U.S. DEPARTMENT OF DEFENSE PREPARES FOR SEQUESTRATION

Credit:  U.S. Navy.

FROM: U.S. AIR FORCE

DOD prepares for potential sequestration
by Senior Master Sgt. David Byron
Air Force Public Affairs Agency

12/10/2012 - WASHINGTON (AFNS) -- The Office of Management and Budget has instructed the Department of Defense to pursue internal planning to meet required budget cuts if sequestration goes into effect Jan. 3.

"We are at the very start of this process," said Dr. George Little, acting assistant secretary of defense for public affairs, during a Pentagon press availability here, Dec. 5. "We don't have all the details firmed up. Naturally, we hope very much that sequestration will be avoided and we don't enter that phase."

Sequestration is a mechanism enacted by Congress that will initiate severe across-the-government budget cuts if Congress and the president are unable to pass a budget that meets the requirements of the Budget Control Act of 2011.

For the DOD, sequestration would cut the defense budget by $500 billion over the next 10 years. These cuts would be in addition to the nearly $500 billion in cuts, during the same time frame, already directed by the 2011 BCA.

DOD officials have already been considering possible effects of sequestration, including communicating impacts to the DOD work force.

"Our focus has been on examining the potential impacts of sequestration," Little said. "We know what the potential impacts might be, and that helps us create a baseline for what we need to plan against."

He explained that although the core of the effort this month is planning against the possible cuts, officials still hold hope that Congress and the administration can come to a resolution avoiding sequestration.

If the cuts do go into effect Jan. 3, Little said the DOD should still have the first couple of months in 2013 to determine the best way to handle the effects.

"Not every consequence of sequestration would occur on Jan. 3," he said. "People will still come to work, we think, at this stage. This will be a phased-in approach to dealing with sequestration, if it were to take place."

Whatever the effect, he said DOD officials are committed to communicating the issues to the internal DOD community as soon as they are clear.

"We have a lot of internal constituencies to reach out to -- service members, their families and the civilian employees of the Department of Defense -- and we're talking active, Guard and Reserve," said Little. "Three million people work inside this department. One out of 100 Americans work for the secretary of defense. That is a big number and it's a big communication challenge should sequestration take effect."

Little said he has stood up a communication task force to take part in the planning process.

"We expect, through our planning efforts, to identify not just numbers, but also how we communicate it to our three million-person workforce, and prepare them for what may come down the pike," he said. "We're going to try to do what we can, as quickly as possible, to define precisely who we need to talk to and when."

SOME U.S. NAVY PHOTO HISTORY OF "OPERATION ENDURING FREEDOM"

FROM: U.S. NAVY
011017-N-2383B-506 Aboard USS Theodore Roosevelt (Oct. 17, 2001) -- An Aviation Ordnanceman pushes a 2000-pound GBU-10 laser guided bomb through the hangar bay of the aircraft carrier USS Theodore Roosevelt (CVN 71). Theodore Roosevelt and its carrier air wing are conducting missions in support of Operation Enduring Freedom. U.S. Navy photo by Chief Photographer's Mate Johnny Bivera. (RELEASED)

011031-N-3405L-007 In the skies over Afghanistan (Oct. 31, 2001) – Two 500-pound Laser Guided Bomb Units (GBU-12) (left) and an AIM-9 "Sidewinder" short-range air-to-air missile are visible on the wing of an F/A-18 "Hornet" from the "Mighty Shrikes" of Strike Fighter Squadron Nine Four (VFA-94). VFA-94 is assigned to Carrier Air wing Eleven (CVW 11) aboard USS Carl Vinson (CVN 70) and conducting missions in support of Operation Enduring Freedom. U.S. Navy photo by Lt. Steve Lightstone. (RELEASED)

011207-N-2383B-504 At sea aboard USS Bataan (LHD 5) Dec. 7, 2001-- U.S. Marines of the 26th Marine Expeditionary Unit (Special Operations Capable) conduct a small arms live-fire exercise on the flight deck aboard USS Bataan. The Bataan Amphibious Ready Group is deployed in support of Operation Enduring Freedom. U.S. Navy photo by Chief Photographer's Mate Johnny Bivera (RELEASED).


 

U.S. AID TO THE SYRIAN PEOPLE

Temple ruins at Palmyra.

FROM: U.S. STATE DEPARTMENT
U.S. Government Assistance for Syria
December 10, 2012

