Lehman Brothers sitting on nuclear stockpile

Lehman Brothers sitting on nuclear stockpile 17 Apr 2009, 0048 hrs IST, AGENCIES

NEW YORK: Failed investment bank Lehman Brothers sits not only on toxic sub-prime mortgage loans but also toxic nuclear stockpile.  According to reports, the bankrupt bank holds up to 450,000 pounds of uranium — called yellowcake — which can be upgraded to run nuclear plants and make nuclear weapons.  The stockpile is a hangover from a commodities trading contract undertaken before the Wall Street bank collapsed last year. Lehman filed for bankruptcy after the Bush administration refused to bail it out last September. After bankruptcy, it managed to sell its brokerage business to Barclays, leaving it saddled with $200 billion worth of sub-prime loans and yellowcake worth $20 million.  Liquidators have been trying to offload the stuff for months, but the price of uranium has fallen from $65 to $40 per pound because of the global recession, leaving Lehman's yellowcake languishing in a variety of secure storage facilities, some of which are in Canada.  "It turns out we were looking in the wrong place for weapons of mass destruction,'' said the New York Post on Wednesday in a sarcastic comment on the invasion of Iraq in search of Saddam Hussein's non-existent deadly arsenal. "They were not in Iraq. They were in Lehman Brothers' portfolio."  Bryan Marshal, Lehman's chief executive, who was appointed to salvage value for creditors, told Bloomberg News that the stockpile would be sold responsibly.  "We plan on gradually selling this material over the next two years," he said. "We are not dumping this on the market and have no fire-sale mentality."Yellowcake can be purified and enriched to fuel nuclear reactors or, theoretically, weapons. A lively financial market in uranium trading has developed in recent years. While commodities such as oil and precious metals are dealt in futures contracts which rarely see delivery, the relative immaturity of uranium trading means that trading firms sometimes end up taking ownership of the stuff. Lehman's ownership is governed by tight regulations.   What is yellowcake?  Yellowcake (also called urania) is a kind of uranium concentrate obtained from processing of uranium ore. The name comes from the colour and texture of concentrates produced by early mining operations; modern yellowcake is brown or black. Yellowcake is used in the preparation of fuel for nuclear reactors and may also be turned into enriched uranium suitable for use in weapons and reactors.

Attacks Plague Indian Elections, Killing at Least 17

Attacks Plague Indian Elections, Killing at Least 17

By Rama Lakshmi

Washington Post Foreign Service

Thursday, April 16, 2009 3:32 PM 

NEW DELHI, India, April 16 -- Violence marred the start of the month-long national election in the world's largest democracy Thursday, as Indian voters cast ballots to choose a new government that will confront the twin challenges of the global economic slowdown and the growing threat of terrorism.

In 14 attacks on polling stations and vehicles carrying election officials, 17 people were killed in eastern and central India. The strikes were blamed on Maoist insurgents, who used landmines and rocket launchers. The Maoist groups had called for a poll boycott in several areas, and had vowed to disrupt the vote.

India's election commission said that voter turnout ranged between 46 and 86 percent among the 140 million eligible voters in the 17 states that went to the polls Thursday. The turnout was lower in areas affected by the violence.

The staggered, five-phase national election, which ends on May 13, will cost an estimated $2 billion, with about 714 million voters. The counting of votes is scheduled for May 16, with 543 lawmakers being chosen for the lower house of parliament. More than 6 million security and civil officials are responsible for helping to oversee the elections, and 1.3 million voting machines will be used.

The government deployed hundreds of thousands of police and paramilitary forces to guard polling stations, especially along thickly forested areas that security officials call India's "red corridor" because of the Maoist presence.

"Their political philosophy is such that they don't want to believe in democracy," M.L. Kumawat, director general of the Border Security Force, told reporters in New Delhi.

The attacks were targeted at security forces and polling officials, not voters. Helicopters were flown into some areas to evacuate soldiers who had come under fire. Maoists also destroyed electronic voting machines. The Maoist rebels are active in 17 of India's 28 states, and have been waging for four decades a low-grade insurgency that they say is intended to promote the rights of landless farmers and tribal people.

"The extent of violence is unprecedented and shows it will be a significant political and security challenge for the next government," said Mahesh Rangarajan, a political analyst at Delhi University. "In many parts of India, they run parallel governments."

The marathon election involves voting at polling booths from high in the Himalayans to remote islands in the Bay of Bengal. About 131 seats have been set aside for lower-caste candidates or members of indigenous tribes.

Opinion polls forecast that no party will gain a clear majority to form a government on its own. Analysts predict that a coalition of parties will be stitched together after the final results are announced next month.

The election features three primary political alliances -- the ruling, left-of-center coalition led by the Congress Party; the Hindu nationalist Bharatiya Janata Party-led group; and a third bloc consisting of smaller, regional and communist parties.

The Congress Party coalition, headed by the Oxford-educated economist Prime Minister Manmohan Singh, is appealing to voters by showcasing several anti-poverty programs that the government has launched. About 76 percent of Indians live on less than two dollars a day.

