April 8, 2008
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The Polls say we Americans overwhelmingly think that we never should have gone into Iraq and that nearly half of us say we need to get out within a year.

That’s the polls.

Visble manifestations of that oppostion seem to be far and few between.

CBS News/New York Times Poll. March 28-April 2, 2008. N=1,368 adults nationwide. MoE ± 3 (for all adults).

Looking back, do you think the United States did the right thing in taking military action against Iraq, or should the U.S. have stayed out?”


Right Thing Stayed Out Unsure
% % %

ALL adults

34 62 4


68 26 6


13 85 2


32 62 6

“From what you know about the U.S. involvement in Iraq, how much longer would you be willing to have large numbers of U.S. troops remain in Iraq: less than a year, one to two years, two to five years or longer than five years?”


Less Than
A Year
One to Two
Two to Five
Longer Than
Five Years
% % % % %
46 22 14 6 12

How is it that we can have such opposition to the Bush Administration’s war policies and yet not be able to get a dozen people to join an anti-war protest here in Dayton? Where is the outrage?? Bush comes to the Air Force Museum and 35 people show up to a demonstration called by the Montgomery County Democratic Party, including just Two Union reps [in a supposedly Union town], ONE party Chairman and NO ELECTED OFFICIALS.

Over the five years this vigil has been held I have personally invited Democratic office holders Nan Whaley, Dean Lovelace, Mayor McLin, Joey Williams, Debbie Lieberman and Dan Foley MULTIPLE TIMES to join the anti war vigils at the Dayton Dragon’s games, and not one of them has shown up yet.

I ask again, Where is the Outrage? and, perhaps as important, Where is the”leadership” of the local Democratic party on this critical issue??? and, please, don’t respond with that lame crap about how “we are LOCAL elected officials and anti-war issues are not our thing…” I’m not buying it, and you should be ashamed to offer it as an excuse for your inactivity.

If the opposition is there on paper and the physical manifestation is not, we have to ask why? There are indeed answers, including the fact that for much of the US mainstream media the war is simply something that they are not given very much attention to, excepting the parroting of the McCain-Bush bullshit about how well the “surge” is working …[though today’s NY Times reports that insurgent attacks in Baghdad more than doubled in March over February’s numbers...]

By way of example, the author Eric Boehlert, from the website Media Matters, notes in an April 2 column:

Last November, I noted that ABC’s Nightline, its long-running signature news program, had essentially boycotted Iraq as a news story. I found that over an 18-week span, from mid-July through late November, Nightline aired approximately 230 separate news segments, only one of which was about events on the ground in Iraq. In the 17 weeks since then, Nightline has continued to look the other way, which means that over a nearly nine-month span, during which time more than 300 reports aired, Nightline has effectively ignored the war in Iraq as a news event.–

Excerpetd from his excllent article

Myth: the American Public Tuned out Iraq Fact: The press tuned out Iraq


It sems that the unfortunate reality is that most people, despite their poll answers, are simply disconnected to the war in their daily lives. The images we are NOT seeing is the reality of this evil war.

How’s this for complicity?? In March 2003, on the eve of the Iraq war, a directive arrived from the Pentagon at U.S. military bases. “There will be no arrival ceremonies for, or media coverage of, deceased military personnel returning to or departing from Ramstein [Germany] airbase or Dover [Del.] base, to include interim stops,” the Defense Department said, referring to the major ports for the returning remains.

The answer from our “elected representatives, our “leaders”??

Senate Backs Ban on Photos of G.I. Coffins: June 21, 2004.


And the money?? The Billions and Billions [and trillions] of dollars BORROWED from China, Japan and other countries? Off the “books” and payable by our children, grandchildren and great grandchildren [and theirs…]

The money that could be used to pay for comprehensive medical care far beyond any of the presidential candidates offerings..The money that could be used to repair our falling apart infrastructure of bridges, roads and waterways. The money that could be used to provide a college education for every person who had the gumption to go to school and improve themselves and our nation?? And so much much more.

