by Debs is Dead
lifted from a comment

Going on from what Giap wrote about State actors in many large
‘terrorist’ operations, it seems from where I sit that the states most
likely to benefit from the action in Mumbai are USuk/BJPIndia/Israel.

The prez elect of America has given a firm commitment to move troops
from Iraq where he imagines they are no longer needed, to Afghanistan
where they are required, he claims. The problem is that the people
America has declared war on the Pashtu, are spread across two nation
states so war in Afghanistan of itself cannot truly subjugate these
people and turn them away from the ancient culture into dumbed down
consumerists.

Therefore USuk must wage war against those Pashtu who
live in Pakistan as well but the Pakistani government stands ready and
willing to do that themselves, repeatedly advising USuk that their
presence on Pakistan soil is not required, not wanted and certainly not
gonna be tolerated.

That dichotomy of belligerence could have worked with the BushCo
administration who had no interest in the Pashtu other than shooting or
bombing any head which appeared over the parapet, but Obama appears to
want more.

Cont. reading: Mumbai: What Follows?

This will likely get lost in future news from Afghanistan, so let us make sure we note it:

Press And "Psy Ops" to Merge At NATO Afghan HQ: Sources

KABUL (Reuters) – The U.S. general commanding NATO forces in Afghanistan has ordered a merger of the office that releases news with "Psy Ops," which deals with propaganda, a move that goes against the alliance’s policy, three officials said.

The move has worried Washington’s European NATO allies — Germany has already threatened to pull out of media operations in Afghanistan — and the officials said it could undermine the credibility of information released to the public.
…
U.S. General David McKiernan, the commander of 50,000 troops from more than 40 nations in NATO’s International Security Assistance Force (ISAF), ordered the combination of the Public Affairs Office (PAO), Information Operations and Psy Ops (Psychological Operations) from December 1, said a NATO official with detailed knowledge of the move.

"This will totally undermine the credibility of the information released to the press and the public," said the official, who declined to be named.

…
The new combined ISAF department will come under the command of an American one-star general reporting directly to McKiernan, an arrangement that is also against NATO policy, the NATO official said.

Unfortunately the unnamed ‘official’ is wrong. This will not ‘undermine the credibility of the information released to the press and the public’.  The public will not take note of this.

Sure, while news from Afghanistan was already often propaganda,  spoon fed to embedded journalists, this will make absolutely sure that nothing will be believable unless it comes from multiple independent sources.

But the mainstream media will continue to report from Afghanistan whatever that new combine operation will feed them. They will soon forget to mention the above, if they will mention it at all.   They will deliver  "The Truth^TM" straight from McKiernan’s propaganda shop without flagging its dubiousness.

"What we are seeing is a gradual increase of American influence in all areas of the war," the NATO official said. "Seeking to gain total control of the information flow from the campaign is just part of that."

NATO troops as auxiliaries of the U.S. empire – what is not to like with that?

by Debs is Dead
lifted from a comment

The only interesting part of this horror of people killing each
other for entertainment, for that is what this sort of attack aimed at
generating publicity must be considered as, is the inability of the
mainstream media to construct a durable, credible meme on the fly. Oh
they will eventually decide that this is ‘Muslim terror’ whatever the
real causes were, but in the meantime it is interesting to watch them
make a mess of out of their hastily constructed collection of sparse
facts, half truths and outright lie.

The bitter and twisted man/woman that was screeching about the
ultra-orthodox Jewish centre missed a great piece of reportage on the
BBC last night. The BBC showed one commentator who was enthusing about
the cheers from the crowd as the Israeli commandos arrived and how
pleased the audience was to see the Israelis arrive, that the commandos
despite their masked faces were giving deprecating waves to the crowd.

The reporter emphasised several times about how pleased the people of
Mumbai were to see help from the elite Israeli anti terror unit. That
must have been recorded some time earlier because then we cut to
another beeb reporter mournfully describing that at least 5 hostages
possibly more had died in the ‘liberation’ of the centre by an "Indian
Anti Terror Squad" and this morning (NZ time) the papers said:

Cont. reading: Mumbai And The War Of Terror

A German word with no real English equivalent is Konsumterror.  The verbal translation is consuming-terror. A English definition of the sense might be: a fear that one is missing out by not buying something.

This person then could be called a casualty of Konsumterrorism:

A worker died after being trampled and a woman miscarried when hundreds of shoppers smashed through the doors of a Long Island Wal-Mart Friday morning, witnesses said.

