Right Wingnut Myths 2: The Democrats Prevented GSE Regulation

The ignorant right has been huffing glue again. They are screaming about how many times the Democrats defeated plans to regulate Freddie Mac and Fannie Mae.

Newsflash: The GSEs have been under Executive Branch Regulation since at least 1992.

Until Paulson put them in conservatorship, the GSEs were regulated by HUD and OFHEO - both part of the Executive Branch.

From OFHEOs FAQ:

How is oversight of Fannie Mae and Freddie Mac divided between OFHEO and HUD?
The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 created a regulatory oversight structure for the housing government-sponsored enterprises of Fannie Mae and Freddie Mac. The regulatory oversight was divided to address two functions – their financial safety and soundness and their affordable housing mission. The financial safety and soundness regulation is vested in the Office of Federal Housing Enterprise Oversight (OFHEO). OFHEO implements, monitors and enforces capital standards for Freddie Mac and Fannie Mae.
...

Effective January 1, 2005, HUD established new and increasing affordable housing goal levels for the GSEs for the years 2005 through 2008. These goals require that a certain percentage of the mortgages purchased by Fannie Mae and Freddie Mac support financing for housing low – and moderate – income families.

January 1, 2005:

Republican President and Executive Branch: Check!

Republican House and Senate: Check!

One more right-wing myth explodes upon impact with the facts.

Right Wingnut Myths: "The CRA Caused the Subprime Crisis"

A table regarding Community Reinvestment Act loans and Subprime loans:

Characteristic	CRA	Subprime
Interest Rate	low	HIGH
Default Rate	low	HIGH
Timeframe	Mostly before 2003	Exploded after 2005
Issuers	all by Regulated Banks	at least 3/4 by enitites no fully regulated by CRA
Location	by law, Neighborhoods where bank deposits were taken	Much in vast new construction such as the Inland Empire and exurban Phoenix, where by definition no bank deposits were being taken because nobody lived there

So, except for all the important salient characteristics noted above, CRA and Subprime are exactly the same. Right.

The idea that Community Reinvestment Act (CRA) == Subprime has becaome a new conservative wet dream - but with less substance. (Thank goodness.)

The latest Right wing meme is that the Community Reinvestment Act "paved the way" or "provided the template for" or "is" Subprime Lending. I will not link to the idiots who propound this, other than to mention that I am seriously disappointed in Mike Huckabee, who seemed like the smartest of all the candidates, albeit too ready to mix religion with Constitution.

Here is the information I used in the table above. Money quotes:

CRA applies only to banks and thrifts that are federally insured...

The law imposes on the covered depositories an affirmative duty to lend throughout the areas from which they take deposits...

Studies by the Federal Reserve and Harvard's Joint Center for Housing Studies, among others, have shown that CRA increased lending and homeownership in poor communities without undermining banks' profitability.

In the mid-1990s, new CRA regulations and a wave of mergers led to a flurry of CRA activity, but, as noted by the New America Foundation's Ellen Seidman (and by Harvard's Joint Center), that activity "largely came to an end by 2001." In late 2004, the Bush administration announced plans to sharply weaken CRA regulations, pulling small and mid-sized banks out from under the law's toughest standards. Yet sub-prime lending continued, and even intensified -- at the very time when activity under CRA had slowed and the law had weakened....

Second, it is hard to blame CRA for the mortgage meltdown when CRA doesn't even apply to most of the loans that are behind it...Perhaps one in four sub-prime loans were made by the institutions fully governed by CRA.....

[Which is not to say that 1/4 of subprime loans were CRA, btw.]

Most important, the lenders subject to CRA have engaged in less, not more, of the most dangerous lending. Janet Yellen, president of the San Francisco Federal Reserve, offers the killer statistic: Independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts.

One of the only regulators who long ago saw the current crisis coming was the late Ned Gramlich, a former Fed governor. While Alan Greenspan was cheering the sub-prime boom, Gramlich warned of its risks and unsuccessfully pushed for greater supervision of bank affiliates. But Gramlich praised CRA, saying last year, "banks have made many low- and moderate-income mortgages to fulfill their CRA obligations, they have found default rates pleasantly low, and they generally charge low mortgages rates. Thirty years later, CRA has become very good business."