The War goes on, and the American public, having been lulled into complacency, appears comatose in the face of impending disaster, unable or unwilling to take the time to do the right thing, get up off their asses & confront our “leadership” and demand an end to this evil war.

Wake up America . It’s way past time for the wake up call.


January 31, 2008

Ralph Nader Flirts with Presidential Bid. Give it up, Ralph…after what you did last time around [including accepting PAC money from REPUBLICANS] who do you think is going to vote for you? When I ponder who it is we need as our next President I try to imagine someone in the office who actually has the ability to LEAD. Nader’s “following” is so minuscule as to be next to non existent. Yes, he had a progressive role at one time, but, despite his rhetoric, Ralphie’s time has PASSED!

Mukasey Won’t Comment on Waterboarding

WASHINGTON (AP) — Attorney General Michael Mukasey said Tuesday he will refuse to publicly say whether the interrogation tactic known as waterboarding is illegal, digging in against critics who want the Bush administration to define it as torture.

Did we say TOLD YOU SO?? Despite harsh questioning by Senators Leahy, Kennedy and Specter, the nations top Law Enforcement official refused [again] to condemn the torture technique of waterboarding as, of all things, torture.

“Given that waterboarding is not part of the current program and may never be added to the current program, I do not think it would be appropriate for me to pass definitive judgment on the technique’s legality,” he said.

The reasoning behind this deliberate dance of deceit? If the AG formally recognizes waterboarding as torture it puts his bosses, Mssr Bush and Cheney, in deep doo doo, mainly because they and their minions are ultimately responsible and could therefor conceivably be charged with War Crimes under the Geneva Conventions. Gasp! Shades of Alberto Gonzalez!


December 3, 2007
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Starting in January, getting caught in a compromised “situation” with a prostitute in Dayton will get you sent back to “school”, John School, that is. Convicted offenders of city anti prostitution laws will be required to attend a type of aversion therapy as part of the sentencing process. According to Assistant City Manager Julie Howington, city officials felt that while work continues on details for a zone specific ordinance, that immediate measures were also needed.

Ms Howington emphasized that the “John School” was something that the city could implement with a minimum of extra effort, working in coordination with local law enforcement agencies and the courts. While details about exact curriculum are sketchy at this time, “John Schools” usually involve lectures on STD’s, legal ramifications and also usually include interactive sessions with former prostitutes /social agencies to address other more direct societal – personal impact issues.

The blowback to the initial discussion from citizens & community organizations centered on the negative connotations inherent in using signage to designate the targeted zones, and,  it appears that if used at all, such signage will be very  limited in scope. “the police know where the areas of activity are”, Howington said,

Two tasks forces have been established by the Managers office, one with City law enforcement, the law department and the managers office, and another, involving Montgomery County personnel, including the sheriff. “involving the Sheriff and County is critical,”said Howington, ” they control the Jail, and have access to funding sources for rehabilitation programs not available to city government. We want to do more than just add to the jail burden, hopefully to find some rehabilitation avenues where at least some of the newer, younger prostitutes might be helped out of that life. ”

Ms Howington acknowledged the intractability of the problem, noting that” people have been working on this for hundred of years without much really changing. The hope is that you can have some effect, to help some women, deter some “johns” and make a difference in the neighborhoods impacted by prostitution”

“It is also good that this discussion is now more public, ” Howington said, “too often people want to avoid dealing with issues like prostitution, pretending it isn’t happening. A public focus gives us more latitude to do more.”

Hooker Update/The Future is Ours??

September 18, 2007

Last week a small group of BusinessPeople and a Santa Clara Neighborhood Association member met with County Commissioner Dan Foley and two County officials {Sunrise Center & Criminal Justice Council} concerning the prostitution issue on Main St and Dayton in general. The discussion ranged from a general overview to what specifically can be done.