The unidentified worker, employed as an overnight stock clerk, tried to hold back the unruly crowds just after the Valley Stream store opened at 5 a.m.
…
"He was bum-rushed by 200 people," said Jimmy Overby,
43, a co-worker. "They took the doors off the hinges. He was trampled
and killed in front of me. They took me down too…I literally had to
fight people off my back."

Link via Atrios

Ain’t there laws against inciting terrorism? Who should be punished for this?

The cleanup operation in Mumbai are still ongoing as the police and army search and fight through two big hotels that were attacked. The latest casualties numbers are 125 dead, 327 injured.

As said before, there is something weird about these attacks.

There was no clear target.

The major attacks were on a railway station, two big hotels, a multiplex movie theater and a bar. Two taxis were blown up. Two terrorists allegedly were at a hospital.

Of the dead only 6 were foreigners, of the wounded 7. While those hotels and the bar frequently have foreigners those numbers and the attack on the railway station and the cinema do not fit to an "attack on foreigners" scheme.

There also seams to be no special religious anti-Muslim or anti-Hindi scheme in this as no place of worship was attacked.

The attacks, even while there were a lot of casualties, seem not designed to cause the maximum number of dead. One would do that with explosives within the crowded railway station. Not by  shooting into the masses or by blowing up a random taxi.

There were no suicide bombings. Apparently there was no hostage taking either. But the attackers did not care or prepare to get away either. Instead they waited for the police and then had a shootout at each place.

The group that allegedly claimed the attack has never been heard of. For maximum international media attention thanksgiving is not a good day.

This coordinated attack brought out all anti-terror units in Mumbai. That, I think, might have well been the intended aim. The attacks seem to have been designed to do and to create direct battle situations with the anti-terror forces.

Here is my conspiracy theory:

Cont. reading: The Attack in Mumbai II

What does beggar thy neighbour mean?

After reading yesterday’s Financial Times editorial, Fiscal fairness, not fiscal prudence, I was in serious doubt over that. I looked it up:

Beggar thy neighbour, or beggar-my-neighbour, policies are those that seek benefits for one country at the expense of others.
 

That is exactly what I thought it would mean. But somehow the FT has a different concept of that phrase.

According to the FT, you are a serious beggar-thy-neighbour case when you are unwilling to pay down the debt your neighbor made by spending too much. That is, if your neighbor can not live off your expense. Seriously:

Cont. reading: The FT’s Understanding of Beggar Thy Neighbour

Somewhat weird.

This seems to be a botched attack on a target we yet do not know.

There have been shootings at a police station, a main railway station, a multiplex cinema, a hospital, a bar and two luxury hotels. Only the last three have some concentration of foreigners. Additionally two taxis blew up in different locations. Over a hundred people are dead and many more wounded.

Which of these diverse places were real targets?

The attackers are said to have come by boat. My first hunch is that they separated into several groups on their way to some place. Some of these smaller groups were then challenged by security forces and then went on a rampage. The locations and high number of random victims do not make any sense. If so many attackers were involved, a real operation with one or two targets would be much more likely to lead to some ‘success’.

So what was the real target?

As for who they are. They could be from any group. As Debs is Dead remarks:

Funny the papers here which have been reporting it since about 8.00pm Wednesday GMT initially put the attacks down to Assamese separatists, but it could just as easily have been Gorkhaland separatists, Sikh separatists or any of the myriad other nationalist movements within India known to have used violence against citizens and tourist spots.

The phone call from a previously unknown ‘muslim terror group’ is as convenient as it is unlikely to be genuine.

Additional possible groups are Kashmiris, Thais in revenge of the Indian attack on a Thai trawler near Somalia (though I think that is unlikely) or Hindu rightwingers near to the BJP party in a false flag operation. I would not exclude any Muslim group with official, unofficial or no Pakistani support, but it is just one of many possibilities.

Comment or perish … another open threat …

The former Georgian ambassador to Russia and once follower of Saakashvili, Erosi Kitsmarishvili, testified in front of a Georgian parliament commission. Major points:

# In the second half of April, 2008, I have learnt from the President’s inner circle that they have received a green light from the western partner to carry out a military operation;

# When asked to specify “the western partner” Kitsmarishvili said: after a meeting with the U.S. President George W. Bush [the meeting between Bush and Saakashvili took place in Washington on March 19], our leadership was saying that they had the U.S. support to carry out the military operation;
…
# The military operation should have been undertaken in direction of Abkhazia; military instructors from Israel were brought here in order to prepare that military operation;

# [Defense Minister] Kezerashvili also said at that meeting that the operation should have started in early May, or at least before the snow melted on the mountain passes;

# This decision was not materialized;
…
# On August 7, at 4pm I again had a phone conversation with Saakashvili; he told me that war was starting; I do not want to go further into details of that conversation;

This account is, of course, much more believable than Saakashvili’s lies.

