-Caveat Lector- from: http://www.aci.net/kalliste/ <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- ------------------------------------------------------------------------ Japanese Financial Crisis Government Urged to Buy 10% of Stock Market Leveraged buyout of Japan, Inc. An influential Japanese business group has called on the government to issue up to ¥30,000bn ($250bn) of bonds to purchase corporate shares and stave off a further decline in the stock market. These plans, which have been drawn up by a think tank affiliated to the Keidanren, Japan's main business federation, would potentially leave the government holding up to 10 per cent of the shares on the stock market. The proposals, by the respected 21st-Century Public Policy Institute, have triggered strong opposition from officials at the ministry of finance and the Bank of Japan, who fear that it could put more pressure on the government bond market. However, the idea is supported by some members of the ruling Liberal Democratic party, whose politicians have often used respected business groups such as the Keidanren to float radical new policy ideas. Although the LDP leadership has shown little willingness yet to adopt the scheme, the proposals highlight the degree of unease felt in the government about the weakness of the stock market. Government officials admit that the proposals could influence policy in coming months if Japan's economic problems worsen. One senior bureaucrat said: "If the stock market falls again, there may be more support from politicians for something like this." Mayasa Miyoshi, a senior adviser to the Keidanren, said: "We urgently need to take measures." The debate about the stock market has been triggered by the recent sharp fall in the Nikkei 225, the key stock market indicator, which fell below 13,000 in October. This threatens to hurt many companies, since banks and their clients have traditionally held huge equity stakes in each other. The Nikkei 225 has since rebounded, closing at 14,808.2 yesterday. However, some officials fear the market will remain weak, since many companies are trying to unwind these cross-shareholdings, further depressing prices. In recent months, the Keidanren has called on the government to offset this problem by creating a special institution to unravel unwind cross-shareholdings without selling shares them in the open market. However, this proposal has now been partly abandoned since it would reduce the banks' capital base under current Bank for International Settlements guidelines. The think tank has now proposed a separate scheme according to which the government would purchase shares to offset the impact of companies unwinding cross-shareholdings. These purchases would be managed by independent financial companies, and conducted for a limited period. The Financial Times, Dec. 9, 1998 Chinese Missiles Secret Pentagon Report Faults Hughes Assistance to China by Jeff Gerth WASHINGTON -- A secret Pentagon report concludes that Hughes Space and Communications, without proper authorization, gave China technological insights that are crucial to the successful launchings of satellites and ballistic missiles. According to the report, completed on Monday, Hughes scientists helped Chinese engineers in 1995 to improve the sophisticated mathematical models necessary to predict the effects of wind, high-atmosphere buffeting and other natural forces on a rocket launching. These formulas are important to designing nuclear missiles and launching satellites that do not explode or break apart. They help technicians calculate the appropriate angle of launch, the shape of the nose cone of the rocket, the tolerable limits of weather and other factors. The Chinese, the Pentagon said, had been using an "oversimplified" mathematical analysis, resulting in a series of failed satellite launchings. Hughes pointed out that shortcoming to the Chinese in 1995, when its scientists helped investigate the failed launching of a Hughes commercial communication satellite atop a Chinese rocket. The report concluded that Hughes had provided a "defense service" to China that violated American standards against helping Beijing make better satellites and missiles and required a State Department review. The company's assistance to China "raises national security concerns both with regard to violating those standards and to potentially contributing to China's missile capabilities," the report said. The company, and other American aerospace concerns, were eager to use Chinese rockets because they are cheaper than American or European competitors, but only if they could be made reliable. The Pentagon report said that contact between Hughes engineers and Chinese scientists allowed the Chinese to gain "specific insight into specific launch vehicle design and operational problems and corrective actions." The report also says Hughes showed Chinese scientists flaws in the way they were attaching the cargo of rockets to the rockets themselves, including the strength of the rivets they used and the shape of the nose cone. In the case of the Chinese launchings, the cargo was satellites, but the technology is applicable as well to attaching a nuclear warhead to a missile. A spokeswoman for Hughes, which has denied any wrongdoing in the case, said that the company's actions were approved at the time by the Commerce Department, which she said was the "appropriate licensing authority." The Pentagon report did not say whether China had used the information for military purposes, but it said the transfer did not likely alter the strategic military balance between China and the United States. "What it taught them how to do, which they evidently didn't know how to do, is analysis on the stresses on a launch vehicle as it goes into the upper atmosphere," said one administration official who has read the report. The official added that what Hughes taught the Chinese "could be directly applicable to military systems, although we have no information that it has been." An unclassified version of the Pentagon report, consisting of 11 pages and a two-page appendix, was made available by a government official who favors tighter controls on satellite technology. The Justice Department has been examining whether Hughes and Loral Space and Communications violated export laws when they helped Chinese rocket scientists understand the causes of another failed launching in 1996. That investigation has now been expanded to include whether Hughes violated export control laws in 1995. Hughes is a subsidiary of Hughes Electronics, which is owned by General Motors. The Pentagon report is the first indication that Hughes gave China valuable information involving the failed launching of 1995, and provides the most detailed account to date of what the Chinese might have gained from their contacts with the American aerospace companies. The Pentagon did not see the entire picture. Some relevant Hughes documents, unavailable for the Pentagon review, are being analyzed separately by intelligence officials as part of the criminal investigation, for which they were subpoenaed. Despite its limitations, the Pentagon report is likely to provide fresh ammunition to critics of President Clinton's 1996 decision to loosen controls over satellite