The Sunrise Center has received a Weed & Seed grant to be used to explore options that include research and development of rehabilitation and deterrence programs which could include “john schools”. According to a pamphlet on Prostitution & community solutions I recently received from the Dept of Justice recidivism among graduates of the john school’s is very low. Different cities John School programs include lectures on STD’s confrontations with ex prostitutes etc. Some include making the johns perform community service in the areas where they were picked up, picking up trash and other unsavory tasks. A possible approach.

Another angle of the discussion concerned a “Million Dollar Murray” solution. An interesting article on this appeared in the New Yorker . http://www.gladwell.com/2006/2006_02_13_a_murray.html

The essence of it being that sometimes it is cheaper to provide concrete solutions [housing, child care] than to continue to arrest the same people over and over again. It was posited that if there were 500 prostitutes in Dayton [a number pulled out of the air that may not be far off…] what if 50 of them accounted for 50% of the arrests? Perhaps targeting those women would do more to alleviate the problem. This assumes that many of the  450 are part timers or ones who don’t get caught.

Arrests peaked in 1999 and have dropped off considerably since then. The last couple of years # have been “flat” [thanks to DDN tip on this]. Possible reasons vary, with the reduction in the # of cops assigned to the Vice squad considered a major factor. Economic issues also play a role, a downturn in the overall economy tends to e reflected in a rise in women resorting to prostitution as a “money solution”. The consensus of the discussion was that a Nevada type “legalization” solution was not in the cards and that aiming at development of programs to help women get out of the “life” offered the most concrete “solution”.

It will be interesting to see if County & City officials can get on the same page with this. More information will be forthcoming as I get it.

The Joe Shump Legacy

September 1, 2007

The decision by 3 county offices to close on Tuesday in memoriam to the passing of former Montgomery Co. Democratic Party chairman may be well intended, but, it is ultimately a very bad decision .Very very seldom am I in agreement with republicans on any issue but Greg Gant, Chairman of the Montgomery Co Republican Party, hit the nail on the head when he said “I think it’s a lack of remembering that you serve the public first“. The inconvenience caused by a partial shutdown of County government will most assuredly backfire as legions of people trying to conduct business will be unable to do so due to the passing of someone they likely neither knew nor care about.

As a leftist political outsider I never knew Joe Shump personally, but I did know he ruled the local Democratic Party with an iron hand, old school party boss style. Decision making by crony-ism, favorite-ism The Party’s history writers will probably say this was a necessary thing during the time when he came to power. I disagree.

The insularity of the Democrats during the period of his dominance guaranteed that, unless you were willing to play by Shump’s rules, you could simply forget being an active or influential player in the Party. It was Joe’s way or the highway. Decision making was definitely not something to be entrusted to the general membership…

Dayton had an activist left during the 70’s and 80’s: The New American Movement, Modern Times Bookstore, the anti-Vietnam war movement, the Miami Valley Power Project, the Dayton branch of the Black Panthers, The Revolutionary Union, Republic of New Africa, The American Friends Service Committee, Dayton Women’s Liberation, just to name a few…Joe Shump’s Democratic Party worked with none of them. None of them. Crony-ism and a vaguely conservative political  bent  ruled the roost.

Ok, so Democrats got elected. Hand picked in a top down party structure, you were vetted by the few and elected by the masses who followed the party’s dictum’s. That did not, however, build the party’s internal organization, which is why the method’s of  old line Bosses like Shump eventually began to lose elections in Montgomery County. No vision, no future.

The revolt that eventually took place and ousted Shump and his cohorts was two steps forward, one step back. Democrats got elected, in a more open nominating process, but a focus on developing the ideological underpinning so vital to the future of a real party has not happened.

The organization Dennis Lieberman “rescued” and which Mark Owens is now leading, is stronger than it has been in years. However, if the party is to truly shake off the more negative aspects of Joe Shump’s legacy it must address the more fundamental question of not just how do Democrats get elected, but why, and, importantly, how are those elected officials held accountable to the people who elected them. You cannot do that without a party base that has a coherent, unified political philosophy . That is the real task that now faces Party leaders. Closing County offices Tuesday is not going to help in that process.