At 6:10pm local time on August 7 Saakashvili announced a ceasefire in skirmishes with South Ossetia. But as Kitsmarishvili confirms, his troops had already orders to attack and were moving into place.

How long will it take until the Georgians finally take this guy to the prison where he belongs?

There are now several version available of the Status of Force Agreement (SOFA) the U.S. is pursuing with Iraq.

There are two translations from the Arab version. One from Iraq blogger and activist Raed downloadable here. The other one is by McClatchy’s Baghdad Bureau available here. So far the U.S. keeps the official English version secret. But McClatchy obtained a copy (pdf). Its team reports:

The Bush administration has adopted a much looser interpretation than the Iraqi government of several key provisions of the pending U.S.-Iraq security agreement, U.S. officials said Tuesday — just hours before the Iraqi parliament was to hold its historic vote.

These include a provision that bans the launch of attacks on other countries from Iraq, a requirement to notify the Iraqis in advance of U.S. military operations and the question of Iraqi legal jurisdiction over American troops and military contractors.

To illustrate the differences lets compare the three editions. For obvious reasons we pick article twenty four.

Raed’s translation:

Cont. reading: Three SOFA Versions – But What About The SFA?

Last month I reported on ships laying idle in Hamburg harbor: Visually Noticing The Downturn

The Baltic Dry Index measures cost for cargoes of raw materials by
sea.  It was around 2,000 points in the beginning of 2006. It jumped to
12,000 in mid 2008. Since then it fell to 925. That is an unprecedented collapse of freight rates.

It is now down to 824.

Oversea goods from and to the Americas and Asia go to Rotterdam, Felixstowe, Bremerhaven and Hamburg on ships carrying up to 10,000 standard 20 feet container (teu). From there smaller ships of mainly two cooperatives service northern Europe. Unifeeder (~38 vessels) and Teamlines (~30 vessels) ships have 500 to 900 teu. They ‘feed’ the oversea ships with goods to and from all of northern Europe, including the Baltic countries and Russia.

As I was told today Unifeeder now has eight ships idle, more than 20 percent of its total capacity, and is planing to idle more. I do not know the total Teamline numbers but at least three of their ships were laying in idle mooring in Hamburg harbor today.

The news from the big shipping lines is even worse:

Coscon, K Line, Yang Ming and Hanjin Shipping had already announced cuts on 13 November, but are now swinging the axe again to cope with the “traditional slack season” from early December to the end of March next year.

…
These cuts will slash existing capacity to northern Europe by 30% or 16,000 teu.

It is a worldwide problem as trade is collapsing even without the disastrous protectionist measures we can still expect to be legislated soon:

It had already suspended its AWE (All Water East Coast) China to US central loop from early October and reduced the total capacity in the trade by around 18.5%.

Earlier this month it also suspended the EMX (East Med Express) service in the Asia-East Mediterranean trade from the middle of October.

And it decided on reducing capacity by 18% in its TAS -1 (North Trans Atlantic) service connecting the US and Europe from the middle of this month. Port calls will be unchanged, but smaller ships will be used.

Capacity on its PSW (Pacific South West) trade will also be chopped and it will scrap the MAP (Mediterranean – Asia – America Pendulum) service connecting Mediterranean, Asia and the US from early 2009, cutting capacity in this trade by 13% to 15%.

Hyundai Heavy Industries, the biggest shipbuilder in the world, has 57% less orders than a year ago. A lot of jobs in transport and all related industries will be lost. It will take many years to revive the trade.

Like a month ago I want to ask you:

What are signs of a downturn you see in your area? What are they? Are the signs getting worse or better?

by Debs is Dead
lifted from a comment

Well I was interested by Mike Whitney’s comments
on the seeming dissonance on the support the banks and financials are
getting and the complete lack of support for the auto industry bailout.
Yeah yeah I know the American auto industry is a basket case completely
captured by the myth of infinite and cheap hydrocarbons, their
inability to change has stranded them on the beach like an old whale
who doesn’t realise he will die before a tide big enough to float him
off comes again.
But the same can be said of the banks and all the rest of Wall St. They
used outmoded inflexible solutions to an ever-changing environment and
consequently got beached too.