But Singh is under attack from the opposition BJP for weakening the nation's security. Several Indian cities were rocked by bombings in 2008, culminating in the deadly three-day siege in the financial capital of Mumbai that killed more than 160 people, including six Americans. The vote also comes as India battles a slowing economy after five years of heady growth.

The BJP, led by 82-year-old party patriarch L.K. Advani, says it will clamp down on terrorism. But the party has been criticized for its role in fomenting violence against Muslims and Christians.

The third front includes a group of communist parties that supported Singh's coalition until last fall, when they withdrew to protest the signing of the controversial India-U.S. civilian nuclear agreement.

Some economists have said the prospect of an unstable and unwieldy coalition government is worrisome for an economy that is saddled with job losses and the biggest fiscal deficit in two decades.

But not everybody agrees.

"It is a mish-mash of different smaller contests in the states that will eventually form the big, national picture in this election. But stimulating the economy will be a priority for whoever forms the government," said Rangarajan, the political analyst. "India has had coalition governments for more than a decade now. They are not a blessing from heaven, but they are not a complete disaster, either."

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• BUSINESS
• APRIL 15, 2009

Wall Street Still Finds Ways to Hire Foreigners

By ROBIN SIDEL

Some big U.S. banks that have received billions of dollars from the government are shipping some of their newest recruits overseas in order to comply with a federal law that restricts their ability to hire foreign workers for U.S. jobs.

Although some financial firms have rescinded job offers to such prospective employees, J.P. Morgan Chase & Co., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley are offering international jobs to foreign students whom they have recruited from U.S. colleges and graduate schools. The new hires are being sent to global financial centers like London and Hong Kong.

The overall numbers affected by the restrictions are small, but the moves represent the banking industry's latest effort to deal with what they consider to be untenable consequences of the Troubled Asset Relief Program.

"There are no U.S. immigration restrictions on people working outside the U.S., so anyone who wants to can have folks work in London versus New York," says Allen Erenbaum, a lawyer specializing in immigration issues at Mayer Brown LLP in Los Angeles.

Under the federal economic-stimulus package signed by President Obama in February, companies that receive TARP funds face additional hurdles before they can hire skilled foreign workers who need temporary work permits known as H-1B visas. Firms that have received government money must prove they have tried to recruit American workers for those jobs and that the foreigners aren't replacing U.S. citizens.

Bank executives have privately lambasted some of TARP's restrictions, particularly those that seek to limit compensation.

Some firms already are exploring loopholes that would allow them to raise base salaries in order to offset potential restrictions in bonus packages.

Restrictions on foreign workers have frustrated bank executives who compete to recruit students fresh out of college or graduate school. They say it is in the nation's interest for them to hire highly skilled foreigners who are educated in the U.S. rather than have non-U.S. companies benefit from their American training.

Such recruitment efforts are a Wall Street tradition, with firms establishing formal relationships with the U.S.'s top universities. Wall Street firms also use these programs to hire minority students from the U.S. and abroad.

Lloyd Blankfein, Goldman's chief executive, described the visa restrictions as "protectionist and self-defeating" in a speech this month to the Council of Institutional Investors.

"Especially at this time in our economy, do we really want to tell individuals who will help companies to grow and innovate -- ultimately creating more jobs -- that they should go work elsewhere?" Mr. Blankfein said.

About 50 of J.P. Morgan's 225,000 employees, or 3% of its graduating hires, are affected by the new restrictions, according to a person familiar with the matter. Most of them work in the firm's investment bank. Rather than rescind offers, J.P. Morgan is sending those new hires to London, São Paulo and Hong Kong, say people familiar with the bank's strategy. J.P. Morgan CEO James Dimon has said the firm, which received $25 billion under TARP, took the money after the government requested it to do so and would like to pay it back.

Less than 1% of Citigroup's roughly 300,000 U.S. employees hold H-1B visas, according to a person familiar with the situation. The firm, which has received $50 billion in TARP funds, is sending affected employees to assorted foreign locations based on factors such as the worker's specific skills and native language.

The firm "is exploring potential opportunities in our non-U.S. global operations for those who may be affected by the law," a Citi spokesman said.

A Goldman spokesman said the firm will ask recruits to work in other offices if they can't get a U.S. visa. "We will honor the offers we have made," he said.

Other companies are leaving it up to the prospective employee to pursue overseas jobs. A spokeswoman for Bank of America Corp. says the firm rescinded a small number of job offers to prospective employees who need H-1B visas, but "like anyone, these individuals are welcome to pursue opportunities with the company based outside of the U.S."

The visa restrictions are also proving to be nettlesome to hedge funds and other investors who may seek to participate in a government-backed program designed to stimulate credit markets. Those firms, too, may be subject to the limitations on H-1B visas under certain circumstances.

—David Enrich contributed to this article.

Write to Robin Sidel at robin.sidel@wsj.com