Monetary Crisis Bigger than Dayton…Saving the City??

August 11, 2007

Two articles today which point to much larger economic issues that will inevitably impact life in the Valley of the Miami’s…I make no claim to being anymore astute on Monetary Policy than the average guy on the street, but the link here is clear. Montgomery County has one of the highest home foreclosure rates in the country, impacting hundreds, if not thousands of Valley residents. Unstable home mortgages are a fundamental and underlying crack in the economic dike and the question may well be whether the crack can be fixed without major pain. The question to  ask on a local level is what our County and City officials doing to prepare for and address before it becomes overwhelming.

Next week I plan to ask some of those officials what they are going to do. In the meantime read and educate yourself>>>

First  Paul Craig Roberts gives a follow up to his article  about being “In the Hole to China” which I posted yesterday >>>>

China’s “Nuclear Option” is real

By Paul Craig Roberts

08/11/07 “ICH‘ — — Twenty-four hours after I reported China’s announcement that China, not the Federal Reserve, controls US interest rates by its decision to purchase, hold, or dump US Treasury bonds, the news of the announcement appeared in sanitized and unthreatening form in a few US news sources.

The Washington Post found an economics professor at the University of Wisconsin to provide reassurances that it was “not really a credible threat” that China would intervene in currency or bond markets in any way that could hurt the dollar’s value or raise US interest rates, because China would hurt its own pocketbook by such actions.

US Treasury Secretary Henry Paulson, just back from Beijing, where he gave China orders to raise the value of the Chinese yuan “without delay,” dismissed the Chinese announcement as “frankly absurd.”

Both the professor and the Treasury Secretary are greatly mistaken.

First, understand that the announcement was not made by a minister or vice minister of the government. The Chinese government is inclined to have important announcements come from research organizations that work closely with the government. This announcement came from two such organizations. A high official of the Development Research Center, an organization with cabinet rank, let it be known that US financial stability was too dependent on China’s financing of US red ink for the US to be giving China orders. An official at the Chinese Academy of Social Sciences pointed out that the reserve currency status of the US dollar was dependent on China’s good will as America’s lender.

What the two officials said is completely true. It is something that some of us have known for a long time. What is different is that China publicly called attention to Washington’s dependence on China’s good will. By doing so, China signaled that it was not going to be bullied or pushed around.

The Chinese made no threats. To the contrary, one of the officials said, “China doesn’t want any undesirable phenomenon in the global financial order.” The Chinese message is different. The message is that Washington does not have hegemony over Chinese policy, and if matters go from push to shove, Washington can expect financial turmoil.

Paulson can talk tough, but the Treasury has no foreign currencies with which to redeem its debt. The way the Treasury pays off the bonds that come due is by selling new bonds, a hard sell in a falling market deserted by the largest buyer.

Paulson found solace in his observation that the large Chinese holdings of US Treasuries comprise only “one day’s trading volume in Treasuries.” This is a meaningless comparison. If the supply suddenly doubled, does Paulson think the price of Treasuries would not fall and the interest rate not rise? If Paulson believes that US interest rates are independent of China’s purchases and holdings of Treasuries, Bush had better quickly find himself a new Treasury Secretary.

Now let’s examine the University of Wisconsin economist’s opinion that China cannot exercise its power because it would result in losses on its dollar holdings. It is true that if China were to bring any significant percentage of its holdings to market, or even cease to purchase new Treasury issues, the prices of bonds would decline, and China’s remaining holdings would be worth less. The question, however, is whether this is of any consequence to China, and, if it is, whether this cost is greater or lesser than avoiding the cost that Washington is seeking to impose on China.

