Even as the US government is set to acquire massive amounts of bad private debt, the Senate demonstrates that is has not forgotten about those defense contractors, who must be feeling a tad slighted considering the size of the Wall Street bailout.

The Senate has embraced last year's Defense Science Board conclusion that directed-energy weapons -- such as high-, medium- and low-power lasers -- hold great potential and should be developed as soon as possible.

In the fiscal 2009 defense authorization bill, which was approved Wednesday, the Senate included additional funds for laser programs and a provision requiring Defense Secretary Robert M. Gates to accelerate work that would make directed-energy weapons operational in the near future.

However, the government promised tax payer relief when FEMA unilaterally decided that the agency would no longer deliver ice to hurricane victims.  Big savings are sure to be had.

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Karl Denninger at The Market Ticker takes Secretary Paulson to task for his complicity in the financial meltdown, and the subsequent move to seek plenary authority over the financial system, such as it is right now. [...]More

The Pakistani arm of the Taliban appears unpersuaded by the rise and rhetoric of President Zardari, for within hours of his presidential inaugural address, a massive truck bomb rammed through a security perimeter at Islamabad's Marriott Hotel.  Noted as a "symbol of wealth and privilege" and favoured by western visitors, the hotel is a mere 500 meters away from the Pakistan parliament buildings and is a frequent meeting site of Pakistani politicians and foreign diplomats.  Dozens were killed.

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Certainly, a lot of people are making hay right now out of the health care deregulation burbling of John McCain, which appears in Contingencies, a journal of the Academy of American Actuaries.  What does McCain propose?  Why, he wants to open up "health care markets" to make them more like the banking industry, or I guess we should say, "the banking industry."

Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

The worst excesses of regulation!  Hilarious, certainly. [...]More

George Bush will leave many a legacy, indeed.  Not the kind he imagines, of course, but rather a vast endowment of failure, malfeasance and murderous disaster.  But apart from Iraq, Afghanistan, torture and secret prisons, there is another legacy that the Bush administration will leave with the world: arms sales that have drastically escalated in the waning years of Bush's second term, and whose delivery lifetimes will ensure that weapons deals  will be "one of President Bush’s most lasting legacies."  Some of those were just documented here a couple of days ago.

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The unraveling on Wall Street continues, as Lehman looks at liquidation, while BofA is in talks for a buyout of  Merrill Lynch.  Masters of the Universe….

Unable to find a savior, the troubled investment bank Lehman Brothers appeared headed toward liquidation on Sunday, in what would be one of the biggest failures in Wall Street history.

The fate of Lehman hung in the balance as Federal Reserve officials and the leaders of major financial institutions continued to gather in emergency meetings on Sunday trying to complete a plan to rescue the stricken bank.

But Barclays, considered the leading contender to buy all or part of Lehman, said Sunday that it could not reach a deal without financial support from the federal government or other banks, making a liquidation more likely.

Bank of America is in advanced talks to buy Merrill Lynch for at least $38.25 billion in stock, people briefed on the negotiations said on Sunday, as a means to preserve that investment bank while Lehman Brothers looks likely to collapse.

The move suggests a desperate effort at triage on Wall Street, as Bank of America works to shore up the likely next victim of the credit crunch. A deal, valued at between $25 a share to $30 a share, could be announced as soon as Sunday night, these people said. Merrill shares closed at $17.05 on Friday.

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Following up on Cernig's post about the deployment of two Tu-160 strategic bombers to Venezuela and signaled joint naval exercises with Venezuelan frigates, submarines and aircraft, comes news that Russia is amping up naval cooperation with Syria. Not only is this an obvious counter move by Moscow to US naval presence in the Black Sea, it could have a serious impact the on-going Israeli-Syrian peace talks that had heretofore been delayed by the resignation of a senior Israeli mediator.

Russia said Friday it was renovating a Syrian port for use by the Russian fleet, signaling an effort to establish a firmer foothold in the Mediterranean at a time of tensions with the United States over Georgia.

Friday's announcement was the first tangible sign of any new cooperation. The Itar-Tass news agency reported a vessel from Russia's Black Sea fleet had begun restoring facilities at Syria's Mediterranean port of Tartus for use by the Russian military.

The two countries' naval chiefs also met in Moscow on Friday and discussed "further strengthening mutual trust and mutual understanding between the two states' fleets," a Russian naval official, Igor Dygalo, told Itar-Tass.

The Tartus renovations could signal an intention to have a long-term Russian naval presence there. In late August, Russia's ambassador to Damascus, Igor Belyev, said Russian ships already patrol the area, but "a new development is that the Russian presence in the Mediterranean will become permanent."

Indeed, the Georgian conflict, far from being an isolated, if ill-conceived incident, is proving to have staying power. Aggressive Russian posturing has no doubt [...]More

The big weapons news this week, of course, was the deployment of two (2) Tupolev Tu-160 strategic bombers to Venezuela, which Hugo Chavez himself promised to fly.  Reports remain sketchy on details of the promised flights.