[Emphasis added.]

So the next time you hear some right winger jabbering about how CRA started, or caused, or even contributed to the subprime crisis, you know you are listening to a profoundly uninformed person.

In fact, the mere nomenclature "Subprime Crisis" shows ignorance. The categories of mortgages known as "Alt-A" and "Option ARMs", generally not included in Subprime statisitics, are exploding and they will be as nearly as big, or bigger, than Subprime. And that still doesn't cover the loans on commercial real estate, where much of the same abandonment of sane underwriting occurred as in the residential mortgage market.

UPDATE:

(Ckick for larger image.)

I wasn't going to link to anything, but this cartoon at Day by Day http://www.daybydaycartoon.com/, by Chris Muir, seems to imply agreement with the CRA-caused-this meme, though I could be mistaken. If it does, then I have to disagree with the 1st half of of Sam's first frame comment.

And, for completely different reasons, I have to disagree with the characterization of the Paulson-Democrat bailout plan as a "crap sandwich". After all, there is bread in a crap sandwich.
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It's Not A Coincidence!

Notice how you never see these two guys together?

Of course this comparison is unfair. One is a vile bloodsucking creature draining life from the living to the dead. The other is a movie character.

Is it Naive for Obama To Meet Ahmedinijad?

Everbody on the right is all up in arms about what could happen if, as President, Obama met the madman who is president of Iran.




Could it be possibly be any worse than this? HOW?


Thinking George W. Bush can conduct foreign policy - now THAT is naive!

UPDATE: Oh, but there were pre-conditions for this - no tongues!
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More Evidence Against the SEC "Regulation"

All those who think this nothing to do with the finanical crisis, hands up? Yep, the usual neo-theo-con morons.

Leading up to its collapse, Bear Stearns was participating along with other major investment banks in a “voluntary” oversight program begun in 2004 designed to consolidate supervision. The idea was that voluntary regulation of these banks was the only way to effectively govern their behavior because of the peculiar complexity and their international structures.

Same topic here:

The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street’s largest investment banks had contributed to the global financial crisis, and he abruptly shut the program down.
....
The commission created the program after heavy lobbying for the plan from all five big investment banks. At the time, Mr. Paulson was the head of Goldman Sachs.

Those would be the 5 investment banks that don't exist anymore, the last 2 having become commercial banks earlier this week.

Doesn't the idea of Hanky Panky Paulson handling the crisis he helped create make you feel all warm and fuzzy inside?

Wasn't the Bush deregulation just the best thing ever?

The De-Liberative Definitive Presidential Debate Review

They both suck donkey dick.

I hadn't done enough drugs, so I couldn't take it. Literally. I could feel I.Q. points being sucked out of my skull as I listened.

I don't know what mixture of meth, coke, smack, ibogaine, weed, alcohol and glue huffing it takes to take either of these guys seriously. Maybe enough Valium to render me unconscious would have allowed me to leave the TV turned on, but the hangover from that stuff is wicked.

I kept turning it on, listening for like 45 seconds, saying "Fuck you" to whichever one was speaking, then turned it off again.

Then I found this at Angry Bear:

Awkward Loan Interview

So I watched it. Then I went to Comedy Central and watched some more.

That's the Liberative Debate Report. Hope you liked it.
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Hank Paulson as "419" Scammer

See Here.

Hilarious, except that it is true.

The Liberative Bailout Plan: Fuck 'Em All

I mean it. Fuck WaMu, Wells Fargo, Citigroup, Morgan Stanley, Downey Savings and Loan, Bank of America, JP Morgan Chase - fuck 'em all. Let them all die - they've earned it.

Pull the props out, get the Fed's and the FHLB's money back.

Whatever bank dies, it deserved to.

Whatever bank lives, it derserved to.

Then, take the 700 Billion dollars and open new Banks under really strict regulation. With fractional lending, 700 Billion yields 7 Trillion of new credit. That should be plenty.

Oh yeah: catch Paulson, Bernanke, Bush, Cox, Dodd, Frank and hang them. Slowly. Especially that fuck Paulson.