American economists make a mistake in their reasoning when they assume that China needs large reserves of foreign exchange. China does not need foreign exchange reserves for the usual reasons of supporting its currency’s value and paying its trade bills. China does not allow its currency to be traded in currency markets. Indeed, there is not enough yuan available to trade. Speculators, betting on the eventual rise of the yuan’s value, are trying to capture future gains by trading “virtual yuan.” The other reason is that China does not have foreign trade deficits, and does not need reserves in other currencies with which to pay its bills. Indeed, if China had creditors, the creditors would be pleased to be paid in yuan as the currency is thought to be undervalued.

Despite China’s support of the Treasury bond market, China’s large holdings of dollar-denominated financial instruments have been depreciating for some time as the dollar declines against other traded currencies, because people and central banks in other countries are either reducing their dollar holdings or ceasing to add to them. China’s dollar holdings reflect the creditor status China acquired when US corporations offshored their production to China. Reportedly, 70% of the goods on Wal-Mart’s shelves are made in China. China has gained technology and business knowhow from the US firms that have moved their plants to China. China has large coastal cities, choked with economic activity and traffic, that make America’s large cities look like country towns. China has raised about 300 million of its population into higher living standards, and is now focusing on developing a massive internal market some 4 to 5 times more populous than America’s.

The notion that China cannot exercise its power without losing its US markets is wrong. American consumers are as dependent on imports of manufactured goods from China as they are on imported oil. In addition, the profits of US brand name companies are dependent on the sale to Americans of the products that they make in China. The US cannot, in retaliation, block the import of goods and services from China without delivering a knock-out punch to US companies and US consumers. China has many markets and can afford to lose the US market easier than the US can afford to lose the American brand names on Wal-Mart’s shelves that are made in China. Indeed, the US is even dependent on China for advanced technology products. If truth be known, so much US production has been moved to China that many items on which consumers depend are no longer produced in America.

Now let’s consider the cost to China of dumping dollars or Treasuries compared to the cost that the US is trying to impose on China. If the latter is higher than the former, it pays China to exercise the “nuclear option” and dump the dollar.

The US wants China to revalue the yuan, that is, to make the dollar value of the yuan higher. Instead of a dollar being worth 8 yuan, for example, Washington wants the dollar to be worth only 5.5 yuan. Washington thinks that this would cause US exports to China to increase, as they would be cheaper for the Chinese, and for Chinese exports to the US to decline, as they would be more expensive. This would end, Washington thinks, the large trade deficit that the US has with China.

This way of thinking dates from pre-offshoring days. In former times, domestic and foreign-owned companies would compete for one another’s markets, and a country with a lower valued currency might gain an advantage. Today, however, about half of the so-called US imports from China are the offshored production of US companies for their American markets. The US companies produce in China, not because of the exchange rate, but because labor, regulatory, and harassment costs are so much lower in China. Moreover, many US firms have simply moved to China, and the cost of abandoning their new Chinese facilities and moving production back to the US would be very high.

When all these costs are considered, it is unclear how much China would have to revalue its currency in order to cancel its cost advantages and cause US firms to move enough of their production back to America to close the trade gap.

To understand the shortcomings of the statements by the Wisconsin professor and Treasury Secretary Paulson, consider that if China were to increase the value of the yuan by 30 percent, the value of China’s dollar holdings would decline by 30 percent. It would have the same effect on China’s pocketbook as dumping dollars and Treasuries in the markets.

Consider also, that as revaluation causes the yuan to move up in relation to the dollar (the reserve currency), it also causes the yuan to move up against every other traded currency. Thus, the Chinese cannot revalue as Paulson has ordered without making Chinese goods more expensive not merely to Americans but everywhere.

Compare this result with China dumping dollars. With the yuan pegged to the dollar, China can dump dollars without altering the exchange rate between the yuan and the dollar. As the dollar falls, the yuan falls with it. Goods and services produced in China do not become more expensive to Americans, and they become cheaper elsewhere. By dumping dollars, China expands its entry into other markets and accumulates more foreign currencies from trade surpluses.