The United States continues to support the Syrian people as the newly-formed Syrian Opposition Coalition sets a course toward the start of the peaceful, democratic, inclusive future that the people of Syria deserve. Assistance includes our vigorous diplomatic support of the newly formed Syrian Opposition Coalition, humanitarian assistance to help those affected by the conflict, and non-lethal support for local councils and civil society inside Syria.
The United States supports the Syrian people’s aspirations for Syrian-led transition to a more just, inclusive, and peaceful Syria. We are working with likeminded states to further isolate the regime and support the Syrian people’s calls for Asad to depart from power. An estimated 40,000 Syrians have been killed over the past 20 months of unrest and violence, and the regime’s legitimacy has completely collapsed. The United States and the like-minded countries are supporting the Syrian Opposition Coalition’s efforts to advance a political transition in Syria and helping the Syrian people pursue a democratic transition.
In partnership with the United Nations and the international community, the United States is providing nearly $200 million in humanitarian assistance through established international humanitarian and non-governmental organizations to support the urgent humanitarian needs of those inside Syria and in neighboring countries who are affected by the continuing violence in Syria. As the winter approaches, we are coordinating closely with the Coalition and civilian groups inside Syria to ensure that our assistance best serves the needs of the Syrian people. We continue to develop ways for humanitarian assistance to reach previously inaccessible areas inside Syria. All humanitarian assistance is provided on the basis of need and not political affiliation.
The United States is also providing approximately $50 million in non-lethal support to the unarmed Syrian opposition and civil society groups, including local councils and grassroots organizations. This assistance provides training and equipment to the Syrian non-violent opposition to build up a nation-wide network of ethnically and religiously diverse civilian activists, which will help promote unity among the Syrian people and accelerate the country’s democratic transition. It builds the capacity of local councils and grassroots organizations and supports their efforts to respond to the needs of their communities and mobilize ongoing non-violent protest movements. Finally, our assistance includes support for independent media, efforts to document abuses of the regime, and transition planning.
Diplomatic Support

The United States was actively engaged in the Doha meetings in late November, which launched the Syrian Opposition Coalition. In subsequent meetings and at the upcoming Friends of the Syrian People meeting that will gather in Marrakesh in mid-December, the United States is supporting efforts to strengthen the Syrian peoples’ leadership of the transition underway. To ensure that our assistance responds to the most pressing needs of the Syrian people, we are closely coordinating with the Coalition and Syrian-based unarmed opposition groups.

Humanitarian Assistance

The Assad regime’s war on its own civilian population has precipitated a critical humanitarian crisis, with an estimated 40,000 killed over the past 20 months. The United States is providing nearly $200 million in humanitarian aid to assist the four million people in need inside Syria and the more than 460,000 Syrian refugees now living in neighboring countries. The U.S. funds are providing urgently needed food, clean water, medical supplies, emergency medical care, and mental health support for children. The United States is also providing relief supplies, such as plastic sheeting to repair damaged buildings, warm clothes, blankets and heaters to help conflict-affected families survive the coming winter.

U.S. DOD Background Briefing on Section 1230 Report on Progress Toward Security and Stability in Afghanistan, Pentagon Briefing Room

Background Briefing on Section 1230 Report on Progress Toward Security and Stability in Afghanistan, Pentagon Briefing Room

ANTARTIC SEA ICE COVER AND CLIMATE CHANGE

FROM: NASA
Sheldon GlacierView of Sheldon Glacier with Mount Barre in the background, seen from Ryder Bay near Rothera Research Station, Adelaide Island, Antarctica. A new NASA/British Antarctic Survey study examines why Antarctic sea ice cover has increased under the effects of climate change over the past two decades.

Image credit-British Antarctic Survey
 

SAM ON MARS

FROM: NASA

Sample Analysis at Mars (SAM) suite on Mars Curiosity
How samples are delivered and then tested in the Sample Analysis at Mars (SAM) suite on the Mars Curiosity rover.

President Obama Talks #My2k with The Santana Family | The White House

President Obama Talks #My2k with The Santana Family | The White House

Who’s at risk for flu?

Who’s at risk for flu?

NEWS FROM AFGHANISTAN FOR DECEMBER 10, 2012

Refueling Over Afghanistan.  Credit::  U.S. Air Force.    

FROM:  U.S. DEPARTMENT OF DEFENSE

Combined Force Arrests Taliban Leader in Helmand Province
Compiled from International Security Assistance Force Joint Command News Releases

WASHINGTON, Dec. 10, 2012 - A combined coalition and Afghan security force arrested a Taliban leader in the Nahr-e Saraj district of Afghanistan's Helmand province today, military officials reported.

The leader was a weapons facilitator directly involved in coordinating attacks targeting Afghan and coalition forces, officials said. He also directed assassinations, coordinated the shipment and distribution of bomb-making materials and weapons, and provided intelligence to Taliban senior leadership operating in the province.

The security force also detained three suspected insurgents and seized an Afghan army uniform.

In other Afghanistan operations today:

-- A combined force in Kandahar province's Arghandab district arrested a Taliban facilitator who organized high-profile attacks while financing the manufacture of improvised explosive devices and vehicle-borne bombs. He also trained insurgents for IED attacks. The security force also detained two suspected insurgents.

-- In Khost province's Terayzai district, a combined force arrested a Haqqani network leader responsible for commanding high-profile attacks against Afghan and coalition forces and the coordination and movement of IEDs and Haqqani insurgents. He conducted IED testing and was overseeing the shipment of weapons to support an impending attack. The security force also seized weapons and detained a suspected insurgent.

-- A combined force in Wardak province's Nerkh district arrested a Taliban leader who directed attacks against Afghan and coalition forces and oversaw IED operations.

-- In Balkh province's Balkh district, a combined force detained four insurgents during a search for a Haqqani network facilitator who coordinates suicide bombings. The security force also seized 10 pounds of illegal narcotics.

In Afghanistan operations yesterday:

-- A combined force in Paktia province's Sayyid Karam district arrested a Haqqani network leader who controlled a group that conducts IED attacks against Afghan officials and Afghan and coalition forces. He also built, stored and transported IEDs for insurgents operating in the area. The security force also detained a suspected insurgent and seized IED-making materials, grenades and a large amount of ammunition.