Whitney maintains that the auto industry will be bailed out alright
but not until the big two have been chapter 11’d and the unions broken
along with worker’s entitlements:

So why would GMAC want to become a bank holding company if General
Motors is headed for the chopping block? Could it be that the
government is working out a secret deal with management to put the
company through Chapter 11 (reorganization) just so it can crush the
union and eliminate their pension and health care benefits in one fell
swoop?

You bet. Car workers will be reduced to slave wages just like they
are in sunny Alabama where sharecropping has moved indoors. And–no
surprise–the Democrats are right on board with this labor-busting
charade. The auto industry isn’t going to be shut down. That’s just
more fear-mongering like the blather about martial law and WMD. Detroit
is going to be transformed into a workers gulag; Siberia on Lake
Michigan, which is why Paulson is withholding the $25 billion. It’s
plain old class warfare.

The ultimate sellout by the dems. Those of us who live in nations
where a ‘leftist’ party finally won government during the great
depression where government then introduced the safety nets and
Keynsian economics and a more friendly attitude towards labour unions;
are probably unaware of the horrors introduced by the likes of Ramsay
McDonald as a labour PM in England when the depression hit.

Cont. reading: Auto Industry Bailout Scam

Yves Smith has some good remarks on how Finance Has Lost Sight of Its Role

In 1980, financial firms accounted for 8% of S&P earnings. During the peak of our last stock market cycle, their profits were over 40% of the total.

Now consider: finance is a necessary function, but is represents a tax, a drain on the productive economy, just as defense and lawyers do …

Instead being a utility that supports the real productive industry, the financial industry has turned into a cult.

Willem Buiter has chastised the Fed for what he calls "cognitive regulatory capture," that is, that they identify far too strongly with the values and world view of their charges. But it isn’t just the Fed. The media. and to a lesser degree, society at large has bought into the construct of the importance, value, and virtue of the financial sector, even as it is coming violently apart before our eyes. Why, for instance, the vituperative reaction against a GM bailout, while we assume Citi has to be rescued?

Why indeed? Why this?

The U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.

As I wrote last month:

Where is the social benefit?

Can we please have a plan for a financial system that is a service to the economy and not a drag –  not a monster that depends on over-leveraged quant strategies nobody really understands?

While now bank after bank gets nationalized, possibly all of them within the next 12 month, we get the once in a lifetime chance to cut the financial system back to the boring utility service that it should be: Collecting savings and distributing them as loans for productive means while maybe making a small profit.

That is the only social and economic value the financial industry has. Everything else is obfuscation of robbery driven by greed.

The U.S. taxpayer will now take most losses on a $300 billion package of bad debt Citigroup is holding:

Under the agreement, Citigroup and regulators will back up to $306 billion of largely residential and commercial real estate loans and certain other assets, which will remain on the bank’s balance sheet. Citigroup will shoulder losses on the first $29 billion of that portfolio.

Any remaining losses will be split between Citigroup and the government, with the bank absorbing 10 percent and the government absorbing 90 percent. The Treasury Department will use its bailout fund to assume up to $5 billion of losses. If necessary, the Federal Deposit Insurance Corporation will bear the next $10 billion of losses. Beyond that, the Federal Reserve will guarantee any additional losses.

In the deal the government will get some likely worthless equity in Citigroup.

The question I don’t see anybody touching is for what percentage of the notional value of the loans this deal was done. The deal terms (pdf) say:

Up to $306 bn in assets to be guaranteed (based on valuation agreed upon between institution and USG).

So who will set those values? Who will supervise those who set these values? There are billions of taxpayer dollars at risk in each percentage difference of these evaluations. Where is the reporting on that?

Instead we are subjected to such nonsense:

Government officials fear taking over Citigroup would create a precedent: Unlike AIG, Citigroup’s balance sheet is relatively healthy, with relatively strong levels of capital particularly compared to most of its competitors.

Ahem, does the Citigroup official balance sheet matter at all?

In addition to $2 trillion in assets Citigroup has on its balance sheet, it has another $1.23 trillion in entities that aren’t reflected there. Some of those assets are tied to mortgages, and investors have worried they could cause heavy losses if they are brought back on the company’s books.

Citigroup is dead. There is no way the company can survive without a massive default. It will not be the only one. Others are lining up:

Government officials could face requests from other banks for similar help shoring up their balance sheets. Banks, hedge funds, and private equity firms have urged Capitol Hill
and government officials to restart the asset-purchase program in
recent weeks.

