Times Square bomb suspect 'didn't like the sunlight'

(News Today) - A suspect charged in the failed Times Square car bombing is a Pakistani who became a naturalized U.S. citizen in April 2009 and used to work as a financial analyst in Connecticut.

Faisal Shahzad, 30, most recently of Bridgeport, Connecticut, was arrested Monday night at John F. Kennedy International Airport in New York as his flight to Dubai was about to take off, law enforcement officials said.

Federal authorities had put him on a no-fly list earlier in the day, with investigators having determined that he had purchased the vehicle used in Saturday's failed bombing attempt, FBI Deputy Director John Pistole said Tuesday.

Customs and Border Protection agents reacted quickly to the name match and made the arrest, Pistole said.

Shahzad has been charged with five counts in connection with the case, according to documents filed Tuesday in U.S. District Court in New York. According to the documents, he admitted to law enforcement officials that he attempted to detonate the bomb and that he recently received bomb-making training in the Waziristan region of Pakistan.

Also according to the complaint, Shahzad returned to the United States via a one-way ticket from Pakistan on February 3. He had told immigration officials upon his return that he had been visiting his parents in Pakistan for the previous five months, the complaint said.

Shahzad has a Karachi identification card, a sign of Pakistani residency, and his family is from northwestern Pakistan, according to Pakistani Interior Minister Rehman Malik.

His father is a retired senior officer in the Pakistani Air Force, Shahzad's cousin, Kafayat Ali, said on Tuesday. The father, Bahar Ul Haq, a former air vice marshal, lives in the Peshawar suburb of Hayatabad in Pakistan.

Shahzad came to the United States and attended college, earning a bachelor's degree in computer applications and information systems from Connecticut's University of Bridgeport in 2000. He earned an MBA at the school in 2005.

He started working as a junior financial analyst for Affinion Media Group in Norwalk, Connecticut, in 2006, leaving voluntarily in June 2009, according to Affinion spokesman Michael Bush.

Before what the court document says was Shahzad's trip to Pakistan, he lived in Shelton, Connecticut. A woman who said she had lived next door to him in Shelton told CNN on Tuesday that the man she knew didn't say much and claimed to work on Wall Street in New York.

"He was quiet. He would wear all black and jog at night. He said he didn't like the sunlight," Brenda Thurman said.

She said Shahzad, his wife and two children and his wife's two sisters lived next to her for about three years, moving out in July 2009. People whom she believes were plainclothes law enforcement officers appeared to be staking out the house Monday, Thurman told CNN affiliate WTNH-TV.

The neighbor said she often saw Shahzad leaving the home in the morning and returning in the evening. She also saw him in his yard with his children, a boy and a girl, and the family usually wore traditional Muslim attire, she told WTNH-TV.

She said she never suspected he might be involved in a possible terror attack.

"I didn't think he was capable of doing something like that. ... I'm very shocked," she said.

Thurman said her daughter often played with Shahzad's daughter, but she herself didn't have much contact with the family.

Shahzad's wife spoke English, but was apparently so insecure about her language ability that she told people she did not, Thurman said.

"I never knew she spoke English until it was time for her to move," Thurman said.

Shahzad's wife told Thurman in July 2009 that the family was moving to Missouri. A few weeks after they left their home, the lender foreclosed on the property and changed the locks, the neighbor said.

At the Bridgeport residence where authorities say he lived most recently, agents with the FBI and local police, including members of a bomb squad, conducted a search, and investigators removed filled plastic bags.

Cell phone calls conducted for the purchase of the vehicle used in Saturday's bombing attempt helped lead police to the suspect, law enforcement sources said.

Sources said investigators got cell phone information from the daughter of the Nissan Pathfinder owner. She sold the vehicle to Shahzad on behalf of her father.

She had been talking on the phone to Shahzad in arranging the purchase of the SUV, which was advertised for sale on Craigslist.

The Nissan Pathfinder was parked in Times Square containing propane tanks, fertilizer and gasoline on Saturday night. After police retrieved the vehicle identification number of the Pathfinder, they located the registered owner of the vehicle.

The sources said the owner's daughter had met with Shahzad at a Stratford, Connecticut, grocery store, for the sale. Shahzad took the car for a test drive in the parking lot and bought the vehicle for $1,300 in cash.

Bridgeport is a working class city of 130,000 on Long Island Sound, 66 miles northeast of New York City. Per capita income there is 26 percent below the national average, and 27 percent of its residents are foreign-born, more than twice the national average, according to the U.S. Census Bureau.

Source : CNN

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Wall Street didn't cause crash of '08

Washington (News Terupdate) - Financial reform? Not exactly. The bill before Congress does nothing to address the fundamental background causes of the crash of 2008.

Wall Street may have been the instrument of the crash. But the crash was made elsewhere: in Washington's failed policies for middle-class families -- and in China's distorted rush for economic growth.

The story is not a simple one. But I hope you will pay attention to the details. If you don't, you may find that the pocket that has been picked is your own.