(hat tip to "Nude" in comments ar Calculated Risk.)
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(UPDATE: For all I know, this could cause a global Depression. (That would be a bad thing, so something should be done. Just not the Paulson plan.) But I sure had fun writing it! )
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Say NO to the Mortgage Bonds Bailout

The Bailout Legislation currently proposed is hideous for 2 main reasons:

1. It cannot work unless the government - using tax dollars - pays more than the mortgage bonds are worth.
   
2. It gives unprecedented power to one man - the Secretary of the Treasury - with no review whatsoever.

Here is the most offensive passage:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

700 hundred Billion dollars are to be put at the sole discretion of one man. And that man is Hank Paulson, who has minimized and lied every step of the way in this crisis.

Here are blogs I've seen so far condemning this thing:


Calculated Risk: NY Times Makes a Funny and Some Thoughts on the Bailout

Paul Krugman, Liberal: No deal

Mike Shedlock, Free Marketeer: Bush Administration Seeks "Dictatorial Power"

Yves Smith: Why You Should Hate the Treasury Bailout Proposal

Update: This just keeps getting more vile: Bailout Eligibility Expanded to Foreign Institutions!
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For All You Recession Denialists, Part 2

It's NOT about 2 quarters of negative GDP growth, and it hasn't been for years.

The NBER, National Bureau of Economic Research, is responsible for timing the start and end of recessions. They say here:

The NBER does not define a recession in terms of two consecutive quarters of decline in real GDP. Rather, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

[Emphasis added].


The also say here:

The committee's approach to determining the dates of turning points is retrospective. We wait until sufficient data are available to avoid the need for major revisions. In particular, in determining the date of a peak in activity, and thus the onset of recession, we wait until we are confident that, even in the event that activity begins to rise again immediately, it has declined enough to meet the criterion of depth. As a result, we tend to wait to identify a peak until many months after it actually occurs.
...
It's more accurate to say that a recession-the way we use the word-is a period of diminishing activity rather than diminished activity. We identify a month when the economy reached a peak of activity and a later month when the economy reached a trough. The time in between is a recession, a period when the economy is contracting.
...
Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. The most recent recession in our chronology was in 2001. According to data as of July 2008, the 2001 recession involved declines in the first and third quarters of 2001 but not in two consecutive quarters. Our procedure differs from the two-quarter rule in a number of ways. First, we consider the depth as well as the duration of the decline in economic activity. Recall that our definition includes the phrase, "a significant decline in economic activity." Second, we use a broader array of indicators than just real GDP. One reason for this is that the GDP data are subject to considerable revision. Third, we use monthly indicators to arrive at a monthly chronology.

[Emphasis added, paragraphs may be re-ordered]


Note the part about the revisions: we see here that after revision, 4Q2007 GDP growth was actually NEGATIVE. This happened on or about July 31, 2008. So we still don't know the real 1Q2008 numbers yet, leave alone later quarters.

Mike Shedlock (aka Mish) looks at this issue here. One of his points - "How can we have an understated inflation rate of 4%, and a GDP Price Deflator of just 2.6%?" - is particularly well taken, given the known rigging of the CPI ("hedonic adjustsments" and other such nonsense) described here and shown graphically here. The flaws in GDP statisitics are discussed here.

Summing up: Once youe realize that the "2 quarters of negatice GDP growth" is the mindless repetition by the MSM of an outdated measurement model, you can see that things have been going the wrong way for quite a while.

Another 3 Days of Murder, from The "Religion of Peace"

Again, this is just the last 3 days - brought to you by The Religion of Peace.

This is not some distortion or hijacking of Islam. This is what Orthodox Islam is.