-- In Kandahar province's Maiwand district, a combined force arrested a Taliban facilitator who was directly involved in IED operations and facilitated suicide-bomb attacks against Afghan and coalition forces. He also oversaw the transport of ammunition and IED-making materials to insurgents. The security force also detained two suspected insurgents.

-- A combined force in Helmand province's Nahr-e Saraj district arrested a Taliban leader who procured heavy weapons, ammunition and bomb-making materials and advised Taliban insurgents. The security force also detained two suspected insurgents.

-- In Balkh province's Chimtal district, a combined force arrested a Taliban leader responsible for planning and conducting attacks and kidnappings and for weapons procurement.

In other recent operations:

-- A combined force in Helmand province's Nahr-e Saraj district arrested a Taliban leader Dec. 8. He distributed IED materials, detained a suspected insurgent and seized bomb-making materials.

-- In Uruzgan province's Shahid-e-Hasas district Dec. 7, Afghan and coalition security forces seized and destroyed weapons, ammunition and three motorcycles used by insurgents. Several insurgents were killed and three suspected insurgent were detained during the operation.

U.S. Department Of Defense Contracts for December 10, 2012

Contracts for December 10, 2012

U.S. State Department Daily Press Briefing - December 10, 2012

Daily Press Briefing - December 10, 2012

MAN + NATURAL CHANGES = DISASTER x ?

Ice Island Moves into the Artic Ocean.  Credit:  NASA 

FROM: NATIONAL SCIENCE FOUNDATION

NSF-supported Researchers Pinpoint 1,500-Year Cycle in Arctic Atmospheric Pattern
A team of scientists supported by the National Science Foundation (NSF) has identified for the first time a clear 1,500-year cycle in the far North's surface atmosphere pressure pattern. Called the Arctic Oscillation (AO), the cycle greatly influences weather in the Northern Hemisphere.

Lead researcher Dennis Darby, a geological oceanographer at Virginia's Old Dominion University, used the findings to describe a worst-case scenario in which the cyclical pressure pattern could combine with man-made climate change to exacerbate severe weather and flooding trends.

The findings were published Nov. 11 on Nature Geoscience's website. Darby coauthored the paper with a team of scientists from Old Dominion and Kent State universities and the University of Southern California (USC).

Coauthors are Joseph Ortiz, a geological oceanographer from Kent State; Chester Grosch, a physical oceanographer and computer scientist from ODU and Steven Lund, a geophysicist from USC.

William Wiseman, a program director in the Arctic Natural Sciences Program in NSF's Office of Polar Programs, said the new research is innovative in its approach to separating human influences on climate from naturally occurring events.

"Separating the effects of human contributions to climate variability from those due to natural variability is never easy," he said. "Darby and his colleagues, using clever analyses of sediment data, have noted an important long-term variation in sediment transport that is consistent with variability in the Arctic climate on similar time scales. This work adds one more piece of information to our understanding of a very complex system."

Working from a 20-meter-long sediment core raised offshore of Alaska from waters 1,300 meters deep, the researchers could detect varying amounts of iron-rich sand grains ice-rafted from Russia over the last 8,000 years. The core was originally recovered from the flank of Barrow Canyon by an NSF-funded oceanographic cruise on which researchers Lloyd Keigwin, Julie Brigham-Grette and Neil Driscoll were co-investigators.

Darby and his colleagues were able to show through geochemical analysis that some of these Russian grains came from the Kara Sea, which is off the northern Russia landmass east of the northern tip of Finland. This is more than 3,000 miles from the core sample site, and the authors say Kara iron grains could have only arrived at the Alaskan coast by drifting in ice. Furthermore, the ice floes would only move from the Kara to offshore Alaska during strong positive AO conditions.

When the AO index is positive, surface pressure is low in the polar region. This helps the mid-latitude jet stream blow strongly and consistently from west to east, thus keeping cold Arctic air locked in the polar region. When the AO index is negative, there tends to be high pressure in the polar region, weaker zonal winds and greater movement of frigid polar air into the populated areas of the middle latitudes.

Measurements taken by instruments in modern times clearly show relatively short-term fluctuations in the AO, with profound impacts on weather and climate. "But how the AO varies during the Holocene (roughly the last 12,000 years) is not well understood," the authors write in Nature Geoscience.

Darby said that time-series analysis of the researchers' geochemical record reveals a 1,500-year cycle that is similar to what other researchers have proposed in recent decades, based on scattered findings in paleoclimate records. But he and his colleagues are the first to find a high-resolution indicator of the Arctic record that resolves multidecadal-through-millennial-scale AO cycles, he said.

"Our record is the longest record to date to reconstruct the AO and documents that there is millennial scale variability in the AO," Ortiz said. "The sedimentation rate at our site is also sufficient to statistically differentiate between a 1,000-year cycle and a 1,500-year cycle, which helps us to understand the dynamics of the response of the climate system to external forcing during the Holocene geological period."

The 1,500-year cycle is distinct from a 1,000-year cycle found in a similarly analyzed record of total solar irradiance, the authors write, suggesting that the longer cycle arises from either internal oscillation of the climate system or as an indirect response to low-latitude solar forcing.

