Playing Politics with Terror Alerts

The End Is Near!!!!!

Treasuries, gold and crude oil rose, while stocks and the dollar fell, after the U.S. government said al- Qaeda may be planning attacks on financial institutions including the New York Stock Exchange.

The yield on the 4 3/4 percent U.S. Treasury note maturing May 2014 fell 5 basis points to 4.43 percent. Gold for December delivery rose as much as 0.9 percent. U.S. Homeland Security Department Secretary Tom Ridge said intelligence sources point to plans to bomb targets in New York, Washington and New Jersey state.

The dollar and stocks fell on concern terrorist threats will sap consumer confidence and deter international investors from buying U.S. assets. Crude oil rose to a record amid concern terrorists may also target oil facilities to disrupt the November U.S. presidential elections and tensions may escalate in the Middle East, which produces about a third of the world's oil.

``This is different from previous terror alerts as Homeland Security is citing specific threats,'' said Singapore-based Kenny Borowicz, a broker of Treasury futures and other financial instruments at UOB Bullion & Futures Ltd., a unit of Singapore's second-largest lender. ``Anytime you throw terror into the picture, it changes everything,'' he said.

The New York Stock Exchange and Citigroup Inc. in Manhattan, and the World Bank and International Monetary Fund in Washington are among al-Qaeda targets, prompting intensified security at the sites, Ridge said at a news conference in Washington.

Crude Oil

Crude oil for September delivery on the New York Mercantile Exchange rose to $43.92 a barrel, the highest intraday price since trading began in New York in 1983. Oil has risen $12 a barrel, or 38 percent, in the past year on concern about possible attacks on oil pipelines in the Middle East and potential disruption to exports from Russia, Nigeria and Venezuela.

Against the euro, the dollar fell as low as $1.2075, and was trading at $1.2058 at 1:08 p.m. in Tokyo from $1.2018 late Friday in New York, according to electronic foreign-exchange dealing system EBS. The dollar also dropped to 1.2737 Swiss francs, from 1.2815 francs. It may fall to $1.2120 per euro and 1.26 Swiss francs today, said Jake Moore, a currency strategist in Tokyo at Barclays Capital Inc.

``Terrorism means increased uncertainty and is negative for the dollar,'' Moore said. ``Dollar-Swiss is the classic risk aversion trade and the dollar could well extend its decline against the euro.''

Intelligence sources point to al-Qaeda plans to use car or truck bombs against financial institutions that are ``iconic'' of the U.S. role in the global economy, Ridge said.

U.S. Economy

The threat of terror attacks may sap confidence, prolonging a slowdown in consumer spending that Federal Reserve Chairman Alan Greenspan said on July 20 should be ``short-lived.''

The U.S. economy grew at a 3 percent annual rate from April through June, the slowest in more than a year, as rising energy prices led to the weakest pace of consumer spending since the 2001 recession, figures last week showed.

The dollar dropped 1.7 percent against the Swiss franc and 1 percent against the euro on March 11 after a train bombing in Spain killed at least 186 people. On Nov. 20, the Swiss franc and the euro rose against the dollar after explosions rocked the Turkish city of Istanbul in an alleged al-Qaeda attack, which damaged the British consulate.

The franc has traditionally been an asset investors turn to in times of international tension because of Switzerland's political stability. Other assets favored for being safe also benefited.

`Potent Reminder'

``It's a potent reminder for investors that the U.S. stays under terrorist threats, highlighting risks for putting money into the country's assets such as stocks,'' said Xinyi Lu, chief investment strategist in Tokyo for UFJ Bank Ltd., a unit of Japan's fourth-largest lender. ``That's bad for the dollar.''

Gold for December delivery rose as much as $3.60, or 0.9 percent, to $397.30 an ounce in after-hours trading on the Comex division of the New York Mercantile Exchange. The contract traded at $396 an ounce at 3 p.m. Sydney time.

U.S. stock-index futures also fell. September futures on the Standard & Poor's 500 Index declined 5.10 to 1096 as of 7:58 p.m. in New York. Nasdaq-100 Index futures declined 7 to 1395.50.

Japan's Nikkei 225 Stock Average lost 1 percent to 11,209.12 at the 12:56 p.m. in Tokyo, while South Korea's Kospi index shed 1.6 percent to 723.70. Exporters such as TDK Corp. and Samsung Electronics Co. led declines.

The apprehension level seems to be about the same as with the Clinton administration. They did as well, in short, without issuing alerts every time they needed a boost in the polls.

I am a bit sick of the length of time it takes to get on an airplane and such restrictions today

Clearly a play with politics.