Date	Country	City	Killed	Injured	Description
9/19/2008	Pakistan	Quetta	8	9	Eight students at a religious school are blown to bits by a suicide bomber.
9/19/2008	Thailand	Narathiwat	1	0	A teenager is taken down in a drive-by shooting by Islamic radicals.
9/19/2008	Somalia	Mogadishu	12	35	al-Shabaab Islamists rain down mortars on a city airport, killing a dozen civilians.
9/18/2008	Iraq	Mosul	2	0	Two family members are killed when sectarian gunmen storm their home.
9/17/2008	Thailand	Yala	2	0	A father and son are brutally gunned down by Religion of Peace militants.
9/17/2008	Pakistan	Khyber	1	0	The Taliban abduct and murder an Afghan refugee.
9/17/2008	Pakistan	Dera Ismail Khan	1	7	A woman is murdered by Islamic bombers in a residential area.
9/17/2008	Iraq	Baghdad	18	79	Eighteen Iraqis are killed in a series of Mujahideen bombing and shooting attacks.
9/17/2008	Yemen	Sanaa	10	13	Women and children are among the casualties when al-Qaeda militants stage a coordinated attack on the US embassy.
9/17/2008	India	Srinagar	0	15	Fifteen pedestrians are injured when Islamic terrorists toss a grenade into the street outside a shopping center.
9/17/2008	Philippines	Mindanao	1	7	Moro Islamists attack a group of local soldiers, killing one.
9/17/2008	Ingushetia	Magas	4	0	Four local security personnel are ambushed and killed by Muslim radicals.

For All You Recession Denialists

Courtesy of Calculated Risk, I got yer great economy, "imaginary" recession right here:

(click for larger version)

MaxedOutMama: How Did We Get Here?

MaxedOutMama: How Did We Get Here?

Great explanation of how multiple Congresses and multiple Administrations aided and abetted the pigmen - aka Wallstreet - in ruining the economy through the mortgage/housing bubble.

Special focus on the failure of the SEC to provide independent securities ratings, which would have stopped this in its tracks.
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Also focuses on how Gramm-Leach-Bliley - passed by a Republican congress and signed by Clinton after massive Citigroup lobbying - removed previously existing controls that stopped this from happening in the past. The "Gramm" is Phil Gramm, of fame for his comments that "Americans are whiners" for complaining about the "mental recession". Gramm is also famous for having been John McCain's chief economic advisor and campaign co-chairmen at the time of those remarks.
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How Bush Fights Terrorism

Here is the problem: Madrassahs and mosques around the world continue to turn out endless streams of fanatics and suicide bombers, with the help of our good friends the Saudis. As long as this continues, we are in constant danger.

From Council on Foreign Relations 2002:

For years, individuals and charities based in Saudi Arabia have been the most important source of funds for al-Qaeda. And for years, Saudi officials have turned a blind eye to this problem.

From PBS-Frontline interview with Ali Al-Ahmed, executive director of the Saudi Institute :

Yes, I am saying that. Because the hijackers, 15 hijackers who are Saudis, they studied this thinking -- destructive thinking -- in Saudi Arabia. They spent a few months in Afghanistan. But they lived their life, they studied this in government mosques. They studied this kind of curriculum that I talked to you about. ... Government curriculum inspired what happened in New York.

From The Institute for the Analysis of Global Security:

Saudi government money funneled into madrassas where radical anti-Americanism is propagated has been instrumental in creating an ideological climate which generates terrorism.

From 2003:

Saudi Arabia continues to fund and export its Wahhabi brand of Islam, making it a "strategic threat" to the United States in the worldwide war on terror, the chairman of the U.S. government commission on religious freedom said yesterday.

"It is an ideology that is incompatible with the war on terrorism," said Michael Young, chairman of the State Department's Commission on International Religious Freedom.

From Saudi Arabia, Wahhabism and the Spread of Sunni Theofascism June 2007:

American efforts to combat this contagion are hamstrung by the fact that its ideological and financial epicenter is Saudi Arabia, where an ostensibly pro-Western royal family governs through a centuries-old alliance with the fanatical Wahhabi Islamic sect. In addition to indoctrinating its own citizens with this extremist creed, the Saudi government has lavishly financed the propagation of Wahhabism throughout the world, sweeping away moderate interpretations of Islam even within the borders of the United States itself.

The Bush administration has done little to halt this ideological onslaught beyond quietly (and unsuccessfully) urging the Saudi royal family to desist. This lack of resolve is rooted in American dependence on Saudi oil production, fears of instability in the kingdom, wishful thinking about democracy promotion as an antidote to religious extremism, and preoccupation with confronting Iran.