"The AO can remain in a rather strong negative or positive mode for many decades," the research team writes in the Nature Geoscience article. "When it is positive as suggested by the upswing in the Kara series during the last 200 years, then the additional warmth due to the entrapped Arctic cold air masses during winters could exacerbate the mid-latitude signature of anthropogenic global warming resulting from increased atmospheric carbon dioxide. When the AO is strongly negative as seen in the winters of 2009-11, the Northern Hemisphere experiences prolonged intervals of colder than normal conditions. Because the maximum amplitudes of the AO as recorded in the Kara (iron) grain record in recent decades is less than a third of the amplitude in the past, the full range of variability in the AO is not likely recorded in the instrumental records of the last few decades."

Darby does his detective work by analyzing sediments, mostly from core samples that have been collected when researchers drill a hollow tube into the floor of the Arctic Ocean or nearby seas. The work is made possible by an iron-grain chemical fingerprinting technique he developed that enables him to determine the landmass where the grains originated. This provides evidence about winds and currents--and therefore the overall weather patterns--that brought the grain to its resting place.

Even if natural cycles are responsible for some recent warming trends, this doesn't let humans off the hook for polluting the atmosphere, Darby said. Human influence may combine with natural cycles to increase global warming.

Darby's research is not directly involved in weighing human contributions to climate change, such as increases in carbon dioxide in the atmosphere brought on by combustion.

"We're looking for natural conditions that are helping to cause this global warming and sea level rise," Darby said. "There seems to be a natural pacing to climate change. If you don't know what changes are naturally occurring over the long haul, you don't know how to deal with conditions over the short term."

THE UNDERWATER UNDERGROUND

FROM: FEMA
Hoboken, N.J., Dec. 4, 2012 -- The Port Authority Trans Hudson (PATH) remains closed due to salt water inundation caused form Hurricane Sandy. The PATH power staff is working overtime to get the trains up and running by December 17th. Adam DuBrowa-FEMA

Hoboken, N.J., Dec. 4, 2012 -- The Port Authority Trans Hudson (PATH) Power Director Andre Bou supervises the electrical repairs to miles of lines along the Hoboken tracks. The PATH is eligible for federal assistance under the FEMA Public Assistance program and is working overtime to repair the electrical systems that were damaged from salt water innundation caused from Hurricane Sandy. Adam DuBrowa/FEMA

EXPORT-IMPORT BANK GUARANTEES FINANCING TO SELL HELICOPTERS TO BRAZIL

Whether seen at night or during the day, the capital city of Brazil is unmistakable from orbit. Brasilia is located on a plateau - the Planalto Central - in the west-central part of the country, and is widely considered to be one of the best examples of 20th century urban planning in the world. One of its most distinctive design features - as seen from above - suggests a bird, butterfly, or airplane traveling along a northwest-southeast direction, and is made dramatically visible by city light patterns (image center right, between Lake Paranoa and the airport). Following the establishment of Brasilia in the early 1960s, informal settlements began to form around the original planned city. Ceilandia was one such settlement. In 1970, Ceilandia was formalized by the government and is now a satellite city of Brasilia with its own distinct urban identity. The developed areas of Brasilia and its satellites are clearly outlined by street grids and highway lights in this photograph taken from the International Space Station. The large unlit region to the upper right is the Brasilia National Park. Image courtesy of NASA. From: CIA World Factbook.

FROM: U.S. EXPORT-IMPORT BANK

Ex-Im Bank Approves Financing to Export Helicopters; Supports More Than 500 Jobs
WASHINGTON, D.C. – The Export-Import Bank of the United States (Ex-Im Bank) announced today it will guarantee financing to support the export of U.S.-made helicopters to Brazil. This marks the first time the Bank has financed high-tech AW139 helicopters destined to be operated by Omni Taxi Aereo (OTA) of Rio de Janiero, Brazil. Omni Helicopters International S.A. (OHI) will buy the aircraft and assign them to its operating subsidiary, OTA. Philadelphia manufacturer AgustaWestland North America will supply its twin-engine helicopters in order for OHI to service its transportation contracts with Petrobras, which operates deep-water drilling rigs off the Brazilian coast.


The Bank’s financing is estimated to support at least 500 American jobs in all phases of aircraft production and delivery, based on the number employed by AgustaWestland in Philadelphia.


"With this transaction, we’ve guaranteed employment for skilled American workers," said Ex-Im Bank Chairman and President Fred P. Hochberg. "We’re pleased not only to help support these well-paying jobs, but also to level the playing field for an American manufacturer in the highly competitive energy-industry aircraft market."


Brazil’s state-owned Petrobras off-shore drilling industry increasingly demands new-technology, medium-lift helicopters like the AW139 model produced by AgustaWestland North America in its Philadelphia factory. Each AW139 helicopter can carry fifteen passengers to remote off-shore operations. It features a range of 575 miles and can fly at a cruising speed of 190 miles per hour.


Bruno Cellemme, President and CEO of AgustaWestland (Philadelphia), remarked, "AgustaWestland is pleased to again partner with the Export-Import Bank of the United States to support the export of helicopters produced at our Philadelphia plant. These exports help to sustain jobs at our Philadelphia-based manufacturing plant, which employs more than 500 aerospace workers."

CRATER SCIENCE

FROM: NASA
Planetary CSI: Crater Science Investigations
If you want to learn more about the history of Earth and other rocky planets in the solar system, craters are a great place to look. Now, thanks to LRO's LROC instrument, we can take a much closer look at Linné Crater on the moon--a pristine crater that's great to use to compare with other craters!

