Obama Coalition Frays Amid Voter Angst

Turbocharged by the tea party, Republicans scored a stunning landslide Tuesday, knocking House Speaker Nancy Pelosi off her political throne in a midterm election upheaval that ultimately may add up to the biggest GOP wave in modern electoral history, taking control of the House while apparently falling one seat short in the Senate. Rand Paul, a Tea Party favorite, won the Senate race in Kentucky. In Florida, Tea Party hero Marco Rubio won a Senate seat. Even so, Senate Democratic leader Harry Reid hung on after a knock-down drag-out battle in Nevada against Tea Party favorite Sharron Angle. Democrats also scored two big victories in California, where Jerry Brown regained the governorship he left nearly three decades ago and Sen. Barbara Boxer won re-election. Twenty-three races remain undecided, including tight Senate contests in Colorado, Washington and Alaska and a key governor’s race in Florida. Colorado’s Senate candidates are preparing for a potential recount in a close race. In Alaska, supporters of Sen. Lisa Murkowski and Tea Party darling Joe Miller braced for what could be a prolonged ballot count in a three-person contest. In Florida, Republican Rick Scott holds a shaky lead over Democrat Alex Sink. Scott clung to a lead of about 1% early Wednesday. Gubernatorial races in Connecticut, Illinois, Maine, Minnesota and Vermont also remained unresolved. Most of the tight races leaned toward GOP and Tea Party candidates.

The voter coalition that elected President Obama and fortified Democratic congressional ranks just two years ago — independents, women, young people, blue-collar workers and more — fractured in the midterm elections Tuesday, either swinging to Republicans or staying home. Economic angst, conservative opposition to the landmark health care law and independents’ disappointment with Obama’s failure to deliver on promises to change Washington all contributed to a dramatic political reversal. The result: A Republican takeover of the U.S. House and a narrowed Democratic majority in the Senate, a rising anti-government Tea Party movement and the third tumultuous U.S. election in a row. It was the first time in more than a half-century that political power in the USA has swung so significantly in three consecutive elections. The results set the stage for confrontation in a more polarized Congress. Obama no longer will be able to count on the big Democratic majorities in the House and Senate that have enabled him to push through the health care bill and an $814 billion stimulus bill over almost solid Republican opposition.

Arizona Joins Wave of Discontent with D.C.

A swell of approval from voters who support the state’s controversial new immigration law and feel that most illegal immigrants should be deported helped Republican Jan Brewer win the election for Arizona governor. Republican newcomer Paul Gosar handily beat freshman incumbent U.S. Rep. Ann Kirkpatrick by a wide margin Tuesday, riding the Republican wave sweeping the nation. Gosar was among at least 57 Republicans who took seats away from House Democrats, easily taking back the House majority. Two incumbents, GOP Rep. Jeff Flake and Democratic Rep. Ed Pastor, were cruising to easy wins in the House, while two others, Democrats Raúl Grijalva and Gabrielle Giffords, were locked in tight races. Sen. John McCain was among the incumbents who survived the anti-Washington wave. Rebounding from his loss to Obama in the race for the White House two years ago, McCain easily defeated Democrat Rodney Glassman, securing a fifth term in the Senate. Ben Quayle, meanwhile, overcame a sometimes rocky campaign and questions about his past to succeed retiring Rep. John Shadegg. The seat remains in Republican hands, but Quayle, son of former Vice President Dan Quayle, would take with him an aggressively anti-Washington and anti-Obama agenda.

Arizona voters decided to keep two programs they approved years ago, rejecting measures that lawmakers say are crucial for balancing the budget. With the failure of Propositions 301 and 302 – by ratios of more than 2-to-1 – voters deepened the state budget deficit by nearly $500 million. Lawmakers had banked on the passage of the two measures to help dig out of a deficit that in September was estimated at $825 million. The deficit now grows to more than $1.3 billion.

Gridlock in Washington May Not Help Economy, Stocks

Wall Street isn’t so sure that divided government, or legislative gridlock, will be as good for stocks as history suggests. There is a popular adage that says split government is bullish for stocks, because it implies less political interference in matters involving the economy, regulation and private industry, says Robert Johnson, senior managing director at CFA Institute. Investors equate gridlock with a more hands-off, growth-friendly brand of government. In other words, all the bickering between the two parties makes it difficult for anything to get done. But with a slew of problems still facing the economy after the financial crisis, many investors fear that gridlock may not be good after all. The reason: All the in-fighting has the potential to result in government inaction at a time when action is needed. Many key policy issues, ranging from taxes to free trade to economic stimulus to deficit reduction, need addressing.