Now consider the non-financial costs to China’s self-image and rising prestige of permitting the US government to set the value of its currency. America’s problems are of its own making, not China’s. A rising power such as China is likely to prove a reluctant scapegoat for America’s decades of abuse of its reserve currency status.

Economists and government officials believe that a rise in consumer prices by 30 percent is good if it results from yuan revaluation, but that it would be terrible, even beyond the pale, if the same 30 percent rise in consumer prices resulted from a tariff put on goods made in China. The hard pressed American consumer would be hit equally hard either way. It is paradoxical that Washington is putting pressure on China to raise US consumer prices, while blaming China for harming Americans. As is usually the case, the harm we suffer is inflicted by Washington.

Article originally posted at



The second article comes from this mornings NY Times and addresses the impact of the mortgage crisis on the the global marketplace>>>>>>>>>>>>>

Central Banks Intervene

to Calm Volatile Markets


Patrick Andrade for The New York Times


Published: August 11, 2007

Central banks around the world acted in unison yesterday to calm nervous financial markets by providing an infusion of cash to the system. But stocks still fell sharply in Asia and Europe, and in early trading in New York, before they recovered and closed essentially flat for the day on Wall Street.





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Mauricio Lima/Agence France-Presse — Getty Images

Traders in Brazil negotiating in the pit. Global stock markets fell for a second day running with investors dumping shares on fears of a widening economic crisis caused by a global credit crunch.


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Wally Santana/Associated Press

Mortgage debt problems are roiling the global economy. Above, watching the markets in Taipei.

As in recent weeks, the markets moved in wild swings — sharp drops were followed by steep gains and vice versa — underscoring the uncertainty. Investors weighed concerns that losses in the American mortgage market would deepen and spread against their faith in the ability of a strong global economy to withstand additional shocks.

Hoping to provide some comfort that there is ample cash available, the Federal Reserve made its largest intervention since the markets reopened Sept. 19, 2001, in the wake of the terrorist attacks. The central bank injected $38 billion into the financial system on top of the $24 billion it put in on Thursday.

The intervention steadied the markets — at least for the day. The Standard & Poor’s 500-stock index closed at 1,453.64, a gain of 0.55 point, and the Dow Jones industrial average closed down 31.14 points, to 13,239.54. For the week, the Dow was up 0.4 percent, the S.& P. 500 rose 1.4 percent and the Nasdaq was up 1.3 percent.

The question that remains is just how exposed the financial system and the economy are to losses in the credit markets and the increase in borrowing costs. The answer will set the agenda at the Federal Reserve, which finds itself confronting its first major financial crisis under the leadership of Ben S. Bernanke, who took over last year.

The Fed will be guided by its assessment of how much do banks, hedge funds, pension funds and others stand to lose and whether consumers and businesses will be able to stomach higher interest rates and stricter loan underwriting.

“There are a lot of risks in front of us,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “Financial crises, in the past, when not accompanied with a recession have been good for the markets.”

But, she added, “if the economic landscape deteriorates much from here, then we are going to have to suffer through a more difficult market period.”

That debate, Ms. Sonders and others agree, will not be resolved anytime soon, which suggests that markets will remain choppy as information about failing hedge funds and mortgage companies dribbles out.

Investor anxiety has been so heightened in recent weeks that days of stability have been shattered by the first sign of trouble tied to the debt markets.

Volatility, as measured by one popular index of options trading, has surged to its highest levels in more than four years, though it remains far lower than it was early this decade and in the late 1990s.

The financial sector has been among the most volatile — stocks there fell by as much as 1.7 percent during the day, only to climb as much as 1.1 percent before closing little changed.

Shares of Countrywide Financial, the nation’s largest mortgage lender, and Washington Mutual, the sixth-biggest lender, opened sharply lower after both companies said they were facing a harder time selling loans and could potentially have problems raising money.

While those stocks recovered much of their losses for the day, they are both down significantly for the year.