Credit-NASA's Goddard Space Flight Center

INCOME OF FDIC INSURED INSTITUTIONS FOR THIRD QUARTER OF 2012

FROM: U.S. FEDERAL DEPOSIT INSURANCE CORPORATION

FDIC-Insured Institutions Earned $37.6 Billion in the Third Quarter of 2012
Number of "Problem" Institutions Fell Below 700 for the First Time in Three Years

Commercial banks and savings institutions insured by the Federal Deposit Insurance Corporation (FDIC) reported aggregate net income of $37.6 billion in the third quarter of 2012, a $2.3 billion (6.6 percent) improvement from the $35.2 billion in profits the industry reported in the third quarter of 2011. This is the 13th consecutive quarter that earnings have registered a year-over-year increase. Increased noninterest income and lower provisions for loan losses accounted for most of the year-over-year improvement in earnings. Also noteworthy was a decline in the number of banks on the FDIC's "Problem List" from 732 to 694. This marked the sixth consecutive quarter that the number of "problem" banks has fallen, and the first time in three years that there have been fewer than 700 banks on the list. Total assets of "problem" institutions declined from $282 billion to $262 billion.

"This was another quarter of gradual but steady recovery for FDIC-insured institutions," said FDIC Chairman Martin J. Gruenberg. "Signs of further progress were evident in a number of indicators, such as loan growth, asset quality and profitability."

More than half of all institutions (57.5 percent) reported improvements in their quarterly net income from a year ago. Also, the share of institutions reporting net losses for the quarter fell to 10.5 percent from 14.6 percent a year earlier. The average return on assets (ROA), a basic yardstick of profitability, rose to 1.06 percent from 1.03 percent a year ago.

Third-quarter loan loss provisions totaled $14.8 billion, which was 20.6 percent less than the $18.6 billion that insured institutions set aside for losses in the third quarter of 2011. Net operating revenue (net interest income plus total noninterest income) totaled $169.6 billion, an increase of $4.9 billion (3.0 percent) from a year earlier, as gains from loan sales rose by $3.9 billion. Net interest income was $746 million (0.7 percent) higher than in the third quarter of 2011.

Asset quality indicators continued to improve as insured banks and thrifts charged off $22.3 billion in uncollectible loans during the quarter, down $4.4 billion (16.5 percent) from a year earlier. The amount of noncurrent loans and leases (those 90 days or more past due or in nonaccrual status) fell for the 10th consecutive quarter, and the percentage of loans and leases that were noncurrent declined to the lowest level in more than three years (since the first quarter of 2009).

Financial results for the third quarter of 2012 are contained in the FDIC's latest Quarterly Banking Profile, which was released today. Also among the findings:

Total loan balances increased. Loan balances posted their fifth quarterly increase in the last six quarters, rising by $64.8 billion (0.9 percent). Loans to commercial and industrial borrowers increased by $31.8 billion (2.2 percent), while residential mortgages rose by $14.5 billion (0.8 percent) and auto loans grew by $7.4 billion (2.4 percent). However, home equity lines of credit declined by $12.9 billion (2.2 percent), and real estate construction and development loans fell by $6.9 billion (3.2 percent).

"More than 55 percent of all banks reported loan growth," Chairman Gruenberg noted. "Small banks are also increasing their lending, including their loans to small businesses."

The flow of money into deposit accounts increased. Total deposits increased by $181.7 billion (1.8 percent) in the third quarter, after rising by only $61.5 billion in the second quarter and $74.7 billion in the first quarter. Deposits in domestic offices increased by $146.5 billion (1.6 percent), while deposits in foreign offices increased by $35.2 billion (2.5 percent). The amount of deposits exceeding $250,000 in noninterest-bearing transaction accounts, which have temporary unlimited coverage under the Dodd-Frank Act, increased by $110.9 billion (8.0 percent) in the third quarter after rising by $65.5 billion the previous quarter.

The number of bank failures fell for the eighth time in the last nine quarters. Twelve insured institutions failed during the third quarter. This is the smallest number of failures in a quarter since the fourth quarter of 2008, when there were also 12. An additional seven banks have failed so far in the fourth quarter, bringing the year-to-date total to 50. Through December 4, 2011, there had been 90 failures year-to-date.

The Deposit Insurance Fund (DIF) balance continued to increase. The unaudited DIF balance — the net worth of the fund — rose to $25.2 billion at September 30 from $22.7 billion at the end of June. Assessment revenue and fewer expected bank failures continued to drive growth in the fund balance. The contingent loss reserve, which covers the costs of expected failures, fell from $4.0 billion to $3.6 billion during the quarter. Estimated insured deposits grew 2.3 percent in the third quarter.

PRECIOUS METALS TRADE THEORY 101 (WHERE IS THE GOLD?)

Credit:  U.S. Marshals Service

FROM: U.S. COMMODITY FUTURES TRADING COMMISSION

CFTC alleges that defendants conducted illegal, off-exchange commodity transactions, and deceived customers in connection with financed transactions in precious metals

Washington, DC - The U.S. Commodity Futures Trading Commission (CFTC) today announced that on December 5, 2012, it filed a civil injunctive enforcement action in the U.S. District Court for the Southern District of Florida against Hunter Wise Commodities, LLC; Hunter Wise Services, LLC; Hunter Wise Credit, LLC; Hunter Wise Trading, LLC; Lloyds Commodities, LLC; Lloyds Commodities Credit Company, LLC; Lloyds Services, LLC; C.D. Hopkins Financial, LLC; Hard Asset Lending Group, LLC; Blackstone Metals Group, LLC; Newbridge Alliance, Inc.; United States Capital Trust, LLC; Harold Edward Martin, Jr.; Fred Jager; James Burbage; Frank Gaudino; Baris Keser; Chadewick Hopkins; John King; and David A. Moore. The complaint charges these entities and individuals with fraudulently marketing illegal, off-exchange retail commodity contracts. The complaint alleges that Hunter Wise Commodities, the orchestrator of the fraud, has taken in at least $46 million in customer funds since July 2011.