As you've heard, the crash begins with the huge excess load of debt built up in the last two decades by American households. Why did Americans borrow so much? Some like to tell a story of irresponsibility: We borrowed too much because we were self-involved yuppies who just could not deny ourselves the latest flat-screen doodad for our McMansions.

Maybe that describes some people. But many millions of middle-class families plunged into debt for a very practical reason. Their incomes were not keeping pace with the cost of crucial items of the middle-class lifestyle: housing, medical care, college tuition. At the same time as housing, medical care and tuition were jumping in cost, the cost of borrowing was dropping to historic lows.

Adjusted for inflation, the typical American family earned less in 2007 than that family had earned in 2000. Meanwhile, everyday necessities such as energy were becoming more expensive: By 2007, the typical American family paid more for energy than it did for clothes and entertainment combined.

As everyday bills piled up, families borrowed to pay extraordinary bills. Mom needs nursing care? Junior got admitted to Chapel Hill? The roof needs refixing? No worries -- just cash out with a cheap refinance deal.

In the 1950s, the total debt of all American households amounted to less than one-third the nation's gross domestic product. In 1980, household debt amounted to less than one-half. As recently as 1990, it was still under 60 percent. In 2000, it was under 70 percent. On the eve of the 2008 crash, total household debt had bulged to 96 percent of gross domestic product.

All this borrowing might look like the road to ruin. And in fact it was the road to ruin. But that's not how it looked at the time. At the time, it looked like a bargain. Between 1980 and 2008, the household debt load doubled as a share of the economy. Yet the interest cost to carry that debt rose much more modestly. In 1980, the average American family devoted about 13 percent of its disposable income to debt service; by 2008, the average family was spending about 17 percent of its disposable income to service debt.

Why was debt so cheap?

This takes us to another fundamental cause of the crisis: the growth of China.

Maybe you've heard that we bought a lot of goods from China and now we are deeply in debt to China. That's true obviously -- but the cause and effect are upside down.

China lent us a lot of money so that we would keep buying Chinese goods.

Export booms do not usually last very long. The exporting country accumulates more and more of the importing country's currency. Eventually the exporting country decides it wants to use some of that currency. It exchanges the importing country's currency for its domestic currency -- and that has the effect of making its exports more expensive. The boom bumps up against its own natural limits.

That did not happen with China. Desperately eager to create more and more jobs to employ the tens of millions of peasants flowing into China's huge cities, China not only accumulated dollars by the hundreds of billions -- it held them. Then it went into the foreign currency market to buy still more billions of dollars, sometimes $1 billion a day.

All that dollar buying prevented China's currency from going up in value, which would have increased the price of China's exports -- and that kept China's factories turning.

What do you "buy" when you buy "dollars"? There are only so many Benjamins in the world, nowhere near enough. Buying "dollars" means buying dollar-denominated debt, and far and away the biggest source of U.S. dollar debt is U.S. mortgage debt.

With China so eager to buy, U.S. bankers went to work to create mortgage paper to sell. It didn't have to be good-quality paper -- the Chinese didn't really care about that. Did you get a great deal on your refi in 2005? Thank the Central Bank of China.

American homeowners borrowed because they could not earn enough. China loaned to keep its factories turning. Money flowed in a frenzied torrent across the Pacific. And somebody had to make it all happen: Wall Street. It created the debt instruments China wanted to buy and packaged the mortgages that Main Street felt pressured to sell. With trillions of dollars changing hands, even a small percentage fee could pay a lot of people a lot of billions in fees.

No doubt some of those fee-takers did abusive things. But the whole dynamic was abusive and dangerous. And so-called financial reform is a petty distraction from that larger, more important, and more urgent dynamic: raising American incomes so Americans borrow less, and redirecting Chinese trade to the home market so that the Chinese lend less. Until we achieve those two things, any recovery will only invite the next disaster.

Source : CNN

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Washington has always helped set rules for Wall Street

Princeton, New Jersey (News Terupdate) - On Sunday, Sens. Chris Dodd and Richard Shelby said that they were close to a bipartisan compromise on financial regulation, which could be reached as early as this week.

Yet many Republicans are attacking the regulations by painting them as yet another example of big government taking over private markets. Even if the bill will likely pass, GOP leaders are planning to use this floor debate to raise philosophical concerns about the role of government in economic life.

As with health care, these Republicans said, the legislation would allow the federal government to control financial decisions in the private sector on Wall Street and squelch private initiative. In The Washington Post, former House Speaker Newt Gingrich has called the Obama-Reid-Pelosi team a "secular-socialist machine."

In response, President Obama traveled to New York to deliver a very different kind of message. Rather than castigating the bankers or threatening a government takeover, he called on Wall Street to "join" the administration in this reform, claiming that the new rules were in the "best interest of our financial sector."

Obama's argument picks up on a long-standing tradition in American liberalism, namely that the federal government has always been needed to protect and strengthen private markets. Historians have shown how the federal government has been essential to the development of our market-based economy. Government and markets have gone hand in hand.

