not elaborate. The European Union has already urged national governments to provide capital to banks identified as weak by the stress tests if they are unable to raise capital on their own.

Last month a summit of euro zone leaders agreed to let the bloc's 440 billion euro ($632 billion) bailout fund finance the recapitalization of banks if necessary, even in countries which are not receiving international bailouts.

Earlier this month, large French and Italian banks suffered steep share price declines on speculation about their financial strength, prompting France, Italy, Spain and Belgium to impose short-selling bans on financial stocks.

Pressure on European banks to raise more capital had increased in July after European stress tests found eight banks failed to meet capital requirements, revealing a total capital shortfall of 2.5 billion euros ($3.5 billion).

FRESH CAPITAL

However, Lagarde's comments came as stocks in Europe bounced back, tracking a late rally on Wall Street on Friday, after signs that the U.S. Federal Reserve would continue to support the U.S. economy. European bank stocks .SX7P were up 1.2 percent on Monday.

Greek bank stocks gained most, with some rallying 20 percent, as they were also boosted by a pending merger of local banks Eurobank (EFGr.AT) and Alpha Bank (ACBr.AT), raising hopes that Greek banks will be able to sort out their problems without government help.

"(Lagarde's) comments won't help to boost confidence in the international financial system," said Gerhard Hofmann, board member of the association of German cooperative banks.

"If any European bank needs fresh capital, it would be better to stabilize the institute properly than to discuss it publicly in such a tense market situation," he said.

A source at Spain's economy ministry echoed those comments.

"The government has already put in place from the start of this year a recapitalization plan for its financial institutions, with very high requirements," the source said.

Lagarde's statement was one of her first public calls for Europe to take policy action since she became head of the IMF in early July. Previously, the Fund had also urged euro zone leaders to expand the size of the bloc's sovereign bailout fund, an idea rejected by Germany and France.

The IMF's comments matter to Europe, because Brussels is counting on the global lender to help finance a second bailout of Greece, announced by euro zone leaders last month, which envisages 109 billion euros of fresh official funding.

When the first Greek bailout was announced in May last year, the IMF quickly pledged to contribute about a third of the funds, which totaled 110 billion euros.

This time, however, the IMF has not said specifically how much it will provide, and it is unclear if the Fund's emerging economy stakeholders are willing to continue shoveling large amounts of aid into the region.

Brazilian and Indian directors of the IMF have warned against pouring excessive sums of money into Europe.

($1 = 0.696 Euros)

(Additional reporting by Sarah White in London and Lionel Laurent in Paris; Writing by Douwe Miedema; Editing by David Holmes and Susan Fenton)