According to the CFTC complaint, the defendants claim to sell physical metals, including gold, silver, platinum, palladium, and copper, to retail customers in retail commodity transactions. Under the defendants’ retail commodity transactions investment contract, customers allegedly make a down payment on certain quantities of physical metals, usually 25 percent of the total purchase price. Defendants allegedly claim to arrange loans for the balance of the purchase price, and advise customers that their physical metals will be stored in a secure depository.

The complaint further alleges that these statements were false, and that the defendants do not purchase any physical metals, arrange loans for their customers to purchase physical metals, or arrange for storage of physical metals for any customers participating in their retail commodity transactions. Instead, all the transactions are just paper transactions, according to the complaint. Defendants allegedly do not own or sell metals to customers; customers are charged storage and insurance fees on metals that do not exist; and are charged interest on loans, which are never made by the defendants

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) of 2010 expanded the CFTC’s jurisdiction over transactions like these, and requires that such transactions be executed on or subject to the rules of a board of trade, exchange or commodity market, according to the complaint. This new requirement took effect on July 16, 2011. The complaint alleges that all of the defendants’ financed commodity transactions after July 16, 2011, were illegal. The complaint also alleges that the defendants defrauded customers in all of these financed commodity transactions.

David Meister, the CFTC’s Director of Enforcement stated: "Here is a prime example of how the Dodd-Frank Act provided the Commission with additional strong authority to go after wrong-doers, such as, as alleged in the complaint, individuals who prey on people looking to make retail investments in commodities like gold and silver. We will use this new authority to the fullest extent possible."

In January 2012 the CFTC issued a Consumer Fraud Advisory (see Advisory under Related Links) regarding precious metals fraud, saying that it had seen an increase in the number of companies offering customers the opportunity to buy or invest in precious metals. The CFTC’s Consumer Fraud Advisory specifically warned that frequently companies do not purchase any physical metals for the customer, instead simply keeping the customer’s funds. The Consumer Fraud Advisory further cautioned consumers that leveraged commodity transactions are unlawful unless executed on a regulated exchange.

In its continuing litigation against the defendants, the CFTC is seeking preliminary and permanent civil injunctions in addition to other remedial relief, including restitution to customers.


 

U.S. SECRETARY OF STATE CLINTON'S REMARKS AT THE IRELAND FUNDS LUNCH

FROM:  U.S. STATE DEPARTMENT
Remarks to a Lunch Hosted by The Ireland Funds

Remarks
Hillary Rodham Clinton
Secretary of State
Titanic Belfast Building
Belfast, Northern Ireland
December 7, 2012
　

This is an absolute personal delight for me to have this opportunity to be here with so many people who I have known over so many years and who have made contributions large and small over those years to bring peace to this beautiful land. And I am very grateful to you, Karen, for putting this together and for everything you do at the Worldwide Ireland Funds. It is a great tribute to the Funds that you are exceeding your funding goals in this time of recession, because people are still so committed to doing what must be done to continue supporting the peacemakers and the decision makers here in Northern Ireland.

I could be here for a long time acknowledging people, which would be a terrible mistake on my part. But I do have to mention a few whom I see in the audience. I am honored to be joined by two men who are known for their commitment to peace and their willingness to work for it, John Hume and David Trimble. (Applause.) Thank you. Thank you (inaudible).

And of course I’ve had already an excellent discussion with Peter and Martin and the more that I have the chance to be with them and work with them, the more impressed I am by their steady leadership and their very sensible, down-to-earth, practical approach to providing the peace and the peace dividend that the people of Northern Ireland so graciously deserve. They both said these incredibly nice things about me. They exceeded their quotient for eloquence by a long shot, but it means the world to me because I not only consider them colleagues, but friends. And so Peter and Martin, thank you. Thank you for what you do every day. (Applause.)

Minister Ford, Secretary Villiers, thank you as well for your contributions. And I was told that Doctor Paisley was here. (Applause.) Dr. Paisley, thank you so much for being here today. It’s just wonderful seeing you and I hope I’ll have a chance to personally greet you before I leave. I was also told Gerry Adams was here. Is Gerry here? Hi, Gerry. (Applause.) I also want to recognize Lou Susman, who has served so (inaudible) as our U.S. Ambassador. And also our Consul General, Greg, thank you for your services here. And I, too, will acknowledge and thank our former Economic Envoy Declan Kelly who has done so much to help bring more investors to the region, and I thank you for your contributions, Declan. (Applause.)

I’m sorry that Loretta cannot be here, but we send our best wishes to Loretta Brennan Glucksman and thank her for her chairmanship of the American-Ireland Fund. But it really is remarkable that for 35 years the Funds have promoted peace without taking sides, and they have been viewed as an important participant in the process of bringing people together. And I was delighted to hear that so many of the groups that I know continue to do such good work will be supported by them.

