WASHINGTON, June 19 - Five months after President Bush was sworn in for another four years, his political authority appears to be ebbing, both within his own party, where members of Congress are increasingly if sporadically going their own way, and among Democrats, who have discovered that they pay little or no price for defying him.

In some cases, Mr. Bush is suffering mere political dings that can be patched up, like the votes by the House this past week to buck him on withholding dues to the United Nations and retaining a controversial provision of the USA Patriot Act.

In others, the damage is more than cosmetic, as in the case of stem cell research, an issue on which a good portion of his party is breaking with him. In a few instances - most notably the centerpiece of his second-term agenda, his call to reshape Social Security - he is dangerously close to a fiery wreck that could have lasting consequences for his standing and for the Republican Party.

On Monday, Mr. Bush will face another test of his clout, when the Republican-controlled Senate tries again to overcome Democratic opposition and confirm John R. Bolton as ambassador to the United Nations. And with his poll numbers sinking as voters grow more restive about Iraq and the economy, he faces additional big challenges in coming weeks and months, from legislative battles over energy, trade and immigration to the possibility of a divisive Supreme Court confirmation fight.

The cumulative effect of his difficulties in the last few months has been to pierce the sense of dominance that he sought to project after his re-election and to heighten concerns among Republicans in Congress that voters will hold them, as the party in power, responsible for failure to address the issues of most concern to the public.

"The political capital he thought he had has dwindled to very little, and he overstated how much he had to begin with," said Allan J. Lichtman, a presidential historian at American University in Washington.

"Congress is like Wall Street - it operates on fear and greed," Mr. Lichtman said. "The Democrats don't fear him anymore, and they're getting greedy, because they think they can beat him. The attitude you see among Republicans in Congress is, my lifeboat first."

In the last week, Mr. Bush has responded by lashing out at Democrats, casting them as obstructionists, a strategy that carries some risk given that it seems to acknowledge an inability by Republicans to carry out a governing platform. Searching as well for a more positive message, the administration, which has always been reluctant to acknowledge that events are not unfolding precisely as planned, has embarked on a public relations campaign intended to reassure Americans that Mr. Bush is attuned to their concerns.

Mr. Bush has offered nothing new in the way of policy but is instead reiterating his views that the war in Iraq is worth the sacrifices it has demanded and that his approaches on issues like energy and trade are the best way of addressing economic jitters. But his message is being undercut somewhat by the more outspoken mavericks in his own party.

Among them are two potential candidates for Mr. Bush's job: Senator Chuck Hagel of Nebraska, who in an interview in the current issue of U.S. News & World Report said the administration's assertions on Iraq were "disconnected from reality," and Senator John McCain of Arizona, who on NBC's "Meet the Press" on Sunday disputed Vice President Dick Cheney's characterization last week of the Iraqi insurgency as being in its last throes.

It is far too early to dismiss Mr. Bush as a lame duck. He remains exceedingly popular among Republicans, he has a skilled and aggressive political team around him, and he has had a way in the past of teasing full or partial victories from dire-looking situations. Even if he has to wheel and deal, he stands a good chance of signing an energy policy bill and a trade agreement with Central American nations this summer.

But he has already had to postpone his next big initiative, an overhaul of the tax code. And barring some crisis that creates another rally-round-the-president effect, analysts said, Mr. Bush's best opportunity to drive the agenda may be past.

To many Republicans, Mr. Bush's problems are not unexpected given his willingness to take on politically difficult issues like Social Security and immigration. They say that divisions within the party are manageable and that Mr. Bush's doggedness and personal appeal ensure that he will still drive the debate on Capitol Hill and around the country, even if he does not get everything he wants.

"More is being done than it appears," said Representative Peter T. King, Republican of New York, pointing to the enactment this year of laws changing the bankruptcy system and limiting class-action lawsuits, as well as Mr. Bush's success in moving more of his judicial appointments through the Senate.

But, Mr. King added, "it's still going to be difficult on Social Security and immigration."

"He will be in control of the agenda, but that control is not going to be as emphatic as it was in the first four years," Mr. King said.

Democrats said Mr. Bush's problems were of his own making, and stemmed from a tendency toward insistence on doing things his way and viewing bipartisanship as nothing more than winning over a few Democrats to get legislation passed.

Mr. Bush and his administration now find themselves with little or no support from Democrats and with a Republican Party that has proved reluctant to support him on a number of fronts.

"Their domestic agenda is really stalled, and they're pretty much looking for an exit ramp," said Senator Ron Wyden, Democrat of Oregon. "They seem to have been unwilling to shift from the politics of a first-term president who has to run for re-election into the clear-eyed policy of a second-term president who wants to be able to point to substantive achievements."

To some extent, Mr. Bush's problems are a result of diverging political interests: the lawmakers he is asking to support him on difficult issues like Social Security, trade and immigration have to run for re-election, many of them next year, while he has the luxury of thinking about his place in history and reshaping, for the long term, politics and policy.

The current situation also reflects Mr. Bush's style of not giving an inch until defeat is certain, and only then compromising or capitulating.

At a recent meeting with Republican Congressional leaders, Mr. Bush told them, "We're on the verge of getting a lot of things done," according to a White House official who was there. The 55 Republican senators have been invited to hold their weekly policy luncheon at the White House on Tuesday, a gesture that is part of an effort by the administration to respond to grumbling among Republicans that the White House has failed to open good lines of communication with Capitol Hill.

"While it's been a rough 45 days, Bush can and will get back on track, and all those jitters will go away," said Scott W. Reed, a Republican consultant who managed Bob Dole's 1996 campaign for president.

But Mr. Lichtman said history suggested that it was difficult for second-term presidents to regain their clout in domestic policy once they had dissipated it.

"Second terms have never been redeemed by domestic policy," he said. "It's very difficult once you've had problems in domestic policy, as they almost all do, to come back. To the extent you've had them come out successfully, it's because of foreign affairs."

PARIS - Anyone who still believes all the Anglo-American propaganda about the Iraq invasion is now faced by deep disillusionment.

On July 2002, the head of MI-6, Britain’s Secret Intelligence Service, briefed PM Tony Blair and his cabinet on US plans to attack Iraq. Leaked to the British media, the document has become infamous as the `Downing Street Memo.’

Sir Richard Dearlove (`M’ to James Bond fans) reported that President George Bush had decided to invade oil-rich Iraq eight months later on March, 2003, in a war `to be justified by the conjunction of terrorism and weapons of mass destruction. The intelligence and facts are being fixed around the policy.’

Translation: the US and British governments would concoct false charges against Iraq to justify war. After Britain’s Attorney General warned unprovoked invasion of Iraq would violate international law, Dearlove noted with oily cynicism, `If the political context were right, people would support regime change.’ Translation: use propaganda and scare tactics to whip up war fever.

British and US intelligence agencies were ordered to produce `evidence’ to justify a war. In the US, faked `evidence’ and grotesque lies were fed to the frightened public by neoconservatives and a frenzied national media. The US Congress, supposedly an independent and equal arm of government, clapped for the war like trained seals in a circus.

In Oct 2002, President Bush actually claimed in a national speech that Iraqi drone aircraft were poised to shower germs and poison gas on America. The Iraqi `drones of death’ were supposedly being carried aboard Iraqi freighters lurking in the North Atlantic.

VP Dick Cheney insisted this absurd, comic book fantasy was `the smoking gun’ that justified invading Iraq.

The vice president, who more often than not resembles Dr. Strangelove in the wonderful film of that name, had the nerve this week to accuse Democrat Howard Dean of being `over the top’ for speaking the truth about American politics. What chutzpah. It is the rarely-seen Cheney, an equivalent of Shia Iran’s Hidden Imam, who has been over the top for a very long time.

Cheney’s wild claims about mushroom clouds and the absolute certainty of finding weapons of mass destruction in Iraq made him appear both highly irrational, even downright unstable – what the French term `un enragé.’

Bush, in his state of the Union speech, warned Iraq was importing uranium from Niger to build nuclear weapons aimed at the US. Bush’s ludicrous claim was based on a forged document created by a leading Israeli agent of influence in Washington who had played a major role in the Iran-Contra arms scandal during the Reagan Administration. The forgery was back-channeled to the Pentagon through neo-fascists in Italian military intelligence closely linked to the neoconservative network in the United States.

And so it went. Lie after lie. Scare upon scare. Fakery after fakery, trumpeted by the tame US media that came to resemble the lickspittle press of the old Soviet Union. Ironically, in the end, horrid Saddam Hussein turned out to be telling the truth all along while Bush and Blair were not.

MI-6’s smoking gun memo would have forced any of Europe’s democratic governments to resign in disgrace. But not Bush and Blair. Far from it. Though hounded over his Iraq lies by Britain’s media, Blair squeaked through a tight election only thanks to the pathetically inept opposition Conservatives, who also backed the Iraq war.

By contrast, US mass media amply confirmed charges of bias, politicization, and acting as government mouthpieces that are being leveled against it. The US media at first ignored the Downing Street memo, then grudgingly devoting a few low-key stories to the dramatic revelation. The cowardly White House press corps never dared raise the issue until a British journalist for Reuters committed lese majesté by asking the president about it. Such is the depths to which the US mainstream media has sunk.

At the same time, front-pages of major newspapers and TV broadcasts featured revelation about the identity of the Nixon era’s `Deep Throat’ leaker of secrets. He turned out to be part of a self-serving cabal of Nixon-haters rather than a selfless patriot as long believed.

In retrospect, President Nixon’s misdeeds appear minor compared to George Bush’s illegal, unnecessary and catastrophic war against Iraq that has so far killed tens of thousands of Iraqis and Americans, cost US $275 billion (plus another $55 billion for Afghanistan), and made America’s name mud around the globe.

But as Nazi leader Herman Goering correctly observed, a government can get way with anything provided it scares its citizens enough.

France and Germany both knew from their own intelligence services that the Anglo-US accusations against Iraq were nonsense and that Saddam was no threat to anyone save his own miserable people. That is why they refused to join the war in spite of US threats and tempting offers of oil concessions in postwar Iraq. Britain, by contrast, readily accepted and joined in concocting justification for war – viz, the notorious `Dodgy Memo’ about Iraq from HM Government that turned out to be a pastiche of erroneous press reports and a plagiarized graduate thesis that was also dead wrong.

The US ordered its intelligence services to shut their eyes, toe the White House party line, and accept as genuine patently false reports about the Mideast from known disinformers and self-serving sources that wanted to see Iraq destroyed.

Two well-known crooks, Iranian Manuchar Gorbanifar and Iraqi exile Ahmad Chalabi, both with close ties to Israel’s Mossad and the neocon network, became the principal source of lies about Iraq for the White House and US media, including the august New York Times.

But Bush and Blair were not the only dissemblers . Vice President Dick Cheney, CIA boss George Tenet, aka `Dr Yes,’ Colin Powell, Condoleeza Rice, Richard Perle, Paul Wolfowitz, Douglas Feith, and other senior administration officials who tirelessly promoted falsehoods over Iraq and war fever were just as guilty of deceiving and misleading the American people and Congress.

The only Anglo-US official who can hold his head high over the sordid Iraq scandal is Britain’s former Foreign Secretary, Robin Cook, who refused to be party to the Blair-Bush lies and resigned. No senior US official had the guts or ethics to follow Cook’s admirable example.

New documents from across the Atlantic paint a picture of a President bent on war and administration officials determined to deliver war in Iraq at any cost.

Against the backdrop of the Bush Administration’s public statements, the documents raise questions about whether the Blair and Bush administrations covered up earlier actions after the invasion.

The original Downing Street Memo, initially reported by The Daily Telegraph, includes the transcribed official minutes of a 2002 meeting between British Prime Minister Tony Blair, members of British intelligence, MI-6 and various Bush officials.

The most damning part of the minutes, as noted by MI-6 director Richard Dearlove, was that “Bush wanted to remove Saddam, through military action, justified by the conjunction of terrorism and WMD. But the intelligence and facts were being fixed around the policy.”

Confirming the documents

Six additional UK Iraq documents, acquired by RAW STORY, reveal the depth and breadth of the plan to go to war and the extent of the deceit on the part of the President and his cabinet, in conjunction with the Blair government.

The documents are transcribed photocopies in PDF format and were acquired from a British source and corroborated by Michael Smith, the journalist who first received the original leaked memos. This site validated them through an independent source and with Smith.

“I was given them last September while still on the [Daily] Telegraph,” Smith, who now works for the London Sunday Times, told RAW STORY. “I was given very strict orders from the lawyers as to how to handle them.”

“I first photocopied them to ensure they were on our paper and returned the originals, which were on government paper and therefore government property, to the source,” he added.

The Butler Committee, a UK commission looking into WMD, has quoted the documents and accepted their authenticity, along with British Foreign Secretary Jack Straw. Smith said all originals were destroyed in order to both protect the source and the journalist alike.

