AFP: US Hails Suharto as “Historic Figure”

THE United States hailed former Indonesian dictator Suharto as a “historic figure” who “achieved remarkable economic development”, in a statement released by its embassy in Jakarta.

IS KARZAI ON THE WAY OUT?

Guardian: US envoy accused of sabotaging Ashdown

Senior Foreign Office officials believe the Afghan-born US ambassador to the UN, Zalmay Khalilzad, is planning to stand for the presidency of Afghanistan and played a complex role in advising the current president, Hamid Karzai

FT: Kabul diplomats’ concerns grow regarding Karzai

President Hamid Karzai’s last-minute derailment of carefully laid plans to appoint Lord Ashdown as the United Nations’ top international envoy in Afghanistan has heightened concerns in Kabul’s diplomatic community about the Afghan leader.

SAM GARDNER (Colonel, USAF (retired) ON IRAN:

A source with connection at the IAEA has confirmed press reports that the Bushehr fuel (~90 tons) has arrived in Iran.

IAEA verified and sealed all transport containers in Russia and checked everything upon arrival in Iran according to IAEA procedures.

The fuel is now in storage, sealed and under constant camera surveillance and subject to enhanced IAEA safeguards verification procedures. Russia demanded effective surveillance and verification and co operation with IAEA has been smooth. IAEA co-operation with Iran has also worked well.

Bushehr is under tough surveillance and the loading of the reactor will only take place when all construction and testing work has been completed.

According to press reports, the fuel will be loaded into the reactor in the fall of this year. Starting the reactor is expected for 2009.

OTHER NEWS: A PROMINENT KENYAN OPPOSITION LEADER HAS BEEN ASSSASSINATED

ON TO THE ECONOMIC CRISIS (For more, see the debt blog at stopthesqueeze.org)

Mike Whitney: The Great Credit Unwind of ‘08

The financial system has been handed over to scam-artists and fraudsters who’ve created a multi-trillion dollar inverted pyramid of shaky, hyper-inflated, subprime slop that they’ve sold around the world with the tacit support of the ratings agencies and the US political establishment. (wink, wink) Now that system is about to collapse and there’s nothing that the Federal Reserve can do to stop the Great Credit Unwind of ‘08.

The FBI announced that it is now investigating several mortgage scammers:

Here are some news stories about the continuing economic implosion:

Columbia Daily Tribune: The Glass is Half Empty ; Federal Reserve’s Rate Cut, Stimulus Package No Panacea.

The year 2008 is still practically a newborn, but it already has set many records - and not the good kind. In light of the foreclosures, Merrill Lynch has predicted a 15 percent drop in home prices in 2008 and another 10 percent in 2009.Apparently, Federal Reserve Chairman Ben Bernanke did not enjoy his three-day Martin Luther King holiday weekend.

Daily Mail (London) Credit Crisis Puts 20

The financial crisis is likely to force 20,000 City workers out of their jobs and Britain risks slipping into a ‘full-blown’ recession, experts have warned.Credit ratings agency Experian has slashed its forecasts for job growth in London’s financial districts. With 400,000 working in the Square Mile and Canary Wharf, this equates to up to 20,000 fewer jobs and could impact other parts of the economy such as the already troubled corporate property market.

IHT: In Blame Game, Fingers Point at Bush on Economy

Will George W. Bush be remembered as the president who lost the economy while trying to win a war? The chaotic events of the past week - wild stock market swings, a large interest rate cut from the Federal Reserve and the announcement Thursday of a deal between Bush and congressional Democrats on an economic stimulus package - has turned that equation on its head, rattling the public just in time for Bush to deliver his final State of the Union address on Monday. With the economy pushing Iraq off center stage, Bush now faces the unwelcome prospect that his legacy - which the White House always assumed would be wrapped up in the war - will be wrapped up in hard times instead.

Business Week: Sallie Mae Moves On

The student lender is settling a dispute over a busted private-equity buyout and securing $31 billion in financing at the same time

Sallie Mae (SLM) has finally cleared away some of the wreckage from its bad break-up with private equity buyer J.C. Flowers. On Jan. 28, the student lender ended a lawsuit against its one-time suitors, and at the same time secured $31 billion in financing.

Flowers, along with Bank of America (BAC) and J.P. Morgan Chase (JPM), wanted to buy up the student loan company last April, offering investors a premium of nearly 50%.

But the buyers got cold feet after the summer’s financial crisis hit.

They left Sallie Mae to deal with a host of tough problems all by itself: The credit crisis had made it difficult for the lender to get financing. Its borrowers were having a harder time making loan payments, meaning Sallie Mae had to deploy $575 million to cover the troubled debts. The Democratic-controlled U.S. Congress last year passed a bill designed to reform the student loan system and squeeze private lenders’ profits. And finally, Sallie Mae had to sue its prospective buyers, claiming it deserved a $900-million break-up fee because the buyout deal fell through.

From Austrailia: Is the Credit Crisis Over?

One clue comes from the market where banks lend money to one another. Our colleague Steve Sjuggerud says the credit crisis is over, at least. How does he know? He says the rate banks charge each other for overnight loans has gone down, and even briefly went under the Fed funds target rate.

If that trend holds, it would be a sign that the crisis in confidence in the banking sector is easing. Banks in Europe and America have taken substantial losses both in their proprietary trading departments and in their loan portfolios. They’ve had to go hat-in-hand to creditors (mostly Sovereign Wealth Funds) in the Middle East and Far East to recapitalize their balance sheets.