There are a number of my former interns who are here from the Ireland Funds, who I was privileged to host in my Senate office. They are extraordinary young people. I am very proud of them. And one of them I first – she first came to my attention in 1995 when she was 14 years old and she sent Bill and a deeply moving letter about the future she dreamed of for Northern Ireland. Then I knew her as a bright young intern when she came to work in my office and helping serve my constituents in New York, and apparently that experience really took because today we know her as the Lord Mayor of Armagh, Sharon Haughey. (Applause.) Sharon, why don’t you stand up? Where are you, Sharon? The next generation of leadership. There she is, way back there. Do you have your chain on – you got it? Good. (Laughter.) And I think she’s getting married later this month, so congratulations on that.

One person who is not here that I could not come to Northern Ireland and address any group without mentioning is Inez McCormack. Inez stands out amongst the extraordinary people I have met and worked with over the last 17 years. She inspired and motivated me, challenged me often, and we’re sending her our thoughts and our prayers and our best wishes as she fights a courageous battle against cancer. (Applause.)

Now, I think that we have all recognized and applauded already today the fact that the peace has proven remarkably durable, but I think it is only fair to say it is being tested, it will continue to be tested. Prison officer David Black, who was murdered last month, the police and citizens who have been assaulted, the elected officials threatened, including Naomi Long, who is here with us today – it has been a sad reminder, unfortunately, that despite how hardy the peace has been, there are still those who not only would test it but try to destroy it. And I really commend the leaders and citizens from the many groups who have condemned this violence, and of course, I join them in condemning it as well.

It’s very clear that the voices of the responsible leadership are needed more than ever to remind us all that peace comes through dialogue and debate, not violence, and we have to be strong in the face of provocation and testing that will continue. Democracy is a challenging form of self-government, but it is the best that has ever been invented by any human being, and therefore we have a lot to be both proud of and very careful to continue nurturing. And for me, it is a reminder as well that we have to continue to make sure that the promise of peace is delivered. Because the progress in a democracy can never be taken for granted, even progress so hard-won as here.

I remember very well when Bill and I came 17 years ago this month. He was the first American president ever to set foot in Northern Ireland. We stood behind a bulletproof screen to turn on Belfast’s Christmas lights in front of a vast crowd that stretched so far I could not even find the end of it in any direction. And it was a moment of such hope. And it has been that image that has kept me going through any challenges that have come across my mind when I think about what lies ahead. I said this morning in Stormont that a little girl, Catherine, who was there that night, said that her Christmas wish was that peace and love would last in Ireland forever. That is an appropriate Christmas wish for this season as well.

I also remember that there were still roadblocks, not just because the President of the United States was visiting. There were still searches for explosives as one walked into department stores. Those roadblocks are gone and the searches have ended. Many of us did a double-take when, this summer, Queen Elizabeth came for a visit and joined Martin McGuinness in that historic handshake. More and more foreign students are coming here to study at Queen’s and Ulster universities. So there still is such a sense of hope. But we know that we’re suffering in a terrible economic downturn, and I think it’s important to recognize that there has to be an economic return on peace, especially for democracies that have to deliver results for people.

And although the real credit of the progress that has been made belong to the people of Northern Ireland, those of us who have tried to help along the way, like George Mitchell or my husband and so many others, will continue to walk with you as you practice and tend to this peace. It is always a work in progress, and we have to do more to get out of the ballrooms, out of Stormont, into the communities where people live, where there yet is not that sense of lasting hope and optimism.

Now, I’ve been especially privileged to work with some of the community activists, and particularly a lot of the women, who are here with me today. I remember the late Joyce McCartan, who called herself a family feminist. I love that term, and in fact, adopted it. But what she understood was that peace had to affect families. Families had to believe that life would be better for themselves and their children. I remember meeting with Monica McWilliams and Pearl Sagar at the White House when I was First Lady, and they wanted to talk about how to grow businesses, how to convince people – especially women – to participate in the economy and the politics that was being created. So yes, we did use Vital Voices as a mechanism for bringing not only women together, but having them then reach out to others in a great chain of potential.

So there’s a lot that we can be proud of, but I want to just offer a cautionary word. Because if we do not focus on the community level – and as David Trimble said to me earlier today, on that interface – we will not have really achieved the peace that has been worked for. So I’m looking for new ideas about how to help you do just that. How can we better make an impact on those who are either indifferent or negative toward what has been achieved? How do we reach the hard-to-reach communities – the young man from a loyalist community whose father couldn’t find work and who sees his own chances for a good job slipping away, the young woman from a Republican family who’s had to give up the idea of going to university? We can be more creative and thoughtful about how we support the political leadership of Peter and Martin and other elected leaders by trying to help them from the ground up.

So my offer to you is, as I leave this current position and become a private citizen again, I want to continue working with you. I want to support you in what you are doing. And I hope that we’ll have a chance to really come to grips with some of the serious remaining problems that are still plaguing the fulfillment of our aspirations for the people of Northern Ireland. Of course I look forward to coming back and having some time just to relax and spend a few hours talking with friends and thinking about things besides public life. But I’m very serious about this offer and very serious to the Ireland Funds that I want to remain involved as a friend, an advocate, and a cheerleader for what you have already achieved.