“It was these photocopies that I worked on, destroying them shortly before we went to press on Sept 17, 2004,” he added. “Before we destroyed them the legal desk secretary typed the text up on an old fashioned typewriter.”

The copying and re-typing were necessary because markings on the originals might have identified his source, Smith said.

“The situation in Britain is very difficult but with regard to leaked documents the police Special Branch are obliged to investigate such leaks and would have come to the newspaper's office and or my home to confiscate them,” he explained. “We did destroy them because the Police Special Branch were ordered to investigate.”

The documents, including the original Downing Street minutes, have been vetted by other foreign and domestic news organizations (see Raw Story Timeline).

Documents at a glance

It is important to introduce these documents, first, as they appear, in their own right with key points highlighted. RAW STORY has constructed a timeline of events to better clarify the process of “From Policy to War.” (Timeline). A quick overview of each of the most recent documents appears below.

NEW YORK (AP) - The director of the CIA says he has an "excellent idea" where Osama bin Laden is hiding, but that Washington's respect for sovereign countries makes it more difficult to capture the al-Qaida chief.

In an interview with Time for the magazine's June 27 issue, Porter Goss was asked about the progress of the hunt for bin Laden.

"When you go to the question of dealing with sanctuaries in sovereign states, you're dealing with a problem of our sense of international obligation, fair play," Goss said. "We have to find a way to work in a conventional world in unconventional ways [that are acceptable to the international community]."

Comment: What???!!! "International obligation"???!!! "Fair play"???!!! What drug is this man on? These are the same people who lied to the world about weapons of mass destruction in Iraq, about the links between Saddam and the 9/11 hijackers (Saddam met with Rumsfeld way back in 1983 long before Rumsfeld and his friends started planning 9/11), and who would now have us believe that the Downing Street memo is either a forgery or says something other than what it says.

Asked whether that meant he knew where bin Laden is, Goss responded: "I have an excellent idea where he is. What's the next question?"

Goss did not say where he thinks bin Laden is, nor did he specify what country or countries he was referring to when he spoke of foreign sanctuaries. But American officials have long said they believed bin Laden was hiding in rugged mountains along the Afghan-Pakistani border.

[...] The CIA chief did not mention Pakistan by name in his interview with Time.

But his comments come after a row between Islamabad and the departing US ambassador to Afghanistan, Zalmay Khalilzad, who has frequently accused Pakistan of sheltering terror suspects.

The US envoy was angered last week after Pakistani television station Geo interviewed a senior Taleban commander in Afghanistan, who said both Bin Laden and Taleban leader Mullah Omar were alive and well.

"If a TV station can get in touch with them, how can the intelligence service of a country which has nuclear bombs and a lot of security and military forces not find them?" asked Mr Khalilzad in an interview with an Afghan television station.

Pakistan's Foreign Ministry spokesman called Mr Khalilzad's remarks "irresponsible".

Pakistan was the main backer of Afghanistan's hardline former Taleban rulers until President Musharraf joined the war on terror in late 2001.

Hundreds of terror suspects, including a string of men alleged to be senior al-Qaeda figures, have been arrested in Pakistan since then.

The euro gained some ground back from the dollar last week, closing at 1.2282 dollars, up 1.5% from the previous Friday's close of 1.2106. That put the dollar at 0.8142 euros compared to 0.8261 the week before. Gold closed at $439.50 an ounce on Friday, up 3.1% from last Friday's close of $426.40. Gold converted to euros would close at 357.84 an ounce, up 1.6% from the previous Friday's close of 352.22. Oil closed at 58.47 dollars a barrel, up 9.8% from the previous week's close of $53.23. Oil in euros would be 47.61 a barrel up 8.3% from last week's 43.97. Comparing oil to gold, at Friday's close an ounce of gold would buy 7.52 barrels of oil, compared to 8.01 a week earlier, a rise of 6.5 percent for oil compared to gold. In contrast to commodities, the U.S. stock market was quiet, with the Dow closing at 10,623.07, up 1.1% from 10,512.63 a week earlier. The NASDAQ closed at 2,090.11 up 1.3% from 2,063.00 the previous Friday. As for long-term U.S. interest rates, the yield on the ten-year U.S. Treasury bond closed at 4.08 up four basis points (hundredths of a percent) from the previous week's 4.04.

With the price of oil hitting a new record on Friday before falling back a bit and with gold increasing sharply as well, as well as a record-high current accounts deficit (in a nutshell the difference between the money coming in the U.S. and the money going out) for the United States in the first quarter of 2005, it is not hard to see trouble ahead in the very near future.

We have written about both the "conundrum" described by Alan Greenspan of falling long-term interest rates and rising short-term rates and the potential problems with the rapid rise of hedge funds. Nick Beams ties the two together nicely:

Greenspan first raised the issue in his testimony to the US Senate Banking Committee on February 16, noting that long-term interest rates were lower than when the central bank began its series of tightenings. Noting similar declines in the rest of the world, he pointed out that the greater integration of the world's financial markets had increased the "pool of savings", while there was a lower inflation risk premium. However, these developments were not new and could not be the reason for the long-term interest rate decline over the previous nine months.

"For the moment," he continued, "the broadly unanticipated behaviour of world bond markets remains a conundrum. Bond price movements may be a short-term aberration, but it will be some time before we are able to better judge the forces underlying recent experience."

Nearly four months on, the Fed chief seems no closer to an explanation. In an address to a bankers' conference in Beijing on June 6, he pointed out that the "pronounced decline" in the return on long-term US Treasury bonds - down by 80 basis points, while the federal funds rate increased by 200 basis points over the same period - was "clearly without recent precedent".

Greenspan put forward several possible explanations for this unusual behaviour. Among them were: the possibility that the market was signaling future economic weakness; that pension funds are making significant bond market purchases and pushing down interest rates; that the accumulation of US Treasury debt by foreign central banks is lowering long-term rates; and that the greater integration of financial markets has increased the supply of savings, thereby lowering the interest rates. However, none of these explanations seemed to provide a satisfactory answer.

Whatever the cause of this unexpected development, Greenspan made clear it was one of the factors behind increased risk in financial markets as investors reached for higher returns.

"The search for yield is particularly manifest in the massive inflows of funds to private equity firms and hedge funds. These entities have been able to raise significant resources from investors who are apparently seeking above-average, risk-adjusted rates of return, which, of course, can be achieved only by a minority of investors. To meet this demand, hedge fund managers are devising increasingly more complex trading strategies to exploit perceived arbitrage opportunities, which are judged - in many cases erroneously - to offer excess rates of return."

In other words, the falling rate of return on long-term risk-free Treasury debt has lowered rates of return all along the line. Consequently, to obtain the same rate of return as in the past - or to increase it - financial investors must undertake riskier investments, often through hedge funds which trade in increasingly complex financial instruments.

This process, Greenspan warned, could mean that "after its recent very rapid advance, the hedge fund industry would temporarily shrink, and many wealthy fund managers and investors could become less wealthy." Such an outcome would not pose many problems for the financial system as a whole were it not for the fact that hedge funds often enjoy large support from banks and other financial institutions.

Here Greenspan struck an optimistic note, suggesting that "so long as banks and other lenders to these ventures are managing their credit risks effectively, this necessary adjustment should not pose a threat to financial stability." That is, so long as things are going well, they should continue to go well.

But this upbeat assessment does not sit well with Greenspan's admission towards the conclusion of his remarks, that "the economic and financial world is changing in ways that we still not fully comprehend."

Cheap credit

Significantly, Greenspan did not point to one development that some observers regard as playing a central role in the present peculiar situation - the rapid increase in financial liquidity over the past five years fueled by the accommodative monetary policies pursued in the US, Europe and Japan.

The reason for this omission is not hard to find - the policy of increased liquidity has come to occupy a central place in the policy platform of Greenspan in the face of growing problems in the US economy. In fact, his first major decision as Federal Reserve Board chairman was to open the lines of credit from the central bank in order to prevent a global financial and economic crisis following the stock market crash of October 1987.

When the stock market began to rise rapidly in 1995-96, Greenspan acknowledged, in the confines of meetings of the Federal Reserve, that a "bubble" was starting to develop. But even after issuing his famous warning of "irrational exuberance", nothing was done. In fact, Greenspan became one of the chief boosters for the so-called "new economy" of the late 1990s, where increased productivity, globalisation, information technology were said to have produced an ever-rising market.

Following the bursting of the bubble in March 2000, Greenspan initiated a series of cuts in the federal funds rate, eventually bringing it to an historic low of 1 percent in 2003-2004. The sharp reduction in official interest rates has led to the growth of so-called "carry trades" - the process in which investors borrow funds at the low short-term rates in order to lend at higher rates. But the longer it continues, the greater the dangers this process poses for the stability of the financial system. This is because so long as the flow of funds continues, rates of return on less risky ventures start to come down and consequently increasingly riskier financial operations have to be undertaken to achieve the same return as previously.

It would be wrong to conclude, however, that the mounting problems of the global financial system can simply be attributed to the "wrong policies" of Greenspan and the other central bankers. Rather, the fact that the world's central bankers have fueled an increase in the money supply is indicative of deeper problems. Above all, it is a sign of falling profit rates and the ever-present recessionary tendencies within the global economy.

In parallel to the increasing instability and ominous nature of political news lately, the economic situation seems increasingly precarious. Keeping everything afloat by allowing massive debt can only work so long. Strains are beginning to show. It appears that housing foreclosures are up 57% from a year ago in the United States. Given the popularity of interest-only loans lately, we can expect to see a lot more foreclosures and bankruptcies in the near future. And, now that the housing bubble has spread from the United States to much of the rest of the world, the bubble is now being called the largest in history by the Economist:

The worldwide rise in house prices is the biggest bubble in history. Prepare for the economic pain when it pops.

NEVER before have real house prices risen so fast, for so long, in so many countries. Property markets have been frothing from America, Britain and Australia to France, Spain and China. Rising property prices helped to prop up the world economy after the stock market bubble burst in 2000. What if the housing boom now turns to bust?

According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stock market bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stock market bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history.

…And after the gold rush?

The housing market has played such a big role in propping up America's economy that a sharp slowdown in house prices is likely to have severe consequences. Over the past four years, consumer spending and residential construction have together accounted for 90% of the total growth in GDP. And over two-fifths of all private-sector jobs created since 2001 have been in housing-related sectors, such as construction, real estate and mortgage broking.

One of the best international studies of how house-price busts can hurt economies has been done by the International Monetary Fund. Analysing house prices in 14 countries during 1970-2001, it identified 20 examples of "busts", when real prices fell by almost 30% on average (the fall in nominal prices was smaller). All but one of those housing busts led to a recession, with GDP after three years falling to an average of 8% below its previous growth trend. America was the only country to avoid a boom and bust during that period. This time it looks likely to join the club.

Japan provides a nasty warning of what can happen when boom turns to bust. Japanese property prices have dropped for 14 years in a row, by 40% from their peak in 1991. Yet the rise in prices in Japan during the decade before 1991 was less than the increase over the past ten years in most of the countries that have experienced housing booms (see chart above). And it is surely no coincidence that Japan and Germany, the two countries where house prices have fallen for most of the past decade, have had the weakest growth in consumer spending of all developed economies over that period. Americans who believe that house prices can only go up and pose no risk to their economy would be well advised to look overseas.

The rise in foreclosures, a sure sign of the impending end of the housing bubble, in the face of massive infusion of debt-driven consumption money into the economy shows that the fundamentals of the economy are much worse then mainstream commentators are letting on. If the economy was not so weak, they wouldn't need to pump so much money into it. Max Fraad Wolf isn't fooled:

Which Macro Economy?

"Despite the uneven character of the expansion over the past year, the U.S. economy has done well, on net, by most measures"
- Federal Reserve Chairman Alan Greenspan June 09, 2005

The above assessment suffers from one problem, it is not really true. The remarks are important as a stark reminder of a powerful sea change in thinking and talking about the economy. For many on Wall Street and at the Fed, the macro economy has been reduced to Fortune 500 profitability and asset market performance. These are certainly important metrics. However, the economy they are not!

The IMF has lowered its forecast for global growth and called attention to risks from US imbalances. The National Association of Business Economists (NABE) just reduced its US GDP growth forecast by 0.2% to 3.4%. More sanguine forecasts are increasingly driven by a differently defined macro economy. We are no longer all on the same page regarding the object of analysis. The relentless search for the positive while ignoring asset bubbles and income redistribution from public view has required shifting focus. It has also required equating the health of the macro economy with equity and bond market performance, corporate profits and the housing market. Maybe this is what they really meant by "the new economy"

Broadly the US economy is composed of the actions and decisions of consumers, firms, governments and international trade and financial flows. Enterprises, particularly the largest 500-1000, have been performing well. There are some glaring exceptions like autos, auto-parts and airlines. Heavy financial-ization in a wide range of firms- taking advantage of cheap money and debt hungry consumers- has reached a fever pitch as a profit driver. Thus, profits remain strong notwithstanding serious risk of profit deceleration from a flattening yield curve, over exposure to highly leveraged consumers and strengthening dollars. One might pause to note that leading American firms have worked ceaselessly over the last 30 years to diversify away from excessive reliance on what used to be called the US economy. BEA estimates suggest that more than a quarter of American corporate profits were earned outside the US in 2004. There is consensus that this number will continue robust growth in the years ahead. This might suggest the dangers of conflating profits with domestic economic health.