A common pattern has been a surge in trading late in the afternoon, around 3 p.m., that has often sent stocks higher, as it did yesterday — though on some days, like Thursday, the move has been just as sharp on the downside.

Richard X. Bove, an analyst at Punk Ziegel & Company, noted the trend in a recent note to investors and suggested that the reason was strong buying from portfolios that use computer models to buy and sell quickly, a practice known as program trading, or a foreign source like the investment arm of the Chinese government.

“We are talking about such a sizable amount of buying and volume goes up and stocks react strongly one way or the other,” Mr. Bove said. “What I have trouble with is trying to figure out where it’s coming from.”

But he acknowledges that the pattern will probably not last long, because as sophisticated traders figure it out they will jump in on the other side to profit from the trades.

Using data from the New York Stock Exchange, Ms. Sonders of Charles Schwab estimates that program trading accounted for about 40 percent of all trades on the Big Board in recent days, up from the 30 percent range earlier this year.

“That’s why we are getting these swings, this is professional- to-professional trading,” she said. “This is money that has a time horizon measured in minutes.”

Indeed, there is evidence that the average individual investor has not been a big player in recent days.

Flows into mutual funds that specialize in American stocks were essentially flat for the week that ended on Wednesday, according to AMG Data Services. But investors put $36.2 billion into money market accounts, the largest weekly inflow this year. Investors often put cash into money market funds, which earn more than savings accounts, that they eventually plan to invest in the market.

It is not surprising that individuals are sitting on the sidelines, given the sharp moves in the market. Yesterday, for instance, all three major American indexes fell immediately after the opening bell, and at one point the Dow Jones industrial average was down 212 points. By noon, stocks were on the rebound and the indexes were briefly in positive territory, then declined. The Nasdaq finished at 2,544.89, down 11.60, or 0.4 percent.

“You can’t invest into a market that does that,” Mr. Bove said. “You have a better chance at making money on the craps table than in this market.”

Treasury prices were little changed yesterday. The 10-year note fell 9/32, to 99 18/32 and the yield, which moves in the opposite direction from the price, rose to 4.81 percent, from 4.77 percent on Thursday.

Earlier, stocks in Japan, Hong Kong and Australia dropped by more than 2.5 percent. The benchmark Kospi in South Korea fell 4.3 percent, the biggest decline since June 2004. Most major European indexes plunged by 3 percent or more.

In both Asia and Europe, fears about the American housing market prompted investors to sell assets and forced commercial banks to reel in credit lines.

Central banks around the work stepped up efforts to slow the losses. The Bank of Japan added liquidity for the first time since the market problems began.

The European Central Bank injected money into the system for a second day, adding another 61 billion euros ($84 billion), after providing 95 billion euros the day before. The Federal Reserve yesterday added $19 billion to the system through the purchase of mortgage-backed securities, then another $19 billion in three-day repurchase agreements.

In Washington, Treasury Secretary Henry M. Paulson Jr. spent the day in what his aides said was hourly contact with the Fed, other officials in the administration, finance ministries and regulators overseas and people on Wall Street — where until last year he had worked as an executive at Goldman Sachs.

“We’ve been in touch with our colleagues in other agencies and among the financial regulators and are monitoring the situation carefully,” said Michele Davis, the Treasury Department spokeswoman. “Beyond that, we are not commenting.”

As investors in Asia sold off assets considered relatively risky, like Philippine stocks, they bought those considered safer, like Japanese government bonds. Asian currencies like the Thai baht also retreated against the dollar and more liquid and stable currencies like the yen.

“Everyone’s been talking about a credit crunch, and not surprisingly it turned into one,” said Jan Lambregts, head of Asia research at Rabobank.

While Asian banks did not seem to be directly affected, he said, “the main problem is we don’t know who is bearing the losses, and that kind of uncertainty is creating the situation that we’re in right now.”

Wayne Arnold, Steve Weisman and Jeremy W. Peters contributed reporting.


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