Much of the information obtained by al Qaeda that led the United States to raise terror alerts in Washington and New York was at least three years old, and U.S. officials are unsure if the group's surveillance continues, according to published reports on Tuesday.

The Washington Post and The New York Times reported in Tuesday editions that officials were still analyzing documents seized late last month after a raid in Pakistan that showed al Qaeda surveillance of specific U.S. targets.

Documents, computers, surveillance reports and sketches were recovered related to the capture of suspected al Qaeda computer expert Muhammad Naeem Noor Khan, also known as Abu Talha, in July, officials said.

Much of the information that resulted from the arrest was compiled before the Sept. 11, 2001 attacks, The New York Times reported, citing intelligence and law enforcement officials.

Federal authorities said they are unsure whether al Qaeda's surveillance continues, the newspapers reported.

"You could say that the bulk of this information is old, but we know that al Qaeda collects, collects, collects until they're comfortable," a senior government official was quoted in the Times as saying. "Only then do they carry out an operation. And there are signs that some of this may have been updated or may be more recent."

The Post cited officials as saying that much of the information al Qaeda gathered on buildings in Washington, New York and Newark, New Jersey, was obtained through the Internet or other "open sources" available to the general public, including floor plans.

"What we've uncovered is a collection operation as opposed to the launching of an attack," said a senior American official quoted by the Post.

U.S. officials have previously warned of possible attacks before the presidential election in November. The latest warnings on Sunday were of al Qaeda threats to attack symbols of U.S. financial might such as the New York Stock Exchange, World Bank, and International Monetary Fund, among other targets in the New York area and Washington.

America was bracing itself last night after intelligence agencies warned al-Qa'ida could be planning to attack financial institutions on the East Coast and that its operatives had already carried out surveillance missions on the targets.

Police sealed off streets in New York, ordered international finance employees in Washington to go through extra security checks and added barricades and a heavy armed presence in Newark, New Jersey, after intelligence gathered in Pakistan identified that institutions in these cities were being targeted.

"We are a nation in danger," said President George Bush, after the nation's state of alert was raised to "orange" (high) on Sunday evening. "We are doing everything in our power to confront the danger. [This alert is ] a solemn reminder of the threat we continue to face"

Officials said the warning was based on information gathered following the unannounced arrest in Pakistan on 13 July of a computer engineer, Muhammad Naeem Noor Khan, 25, who allegedly operated an al-Qa'ida communications system. Warnings based on "documentary evidence" were passed to Washington last Friday, which, combined with other intelligence, reportedly led officials to raise the alert.

The US has issued numerous terror alerts since the attacks of September 2001, and some people were sceptical yesterday as to the nature of the administration's latest warning. The former Democratic presidential candidate Howard Dean highlighted the concerns of many without access to the information. "It's hard to know what to make [of it]. None of us outside the administration have access to the intelligence which led to this determination," he said.

"I am concerned that every time something happens that's not good for President Bush, he plays this trump card, which is terrorism," he told CNN. "His whole campaign is based on the notion that 'I can keep you safe, therefore, at times of difficulty for America, stick with me' and then out comes Tom Ridge. It's just impossible to know how much of this is real and how much of this is politics, and I suspect there's some of both in it."

But Mr Ridge, head of the Department of Homeland Security, and other officials insisted the information was "alarmingly" more specific than the usual intelligence chatter. Information recovered after Mr Khan's arrest was a "potential treasure trove", they said.

Officials said that institutions being targeted by al-Qa'ida included the New York Stock Exchange and the Citigroup buildings in Manhattan, the International Monetary Fund and the World Bank in Washington and Prudential Financial in Newark, New Jersey.

Reports yesterday said that al-Qa'ida operatives had carried out surveillance of those institutions and The New York Times reported investigators in New Jersey said suspects had been found with blueprints of the Newark building and a "test-run" to launch a car-bomb or similar attack had been carried out in recent days.

People keep talking about how our freedoms are being taken away but I haven't seen any proof of this and in the several boards I have been on no one has been able to provide any proof of this. I think it is a scare tactic used by those that don't like the current administration.

Please, please oh dear God please provide some proof that our freedoms have been taken away. I would like some examples of how our fellow Americans have been harmed and other wise imprisoned due to the Patriot Act!

Ridge, today:

Quote:

But we must understand that the kind of information available to us today is the result of the president's leadership in the war against terror, the reports that have led to this alert are the result of offensive intelligence and military operations overseas, as well as strong partnerships with our allies around the world, such as Pakistan.