The news on the other three fronts, representing over three-quarters of the American economy, is terrible! Our general public, larger by over 10 million since 2001, is just recovering the jobs lost across a short and steep recession followed by a protracted and painful "recovery." In May 2005 we finally recovered March 2001 employment numbers. The stunning growth in employment that has so many crowing is net 0.03% private sector employment growth over 50 months. Since WWII, it has taken an average of 23 months to regain pre-recession employment levels. This time it took 50 months to generate growth not statistically different form 0%. Real median wage and salary growth has under-performed badly. Miraculously consumer spending has risen by several percentage points as a GDP component while wages and salaries have fallen as a national income component. Consumer debt, particularly in the housing area, has grown at super-exponential rates. 2004 marked the all time high water mark for corporate profits as a percentage of national income and a 40 year low for wage compensation as a national income share. Before the new economy, when macro economics referred to more than assets, bubbles and profits, this was called redistribution and viewed with some nervousness. Fortunately our leading lights are busy taking the dismal - and perhaps the science - out of the dismal science.

The Federal Budget, despite recently ballyhooed excitement about mere $350 billion projected shortfalls, is dismally in the red. Long term commitments, prescription drug coverage, $354 billion in under-funded insured pensions and changing population demographics beg for skepticism regarding these projections. In addition, the supplemental spending games and likely high future costs of foreign and domestic security operations mock rosy forecasts. Rapid growth in non-discretionary spending and proposed tax cut extension, render ebullience absurd. So goes another pillar of that strong macro economy. Perhaps, the Fed and many on The Street prefer to focus on Fortune 500 profits and asset markets because they are macro economic high points. However, calling them the macro economy requires jettisoning the presumptions that economic models are based on. Dropping more than half of the measures formerly known as 'the economy' seems to do wonders for bullishness- in many senses of the word.

The Anglo-American branch of the Powers That Be have been as desperate in their patching of the weak economy as they have been in the patching of the failing wars in southwest Asia. That is because the one (the war) was supposed to prop up the other (the economy) and vice-versa. See this, for example, from Stirling Newberry in Newtopia and Truthout:

[In the nineteenth century]the British would fight wars to secure resources, cheap labor, and to open markets. But it meant they had to find gold for currency, and coal for their industry, and later, their navy. The navy built with gold, and run on coal, was used to find more gold and coal. India and Ireland were used to grow food and cotton, allowing more people in Britain to be employed supporting "The Empire" without creating inflation. On the contrary, Victorian England was under deflationary pressure.

This "first era of globalization" expanded trade, but it also created misery in Britain, as wages raced down to parity with colonial wages, and it caused famines in Ireland and India, as the price of food raced upward to the price that the British were willing to pay for it. The Irish potato famine was one example: even as people starved, food continued to be sold to Great Britain. Famine is not caused by a shortage of food for people, but by the people having a shortage of money to buy the food they need.

In the wake of World War II, America set up its own system of triangular trade, because we had most of the working industrial base of the world. In the 1960s and early 1970s, the modern post-war triangular trade system fell apart, in no small part because the exporters of cheap resources rebelled against it. OPEC is the most well-known example of this, but the entire era was one of colonies that had had triangular trade imposed on them rebelling against the nations of Europe. As with the British system of triangular trade, its disintegration left behind high inflation and the collapse of the monetary basis of the old currency. What happened to the pound in the 1790s happened to the dollar in the 1972, with the failure of the Bretton Woods agreement.

As with the British before us, when triangular trade failed, we turned to hegemony, and the implementation of it came to have a name, "The Washington Consensus." This system used the dollar, and the access to oil that it brought, as a lever to open the capital markets and economies of developing nations. The profits from this would be used to keep the dollar as the gateway to a commodity which was both the gold and the coal of the new system: petroleum.

In the larger picture, Iraq was to be our India, not merely a client state, but the place where Americans would go to earn high wages in turning a country into a mirror of ourselves. We were to build hotels, oil infrastructure and other assets.

…The Neo-Victorian world now trying to emerge is being driven by "Conservative" parties that are much like the "Conservative" parties of the late 19th century. Social conservatism creates society that concentration of economic power through hegemony requires. Every prop that people might have that is not part of the hegemonic enterprise is taken away; instead, incentives to buy land and to pour retirement money into the stocks of large corporations are being given, so that each individual is bound to it by personal interest.

Thus, the political fights over Iraq, Social Security, and now the filibuster are not isolated, they are about whether we are going to create the kind of society that a military hegemony requires to sustain itself: filled with people who are desperate for work, a stone's throw from poverty, and feeling themselves surrounded and beset by terrors and disaster. People who, therefore, cling zealously to arbitrary rules and partisan passions. Each fight is not about the margins of a few court decisions, nor a few dollars in a monthly check, nor over how much testing to do in schools - instead, it is over what kind of people we are to become, and what kind of nation we are to be, now, and for a century to come.

Even if things in Iraq had gone according to plan, average Americans would have found themselves in much worse shape economically. Now, however, disaster looms, as failure in the war exacerbates economic failure.

SINGAPORE (Reuters) - Oil prices soared to a record high above $59 a barrel on Monday, extending last week's surge as a threat against Western consulates in OPEC-member Nigeria jolted traders already worried about tight supplies.

Oil climbed more than 9 percent, or nearly $5, last week, drawing buying interest from trend-following hedge funds as prices surpassed the previous early April high.

U.S. light crude for July delivery hit a front-month record $59.18 per barrel, before paring gains to stand up 59 cents at $59.06 at 0439 GMT.

The August contract rose 62 cents to $59.80 a barrel and contracts for the last four months of the year, when oil demand picks up in the northern hemisphere, were all trading above $60.

London Brent crude for August jumped 71 cents to $58.47 a barrel, also a front-month peak.

Market anxiety over oil exports from producer nations resurfaced on Friday after the United States, Britain and Germany closed their consulates in Nigeria's largest city Lagos due to a threat from foreign Islamic militants. [...]

POLITICAL RISK

An industry survey in Boston last week showed that more than half the respondents considered "political upheaval in a strategic country" as the most likely cause for disruption to oil supply.

In Iran, the world's fourth-biggest producer, hard-liner Mahmoud Ahmadinejad made a surprisingly strong showing in presidential elections, pitting him against pragmatic cleric and former president Akbar Hashemi Rafsanjani in Friday's run-off. [...]

Prices are up 36 percent since January as speculative funds bet strong global economic growth will strain supplies, especially if there are any unexpected disruptions, such as last week's shutdown by Royal Dutch/Shell of a gasoline unit at it's Deer Park, Texas, refinery. The unit may be shut for up to two weeks. [...]

STANFORD, Calif. - As an eager freshman in the fall of 2001, Andrew Mo's career trajectory seemed preordained: He'd learn C and Java languages while earning a computer science degree at Stanford University, then land a Silicon Valley technology job. The 22-year-old Shanghai native graduated this month with a major in computer science and a minor in economics. But he no longer plans to write code for a living, or even work at a tech company.

Mo begins work in the fall as a management consultant with The Boston Consulting Group, helping to lead projects at multinational companies. Consulting, he says, will insulate him from the offshore outsourcing that's sending thousands of once-desirable computer programming jobs overseas. [...]

Mo's decision to reboot his nascent career reflects a subtle but potentially significant industry shift. As tens of thousands of engineering jobs migrate to developing countries, many new entrants into the U.S. work force see info tech jobs as monotonous, uncreative and easily farmed out - the equivalent of 1980s manufacturing jobs.

The research firm Gartner Inc. predicts that up to 15 percent of tech workers will drop out of the profession by 2010, not including those who retire or die. Most will leave because they can't get jobs or can get more money or job satisfaction elsewhere. Within the same period, worldwide demand for technology developers - a job category ranging from programmers people who maintain everything from mainframes to employee laptops - is forecast to shrink by 30 percent.

Gartner researchers say most people affiliated with corporate information technology departments will assume "business-facing" roles, focused not so much on gadgets and algorithms but corporate strategy, personnel and financial analysis.

"If you're only interested in deep coding and you want to remain in your cubicle all day, there are a shrinking number of jobs for you," said Diane Morello, Gartner vice president of research. "Employers are starting to want versatilists - people who have deep experience with enterprise-wide applications and can parlay it into some larger cross-company projects out there."

Comment: You see, it's not that psychopathic US corporations are transferring high tech jobs overseas; the problem is that US employees aren't being versatile enough...

Career experts say the decline of traditional tech jobs for U.S. workers isn't likely to reverse anytime soon.

The U.S. software industry lost 16 percent of its jobs from March 2001 to March 2004, the Washington-based Economic Policy Institute found. The Bureau of Labor Statistics reported that information technology industries laid off more than 7,000 American workers in the first quarter of 2005.

"Obviously the past four or five years have been really rough for tech job seekers, and that's not going to change - there are absolutely no signs that there's a huge boom about to happen where techies will get big salary hikes or there will be lots of new positions opening for them," said Allan Hoffman, the tech job expert at career site Monster.com. [...]

Thousands of U.S. companies have opened branches or hired contractors in India, China and Russia, transforming a cost-saving trick into a long-term business strategy. Offshoring may be a main factor in eroding enthusiasm for engineering careers among American students, creating a vast supply of low-wage labor in eastern Europe and Asia and driving down worldwide wages.

The average computer programmer in India costs roughly $20 per hour in wages and benefits, compared to $65 per hour for an American with a comparable degree and experience, according to the consulting firm Cap Gemini Ernst & Young.

According to the most recent data from the National Science Foundation, 1.2 million of the world's 2.8 million university degrees in science and engineering in 2000 were earned by Asian students in Asian universities, with only 400,000 granted in the United States. [...]

At Stanford, career experts are urging engineering and science majors to get internships and jobs outside of their comfort zones - in marketing, finance, sales and even consulting.

They suggest students develop foreign language skills to land jobs as cross-cultural project managers - the person who coordinates software development between work teams in Silicon Valley and the emerging tech hub of Bangalore, India, for example.

Stanford listed 268 job postings in its computer science jobs database in the spring quarter - roughly double the number from last year.

But that doesn't necessarily indicate a plethora of traditional tech jobs. About half of the new postings would prefer applicants who speak at least two languages and many were for management-track positions, said Beverley Principal, assistant director of employment services at Stanford.

"When they're first hired at the entry level, just out of school, people can't always become a manager or team leader," Principal said. "But many employers see these people moving into management roles within two years. They need to know how to step into these roles quickly."

The United States has asked Japan to contribute 58 billion yen toward a joint missile defense development project expected to begin in fiscal 2006, The Yomiuri Shimbun learned Sunday.

The U.S. government estimates it will spend a total of 545 million dollars (about 58.3 billion yen) on the project by fiscal 2011 and it has requested Japan make an equal contribution.

Japan contributed 26.2 billion yen to joint Japan-U.S. technical research on the missile defense system between 1999 and 2005.

Amid a climate of curbing defense expenditure, the government will seek to negotiate with the United States to avoid a blowout in project costs and have Japan's contribution slashed.

The joint project will see the development of a 53-centimeter-wide interceptor missile that is currently under technical research.

The missile is expected to greatly expand the area defended from that covered by a 34-centimeter-wide interceptor missile planned for deployment on an Aegis destroyer from the end of April 2007.

The new missile is expected to be capable of distinguishing a ballistic missile from a decoy.

Under the development project, the two governments plan to complete system designs for the advanced interceptor missile by the end of fiscal 2006, and commence full-scale development in April 2007. [...]

The two governments will conduct a final function test on the missile in March, firing a prototype missile to intercept another missile off Hawaii.

Google is planning an online payment system to compete with eBay's PayPal system, according to reports, adding another area of potential online dominance for the search engine company.

The chief executive of an unnamed online retailer said it had been approached by Google to take part in the new service, according to a report in The New York Times. The service was also discussed at an analyst conference, according to The Wall Street Journal.

No other details about the proposed service were published, but it would be a chance for Google diversify its revenue. And it points to the company's Microsoft-styled efforts to use its name and clout to take over online markets.

Google's main source of revenue is selling ads that appear next to search results. The company reported a net income of $369 million for the three months ending 31 March, nearly six times the income for the same period the previous year, on surging advertising revenues. Revenue was $1.3 billion, up 93 percent on the same period in 2004.

Moscow, Russia -- One of the most terrifying weapons of the Cold War is no more. On Wednesday, the Russian Federation scrapped the last of its 36 BZHRK nuclear trains.