  • In general, the less government the better. However, we have already passed the tipping point, so it will be extremely difficult for a split government to undo the leftist damage quickly enough

Only 20% of Cargo to U.S. Checked for Bombs

Billions of pounds of packages bound for the U.S. each year are delivered on passenger flights in which cargo is checked with an electronic system that does not screen for bombs, lawmakers and security experts said Monday. The Homeland Security Department uses computers to identify possibly dangerous cargo, usually after flights are already in the air and en route to the USA. Many of those flights are passenger planes carrying cargo in the hold. About 20% of the 9 billion pounds of air cargo that comes from overseas each year is physically checked for bombs, according to the Transportation Security Administration, which says the tracking system picks out all “high risk” air cargo. After the 9/11 attacks, Customs and Border Protection began receiving electronic manifests listing each cargo package coming to the U.S. by ship, truck, rail and airplane. The lists show each shipment’s contents, origin, destination and other information that is run through a database filled with shipping histories and intelligence. The TSA may start forcing airlines to inspect suspicious cargo before a plane takes off from overseas, the GAO said. The TSA is studying whether the tracking system can target certain U.S.-bound air cargo for screening prior to departure.

German police disarmed a mail bomb Tuesday that was sent from Greece to German Chancellor Angela Merkel‘s office, hours after similar small bombs exploded outside the Russian and Swiss embassies in Athens in attacks blamed on far-left Greek extremists. Greek police destroyed five more suspected bombs in Athens, and two local men have been charged with mailing bombs. Among them were two parcels police destroyed late Tuesday in the cargo area of Athens International Airport. Flights were not affected. Police said the packages were addressed the European Union‘s highest court in Luxembourg and the Europol law enforcement agency in the Netherlands. That brought the total number of similar mail bombs found to eight.

Ø There are always loopholes for terrorist to exploit. We need to thank God, not government, that America has not seen any more successful attacks on our country since 9/11

Economic News

Orders to U.S. factories rose broadly in September, propelled by business spending on commercial aircraft, boats and machines. And a second report Wednesday said the service sector expanded in October at faster pace, its 10th straight month of growth. The Commerce Department said factory orders rose 2.1% in September, the steepest increase since January. Business spending on costly, long-lasting goods such as airplanes and heavy machines produced most of the demand. But consumer spending also rose by 1.0%, after running flat in August.

Mortgage buyer Freddie Mac (FMCC) on Wednesday posted a narrower loss of $4.1 billon in the July-September quarter. The government-controlled mortgage buyer also asked for an additional $100 million in federal aid, substantially less than the $1.8 billion it sought in the second quarter. The government rescued Freddie Mac and sibling company Fannie Mae nearly two years ago to cover their losses on soured mortgage loans, and it estimates the bailouts will cost taxpayers up to $259 billion. That’s nearly twice the $133 billion Fannie and Freddie are in line to receive from taxpayers so far.

The nation’s homeownership rate is at the lowest level in more than a decade, hampered by a rise in foreclosures and weak demand for housing. The Census Bureau says the percentage of households that owned their homes was 66.9 percent in the July-September quarter. The nation’s homeownership rate was around 64 percent from 1985 through 1995. It then rose dramatically during the Clinton and Bush administrations, hitting a peak of more than 69 percent in 2004 at the height of the housing boom.

BP PLC raised the likely cost of the devastating Gulf of Mexico oil spill by $7.7 billion Tuesday, dragging down its third quarter net profit by more than 60% despite higher oil and gas prices. In an earnings update, the London-based company said it returned to profit for the first time since the April spill, though net income of $1.79 billion was still well below a year-earlier profit of $5.3 billion because of the extra charge.

India‘s central bank raised key interest rates for a sixth time this year on Tuesday to contain persistently high inflation — another sign of the gulf between fast growing emerging Asian economies and tepid growth in the developed world. At 11.6%, India’s consumer inflation is higher than any other major economy. Australia’s central bank also jacked up its key interest rate in a surprise move Tuesday, also aimed at fighting inflation. China began hiking rates in October.

Obama Off to Asia

President Obama’s longest foreign trip yet has him visiting four Asian nations, all democracies; China is not on the list of stopovers. That’s no accident, say foreign policy experts. The four nations Obama is visiting —India, South Korea, Indonesia and Japan— all share a concern about Chinese demands over unsettled issues in the region, its growing military and economic might. China has had several recent public disputes with Asian nations over unsettled territorial claims and provocative actions from North Korea. South Korea has objected to China’s protection of North Korea. Some in India want a return to the stronger strategic emphasis the United States paid India under Presidents Bush and Clinton. Threats from Islamist terrorist groups are another issue on the presidential agenda. Another focus of the trip will be the U.S. economy.