"The problem is that other banks would want to get in line" for such government support, says Thomas B. Michaud, a vice chairman of investment bank Keefe, Bruyette & Woods Inc. "Is there enough money to do that?"

Only if you print it …

And who is pulling the strings behind all this?

Cont. reading: Rubin’s Citigroup Bailout

Obama announces a big infrastructure program:

With the worsening economic turmoil certain to mark Mr. Obama’s first year in office, his advisers say they are intent on trying to use the crisis as an opportunity to act on many of the issues he emphasized in his campaign, including tax cuts for lower- and middle-class workers, addressing neglected public infrastructure projects like roads and schools and creating new “green jobs” through federal business incentives for energy alternatives and environmentally friendly technologies.

That is a pretty standard Keynesian reaction in a recession.

But the program lacks real initiatives. Why spend on roads when better public transport would be much more effective in reducing dependency on hydrocarbons?

The best policy for energy alternatives is to make carbon-energy more expensive by introducing a gas tax and to guarantee an (over time decreasing) extra amount per kilowatt for wind energy.

These are recipes known to work. Federal business incentives will simply end up as pork.

So far I have yet to see any change from standard U.S. policy approches.

As Jereme Scahill points out (h/t r’giap), the Obama team looks more and more like a Clinton team sprinkled with some CIA torture advocates and arch-republicans like Gates in important position.

Why was there such a long primary at all when the people who lost that ride end up in the front seats of the presidency?

Some weird terror scare is constructed in this:  Somali Pirates’ Successful Business Model, Trade with Terrorists: UM Researcher

The Somali pirates are growing their business – expanding their area of operation, managing public relations, reinvesting in the enterprise – and appear to have a growing relationship with militant Islamic groups, says University of Maryland researcher, Jana Shakarian, who monitors political, social and security conditions in Africa.
…
Al-Shabaab is suspected to entertain relations with Al-Qaeda. … Al-Shabaab seems to profit from the piracy business …

Shakarian makes up a six degree relation between the Somali coast guard/pirates and Al-Qaeda. But there is not one tiny bit of proof for any of the those relations.

David Axe, who has at least been on the grounds in Somalia, finds such relations very unlikely.

b real points us to the real news:

MOGADISHU (Reuters) – Dozens of Somali Islamist insurgents stormed a port on Friday hunting the pirates behind the seizure of a Saudi supertanker that was the world’s biggest hijack, a local elder said.

and:

MOGADISHU (AFP) — A hardline Islamist alliance controlling Somalia’s main southern port of Kismayo on Wednesday promised tough measures to protect ships and traders from marauding pirates.

The pirates/Somali coast guardians have so far only demanded money for returning the ships they captured. They have no political demands and use as little violence as possible. The have no connection to any of the Islamic movements there.

So who is this Jana Shakarian who is asserting this nonsense relation between the pirates and terrorists?

Cont. reading: Jana Shakarian or How to Bomb for a Ph.D.

There is currently a meeting of Tibetan exiles in Dharamsala, India, to discuss the future of their movement.

In March several Han Chinese were killed by violent Tibetan protesters in Lhasa. As the ‘western’ media misrepresented the issue, I wrote a small piece on the history of the Tibet conflict:

After he won control over most of China Mao Tse Tung in 1950 reasserted Chinese rule over Tibet, but allowed the local religious aristocracy and government to carry on.

Then most of the Tibetan people were still working as serfs for the big land owners. These were the thousands of monasteries controlled by various lama lineages, feudal religious ruler clans. Despite the peaceful image of Buddhism the various lamas and monasteries regularly fought over territory and economic benefits.

…
During the 1950s the Chinese implemented land reform and secular
schooling in Tibet. The lamas fought against the loss of their
economic, social and political power by sending their monks into the
streets. With the active help of the CIA
the lamas had some success against the communists, but the movement was
crushed when in 1959 the Chinese again occupied the capital and the
seat of the Dalai Lama, Lhasa. Financed by the CIA, the Dalai Lama fled to India to set up an exile government.

The people behind the uprising in March were trained in ‘color revolution’ techniques and are financed with million dollar grands from the U.S. government.

Under international public relation pressure due to the Olympics and to avoid further strife, the Chinese government agreed to more negotiation with the Tibetan exiles. It asked them to write down their demands.

The exiles did so and a memorandum was presented to the Chinese officials. The demands therein were rejected as going much too far. The public relation fight about these demands and their rejection is now made in English language.