While the official reason given for scrapping the system was "the expiration of the guaranteed life cycle," the BZHRK system's capabilities exceeded the newer Topol and Bulava missile systems.

The system thoroughly unnerved the Pentagon because it was impossible to distinguish the BZHRKs from the thousands of regular freight trains traversing the Soviet Union.

On a BZHRK train one carriage housed the command post while three others with collapsible roofs carried RT-23UTTKH Molodets (SS -24 Scalpel) missile launchers. Each missile division included up to five such systems.

BZHRKs were capable of covering up to nearly 1,000 miles in 24 hours. The missiles could be launched both from planned stopovers or any point of the route.

As the Pentagon could not determine which of "the freight trains" carried the nuclear missiles, Washington was forced to deploy a network of 18 spy satellites over the Soviet Union.

Russian rocketry men are certainly nostalgic for the system and claim that the future Topols and Bulavas are not worth even the warhead of a rail-mobile missile.

RIA Novosti reports that the USA tried to get rid of the BZHRKs as soon as the political situation allowed it. In the 1990s the USA secured an undertaking that the BZHRKs would stand still, rather than running across the country.

This allowed the Americans to keep a mere 3-4 spy satellites over Russia instead of the former 16-18. Then, they talked Russian politicians into eliminating the missile systems altogether, most likely after promising them some financing.

Washington -- Russia and China have joined forces in a major U.N. forum to oppose U.S. plans to develop new space weapons. And the move could herald a far more wide-ranging strategic cooperation between the two nations.

Russia and China have joined forces to urge the U.N. Conference on Disarmament to launch a new round of international negotiations to prevent the increased militarization of space.

On June 9, the two countries issued a joint working paper calling for the reactivation of the moribund Committee on Prevention of an Arms Race in Outer Space that was discontinued in 1994. The appeal was delivered to the Disarmament Conference in Geneva.

Hu Xiaodi, China's veteran top negotiator, and one of its most influential policymakers on space weapons systems, told the conference, "The recent developments concerning outer space are worrisome and require more urgent efforts to start work on preventing an arms race in outer space... China and Russia stand for the negotiation, at the Disarmament Conference, of an international legal instrument prohibiting the deployment of weapons in outer space and use of force against outer space objects."

Analyst Sergei Blatov writing for the Eurasia Daily Monitor of the Washington-based Jamestown Foundation called the Sino-Russian initiative "an apparent strategic partnership" and added that it was "understood to be anti-Washington, due to known joint Russo-Chinese opposition to the planned U.S. National Missile Defense (NMD) program."

The initiative is not likely to get anywhere.

Efforts through the U.N. Disarmament Conference to update international space disarmament agreements have deadlocked. The United States has said it sees no need for any new space arms control agreements.

Also, President George W. Bush has appointed a neo-conservative super-hawk, Robert G. Joseph, to replace John Bolton as undersecretary of state for arms control and international security affairs.

Joseph has been a leading advocate of countering Chinese and other potentially threatening ballistic missile build ups not with arms control agreements but with the unilateral U.S. deployment of high tech active, as well as passive weapons systems.

Russian Defense Minister Sergei Ivanov used the occasion of the 50th anniversary of the founding of the famous Baikonur cosmodrome, still operated by Russia but now in independent Kazakhstan, on June 2 to warn that his country was prepared to deploy counter weapons to any new ones the United States launched into the heavens.

"If some state harbors plans to deploy weapons in space or starts doing this, we will certainly take measures in response to this," he said.

Some U.S. and Russian experts have pooh-poohed both the signals from the Bush administration that it intends to boldly develop new strategic capabilities in space and the ability of nations like Russia and China to block them.

However, U.S. experts have warned that Chinese military scientists have been seriously exploring forms of asymmetrical warfare with which they could cost-effectively disable America's space domination.

The easiest way to paralyze the entire U.S. space satellite system in so-called Low Earth Orbit, or LEO, they warn, is by detonating a nuclear weapon above the Earth to produce a radiation belt at the altitude where the satellites orbit.

Satellites built to function for 10 years will then all die a slow death over just a few weeks as they pass through the most irradiated areas.

"Given the inherent vulnerability of space-based weapons systems (such as space-based interceptors or space-based lasers) to more cost-effective anti-satellite, or ASAT, attacks, China could resort to ASAT weapons as an asymmetrical (defense) measure," Hui Zhang, an expert on space weaponization and China's nuclear policy at the John F, Kennedy School of Government at Harvard University told United Press International in a recent interview.

Also, if China, Russia or even North Korea were to detonate a single nuclear weapon in the upper atmosphere it would produce an electromagnetic pulse, or EMP. One nuclear weapon detonated in near space would therefore melt down the entire electronic communications network of the United States. That could ruin the U.S. economy and utterly disrupt society

China has repeatedly made clear that it would vastly increase the size of its intercontinental ballistic missile force, building hundreds more nuclear armed ICBMs if necessary to swamp America's new ABM defenses.

That could include producing as many as 14 or 15 times as many ICBMs with a range of more than 7,800 miles that are able to threaten the United States, Zhang said.

Currently, China has about 20 liquid-fueled, silo-based ICBMs with single warheads. But if the United States deployed a Ground-Based Missile Defense system with 100 to 250 ground-based interceptor rockets, China would probably be willing to build and deploy anything from 100 to almost 300 more warheads and the missiles necessary to carry them, Zhang said.

Even if the new Alaska-California system of ABM interceptors eventually works as planned to prevent individual or small numbers of ICBM launches by so-called "rogue" nations like North Korea or Iran, it was never designed to protect the United States against any attack by Russia's still huge Strategic Rocket Forces, with their 2,500 nuclear weapons - more than 10 times as many as are needed to obliterate every city in the northern hemisphere or every U.S. town and city with a population greater than 50,000.

Neither the West Coast-Alaska ABM system nor any of the visionary "Star Wars" type programs currently being developed at astronomical cost by the Air Force and, to a far lesser extent, by the Army, show any possibility of defending America against the Multiple Independently Targeted Reentry Vehicle, or MIRV, capabilities of the Strategic Rocket Forces.

So far Russia, apart from the United States, is the only other country in the world with a MIRV capability. And China, despite all its astonishing industrial and technological progress, is still believed to be decades away from developing a MIRV capability of its own.

Up to now, Russia has jealously guarded its MIRV technology and refused to sell or share it with China. But there is no doubt that Russian-Chinese strategic cooperation is developing rapidly. And no one truly knows how far it will ultimately go.

This fall, Russia and China are going to hold massive war games that Blagov described as "unprecedented."

"The war games are expected to involve Russia's strategic Tu-95MS bombers firing cruise missiles, presumably an exercise on how to overcome missile defense," he wrote.

Many experts like respected U.S. space analysts Dwayne Day and James Oberg, and Russian Maj. Gen. Vladimir Dworkin have expressed skepticism that most if not all of the projected new U.S. wonder weapons will ever be deployed at all, given the enormous engineering and technological costs and problems involved

But the very fear that they might be could be enough, others warn, to propel Russia and China to level of strategic and technical cooperation they might never otherwise have contemplated against what may only be a "phantom menace."

JERUSALEM (Reuters) - Israel publicly apologized to the United States on Sunday over arms exports to China that have drawn criticism from Washington and strained U.S.-Israeli security ties.

"It is impossible to hide the crisis between Israel and the United States with regard to the security industries. We are doing everything possible to put it behind us," Israeli Foreign Minister Silvan Shalom said on Israel Radio.

The dispute centers on Israel's sale of Harpy attack drones and other advanced technology to China that the Pentagon fears could tilt the balance of power and make it difficult to defend Taiwan, which Beijing deems a renegade province.

"If things were done that were not acceptable to the Americans then we are sorry but these things were done with the utmost innocence," Shalom said in comments that coincided with a visit by Secretary of State Condoleezza Rice.

"The United States is our biggest ally and none of the things that were done were done with the intention of harming U.S. interests," Shalom added.

The dispute has strained security ties between Israel and the United States, its main ally and provider of about $2 billion in annual defense aid, at a time when it seeks U.S. assistance to help implement its planned withdrawal from Gaza.

Commenting on the arms dispute ahead of her trip to Israel and the Palestinian territories, Rice said Israel should be "sensitive" to U.S. concerns on arms sales to China particularly given its close defense cooperation with Washington.

"We have had some very difficult discussions with the Israelis about this. I think they understand now the seriousness of the matter and we'll continue to have those discussions," Rice said.

An Israeli official is negotiating an agreement which would likely enable the United States to supervise Israeli arms sales to countries that Washington deems problematic, including China and India.

Washington torpedoed Israel's multi-billion dollar sale of Phalcon strategic airborne radar systems to China in 2000, citing concerns it could upset the regional balance of power.

U.S. displeasure over the Harpy deal played a role in a decision in April to suspend Israel from involvement in the F-35 Joint Strike Fighter project.

WASHINGTON -- A handful of people at Democratic National Headquarters distributed material critical of Israel during a public forum questioning the Bush administration's Iraq policy, drawing an angry response and charges of anti-Semitism from party chairman Howard Dean on Friday.

"We disavow the anti-Semitic literature, and the Democratic National Committee stands in absolute disagreement with and condemns the allegations," Dean said in a statement posted on the DNC Web site.

Comment: Once again, daring to criticize anything Israel does automatically earns one the label of "anti-Semite". Daring to disagree with the Bush administration makes one "anti-American". Coincidence? We think not.

Rep. John Conyers of Michigan, the senior Democrat on the House Judiciary Committee, organized the forum on Thursday at the Capitol to publicize and discuss the so-called Downing Street memo. That document suggests that the Bush administration believed that war with Iraq was inevitable and that the administration was determined to use intelligence about weapons of mass destruction to justify the ouster of Iraqi President Saddam Hussein.

The Sunday Times of London has reported that the prewar document, which recounts a meeting of Prime Minister Tony Blair's national security team, was leaked from inside the British government. The White House has rejected the memo's assertions.

Conyers' event occurred in a small Capitol meeting room, and an overflow crowd watched witnesses on television in a conference room at DNC headquarters. According to Dean, some material distributed within the DNC conference room implied that Israel was involved in the Sept. 11, 2001, terrorist attacks.

Comment: Well, when confronted with the reports of Israeli "art students" attempting to infiltrate high-security locations in the US and the Israelis caught dancing while filming the smoking WTC towers on 9/11, how can one not make the suggestion that Israel was involved in the Sept. 11 attacks??

One witness, former intelligence analyst Ray McGovern, told Conyers and other House Democrats that the war was part of an effort to allow the United States and Israel to "dominate that part of the world," a statement Dean also condemned.

"As for any inferences that the United States went to war so Israel could 'dominate' the Middle East or that Israel was in any way behind the horrific September 11th attacks on America, let me say unequivocally that such statements are nothing but vile, anti-Semitic rhetoric," Dean said.

"The inferences are destructive and counterproductive, and have taken away from the true purpose of the Judiciary Committee members' meeting," he said. "The entire Democratic Party remains committed to fighting against such bigotry."

(In Greek mythology there is a river in Hades, from which the souls of the dead had to drink, which made them forget all they had done and suffered when they were alive.)

Stephan Korbonski is a well known in Poland. He was the last surviving leader of the Polish Resistance to the Nazi occupation of Poland. Korbonski was one of the Polish resistance leaders that sent word about what was happening in Nazi occupied Europe, reporting about the fate of the Jews, and providing some of the few non-Jewish accounts of the employment of gas chambers and genocide in the German Concentration camps. In 1980 he was recognized as a ‘Righteous Gentile’ by Yad Vashem.[1] No doubt Korbonski was a good guy (search ‘Korbonski’ on this Rabbis long sermon), but even good guys have their limits. Before he died, he published his memoirs, in which he committed the sin of defiling the memory of Jews about the Holocaust. He was pissed that Poles were being blamed as accomplices in the Death Camps and he sought to debunk that idea and highlight the activities of the real accomplices in the slaughter of Jews and Poles alike - other Jews.

Of the latter he writes; “"The victims of the reign of terror imposed by Stalin and carried out by his Jewish subordinates, during the first ten years of the war numbered tens of thousands. Most of them were Poles who had fought against the Germans in the resistance movement. The communists judged, quite correctly, that such Poles were the people most likely to oppose the Soviet rule and were therefore to be exterminated. The task was assigned to the Jews because they were thought to be free of Polish patriotism, which was the real enemy."

The misuse of memory in this way is not confined to the Holocaust, but it does provide a means to demonstrate how memories serve to buttress ideologies, often becoming the core ideology. When the memory becomes the ideology, it is often divorced from reason, and considered above any questioning, and beyond any challenge. It becomes sacred; and to question its tenets is to engage in heresy. To drive home the point, we erect shrines to remember and embed it in the consciousness, and expect others to respect it as they would any religion.