And, regarding the Islamic Saudi Academy, in Virginia, in 2008:

Examples of Problematic Passages in Current ISA Textbooks

In a twelfth-grade Tafsir (Koranic interpretation) textbook, the authors state that it is permissible for a Muslim to kill an apostate (a convert from Islam), an adulterer..

A twelfth-grade Tawhid (monotheism) textbook states that “[m]ajor polytheism makes blood and wealth permissible,” which in Islamic legal terms means that a Muslim can take the life and property of someone believed to be guilty of this alleged transgression with impunity. (Tawhid, Arabic/Sharia, 15) Under the Saudi interpretation of Islam, “major polytheists” include Shi’a and Sufi Muslims, who visit the shrines of their saints to ask for intercession with God on their behalf, as well as Christians, Jews, Hindus, and Buddhists.

Although this Koranic passage does not in itself invoke the term jihad, the Saudi textbook authors write:

• “In these verses is a call for jihad, which is the pinnacle of Islam. In (jihad) is life for the body; thus it is one of the most important causes of outward life. Only through force and victory over the enemies is there security and repose. Within martyrdom in the path of God (exalted and glorified is He) is a type of noble life-force that is not diminished by fear or poverty.” (Tafsir, Arabic/Sharia, 68)

• 
  

And HERE is what Bush does about it:

Bush: Have you no shame or pride or backbone or balls at all?

God Damn It! You are the Fucking President of the Fucking United States of America! We may need their oil and their money, but can't you have the decency to preserve the diginity of the POTUS, if not for your miserable useless self, at least for those who follow?

Support The 2nd Amendment Rights of D.C. Residents

Even in the face of an unambiguous Supreme Court decision, Washington D.C. government continues to to illegally make effective self-defense impossible.

See here for what you can do about it.

In a strong bipartisan effort, House Democrats and Republicans recently joined forces to introduce H.R. 6691, the “Second Amendment Enforcement Act.” This critical NRA-backed legislation would overturn Washington, D.C.’s newly enacted “emergency gun control laws,” which continue to defy the U.S. Supreme Court’s unambiguous decision in District of Columbia v. Heller by continuing to restrict D.C. residents’ right to self-defense....

H.R. 6691 currently has 116 cosponsors, but we need more! The bill is expected to be considered on the House floor next week, so please be sure to contact your U.S. Representative -- AS SOON AS POSSIBLE -- at (202) 225-3121, and urge him or her to cosponsor and support H.R. 6691 (“Second Amendment Enforcement Act”).

Let Carl have his Sig!
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2nd Thoughts On McCain

In a previous post I wrote that McCain was not fit to be president, based on my perception of his support for Bush actions and assertions which I consider to threaten our most basic freedoms and move us to statism.

I am still working out how the AUMF and the MCA and the DTA and the SCOTUS in Quirin and Habeas Corpus in the Constitution interact. I can say it's more confusing the more I look.

But it has occurred to me that aspiring dictators of every stripe support and impose gun control - and John McCain opposes it and, in choosing Sarah Palin, has reaffirmed that position.

Dictators don't let the people have guns - because that makes them citizens, not subjects.

Obama's views on this are well known - he'd make gun ownership damn near impossible if not outright illegal - all in the name of "common sense" while claiming to "support" the second amendment.

I got some thinking to do.

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September 11, 2001

Never forget the heroes - the NYPD and NYFD, the passengers on Flight 93.

Never forget the thousands lost, - in the planes, in the towers, in the Pentagon and in the field in Pennsylvania.

But also never forget the thousand that continue to die at the same hands - the hands driven by Islamic intolerance.

And never, ever forget who did this: The "Religion of Peace".

Reader obloodyhell reminds me:

"To the men and women serving in Iraq and Afghanistan, as well as to the direct victims of 9/11."

I could not agree more - here's to our troops - doing a magnificent job under the most difficult circumstances.

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Media Bias? No way!!!!

From E3 Gazette, we see A Tale of Two Shootings

The link E3 Gazette used has stopped working, but the story, from Winnemucca, NV, is also here:

A man [Villagomez] entered the crowded Players Bar and Grill. He fatally shot two brothers...

According to witnesses, Villagomez at some point stopped to reload his high-capacity handgun and began shooting again when he was shot and killed by another patron - a 48-year-old Reno man who had a valid concealed weapons permit.