Iran

Israel‘s military intelligence chief said Wednesday that Iran possesses enough enriched uranium to build one nuclear bomb and soon will have enough to produce a second. Maj. Gen. Amos Yadlin‘s statement coincides with previous assessments from both the CIA and the U.N.’s nuclear watchdog. But any Israeli commentary on Tehran’s nuclear program is significant because Israel has not ruled out a military strike to try to prevent Iran from developing nuclear weapons.

Iraq

Rapid-fire bombings and mortar strikes in mostly Shiite neighborhoods of Baghdad killed up to 100 people and wounded 280 on Tuesday, calling into question the ability of Iraqi security forces to protect the capital. There was no immediate claim of responsibility. But the coordination of the blasts, the complexity of the operation and the predominantly Shiite targets point to al-Qaeda-linked Sunni insurgents. The blasts — at least 13 separate attacks — came just two days after gunmen in Baghdad held a Christian congregation hostage in a siege that ended with 58 people dead. Tuesday morning, hundreds of Christians gathered at a downtown church to mourn their lost brethren.

Iraq was once a remarkable mélange of beliefs, customs and traditions; the church killings on Sunday drew another border in a nation defined more by war, occupation and deprivation. Identities have hardened; diversity has faded. Nearly all of Iraq’s Jews left long ago, many harassed by a xenophobic government. Iraq’s Christians have dwindled; once numbering anywhere between 800,000 and 1.4 million, at least half are thought to have emigrated since 2003, their leaders say.

Mexico

Four U.S. citizens were shot to death in separate attacks in the border city of Ciudad Juarez, Mexican authorities said Monday. Ciudad Juarez has become one of the world’s deadliest cities amid a turf war between the Sinaloa and Juarez drug cartels. More than 2,000 people have been killed this year in the city, which is across the border from El Paso. Elsewhere in Mexico, three city police officers were gunned down early Monday in a drive-by shooting as they patrolled the heart of Acapulco’s upscale tourist district.

Eritrea

ASSIST News Service reports that on October 20 Eritrean government officials arrested 11 Christians and took them to unknown locations following a provincial governor’s orders. Mustafa Nurhussein, the governor of the Southern Zone (province) of Eritrea, ordered Christians in the cities of Mendefera, Dekemharre and Dibarwa arrested. Security officials also confiscated TVs, video players and other electronic equipment that belonged to the Christians. Most of the detained belong to the Full Gospel Church, an evangelical church that was among those that were banned by Eritrean officials in 2002. Eritrea only recognizes four religious groups: Islam, the Eritrean Orthodox Church, the Roman Catholic Church and the Lutheran Evangelical Church of Eritrea.

Volcanoes

Indonesia‘s deadly volcano erupted Wednesday with its biggest blast yet, shooting searing ash miles into the sky and forcing the hasty evacuations of panicked villagers and emergency shelters near the base. Soldiers loaded men, women and crying children into trucks as rocks and debris hurled in the air and down the mountain’s slopes. The danger zone was widened Wednesday from six miles from the glowing crater to 9 miles because of the heightened threat. Indonesia, a vast archipelago of 235 million people, is prone to earthquakes and volcanoes because it sits along the Pacific “Ring of Fire,” a horseshoe-shaped string of faults that lines the Pacific.

Weather

A hurricane over the weekend, Tropical Storm Tomas was in the central Caribbean late Tuesday with maximum sustained winds of 40 mph, according to the U.S. National Hurricane Center in Miami. Its center was about 385 miles south-southwest of Port-au-Prince and moving west near 8 mph. Forecasters predicted it will veer north toward Haiti and slow in its forward movement. The forecast said Tomas was likely to strengthen over the next 48 hours, and could regain hurricane strength by Friday. A hurricane watch was issued for Jamaica, and the center said the storm could dump up to 8 inches of rain on Aruba, Bonaire and Curacao. Tomas has already killed at least 14 people and left seven missing in the eastern Caribbean nation of St. Lucia, where it caused more than $37 million in damage. In nearby St. Vincent, the storm wrecked more than 1,200 homes and caused nearly $24 million in damages to crops. It would be the first big storm to strike Haiti since the Jan. 12 earthquake. On Tuesday, the government advised the estimated 7,850 residents of its primary relocation camp to ride out the storm somewhere else.

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