They are not always the same, its intent and its use, and the suspicion is that the stated intent of the memorial hides its true purpose: to justify the opposite of it’s stated intent. WWII holocaust memorials proliferate, because of a need to justify injustice against Palestinians and to ensure that a black curtain veils the atrocious treatment of Palestinians by the Haven of proclaimed children of the WWII Jewish Holocaust - Israel. Such blatant hypocrisy demands a response, and it not surprising that that the entire Holocaust is being value judged based on its use, in furtherance of an agenda that manifests as a despicable exploitation of the dead, and a negation of the Jewish Dead fellow victims. Under such circumstance, it is fitting that good people protest the memory of war dead, that justifies the creation of more war-dead, and undermine the theology that underpins such behavior. Better to forget the dead, than remember, and thereby cause more dead.

Dead Germans, victim of Nazi ideology, and anti-Nazi rage, haunt the collective psyche of Germanic peoples, as they are rendered worthless, as justification for the States existence. It is perverse, that Germany today celebrates the slaughter of millions of their own, in order to retroactively put themselves on the winning side. It is grotesque that an entire nation can be force-fed the notion that they are genetic monstrosities that have a need to perpetually be on guard against demons embedded in their souls. To oppose the psychological rehabilitation of a people, because of a belief in their inherent viciousness, is the epitome of Racism. To insist on it, and demand it, is the practice of Racist supremacy.

“In the Middle Ages, the Crusaders launched their conquests from the Church pulpits. Today, NATO does so in the Holocaust Museum. War must be sacred.”

It is therefore being used to facilitate, and to legitimise a State of affairs that itself incorporates many flawed characteristics. It protects the social order against radical change It is not surprising that those that want to remember the Holocaust are the elite, the privileged holders of power. The poorest people in the world devote absolutely no energy towards holocaust memorials, or in many cases, even remembering atrocities against them. Nobody uses the memory of the Holocaust to act in an unquestionably good way. Usually it is to justify harm being done to others.

[1] In Stefan Korbonski's book The Jews and Poles of W. War II, Korbonski himself a rescuer, recipient of Yad V'shem's Medal of Honor reveals from records: Twenty five hundred Christian Poles were executed for helping Jews. Ninety six Polish men were murdered in village of Biala for the crimes of hiding and feeding Jews. In Stary Ciepielow, the S.S. pushed twenty-three Poles, men, women and children into a barn which they then burned down because they helped Jews.

WASHINGTON -- President Bush's best bets for filling a potential vacancy on the Supreme Court include six solidly conservative federal judges, each of whom has unique qualities that could make all the difference.

The president might choose, for example, a gregarious Texan with whom he might click personally. Or a courtly Virginian who has backed Bush in the fight against terrorism. Or a former Marine long viewed as a leading candidate to become the first Hispanic on the high court.

Speculation about who is on Bush's short list changes daily. So does the betting on when - or even if - an opening might come. But with 80-year-old Chief Justice William Rehnquist battling cancer and eight of the nine justices over age 65, the White House wants to be ready.

Bush has gone about winnowing his list with trademark secrecy. That has not stopped interest groups and court watchers from feverishly ranking and re-ranking their lists of contenders.

Any self-respecting list, however, must factor in the all-important caveat that Bush has shown a great penchant for disregarding conventional wisdom in his appointments. Consider the selection of Dick Cheney as vice president on Bush's ticket in 2000.

"The president goes with his gut," said Wendy Long of the Judicial Confirmation Network, which is rallying support for the White House's judicial nominees. "He's not afraid to fight for someone he believes in if he thinks it's the right person."

The latest thinking focuses on six judges on federal appeals courts. Not one is a household name, but all are very familiar to observers who have scoured their resumes, writings and public utterances for clues as to how they would rule if they were named to the Supreme Court.

One name that consistently pops up is J. Michael Luttig, a Texan who was named in 1991 by the first President Bush to the 4th U.S. Circuit Court of Appeals, based in Richmond, Va.

Luttig, then 37, became the youngest federal appellate judge. At 51, he still has a boyish look and playful manner that belie his judicial experience on what is considered the most conservative of the appeals courts.

"I think the president would hit it off with him," Long said. "They are both from Texas, have a similar sense of humor and share the same judicial philosophy."

Luttig's father was murdered and his mother shot in a 1994 carjacking in their driveway. The judge is known to be particularly tough on criminals, but he has rejected occasional requests that he withdraw from capital cases because of his father's death.

If Luttig were nominated to the high court, liberals would be sure to pounce on his role in helping Clarence Thomas win confirmation to the Supreme Court when Luttig worked in the first Bush Justice Department.

J. Harvie Wilkinson III is one of Luttig's colleagues on the 4th Circuit. The 60-year-old also figures prominently in Supreme Court speculation, particularly if Bush were to fill a vacancy in the chief justice's seat with an outsider rather than elevating one of the associate justices, such as Thomas or Antonin Scalia.

"There's something about the aura of the chief justice that raises the threshold," said A.E. Dick Howard, a Supreme Court expert at the University of Virginia. "I think the list gets narrowed if you're talking about a chief justice."

With his courtly Southern manner, Wilkinson has the gravitas and demeanor of a chief justice. He is known for a somewhat more moderate strain of conservatism than some of the other judges on Bush's short list.

But strategists involved in the confirmation process say there is some concern that Wilkinson is vulnerable to charges he has engaged in judicial activism from the right - using the courts to rewrite laws to his liking rather than simply interpreting them.

In a commencement address at Duke University's law school last month, Wilkinson seemed to be trying to allay that concern.

Not all "judicial interventions" are bad, Wilkinson said, citing the historic Brown v. Board of Education ruling that integrated public schools as one example.

But he added: "What the past century suggests to me is that a call for the greater exercise of restraint on the part of the federal courts is not a rear-guard action but the vital vision for our future."

If Bush wants to make history by appointing the first Latino justice, Judge Emilio Garza of the 5th Circuit, based in New Orleans, is a leading candidate. Nearly 15 years ago, the first President Bush gave serious thought to appointing Garza, now 57, to the high court.

Strategists say the historic nature of such an appointment could be an important factor when Bush has a number of solid conservatives to choose among.

Garza would be sure to be questioned closely about his writings suggesting that the Roe v. Wade ruling that legalized abortion should be overturned.

Three others circulating as candidates for the court are Judges John Roberts of the U.S. Court of Appeals for the District of Columbia Circuit; Michael McConnell of the 10th Circuit; and Samuel Alito of the 3rd Circuit.

Roberts has been given more prominence of late. Low-key, staunchly conservative and with a relatively short paper trail, Roberts is very much considered the safe, establishment candidate in Washington. He has generally avoided weighing in on disputed social issues. Abortion rights groups, however, have maintained that he tried during his days as a lawyer in the first Bush administration to overturn Roe v. Wade.

Others seen as plausible picks by the president, especially given his penchant for picking a wild card, include:

• former Solicitor General Theodore Olson.
• former Deputy Attorney General Larry Thompson.
• Judge Edith Jones of the 5th Circuit.
• Judge Danny Boggs of the 6th Circuit.
• Attorney General Alberto Gonzalez.
• Lawyer Miguel Estrada, who withdrew his nomination to the D.C. Circuit when he ran into a Democratic filibuster.

Jay Sekulow, chief counsel for the conservative American Center for Law and Justice, said he is confident that Bush would nominate someone who shares the president's conservative judicial philosophy.

"I like the nominees the president has put on the appellate bench and that will translate well to his appointments to the Supreme Court," Sekulow said.

Liberal groups already are voicing displeasure with virtually all of the names in circulation.

"Regrettably, the most often mentioned names certainly seem to be individuals in the mode of Justices Thomas and Scalia," said Ralph Neas, who directs the liberal People for the American Way.

"If you look at the last four and half years, the president's always chosen confrontation over collaboration. I hope he surprises me."

US Secretary of State Condoleezza Rice has said Jewish homes in the Gaza Strip will be destroyed when Israel pulls out its troops and settlers.

Speaking after talks in Jerusalem with Israeli PM Ariel Sharon, Ms Rice said the move had been agreed by Israel and the Palestinians.

Earlier, Ms Rice said the pull-out would be an "historic" step which could lead to a Palestinian state.

In Gaza two have died, one Israeli, one Palestinian, in an army base attack.

The Israeli army said one Palestinian militant was killed after militants fired rocket-propelled grenades at Israeli soldiers and civilians on the border between the Gaza Strip and Egypt, and the army returned fire.

One Israeli soldier was also killed in the attack and two others were wounded.

Two Palestinian militant groups, including the Islamic Jihad movement, combined to launch the assault.

They said it was partly a response to Israeli army operations against Islamic Jihad leaders in the West Bank.

The Israelis say the Jihad activists there are continually plotting to carry out attacks despite the current tentative ceasefire between the two sides.

Ms Rice has called on the Palestinian leadership to take action to prevent the kind of attacks witnessed in Gaza.

She is now headed to Jordan for the next leg of her Middle East tour.

Torn down

Ms Rice told reporters about 1,200 Jewish homes would be removed to make way for 1.3 million Palestinians living in the Gaza Strip, one of the most densely populated areas on Earth.

"The view is that there are better land uses for the Palestinians to better address their housing needs," adding that the parties would "work towards a plan for destruction and clean-up".

The fate of Jewish housing in the Gaza Strip following an Israeli withdrawal has been uncertain since Mr Sharon announced his plan in February 2004.

Last week, Israeli Defence Minister Shaul Mofaz warned that destroying the settlers' homes was unnecessary and could endanger the lives of soldiers.

Ms Rice also said Israel had agreed that Palestinian goods and people must be allowed to flow in and out of Gaza at a level that helps revive the economy.

Israel plans to withdraw about 8,500 Jewish settlers and the soldiers who guard them from Gaza and parts of the West Bank beginning in August.

Israel will continue to control Gaza's external borders, coastline and airspace.

Co-operation urged

Earlier, the secretary of state said the planned withdrawal from Gaza could boost the flagging peace process.

She said it was an "historic step that can lead to the eventual resolution and the eventual ability to get to a two-state solution", as envisaged under the internationally-backed roadmap plan for peace between Israel and the Palestinians.

The plan has been largely stalled since its launch in June 2003.

For his part, Mr Sharon said the US had an important role to play to ensure the pull-out - which he described as a very difficult step for Israel - goes smoothly.

The BBC's Barbara Plett in Jerusalem says Ms Rice wants Israel to work together on the withdrawal with the Palestinians, even though it made the decision to leave Gaza without consulting them.

Ms Rice, who met Palestinian leader Mahmoud Abbas on Saturday, will later travel to Saudi Arabia and Egypt after going to Jordan to discuss democratic reforms.

GAZA, June 20 (Xinhuanet) -- A senior Palestinian security official said on Monday the recent surge of militant attacks on Israel was aimed at embarrassing the Palestinian National Authority (PNA) ahead of the Israeli Gaza pullout.

Tawfeek Abu Khousa told reporters that the recent escalation of violence in the Gaza Strip was "a desperate attempt by some militant groups to weaken and embarrass the PNA."

Terming the new bloodshed as "political blackmail" that can only bring negative impact on the Palestinian national unity, Khousa said, "Such attempts (against the PNA) can never be accepted and allowed."

The senior official also urged the militant groups to be committed to the "period of calm" for the sake of the national interests.

Earlier in the day, an Israeli civilian was killed during a Palestinian militant ambush in the West Bank while a Palestinian was shot dead and another wounded by Israeli gunfire in eastern Gaza.

In a spree of violence on Saturday and Sunday, an Israeli soldier and at least three Palestinian militants were killed in Gaza with casualties on both sides.

The recent stepped-up violence has cast a clout over a coming summit of Israeli Prime Minister Ariel Sharon and Palestinian leader Mahmoud Abbas due on Tuesday.

The two sides are expected to discuss coordination over the Israeli pullout from Gaza and the northern West Bank in mid August.

Israel has said the pullout would not proceed under Palestinian fire and that there would be no progress on the internationally-supported road map peace plan unless the PNA dismantles militant groups.

Attacks on Israeli targets have dropped sharply since the major Palestinian militant groups agreed to keep to "calmness" till the year end.

SEOUL, June 20 (Xinhuanet) -- The Democratic People's Republic of Korea (DPRK) is willing to dismantle its nuclear-capable long-range missiles if the United States establishes diplomatic ties with it, South Korean Unification Minister Chung Dong-young said on Monday.

"North Korean (DPRK) leader Kim clearly told me that the North is ready to scrap all of its long-range missiles, as soon as bilateral diplomatic relations are established (with the US)," Chung was quoted by South Korean Yonhap News Agency as saying in a cabinet meeting presided over by South Korean Prime Minister Lee Hae-chan.

Chung held a meeting with the DPRK top leader Kim Jong Il last Friday in Pyongyang on various issues.