And so as we approach another Christmas season with all that it represents – a season of hope and good tidings – let’s reach out to those who don’t yet feel that in their heart about what has been achieved by the hard work and sacrifice of so many here and so many who have come forth. And know that the greatest gift we can give to any of our fellow man or woman is the gift of peace and of love, and that’s what I want to see for the future for every child, boy and girl, here in Northern Ireland.

Thank you, and God bless you. (Applause.)

THE CFTC AND INTERNAL CONTROL FAILURES AT GOLDMAN, SACHS & CO.

FROM: U.S. COMMODITY FUTURES TRADING COMMISSION

CFTC Orders Goldman, Sachs & Co., a Commission Registrant, to Pay $1.5 Million for Supervision Failures

By exploiting Goldman’s internal control failures, a former Goldman employee hid an $8.3 billion trading position; Goldman lost in excess of $100 million unwinding the position

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that Goldman, Sachs & Co. (Goldman), a registered futures commission merchant (FCM) based in New York, N.Y., has been ordered to pay a $1.5 million civil monetary penalty to settle CFTC charges that it failed to diligently supervise its employees for several months in late 2007. The CFTC Order also requires Goldman to cease and desist from violating a CFTC regulation requiring diligent supervision.

According to the CFTC’s Order, for several months, Goldman failed to ensure that certain aspects of its risk management, compliance, and supervision programs comported with its obligations to supervise diligently its business as a Commission registrant. During November and December 2007, Goldman further failed to supervise diligently the trading activities of an associated person and former Goldman trader, Matthew Marshall Taylor, whose trading activities on seven days in mid-November and mid-December 2007 in the e-mini S&P 500 futures contract traded on the Chicago Mercantile Exchange’s (CME) Globex platform resulted in a substantial loss to Goldman.

Specifically, in violation of Commission Regulation 166.3, Goldman failed to have policies or procedures reasonably designed to detect and prevent the manual entry of fabricated futures trades into its front office systems, which aggregated manually entered and electronically executed trades in the same product. As a result, on seven trading days in November and December 2007, Taylor circumvented Goldman’s risk management, compliance, and supervision systems, by entering fabricated e-mini S&P 500 sell trades into its manual trading system, which artificially offset and thereby camouflaged e-mini S&P 500 buy trades Taylor had executed in the market. In particular, Taylor established an $8.3 billion e-mini S&P 500 position in a Goldman trading account on December 13, 2007. Goldman suffered a loss of over $118 million in unwinding Taylor’s position.

Separately, the Order states that after Taylor was discharged, Goldman orally notified the CME and the Financial Industry Regulatory Authority (FINRA). Goldman’s ensuing regulatory filings with the National Futures Association (NFA) and FINRA stated that Taylor had been accused of "violating investment-related statutes, regulations, rules, or industry standards of conduct" for "conduct related to inappropriately large proprietary futures positions in a firm trading account." Thereafter, in response to FINRA’s follow-up inquiries, Goldman provided additional important information only to FINRA, i.e., that Taylor attempted to conceal his trading via fabricated trades. Goldman never provided that additional important information to the NFA or the Commission until after the CFTC’s Division of Enforcement commenced the investigation leading to today’s settlement.

The Order states that Goldman has represented in its settlement offer that it has made changes in light of the events discussed in the Order, including implementing written enhancements to its U.S. futures-related trading and risk management controls and supervision policies and procedures. Goldman has also undertaken to implement a written procedure to enhance its provision of information to the NFA and the Commission about misconduct or alleged misconduct of terminated Goldman employees that relates to trading on a Commission-regulated market to ensure that termination notifications of associated persons, including follow-up disclosures, are provided to the NFA and the Commission.

On November 8, 2012, in a related action, the CFTC filed an enforcement action in the Federal District Court for the Southern District of New York, charging Taylor with defrauding Goldman by intentionally concealing from Goldman the true size, as well as the risk and potential profits or losses associated with the S&P e-mini futures contracts positions traded by Taylor in the Goldman account (see CFTC Press Release 6409-12, November 8, 2012 under Related Links).

CFTC staff members responsible for this case are Janine Gargiulo, Trevor Kokal, Judith Slowly, David Acevedo, Lenel Hickson, Stephen Obie, and Vincent McGonagle.

U.S. AIR FORCE PHOTOS

FROM: U.S. AIR FORCE

Search
Staff Sgt. Eduardo Ausmann observes Kyrgyz Republic Lt. Salamat Temirbekov search for simulated contaminated materials as part a chemical, biological, radiological, nuclear and explosives training scenario during Exercise Regional Cooperation 12 at the Koi Tash Military Academy in Kyrgyzstan on June 22, 2012. Regional Cooperation 12 is a multinational exercise designed to strengthen relationships and promote regional cooperation among the participating nations while offering coordinated, rapid response scenarios in the event of a disaster affecting multiple countries within the region. Ausmann is a 376th Expeditionary Medical Group biomedical engineer deployed out of Wright-Patterson Air Force Base, Ohio. (U.S. Air Force photo/Senior Airman Brett Clashman).

Phasing Spirits

Crew chiefs from the 509th Aircraft Maintenance Squadron and 131st Bomb Wing perform a phase inspection on a B-2 Spirit at Whiteman Air Force, Mo., July 12, 2012. Every 1,000 flight hours the B-2 must be ‘phased’ in search of any discrepancies that could cause major damage. (U.S. Air Force photo/Senior Airman Nick Wilson)