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While generally avoiding covering much of the nonsense that passes for what American calls its "presidential election campaign," the Palin piñata is proving too much to avoid even for the staid observatory here at Shockfront.  Of course, we all know about the historic Palin/Gibson interview and just how very badly the woman looked in her first appearance on national television since the GOP convention.  Deconstruction of that sorry performance can be found in many a place, but I would like to jab a stick at a couple of the exchanges in the interview.

GIBSON: Do you agree with the Bush doctrine?

PALIN (short version): Whatever that is, I'm for it! … Charlie.

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These are dark days for American influence in Iraq, especially regarding western access to oil.  Big Oil has been haggling with the Iraq Oil Ministry for weeks over terms of no-bid service contracts initially offered in June this year.  And while western oil interests were arguing for payment in oil rather than cash, Iraq signed the country's first oil contract with the Chinese National Petroleum Company (CNPC).  Reports further had it that the oil majors, Exxon, BP, Shell, Total and Chevron, were also demanding that they be "guaranteed a slice of the massive oil-pumping deal" in future expected Production Sharing Agreements (PSAs).  The Iraqi government balked on such demands, seeing them as far too politically contentious, which they clearly were.  Despite the obvious political difficulties, Big Oil held firm. [...]More

Irony continues to cut a wide swath in the Caucasus, as repercussions grow in the wake of the Russo-Georgia conflict. After helping arm and train the Georgian military, Israel is now reportedly telling Israeli businessmen "involved in military sales" to halt all travel to Georgia.

Israeli defense officials say the government has told all businessmen involved in military sales to Georgia to immediately cease visits to the former Soviet republic.

The officials say the directive was decided upon this week because Israel is concerned about damage to its relations with Russia. Israel had decided to stop most weapons sales to Georgia even before the Russia-Georgia war last month.

One of Israel's primary concerns is that Russia could sell Iran advanced weapons, including anti-aircraft missiles.

This could be a little psy-oping here, but it does further suggest that, indeed, Israel had been out of the loop on the Georgian operation and that Saakashvili's decision was the rogue move many think it was, one that may have been encouraged by US elements operating outside nominal channels. Long-time Georgian lobbyist and McCain foreign policy advisor Randy Schueneman redound such suggestion, while convenient circumstances brought Karl Rove and Saakashvili together in the weeks prior to the conflict. Both had attended the Yalta European Strategy (YES) conference and, in fact, were present during the same conference session on July 12. Speculation, of course, but that is some of what I thrive on here.

This move by the Israelis follows in the wake of [...]More

Now, more than ever, people -- at least ones overseas -- are finding some new inner strength and telling Dick Cheney to screw off. More

Tensions have been on the boil since the August 22 bombing of the Afghan village of Azizabad.  Hell had indeed been unleashed upon the village, as a combined operation of US Special Forces and Afghan commandos descended on the village after US attack helicopters, drones and a C-130 Spectre gunship leveled the town. [...]More

Looks like all those lobbyists Microsoft hired after their own anti-trust lawsuit are starting to pay dividends.

The Justice Department has quietly hired one of the nation's best-known litigators, former Walt Disney Co. vice chairman Sanford Litvack, for a possible antitrust challenge to Google Inc.'s growing power in advertising.

Mr. Litvack's hiring is the strongest signal yet that the U.S. is preparing to take court action against Google and its search-advertising deal with Yahoo Inc. The two companies combined would account for more than 80% of U.S. online-search ads.

Google shares tumbled 5.5%, or $24.30, to $419.95 in 4 p.m. trading on the Nasdaq Stock Market, while Yahoo shares were up 18 cents to $18.26.

Google stands by the deal and says the arrangement does not and will not violate anti-trust law. In fact, they say, Google will delay implementation until the DoJ has time to "understand it."  Knowing just how gutted the DoJ is of actual lawyerly abilities, this is something that might never happen.

Google has said the Yahoo deal doesn't violate antitrust law. It has forcefully argued -- in public testimony before Congress and in private meetings with Justice Department lawyers -- that the deal is pro-competition. The companies say they voluntarily delayed closing the deal until early October, to allow the U.S. to complete its review.

"We voluntarily delayed implementation of this arrangement to give the Department of Justice time to understand it, and we continue to work cooperatively with them," Google said. "While there has been a lot of speculation about this agreement's potential impact on advertisers or ad prices, we think it would be premature for regulators to halt the agreement before we implement

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Sunday 31 August 2008: Palin play no role in national defense activities, even when they involve the Alaska National Guard. The entire operation is under federal control, and the governor is not briefed on situations.

-- Major General Craig Campbell, 

Adjutant General of the Alaska National Guard

Wednesday 3 September 2008: while the Alaska National Guard operates a launch site for a US anti-missile system at Fort Greely, about 100 miles south of Fairbanks, the Alaskan governor is not in the site's chain of command and has no authority over its operations. Nor are the recent deployments to Iraq and Afghanistan by the Alaska National Guard under Palin's purview. Her primary role is in recruiting National Guard volunteers.

-- Major General Craig Campbell, 

Adjutant General of the Alaska National Guard

Friday 5 September 2008: "I've not been very pleased with what I've been seeing about the chastising of the National Guard by having it diminished by the insinuation that a commander-in-chief of the National Guard doesn't really control the military. National Guards are state military forces run by governors, and Sarah Palin does it great."

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