Chung quoted Kim on that day as saying that "The DPRK is willing to return to six-party nuclear talks as early as in July, if the US recognizes and respects" Pyongyang.

The recent nuclear issue on the Korean Peninsula emerged in October 2002. In order to peacefully solve the issue, China, the DPRK, the United States, Russia, South Korea and Japan have convened three rounds of six-party talks in Beijing.

However, the fourth round of the talks failed to be convened as the DPRK refused to participate, citing hostile US policy.

Le Figaro is reporting that Mark Mendelson, a high-placed official in the US Department of Justice, met with Renaud Van Ruymbeke and other French officials last week to exchange information on a case of corruption on the part of Haliburton and other multinationals on Bonny Island in Nigeria between 1995 and 2002. The contract was over 6 billion dollars. Also involved are the French company Technip, the Italian Snamprogetti , and the Japanese company JGC.

Dick Cheney was CEO of Haliburton from 1995 until 2000. He continues to receive his golden handshake from the company.

LIVE 8 founder Bob Geldof is determined to see his international concerts stay focused on the plight of Africa's poor -- and not fall into cliched Bush bashing and global warming rhetoric!

Geldof has ordered show organizers and producers to redouble all efforts to keep LIVE 8 performers "on message" during the July 2 event, the DRUDGE REPORT has learned.

"Please remember, absolutely no ranting and raving about Bush or Blair and the Iraq war, this is not why you have been invited to appear," Geldoff said to the manager of a top recording artist, who asked not to be identified. "We want to bring Mr. Bush in, not run him away." [...]

"Bob wants no attention on global warming, or the war," the manager warns, "He is very determined, he does not want to lose control of the message... But we have the most unpopular American president since Nixon, soldiers are dying... you are going to see some righteous anger on stage."

LIVE 8 will be a series of free international concerts with unprecedented star power. [...]

The war in Iraq is degenerating... a lot. For American troops, Iraqi police, and Iraqi civilians, the last two months have been filled with dread, death, and disfigurement. In spite of around-the-clock spin by the administration and show-dog obedience by the bouzhie-press, the reality of the war is filtering into the public's consciousness. Certain phrases are haunting us: "weapons of mass destruction"... "yellow-cake uranium"... "al Qaeda connection"... "mission accomplished"... and "bring 'em on"...

The Bush administration carries on with a brave face -- being far removed itself from the smell of burning vehicles and bleeding bodies -- secure in the knowledge that they cannot and will not have to run for re-election. The polls that show 60% of Americans now believing the war was wrong have no effect on them, because they are securely situated in power, and they can continue for the next 3.7 years to roll the dice in Iraq with other people's lives and hope for a miraculous breakthrough.

But there are 435 House and 35 Senate seats that could be contested in 2006, and many of them also staked their futures on this war, and they are watching these poll numbers with very grim faces indeed. Many are beginning to feel a little like the ballroom dancers on the Titanic, and while they praised her virtues yesterday, the icy fingers of self-preservation are clutching at their hearts and vanquishing superficial loyalties.

Nixon, they remember, was elected in a huge landslide in 1972. On August 9, 1974, he resigned in arrant disgrace and had to rely on the newly ascendent President Gerald Ford to pardon him on September 28 from all future criminal charges.

Some people's eyesight is better than others, and they can read the signs along the road from further away. Representative Walter Jones, Jr., a North Carolina conservative Republican, has his driving glasses on. He is working with some Democrats and other Republicans on a resolution to name a departure date from Iraq. This is the same man who re-named oily fast-food potatoes "freedom fries," after the French refused to co-sign the Bush war in the UN Security Council. He has two major military installations in his district, and his constituents, along with those troublesome poll numbers, are telling him enough is enough.

Like the white Southern segregationist politicians who had religious epiphanies after the Voting Rights Act passed, and abandoned their racial ideologies in exchange for those big pools of Black Belt votes, Jones has undergone a miraculous conversion on Iraq.

He may be the first of many. In the same way that Democrats developed a public allergy to their own commander in chief, when the DNA was extracted from the blue dress and the presidential cigar... well... As the USS Bush begins to take on water in earnest, you can bet that more Republicans will be looking to the lifeboats.

This should also send a quiver of distress up the spines of the most Machiavellian Democrats.

In 2004, they could have their war and their anti-war voters, too. They had that special power to say, "We are all you've got."

But what happens if Republicans begin to oppose the war? That is to say, what happens when the pressure of the American masses, slowly waking to the reality of the war "over there," is such that the war becomes an issue? With two pro-war candidates, there was nothing left to the confused masses but Roe v. Wade on the one hand and the cherished homophobia of the right on the other. What if, these most guileful of Dems must ask themselves, there are more Walter Joneses, and antiwar voters can turn away from their Democrat-dependency to register their opposition to the war?

The polls that are increasing Maalox sales along Constitution Avenue not only showed that the Republican position of maintaining current troop levels in Iraq was unpopular, but that the most unpopular position was the very one articulated by the John-John Democratic Party ticket for 2004 -- that is, send MORE troops. Ain't life funny?

Suddenly, the masses have this period when a window of power, however small, has opened. Given the herd behavior of Congress generally, and the political poopie-on-the-shoe that Iraq is now becoming, a flood of demands from the public to these intrepid politicos to end the war has what I like to call stampede potential.

I'm not talking about lobbying. Don't think so. I've done lobbying before. That's when you dress up in something "respectful," due deference to their positions and all that, and ask them nicely to "please, sir" support my little pet-bill. They need a flood of emails, letters, telephone calls, and visits from people wearing shower shoes and cutoff jeans (hey, it's hot, dammit!) demanding that they do everything in their power to get the US out of Iraq... yesterday! Lobbying gives them the power. They need to be harassed like stray cats caught in a schoolyard.

I'll personally contact my jellyfish Democrat, David Price, and tell him that I'll vote a Republican out of sheer delicious spite if he doesn't overcome his issue-aversion. If he were a Republican, I'd tell him the same thing about a Democrat challenger. This is the year of the anti-war tidal shift, so it is the year to stoke the terrors of incumbency.

Republicans have their own fears to deal with. Bush is still in the White House, and none of his cabinet seem to be getting any smarter.

That's my suggestion, just a starter suggestion. Every week from now on, write your Congress-hack (there are a few who don't deserve this) and tell him (or her) that you are extremely disappointed in them for not having stopped the war. Get as many people as you can to do the same thing. Call them on the phone until they sign out a restraining order against you for stalking. Take delegations to her (or his) office.

Warning: This stuff is harder than whining, and requires a certain amount of time and effort.

Then organize at least two public events -- one in July and one in September, no matter how small, in your local community -- that explain why the war is wrong. If you want to know how to answer that business of "we broke it, we own it," I have talking points listed at http://stangoff.com/index.php?p=134. That's the next layer we have to win over -- the people who didn't want the war, who don't want the war, but can't conceive of how the US can simply leave.

Contact Veterans for Peace, Military Families Speak Out, Gold Star Families for Peace, September 11 Families for a Peaceful Tomorrow, and Iraq Veterans Against the War, and have them contact local reps to attend these events. They have immunity from pro-war, patriot-baiting nonsense. At each of these events, badger people unmercifully to come to Washington DC on September 24-26 for a mass mobilization against the war. Information is available at http://www.unitedforpeace.org/. Don't just badger them to come, badger them to get others to come. Badger them to pay for at least one person to come that can't afford to come.

Because when a poll makes Walter Jones, Jr. abandon his "freedom fries" chauvinism in a district where the 2nd Marine Division lives, there is fear stalking the halls of the federal legislature, and we should exploit it without shame. It is now mid-June. We have over three months, around 95 days, in fact, in which to drown out the air conditioners droning in the offices of Wall Street's political representatives. We have 95 days to pre-Nixonize George W. Bush, before we show up on their doorsteps and tell them, "Enough!"

Or we escalate...

Stan Goff is the author of "Hideous Dream: A Soldier's Memoir of the US Invasion of Haiti" (Soft Skull Press, 2000), "Full Spectrum Disorder" (Soft Skull Press, 2003) and "Sex & War" which will be released approximately December, 2005. He is retired from the United States Army. His blog is at www.stangoff.com.

Goff can be reached at: sherrynstan@igc.org

Tony Blair will this week attempt to reach out to the next generation of European leaders when he travels to Brussels for the second time in seven days to declare that he is no Margaret Thatcher.

Bruised by his battles with Jacques Chirac and Gerhard Schröder - who are now regarded in No 10 as yesterday's men - the prime minister will appeal over their heads to reassure their successors he is not an American-style free marketeer.

Mr Blair, who worked on his speech to the European parliament at Chequers yesterday, believes that Europe faces an opportunity with the likely departure of Mr Schröder in Germany's election in September. Mr Chirac, who came under fire in the French press over the weekend for focusing so much attention on Britain's budget rebate, will struggle on until the presidential elections in 2007.

Peter Mandelson, Britain's European commissioner, makes clear in today's Guardian that the Blair circle has given up on the two men. "A new consensus can be found in Europe. You don't have to know much about the political situation in France and Germany to realise that," he writes in a carefully worded article in which he refrains from naming anyone.

The prime minister will not criticise the French and German leaders when he sets out his plans for the British presidency of the EU, which begins on 1 July, in his speech on Thursday. But he will make clear he has his eye on the future as he attempts to reassure potential leaders - Angela Merkel in Germany and Nicolas Sarkozy in France - who are better disposed to Britain but still fear Mr Blair wants to impose a Thatcherite vision.

"The prime minister will challenge the idea that Britain is some Dickensian society with no social protection," one Downing Street source yesterday. "He will reassure them that every country has its own social protection and he is very proud of the minimum wage and extended maternity leave he has introduced in Britain."

Mr Blair, who returned to Chequers in the early hours of Saturday after the European summit collapsed amid bitter acrimony, knows he faces a delicate challenge on Thursday. With much of "old" Europe - and allies in "new" Europe - blaming Britain for the collapse of the summit, Mr Blair knows he must make clear that Britain is willing to negotiate over its £3.2bn EU budget rebate.

But he will make clear that his alternative - to channel much of Europe's £32bn farm subsidies into hi-tech initiatives and to reform labour markets - does not mean he is trying to impose a Thatcherite vision on Europe. Mr Blair is expected to say: "It is not a zero sum game in which there is a choice between a social Europe and a market Europe. That is a false choice. We need an effective Europe. We need a social approach which boosts the economic approach. They work together."

While the prime minister will choose his words carefully, he was delighted by articles in the weekend French press which criticised Mr Chirac for focusing so much attention on the rebate - criticism that may strengthen the hand of France's reforming interior minister, Nicolas Sarkozy, who wants to run for the presidency in 2007.

The German press was divided yesterday in its views of Mr Schröder, who sided with Mr Chirac in rejecting Britain's attempts to link any changes to the British rebate to reforms of farm subsidies. Mr Blair has given up on his former "third way" partner as he courts Angela Merkel, the centre-right opposition leader tipped to unseat Mr Schröder in Germany's general election in September, who is more sympathetic to Britain.

Mr Mandelson dismisses the Chirac-Schröder vision as outdated. "Europe is faced with a fundamental choice," he writes. "One way we sink into economic decline, losing the means to pay for our preferred way of life. The other way, we press ahead with painful economic reforms that can make us competitive once again in world markets."

But ministers know that they are in a for a tough ride after the collapse of the summit which prompted Mr Chirac to denounce Mr Blair for his "pathetic and tragic" attempt to hold onto Britain's rebate. Jack Straw, the foreign secretary, told Radio 4's The World This Weekend: "It's certainly a crisis - it's the worst crisis that I've seen during my four years as foreign secretary, indeed my more than eight years as a member of this government."

The conversation on the fifth-floor meeting room of the Justus Lipsius building in Brussels is usually polite, stage-managed and, above all, diplomatic. In a few explosive minutes late on Friday night, 50 years of European protocol was blown away in a row that has shaken the EU to its core.

As he had done all day, Tony Blair defended Britain's budget rebate and demanded reform of Europe's system of farm subsidies. By 10.45pm on Friday he still had two key allies - the Netherlands and Sweden - albeit both were anxious to reduce farm spending rather than save the rebate.

Then, in a dramatic 11th-hour gesture, the Polish Prime Minister, Marek Belka, and his Czech counterpart, Jiri Paroubek, led a group of former Communist nations in offering to forgo some of their countries' cash in the interests of a deal.

That was the cue for the French President, Jacques Chirac, to launch one of the most furious verbal volleys in EU history. Britain's stance, he said, was "pathetic and tragic", before thundering: "This will change Europe." Warming to his theme, Mr Chirac added: "I ask myself what will be the dignity of those that have said 'no' when the poor member states say at the same time that they want to make sacrifices."

As the talks collapsed in disarray, some EU officials were predicting a deep split in the EU or a revival of Franco-German efforts to build an inner core. British officials privately admitted that they were taken aback by the strength of the opposition to the whole range of what Britain proposed, particularly the angry reactions from Mr Chirac and Jean-Claude Juncker, Luxembourg's Prime Minister, who was chairing the summit.