During the 19th century, as University of Virginia historian Brian Balogh showed in his recent book, "A Government Out of Sight," federal and state policy helped create the foundation for the American economic system. Rather than a laissez-faire period, it was a time when the federal government protected property rights, funded public infrastructure projects -- as roads and canals -- and protected international and domestic trade routes.

In the early 20th century, federal policy remained integral to the vitality of the corporate economy. At a time when radical political movements challenged America's political and economic status quo, progressive-era legislation attempted to curb the worst behavior of the new economic titans so that the nation would not move leftward. As President Theodore Roosevelt explained, he wanted to distinguish "good" trusts from "bad" trusts so that Americans would have faith in the former and not embrace socialism or anarchism.

During the heyday of economic regulation, the New Deal, the story was very much the same. The sweeping financial reforms that were put into place by Democrats were a far cry from the type of socialist ideas sweeping through parts of Europe, though many of President Franklin D. Roosevelt's opponents charged him with being on the far left. But in fact FDR wanted to save capitalism by restoring confidence in market institutions.

The government ensured the savings of Americans in their banks through the Federal Deposit Insurance Corp. and imposed numerous regulations on Wall Street so that financiers could not engage in the kinds of destructive practices that led to the market crash in 1929.

The federal government separated investment and commercial banks, created financial disclosure rules, supervised the issue of new securities and more. FDR's message was as much about trusting markets as government. As he told voters in one fireside chat, "it is safer to keep your money in a reopened bank than under the mattress."

As with sports, competition must take place within a certain set of rules, the president understood. When institutions won't impose those rules themselves, the government must help do so.

In 2008, the federal government was once again called upon to save our capitalist system. This time, relief came from a Republican, President George W. Bush, who responded to the terrifying market crash by infusing the system with capital through the Troubled Asset Relief Program to avoid a total meltdown.

When he signed TARP into law, Bush argued, "The legislation is a critical step toward stabilizing our financial markets and ensuring an uninterrupted flow of credit to households and businesses."

Now, Obama is finishing the job that Bush began. The president is pushing for permanent regulations to curb the speculative and fraudulent behavior that robbed America of huge sums of their savings, made wealth vanish and crippled many of our important civic institutions.

The president is calling for Congress to pass legislation that constrains the kinds of risks that banks are allowed to undertake, creates new consumer protection rules and requires more transparency. By restoring the faith of Main Street in Wall Street, the government can make our markets strong once again.

The legislative debate over the proposed financial regulations must address whether the bill contains the best possible set of reforms to improve the stability of Wall Street. The bill is far from perfect.

In a letter to Sens. Harry Reid and Mitch McConnell, a group of policy experts -- ranging from the liberal economist Dean Baker to Lynn Turner, former chief accountant of the Securities Exchange Commission -- have pointed out fixes that must be made, such as requiring balance sheet reporting on all liabilities.

But on the fundamental question, as to whether the government has a right to intervene in these issues and whether these reforms somehow break with the traditions of American history, that is a much easier question to resolve. While there has been tension between markets and government, it is equally important to remember that a close partnership has always existed in this country. The ties between government and markets are as American as apple pie. In other words, government can help markets prosper.

Source : CNN

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Obama to push for tougher financial rules for Wall Street

New York (News Terupdate) - President Obama is expected to call on Wall Street to join him in his efforts to reform the financial sector in a visit to Manhattan Thursday.

The address at Cooper Union For The Advancement Of Science & Art will take place just blocks from the heart of Wall Street.

Likely provisions of any reform legislation would include making banks and financial firms strengthen their capital cushions, as well as creating a new process for taking down giant failing companies and preventing future Wall Street bailouts.

Other topics for reform would include creating a new consumer financial protection regulator and keeping an eye on the kind of complex financial dealings that led to the crisis.

Federal Reserve chairman Ben Bernanke weighed in on one of those issues last week.

During a congressional hearing, when asked whether a consumer financial regulator should be able to act independently of existing regulators, Bernanke said that unchecked independence could adversely impact credit availability for consumers.

Once back in Washington, the president is expected to ask congressional leaders for bipartisan support on a reform bill.

On Wednesday, the Senate Agriculture Committee voted 13-8 in favor of a bill, which would impose regulations on the complex system of Wall Street trades known as derivatives.

Watch how derivatives work

Senate leaders now will look at merging the measure with a financial regulations reform bill already passed by the Senate Banking Committee that is headed for debate by the full chamber.

The House passed a regulatory overhaul in December.

The White House has started some preliminary discussions on Capitol Hill, with Obama meeting with congressional leaders last week in the administration's push for regulatory overhaul.

"All of us recognize that we cannot have a circumstance in which a meltdown in the financial sector once again puts the entire economy in peril," Obama said. "I'm absolutely confident that we can work out an effective bipartisan package that assures that we never have too big to fail again."

Source : CNN

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