So lesson 1: Law-abiding citizens with CCW (Concealed Carry Weapon permit) and a gun can stop massacres - as was seen last year, with Jeanne Assam in Colorado.

(Examples of citizens using gunns to defend themselves and others every day are available at the Civilian Gun Self Defense Blog.)

Lesson 2: The Mainstream Media have completely ignored this story. Google searches on "shooting winnemucca" (without the quotes) find nothing about the story and ABC News, NBC News, CBS News, CNN.com or even Foxnews.com - not one mention at any of the websites for these organizations. Interestingly enough, 3 links show up to MSNBC, but attempts to retrieve the pages give "Page Not Found" errors, amnd the google cache has also apparently expired.

Why the virtually complete media blackout? Possibly because there was absolutely no way to claim that the hero was anything other than a legally armed citizen, rather than the widely mis-used label of "security guard" which was applied to Jeanne Assam.

The "security guard" meme was wrong: Jeanne Assam had no official or profession status as such - she was just a church-goer with a CCW, who volunteered to be on watch after earlier killings at another church in the area. But the "security guard" label stuck very stubbornly - because it allowed the MSM to continue to pretend, contrary to all evidence, that armed citizens cannot improve security and prevent crime.

In the Nevada case, it was just some middle aged patron with a CCW - no way to hide or obscure the facts.
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Bill Whittle Rules!

See his site, Eject! Eject! Eject! for more. Looonngggg essays, worth every second spent reading them.

Hat tip to reader and frequent adversary obloodyhell on this.
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Most Recent 3 days of Islamic Terror

From Religion of Peace: (the list goes back much further, this is just 3 days worth)

Date	Country	City	Killed	Injured	Description
9/3/2008	Pakistan	Sahiwal	1	0	A 17-year-old girl is shot to death by her father and brother for seeking a divorce after being forcibly married at 9.
9/3/2008	Somalia	Mogadishu	2	4	Two civilians are killed during an ambush by Islamic militia.
9/2/2008	Iraq	Mosul	1	0	Islamic fundamentalists abduct and murder a 65-year-old Christian doctor.
9/2/2008	India	Pulwama	1	2	An off-duty soldier is brutally cut down by Islamists while shopping at a vegetable market.
9/2/2008	Pakistan	Swat	2	0	A retired schoolteacher is among two people murdered by the Mujahideen.
9/2/2008	Iraq	Kirkuk	1	2	A 9-year-old boy is murdered by Islamic bombers.
9/2/2008	Iraq	Mosul	7	7	Children are among the victims of a Fedayeen suicide car bombing.
9/2/2008	Iraq	Baghdad	4	23	Four Iraqis are killed in a couple of Jihad roadside attacks.
9/1/2008	Thailand	Pattani	2	0	A Buddhist woman is among two people murdered in separate shooting attacks by Muslim radicals.
9/1/2008	Pakistan	Kohat	7	0	Religious extremists take out seven security personnel in a surprise ambush.
9/1/2008	Afghanistan	Kunduz	1	0	A civilian is blown to bits by a suicide bomber.
9/1/2008	Philippines	Digos	6	32	Islamic bombers are suspected in a blast that rips nails through a passenger bus, leaving six dead.
9/1/2008	Thailand	Yala	1	0	A 61-year-old man is shot to death by militant Muslims while driving home.
9/1/2008	Iraq	Othmaniyah	3	0	Sunni bombers kill three farmers with a device hidden in a water pump.
9/1/2008	Iraq	Kirkuk	1	2	An Iraqi child is taken down by Islamic bombers.
9/1/2008	Afghanistan	Wardak	3	0	Three security guards are killed by religious radicals in an ambush.
9/1/2008	Thailand	Yala	1	0	A teacher is brutally gunned down in front of his wife by Religion of Peace warriors.
9/1/2008	Afghanistan	Khost	2	2	The Taliban take down two local cops with a roadside bomb.
9/1/2008	Afghanistan	Kandahar	1	0	A taxi driver is murdered by Sunni extremists.
9/1/2008	Somalia	Mogadishu	1	0	A civilian is killed during a Mujahideen ambush along a city street.