With Britain set to take over the EU presidency, the prospect is for more of the same for six months. Mr Blair is making it known that he believes ordinary Europeans support his desire to "modernise" the EU, and plans to appeal to them over the heads of their leaders. If the stage were not already set for further crisis and disarray, such a campaign should ensure further bitter recriminations.

On Friday night even Mr Blair's normal allies, like Ireland's Bertie Ahern, were dismayed at the sight of such open vitriol. He called Britain's arguments "simplistic", adding that the spectacle had been "pathetic and embarrassing". "I hate to see grown men bickering like that," he said.

The bust-up had been looming all day. As Mr Blair left his suite at the Hilton Hotel in Brussels just before 9am on Friday, he knew he had one of his toughest days of negotiation ahead.

A week of cross-Channel polemic about the future of the British rebate had hardened positions. Mr Blair had said publicly that the UK's annual cashback from the EU, worth €4.6bn (£3.1bn) a year, could be discussed, but only if the Common Agricultural Policy was debated too.

For Britain, the position was one of perfect logic: its only tool in winning a reform of the CAP was the precious rebate gained by Margaret Thatcher in 1984 to compensate the UK for its low farm subsidy receipts.

The problem with that was the farm spending for the period in question, 2007-13, had been agreed at a summit in 2002. Though Mr Blair was unhappy at the time, he did not veto the deal, and the British Government even endorsed it 18 months ago in a letter, agreed with France, on the need to keep spending low.

So when he arrived at the Justus Lipsius building, Mr Blair's position was defensive. When he rejected a package freezing the rebate at €4.6bn until 2013, Mr Juncker tried other figures on him. Mr Blair said no, arguing that the problem was not just about the rebate but about reform and expenditure. However, the Prime Minister made a counter-offer, promising to exempt the new, ex-Communist countries that joined the EU last May from their contributions to the rebate. Mr Juncker was not impressed.

At around 11am, all 25 nations met for their first formal session. With no movement from any side, the talks seemed deadlocked, and Mr Chirac put out a statement demanding further concessions on the rebate.

As the atmosphere soured, the leaders retreated to the office suites reserved for each country. Mr Chirac and the Italian Prime Minister, Silvio Berlusconi, went back to their hotels for a siesta. Mr Blair stayed.

Mr Juncker promised to reconvene the talks at 4pm, the assumption being that he would draw stumps. Instead, he decided to try to bridge the gulf dividing the key players.

The first sign of movement came when Mr Chirac summoned favoured French correspondents to an off-the-record briefing at his hotel. In the interests of a Europe battered by the French and Dutch referendum "no" votes, he announced France would accept the deal on the table. Even at this stage the French President was hardly complimentary about Mr Blair, describing him as a hypocrite.

Back in the Justus Lipsius, Mr Juncker was preparing his final pitch. Instead of convening all 25 countries, he talked to key allies, confirming tactics on how to buy off or ensnare his opponents. Around 6pm Mr Chirac, the German Chancellor, Gerhard Schröder, and the European Commission President, Jose Manuel Barroso, were invited to the fifth-floor presidency suite for a council of war. Mr Blair was not on the guest list.

The result was an inventive piece of diplomacy with which Mr Blair was confronted in the same room at about 7.30pm. This time the idea was not to freeze the rebate, or limit it in timescale, and was calculated to be much more difficult for the UK to reject. The mechanism, under which two-thirds of the difference between what Britain pays into the EU and what it gets back, would be kept.

The difference would be that money going to structural funds for the new countries joining the EU would be taken out of the equation. The effect would be to reduce the value of the rebate over the period 2007-13 from more than €7bn to around €5.5bn.

Since the rebate is only worth an estimated €5.1bn this year, Mr Juncker calculated that Mr Blair ought to be able to sell such a compromise. This concession, moreover, was linked directly to a calculation of the costs of EU enlargement - a policy that the UK backs enthusiastically.

In normal circumstances, such a deal might have appealed to Mr Blair. But a week of cross-Channel polemic with Mr Chirac, accompanied by tabloid headlines, had locked the Prime Minister into a tough position.

His resolve stiffened by two meetings with his Eurosceptic Chancellor and political rival, Gordon Brown, Mr Blair had pledged to defend the rebate unless he won a reform of the CAP. Though the offer made a reference to a review of agriculture spending, the words were judged to be too weak. Mr Blair said "no", putting him on collision course with most of his EU allies.

Still Mr Juncker ploughed on. Rebuffed by Mr Blair, the Luxembourg premier then sought to isolate him. There followed two hours of bilateral meetings with the other main nay-sayers, the Dutch and the Swedes, "throwing money at them", as one diplomat put it. It was hardly the most edifying of spectacles. As one official put it: "It really started to become like a bazaar, giving something to the Swedes, then something to the Dutch."

Both those countries' deals improved, at the expense of the offer to Mr Blair, and at 10pm the British Prime Minister was presented with the final spending plan. Within 10 minutes, Downing Street's official spokesman had appeared in the cavernous basement press area to reject the offer. What it meant, he said, was "a guaranteed change in the rebate without any guaranteed change in the CAP".

Shortly after 9pm, Mr Juncker held a final meeting with Mr Barroso and Dalia Grybauskaite, the European budget commissioner. By this time it was clear even to Luxembourg's leader that his deal was heading for the rocks. After venting his rage at Mr Blair, the final formal session of prime ministers had to be postponed, as one official put it "so that Juncker could calm down".

Finally, at around 10.45pm, all 25 heads of government made their way back to the fifth floor for the final showdown. A day of negotiation had degenerated into nothing more than a blame game. Fortunately for Mr Blair, the seating plan dictated that he was the last of the band of refuseniks to reject the deal.

Clearly discomforted by Mr Belka's offer, Mr Blair said the disagreement was not about money but about principle, adding that, while a deal was possible, it was not going to happen that night. But the Spanish Prime Minister, Jose Luis Rodriguez Zapatero, offered to drop his opposition to the budget.

By the time the leaders left the conference room, there was no attempt even to pretend that there had been anything other than a catastrophic rift. Mr Juncker's allies were furious. "There were two countries that came with no intention of striking a deal: the UK and the Netherlands," said one.

Questions at Mr Blair's midnight press conference began with one from Andrew Marr. He began by remarking that he had never seen the Prime Minister looking so angry at an EU summit. Having listened to Mr Chirac's invective inside the room, Mr Blair let rip. The French President was not mentioned by name, but his defence of the CAP was targeted with venom.

"What I cannot justify," said Mr Blair, "is a budget so skewed in the way it is now. To hear some of the statements around the table, to say that the CAP represents the future, I find bizarre. If the rebate goes on the table, the CAP goes on the table."

Asked about the effort to isolate him, Mr Blair did not even try to deny it. "If there was such an attempt, it failed," he said. "We were not alone, I think people know what was at stake, I don't think people will be fooled."

Next door in the French briefing room, Mr Chirac was more aggressive still, proclaiming that "Europe is in a deep crisis", and blaming "the selfishness of two or three rich countries". In an extraordinary breach of protocol, he added: "Personally, I deplore the fact that Britain refused to pay a fair and reasonable share of the cost of enlargement."

Mr Schröder blamed British and Dutch obduracy and "national egotism" for what he called "one of the worst crises Europe has known".

Though he avoided having to wield the national veto, most other Europeans saw Mr Blair's summit as little short of a catastrophe. As one official put it: "He had quite a few allies on the points that he raised. But you cannot suddenly demand a fundamental review of the EU budget three days before the meeting."

A Downing Street spokesman admitted yesterday: "There will be a bit of anger, but we hope that things will settle down." Mr Blair believes, however, that among Europe's citizens, if not their leaders, there is majority support for Britain's "pragmatic" way of doing business. His officials claim that commentators and columnists in the French, Spanish, Dutch and German press are beginning to recognise that the British have a serious case.

Such an approach means that there is likely to be no reduction in the rancour for several more months. On 1 July Mr Blair takes over the rotating presidency of an EU that has had to put its constitution on ice. Europe is questioning its expansion plans, and is now deadlocked over its spending plans. Indeed, the EU is in the midst of a fierce ideological struggle over its future, heightened by the deep personal animosity between Mr Blair and Mr Chirac.

An EU presidency is a time during which a country's prime minister traditionally calls in favours from his counterparts. After Friday night in Brussels, Mr Blair is owed precious few of those.

WHAT'S ALL THE FUSS ABOUT?

The EU is in the midst of one of the worst disputes since the Treaty of Rome was signed in 1957.

What was the big row about?

The small matter of €870bn. That's the amount of money the EU planned to spend for the period 2007-13 on all its activities from foreign policy to research and development. EU leaders were due to agree a figure something like this and identify how the cake would be carved up. That involved allocating how much all 25 countries (plus the two expected to join in 2007) would get in receipts from farm subsidies and structural aid.

If Britain's rebate was on the table, why did they not discuss farm subsidies?

No fool, Jacques Chirac, the French President, stitched up a deal in 2002 laying down a financial plan for farm subsidies until 2013. Tony Blair didn't like it at the time but did not block it. Most other countries thought that re-visiting this deal would be like re-opening Pandora's Box.

So now there is no deal, will the EU run out of cash?

No, or at least not yet. The financial plan does not start until 2007, so there is some time to agree a new package of measures.

So why all the pressure to get an agreement?

Because time is limited. Britain takes over the EU presidency in July and, since the rebate is so controversial, is in a bad position to forge a deal on financing. That means that the next realistic chance for a breakthrough will be in the first half of 2006, cutting things a little fine.

Moreover the countries of eastern Europe which joined the EU last year wanted some certainty over spending plans. They stand to gain most from the funding plan and therefore wanted as much time as possible to prepare themselves for an influx of cash designed to regenerate their economies.

So is that why we heard all the apocalyptic language?

In fact many countries were more worried about the message sent out by a collapse of the talks. The EU has been in disarray since the French and the Dutch rejected the EU constitution. There was then a row over whether to shelve the constitutional treaty. Now the 25-nation bloc is in a full-blown crisis over its direction.

What does this mean for Tony Blair in Europe?

A big headache. True, the Prime Minister has stirred up a necessary debate over the future of Europe and its spending priorities. He takes over the rotating six-month presidency of the EU on 1 July, and the UK will now be chairing all the key meetings. But against the background of Friday's summit, the UK presidency could become a six-month nightmare for Mr Blair. He is unlikely to get a much better offer than the one produced on Friday. Relations with Mr Chirac are poisonous, but Mr Blair will probably worry more about the damage to his image in other EU countries, in particular the eastern European nations that desperately wanted a deal.

PARIS, June 18 (AFP) - President Jacques Chirac's popularity rating has plunged to a mere 28 percent, down 12 points in the past month, according to a poll conducted for the Sunday Journal du Dimanche.

But 44 percent of those who replied said they were so far happy with the performance of Prime Minister Dominique de Villepin, whom Chirac appointed this month following the French referendum vote against the European Constitution.

According to the monthly poll, which IFOP has been conducting since 1958, Chirac was approaching lows recorded in 1995 and 1996 during his first mandate.

The late president Francois Mitterrand scored the lowest popularity rating of only 22 percent.

The poll was based on questioning of 1,854 people over the age of 18 representative of the French electorate.

SAN JOSE, CALIF. - Chilling, handwritten lists of more than 36,000 suspected sex acts with boys has led investigators to what may be the most extensive case of child molestation in U.S. history.

The lists, written in loopy cursive on 1,360 pages in seven multicolored, spiral-bound notebooks, have names and apparent codes for various sex acts, according to San Jose police. They were found last month in the San Jose home of convicted child molester Dean Arthur Schwartzmiller, 63, who is now in jail on felony molestation charges involving two local 12-year-old boys.

"If any of these numbers are even close to accurate, then it is one of the most significant child molestation finds that we have ever encountered," said San Jose Police Lt. Scott Cornfield, who called the case "horrendous."

Headings for the grim logs include "Blond Boys," "Cute Boys," "Boys who say no," and boys by specific sex act, Cornfield said.

"I've never seen anything like this," said Sgt. Tom Sims, head of San Jose's child exploitation unit.

Lisa Thornburg, who moved into the neighborhood in March and lives two doors from Schwartzmiller, said she's been suspicious for months - ever since her 9- and 6-year-old sons came home with treats Schwartzmiller purchased for them from an ice cream truck.

"After that, I told them they could ride bikes past his house but couldn't go inside - ever," Thornburg said as her kids played with another neighborhood child in the front driveway.

"It's been frightening and fairly disgusting to find out what's going on," she added.

With Schwartzmiller safely behind bars - held without bail on one count of aggravated sexual assault on a child under 14 and six counts of lewd and lascivious conduct on a child under 14, with each count alleging multiple victims - police were trying to reconstruct his movements over the past 30 years.