Cont. reading: Next Steps on Tibet

Two quotes from:

Technical Analysis of Stock Trends
Robert D. Edwards and John Magee,
8th edition, CRC Press, 2001

A Double Top is formed when a stock advances to a certain level with, usually, high volume at and approaching the Top figure, then retreats with diminishing activity, then comes up again to the same (or practically the same) top price as before with some pickup in turnover, but not as much as the first peak, and the finally turns down a second time for a Major or Consequential Intermediate Decline.
(page 134)

Standard & Poors 500 index (SPX weekly), 1970-2008, via bigcharts.com
bigger

If prices on their recession from the second peak, drop through the Bottom level of the valley, a Reversal of Trend from up to down is signaled. And it is usually a sign of major importance. Fully confirmed Double Tops seldom appear at turns in the Intermediate Trend; they are characteristically a Primary Reversal phenomenon. Hence, when you are sure you have one do not scorn it. Even though prices may have already receded 20%, the chances are they have very much further to go befor they reach bottom.
(page 140)

Yesterday the IAEA released its latest report (pdf) on Iran and one on Syria’s ‘Box on the Euphrates’.

As expected there is nothing new on Iran. It produces low enriched Uranium, as is its right, and refutes murky U.S. allegations of a nuclear weaponization program.

On the Box of the Euphrates, the building Israel bombed in Syria a year ago, the IAEA found that the size of the building would allow for a reactor and the pipeline from the river for enough reactor cooling.

So the demolished building could have been for a reactor. But it could also have been for a myriad of other purposes. Of the ground samples the IAEA took, one(!) included a tiny bit of chemically altered Uranium which was neither enriched nor depleted.

The usual suspects in the ‘western’ media are of course trying to twist the facts to let Iran and Syria look guilty of whatever. This is a campaign, initiated by Israel with the help of the U.S., to simply put independent regional competitors of Israel under international pressure.

A few examples of the false news reporting which often is quite subtle, but effective.

On the Iran report the Financial Times asserts this nonsense:

IAEA officials said relations between the organisation and Iran had deteriorated so much there had been no contact between them for over two months, UN officials said on Wednesday. [sic!]

No contact for two month? Hmm. The IAEA report says:

Cont. reading: IAEA And The Media On Iran And Syria

Does this graph show deflation?

No and yes.

That Google-trends graph shows an inflationary use of the word deflation in search terms and news references.

My personal theory about what the Fed and the Treasury are trying to engineer is this:

• Push the claim that the U.S. is on the border of or in deflation
• Use that claim to propose serious inflationary measures
• Inflate the U.S. out of its debt

Alan Greenspan used a similar deflation-scare scheme to reignite the debt-driven economy in the last half of 2002 to justify a lower Fed rate at 1% and to keep it there for much too long time. The media helped a lot in that by generating "deflation" talk. Greenspan’s policy ignited the housing bubble and led to serious commodity inflation.

While the housing bubble grew and commodity prices exploded, the government and the attached media did their best to obfuscate that the money supply expanded too fast and created serious price-inflation. That was often observable in the reporting when the Bureau of Labor Statistics released the monthly consumer price index (CPI).

When the CPI went up, the media emphasized "core-inflation", the consumer price increase which neglects "volatile" oil and food prices. Now as the relative high inflation decreases a bit, and just like back in late 2002, the media emphasis is on the "headline inflation" number.

CNN Money in July 2007: Inflation tame in June

Government’s key measure in line with expectations, despite higher food prices.

NEW YORK (CNNMoney.com) — Prices paid by consumers rose in June, but when food and energy prices were stripped out the government’s key inflation measure was in line with Wall Street expectations.

CNN Money yesterday: Consumer prices in record decline

Inflation falls by a record 1% in October, worrying economists that falling prices will become a disturbing trend.

NEW YORK (CNNMoney.com) — Consumer prices fell by a record amount in October, another worrisome sign about the contracting economy, the government reported Wednesday.

Only the 16th paragraph of the current piece mentions core inflation, which was – 0.1% compared to last month prices, but the word "deflation" occurs nine times.

In July 2007 the year- over-year consumer price increase, which was downplayed as ‘tame’ by CNN, was 2.7%. The October 2008 y-o-y price increase, that now is used as a deflation scare, was 3.7%, coming down from a high of 5.6% just four month ago. In other words, inflation is still too high. There is no price-deflation (yet).

Cont. reading: The Deflation Scare