exports to China, a decision for which Hughes officials campaigned heavily within the administration and which Congress reversed this fall. "Our suspicions that technology can be transferred in these situations, that you can improve the reliability of Chinese rockets/missiles, were well founded," Sen. Thad Cochran, R-Miss., said Tuesday. He is chairman of a Senate committee that has examined the issue, and he requested the Pentagon report. The story of technology transfers has its beginnings in 1992, when a Chinese-launched satellite exploded and Hughes conducted an investigation for China. At the time, the investigation was monitored by a Pentagon official who restricted the flow of information. Three years later, when the next rocket exploded for what the Pentagon said were identical reasons, the Commerce Department approved an accident review by Hughes without consulting the State Department. As a result, no Pentagon monitors attended the sessions with the Chinese. The Commerce Department has acknowledged that this was a mistake. In addition, in 1995, the Central Intelligence Agency ignored warnings raised that year by one of its scientists, Ronald Pandolfi, that Hughes may have provided crucial ballistic missile technology to China. Pandolfi has now emerged as a key witness in the criminal investigation. A Hughes document obtained by investigators in connection with the 1995 review indicates that Hughes officials disliked the idea of Government monitors, according to an Administration official. In 1995 the chairman of Hughes, C. Michael Armstrong, led a lobbying effort to ease controls over satellite exports by shifting authority from the State Department, which requires monitors, to the less restrictive Commerce Department. President Clinton appointed Armstrong to head his prestigious export council. At the council's first meeting, on Feb. 13, 1995, Clinton said "I don't think we've done nearly enough" on easing export controls, according to a White House E-mail. That same day Hughes provided its first "failure presentation" to Chinese officials. By July, the company completed its final report. A month later the Commerce Department gave its blessing to Hughes. But Pandolfi, the C.I.A. analyst, did not like what he saw when he visited Hughes' scientists in 1995. "What they told him they were sharing and how far the company had been willing to go, he thought it was questionable from the standpoint of national security," said an associate of Pandolfi. But the agency killed Pandolfi's study and no one in Washington paid any more attention to the issue. The Hughes report, though, was carefully read in China. According to an Administration official, the Chinese adopted the recommendations contained in the Hughes report. The issue of satellite exports to China became the subject of increased scrutiny last spring, after The New York Times reported on the Justice Department inquiry into the 1996 review by Loral and Hughes. Last July, the Senate subcommittee on proliferation, headed by Cochran, looked into the 1995 Hughes launching. William A. Reinsch, the Undersecretary of Commerce for export administration, told the panel that Hughes's release of its report to the Chinese was "appropriate and without risk to national security," but his department should have referred the matter to the State Department for prior review. Pentagon oficials told the committee that they had just received the Hughes material from Commerce a few hours earlier so they could not yet assess the impact. Steven D. Dorfman, the vice chairman of Hughes, assured the committee that "no material technology was transmitted to the Chinese that would help them build missiles." Last summer, in the wake of Congressional inquiries, Pandolfi told his superiors that he had relevant information, including detailed contemporaneous notes taken during his trip to Hughes in 1995. He was questioned by agents of the United States Customs Service and aides of the Senate Intelligence Committee. Investigators say they next wanted to question officials at Hughes about what Pandolfi had learned on his trip. But before those interviews took place someone at the C.I.A. alerted Hughes -- a major supplier of spy satellites to the intelligence community -- to the investigators' next move. As a result, the interviews at Hughes never took place. But now the spy agency's warning is part of an investigation into whether the C.I.A. obstructed the investigations of Hughes. Agency officials deny that the C.I.A. intended to obstruct any investigation. The New York Times, Dec. 9, 1998 Impeachment Watch First Day of Clinton Defense Was Pretty Offensive by Deborah Orin WASHINGTON - President Clinton's men are still stonewalling - they won't admit the lies, they won't admit the sex with Monica Lewinsky and they're still playing "Slick Willie" word games. That makes it very hard to cut a "plea bargain" with Republicans for censure instead of impeachment - and there were hints yesterday's White House defense session could backfire. Most Americans agree Clinton lied, but the latest 184-page White House defense papers refuse to concede that and insist that it's just about "President Clinton's denial of a private indiscretion." The latest White House defense does nothing to answer Monica Lewinsky's graphic account of how she had sex with Clinton, even by his narrow definition. Instead it claims two witnesses can honestly recall things differently. Really? On such graphic descriptions of sex and cigars and other hanky-panky? With a president famed for his memory? Also, the White House defense panel of professors from Harvard, Yale and Princeton came in and talked down to the House Judiciary Committee members as if they were stupid college freshmen. That made a mockery of the official White House line, which was that this was a day of contrition and reaching out. The profs just alienated the GOP moderates they were supposed to be wooing. Princeton's Sean Wilentz threw down the gauntlet by claiming that anyone backing impeachment risks "going down in history with the zealots and fanatics ... for your cravenness." Republicans were livid. Rep. George Gekas (Pa.) said Wilentz's remark was "despicable" and Rep. Mary Bono (R-Calif.) pointedly said: "I won't be labeled a zealot because I do believe it was perjury." They were equally skeptical when boyish White House scandal lawyer Greg Craig insisted Clinton didn't lie when he claimed he couldn't recall being alone with Lewinsky, with one Republican saying that simply "is not credible." Bottom line: The White House stuck to its story and nobody's mind was changed, so it's really down to a test of hard-knuckle pressure politics. "I don't really think anything that happens in this committee matters. It's really simply about whether they have the votes," said Democratic consultant Joe Trippi. "I think there's a chance that this could become a runaway train," he added, saying he now believes there's even a "5 percent chance" that Clinton could actually get kicked out of office. Few would go so far. But it appeared that the first day of Clinton's defense did nothing to help his cause. The New York Post, Dec. 9, 1998 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. 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