A message left for Schwartzmiller's public defender, Irma Gallardo, was not returned Thursday.

Police have also arrested Schwartzmiller's roommate - another convicted child molester - in the home they shared in a middle-class San Jose subdivision. The beige stucco ranch is a 10-minute walk from at least two elementary schools.

The front door was plastered with eviction notices from the landlord, saying the pair had three days to pay $1,850 in monthly rent or face eviction. Half-closed blinds revealed a home office whose floor was littered with power cords, computer manuals, printers, manila envelopes and a bottle of tequila.

The list of names found in the police search of Schwartzmiller's bedroom were categorized according to the type of sex acts performed, the age of the victims and other codes whose meaning is unclear - such as an "F" or "X" at the end of the entry, according to Cornfield. Many of the entries did not include last names, and some appeared to be repeats, making police cautious about estimating how many people Schwartzmiller may have victimized.

"If one-tenth of these numbers are accurate, we're looking at hundreds of victims in a number of states. The reason we want to tell the world about this is because we believe he's been involved in child molestations in a number of countries," said Cornfield.

Schwartzmiller's roommate, Fred Everts, is also in jail after police arrested him last month. He was convicted in 1993 for sodomy and sex abuse in Multnomah County, Oregon, and spent four years in prison before violating parole and fleeing the state.

Everts also was charged with child molestation in San Jose, including one count involving one of Schwartzmiller's two alleged victims.

Police who raided the home seized several computers and a 6-foot-tall server, which is being analyzed by a forensic lab in Menlo Park. Cornfield, who is part of a special police unit specializing in Internet crimes against children, said police are trying to determine whether Schwartzmiller was operating a Web site or otherwise using his computers to lure victims.

Although police say Schwartzmiller appears to have spent much of the past 30 years in California, he has also been arrested on child molestation charges in New York, Idaho, Oregon, Arkansas and Washington. He has also lived in Nevada, Texas and Washington.

In 1984, the Idaho Supreme Court upheld a 1978 conviction for molesting two 14-year-old boys and characterized Schwartzmiller as a "repeat offender" who "uses his intelligence to take advantage of the weak and oppressed and those who are in need." [...]

Schwartzmiller has used aliases including Dean Harmon and Dean Miller. He apparently gained the trust of victims and parents by working as a home renovation contractor, and it appears that he didn't register as required, so that his history as a sex offender did not appear in the "Megan's Law" databases in California or other states, they said.

Sgt. Tom Sims, a supervisor with the department's child exploitation division, expressed frustration that Schwartzmiller has been able to live out of jail for most of his life, despite multiple convictions in several states. [...]

Police are asking victims or anyone with information about Schwartzmiller to call the San Jose Police Department's child exploitation division at 408-277-4102. People who wish to remain anonymous can call Crime Stoppers at 408-947-STOP.

British scientists have taken the first step towards creating human eggs and sperm in the laboratory using stem cells.

The technology works by taking young stem cells - that can be developed into another kind of tissue - and coaxing them into becoming sperm or embryos.

Researchers have already shown that embryonic stem cells from mice can be coaxed into becoming eggs and sperm.

Now a first step towards the same goal has been achieved with humans, but more work has to be done before the technology can be considered successful.

Professor Harry Moore, from the Centre for Stem Cell Biology at the University of Sheffield, said: "Ultimately it might be possible to produce sperm and eggs for use in assisted conception treatments.

"This is a long way off and we would have to prove it was safe because, for example, the culture process may cause genetic changes."

He added: "For some men and women this would be the only route for producing sperm and eggs. It would not be reproductive cloning as fertilisation would involve only one set of gametes produced in this way and therefore a unique embryo would form."

A Romanian nun has died after being bound to a cross, gagged and left alone for three days in a cold room in a convent, Romanian police have said.

Members of the convent in north-west Romania claim Maricica Irina Cornici was possessed and that the crucifixion had been part of an exorcism ritual.

Cornici was found dead on the cross on Wednesday after fellow nuns called an ambulance, according to police.

A priest and four nuns were charged with imprisonment leading to death.

Orphan

Police say the 23-year-old nun, who was denied food and drink throughout her ordeal, had been tied and chained to the cross and a towel pushed into her mouth to smother any sounds.

A post-mortem is to be carried out, although initial reports say that Cornici died from asphyxiation.

Local media reports that the young woman had arrived at the remote convent three months before, having initially gone there to visit a friend and opted to stay.

She grew up in an orphanage in Arad, in the west of Romania.

Mediafax news agency said Cornici suffered from schizophrenia and the symptoms of her condition caused the priest at the convent and other nuns to believe she was possessed by the devil.

"They all said she was possessed and they were trying to cast out the evil spirits," police spokeswoman Michaela Straub said.

Father Daniel who is accused of orchestrating the crime is said to be unrepentant.

"God has performed a miracle for her, finally Irina is delivered from evil," AFP quoted the priest as saying.

"I don't understand why journalists are making such a fuss about this. Exorcism is a common practice in the heart of the Romanian Orthodox church and my methods are not at all unknown to other priests," Father Daniel added.

If found guilty of killing Cornici, Father Daniel and the accused nuns could face 20 years in jail.

TOKYO, June 20 (Xinhuanet) -- An earthquake with a preliminary magnitude of 5.0 rocked northeast Japan's Niigata Prefecture Monday afternoon, the Japan Meteorological Agency said.

The region has been rattled by numerous quakes since an M6.8 earthquake last Oct. 23, which claimed the lives of 40 people. Monday's quake is considered to be a separate quake and not an aftershock, the agency said.

The Niigata prefectural government and police said they have not received any reports of injuries or damage from the 1:03 p.m. (0403 GMT) quake. No tsunami warning was issued.

The agency initially put the magnitude of the quake at 4.9 but revised it later to 5.0.

The quake measured a 4-lower 5 on the Japanese seismic intensity scale of 7 in the prefecture, the agency said, adding that the epicenter of the quake was about 15 kilometers underground in the region.

BEIJING, June 20 -- A 5.0-magnitude earthquake hit about 195 kilometres off the northern California coast early Sunday morning, the fifth moderate or strong tremor to hit the state in a week, according to the US Geological Survey.

The quake struck at 2:27 a.m. PDT, and its epicenter was 282 miles northwest of San Francisco, the Geological Survey said.

A Humboldt County Sheriff's Department dispatcher said there were no immediate reports of damages or injuries.

A 7.0-magnitude quake struck about 130 kilometres off the coast Tuesday night prompting an hour-long tsunami warning from the California-Mexico border north to Vancouver Island, B.C.

Two other quakes in the past week had inland epicenters in Southern California.

A patchwork of faults crisscrosses California, and the Southern California Earthquake Center recently estimated a major earthquake beneath Los Angeles could cause up to 18,000 deaths and $250 billion in damage.

Seismologists have said that earthquakes coming in clusters are not necessarily a sign that a major quake is coming.

Dushanbe, 20 June: An earthquake, the epicentre of which was on the border with Afghanistan, 305 km to the southeast of [the Tajik capital] Dushanbe, occurred in Tajikistan this morning.

ITAR-TASS learnt at the Dushanbe seismological station that the earthquake at the epicentre measured five on the 12-point scale used by Tajik seismologists.

The tremors have reached Dushanbe where their magnitude was 2-3 points.

TEHRAN, Iran: A 5.3 magnitude earthquake shook sparsely populated eastern Iran on Sunday, the state-run television said. No one was hurt or killed, according to the report.

Ali Zadeh, governor of Ferdows, a town 700 kilometers (450 miles) southeast of Tehran, said the earthquake caused no casualties or damage since it shook an empty desert area. The quake hit at 9:16 a.m. local time (04:46 GMT).

Iran sits atop seismic fault lines. At least one slight quake rattles the country every day, on average.

A magnitude 5 quake can damage houses and buildings in densely populated areas.

On Feb. 22 a magnitude 6.4 quake hit Zarand, a town of about 15,000 people in Kerman province. It killed more than 600 and injured some 1,400, leveling several villages and leaving thousands of people homeless.

Anatahan's volcano roared in a series of eruptions Sunday afternoon, kicking up a cloud of ash to 50,000 feet and matching the intensity of the volcano's strongest historical eruption on April 6.

Seismicity on Anatahan had been increasing in the past days before Sunday's 2.6-minute eruptive pulse that started at about 3:25pm. The volcano had the highest tremor levels Saturday since early May.

The U.S. Geological Survey and the Emergency Management Office said yesterday that ash and steam reached an altitude of 50,000 feet by 4pm based on infrared imagery. But the agencies said the situation lasted briefly and dissipated as the plume moved easterly. At about 5:42pm, a commercial pilot reported steam and ash at 37,000 feet.

The ash emissions prompted Gov. Juan N. Babauta to issue a public advisory, which reached the Saipan Tribune office past midnight yesterday.

"Eruption materials are being carried away to the east of Anatahan at atmospheric levels before 20,000 feet. As dust and small particulates are settling to lower levels of the atmosphere, trade winds will carry a small amount of the dust and particulates back in the general direction of Saipan and Tinian," the agencies said.

The advisory stated that the leading edge of the dust and particulates cloud could reach the vicinity of Saipan and Tinian at dawn yesterday but disperse in the afternoon.

EMO director Rudolfo Pua said, though, that Saipan and Tinian did not experience any hazy condition yesterday. He said the governor canceled the advisory yesterday afternoon, adding that Saipan and Tinian did not experience any ashfall.

After the strong eruption Sunday, the volcano continued emitting dense ash clouds rising to 8,000 feet and moving westerly. Yesterday morning, the EMO and the USGS said that dense ash and steam reached about 178 nautical miles to the west, with volcanic smog extending to 1,017 nautical miles west-northwest and 772 nautical miles northwest of the island.

The agencies maintained that aircraft should take extra precaution within 10 nautical miles of Anatahan, advising them to pass upwind of the island or beyond 10 nautical miles downwind. They pointed out that conditions could change rapidly, and volcanic activity could suddenly escalate.

Residents hit by flash floods that struck North Yorkshire are beginning a massive clean-up operation.

Villages were cut off, roads washed away and nine people were reported missing during a night of heavy storms.

Two RAF helicopters were scrambled to rescue the missing people when they were tracked down in the market town of Helmsley, which was worst hit.

The flooding followed a weekend of high temperatures across the UK which left four people dead from drowning.

In Yorkshire, drivers were forced to abandon their cars and climb trees to escape rising waters after the River Rye burst its banks.

Boscastle fears over flash floods

The flood waters forced many residents to leave their homes and spend the night in the town hall.

The downpour over the North York Moors cut off a number of villages, with Thirsk, Carlton and Sutton-under-Whitestonecliffe among those affected.

Early on Monday, North Yorkshire Police said the A170 and B1257 roads remained closed. The bridge leading into Helmsley was described as looking perilous.

A spokesman said the roads would remain closed for "quite some time", although the flood waters had reached their peak just after 0130 BST and were "going down satisfactorily".

The storms first hit the area at about 1700 BST on Sunday. [...]

Residents of Drumheller are bracing for severe flooding Monday as water from the Red Deer River is expected to spill over the dikes and into the Alberta town.

Around 2,700 people had been evacuated Sunday night from the town, located northeast of Calgary, as crews raised the height of emergency dikes in areas most at risk for flooding.

Although Alberta Environment officials said the flows would be less than earlier forecasts had predicted, the town is still expected to be hit by the overflow of water.

Alberta has not seen a flood of this magnitude in 200 years, Environment Minister Guy Botillier told reporters in Red Deer on Sunday.

"In terms of the water flow and the magnitude and the intensity, what we are going to be facing in this area is going to be something that we've never witnessed before," he said.

Debris that dammed up in a tributary of the river is expected to ease some of the damage on Drumheller and spare Red Deer the severe flooding that had been predicted.

Few homes are situated right on the river in Red Deer and only about 15 families had been evacuated from their houses. [...]

Red Deer and Drumheller are the next southern Alberta communities to face flooding, while Edmonton and Drayton Valley to the north have now been issued flood warnings.

Alberta officials said the Red Deer River is expected to crest around
midnight in Red Deer and then after noon on Monday in Drumheller.

Evacuations are already underway in Drumheller, while some areas of
Red Deer have been issued evacuation alerts, meaning residents must be ready to leave their homes on an hours notice. [...]

Heavy rains and flooding prompted Calgary to announce a state of
emergency for the first time ever on Saturday.

Alberta has not seen a flood of this magnitude in 200 years,
Environment Minister Guy Botillier told reporters in Red Deer on Sunday.

Close to 2,000 Calgarians were forced from their homes Saturday night after the Glenmore reservoir spilled into the Elbow River.

Members of the Ferrari owners club Easy-Rider wait for Pope Benedict XVI to bless their vehicles during his Angelus message at St. Peter's Square in the Vatican June 19, 2005. (REUTERS/Chris Helgren)