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Sep 3rd
Northwest Airlines Flight 253
Incident
Getting on Flight 253
On Christmas Eve, December 24, 2009, Umar Farouk Abdulmutallab, a 23-year-old Nigerian, arrived at Murtala Muhammed Airport in Lagos, Nigeria. Eight days earlier at the KLM Royal Dutch Airlines office in Accra, Ghana, he had paid ,831 in cash for his Lagos-Amsterdam-Detroit round-trip ticket with a January 8, 2010, return date. Abdulmutallab left Lagos on Christmas Eve at 11:00 p.m. aboard KLM Flight 588, a Boeing 777 bound for Schiphol Airport in Amsterdam. In Amsterdam, on Christmas Day, Abdulmutallab checked in for Northwest Airlines Flight 253 to Detroit with only carry-on luggage.
A couple, Kurt and Lori Haskell, stated that, while waiting at the Amsterdam airport to board Flight 253, they saw the man whom they later learned was Abdulmutallab along with a well-dressed man who was assisting him approach the ticket agent. The other man appeared to be around 50 years old, of Indian descent and was dressed in what appeared to be an expensive suit and shoes. Federal agents later stated that they were trying to find the well-dressed man. According to Lori Haskell, the well-dressed man told the ticket agent: “We need to get this man on the plane. He doesn’t have a passport.” The ticket agent answered that nobody was allowed to board without a passport, to which the well-dressed man replied: “We do this all the time; he’s from Sudan.” Lori Haskell added that both she and her husband believe the man was trying to pass Abdulmutallab off as a Sudanese refugee. Lori Haskell then reported the two being directed down a corridor to talk to a manager. “We never saw him again until he tried to blow up our plane,” Haskell said of Abdulmutallab. Only U.S. citizens are permitted to board international flights to the U.S. without passports and even they may be permitted to do so only if the airline confirms their identity and citizenship, said Chief Ron Smith, spokesman for U.S. Customs and Border Patrol in Detroit, and the allegation that Abdulmutallab was allowed to board without a passport has been called disturbing.
Bombing attempt
Flight 253, a Northwest Airlines Airbus A330-300 twinjet with 279 passengers, 8 flight attendants, and 3 pilots aboard, left Amsterdam around 8:45 am local time. The plane was scheduled to arrive in Detroit at 11:40 a.m. EST, and was painted in Delta Air Lines’ livery, as Northwest was a subsidiary of Delta at the time.
Witnesses reported that as the plane approached Detroit, Abdulmutallab went into the plane’s lavatory for about 20 minutes. After returning to his seat at 19A (near the fuel tanks and wing, and against the skin of the plane), he complained that he had an upset stomach. He was then seen pulling a blanket over himself.
About 20 minutes before the plane landed, he secretly ignited a small explosive device consisting of a mix of plastic explosive powder and liquid acid. Abdulmutallab apparently had a packet of the plastic explosive sewn to his underwear, and injected liquid acid from a syringe into the packet to cause a chemical reaction. While there was an explosion and fire, the device failed to detonate properly. Passengers heard popping noises resembling firecrackers, smelled an odor, and saw the suspect’s trouser leg and the wall of the plane on fire.
“There was smoke and screaming and flames. It was scary.”
Although there were not any air marshals on the flight, several passengers and crew noticed the attack. A passenger seated on the far side of the same row, Jasper Schuringa from the Netherlands, saw Abdulmutallab sitting and shaking, and tackled and overpowered him. Schuringa saw the suspect’s trousers were open, and that he was holding a burning object between his legs. “I pulled the object from him and tried to extinguish the fire with my hands and threw it away,” said Schuringa, who suffered burns to his hands. Meanwhile, flight attendants extinguished the fire with a fire extinguisher and blankets, and a passenger removed the partially melted, smoking syringe from Abdulmutallab’s hand.
Detroit Metropolitan Airport is located in the city of Romulus, Michigan
Schuringa grabbed the suspect, and pulled him to the first class area at the front of the plane. A passenger reported that Abdulmutallab, though burned “quite severely” on his leg, seemed “very calm,” and like a “normal individual.” Schuringa stripped off the suspect’s clothes to check for other explosives or weapons, and he and a crew member handcuffed Abdulmutallab with plastic handcuffs. “He was staring into nothing,” Schuringa said, and shaking. Passengers applauded as Schuringa walked back to his seat.
The suspect was isolated from other passengers until after the plane landed. A flight attendant asked Abdulmutallab what he had in his pocket, and the suspect replied: “Explosive device.”
When the attack triggered a fire indicator light within the cockpit, the pilot requested rescue and law enforcement. The plane made an emergency landing at Detroit Metropolitan Wayne County Airport in the Downriver Detroit community of Romulus, Michigan, just before 1:00 p.m. local time. The airport is about 20 miles (32 km) southwest of Detroit and the adjacent international border.
Detroit Metropolitan Wayne County Airport
The Toronto Star reported that the plane’s flight route would have had it over Canadian airspace when the attempted bombing occurred. Representatives of two pilot associations told the Star that Detroit Metro airport would have been the nearest suitable airport at which to attempt an emergency landing.
While the plane itself suffered relatively little damage, the suspect incurred first and second degree burns to his hands, and second degree burns to his right inner thigh and genitalia, and two other passengers were injured. When the plane landed, Abdulmutallab was handed over to U.S. Customs and Border Protection (CBP) officers, and taken into custody for questioning and treatment of his injuries in a secured room of the burn unit of the University of Michigan Medical Center in Ann Arbor. Schuringa was also taken to the hospital. One other passenger incurred minor injuries.
Federal Bureau of Investigation (FBI) agents arrived at the airport after the plane landed. The aircraft was moved to a remote area so authorities could re-screen the plane, the passengers, and the baggage on-board. A bomb-defusing robot was first used to board the plane, and the Transportation Security Administration (TSA) interviewed all passengers. Another passenger from the flight was placed in handcuffs after a dog alerted officers to his carry-on luggage, searched, and released.
Analysis of explosives
The substance that the suspect tried to detonate was more than 80 grams (3 oz) of pentaerythritol tetranitrate (PETN), a crystalline powder that is often the active ingredient of plastic explosives, the high explosive triacetone triperoxide (TATP), and other ingredients. It is among the most powerful of explosives, in the same chemical family as nitroglycerin. The powder was analyzed by the FBI at Quantico, and an FBI affidavit filed in the Eastern District of Michigan reflected preliminary findings that the device contained PETN. The authorities also found the remains of the syringe. The suspect apparently carried the PETN onto the plane in a 6-inch (15 cm)-long soft plastic container, possibly a condom, attached to his underwear. However, much of the container was lost in the fire. ABC News cited a government test indicating that 50 grams (2 oz) of PETN can blow a hole in the side of an airliner, and posted photos of the remains of Abdulmutallab’s underwear and explosive packet. Further chemical analysis showed that TATP, another high explosive, was also present.
Al-Qaeda member Richard Reid (the “Shoe Bomber”) tried to detonate 50 grams of the same explosives in his shoes during an American Airlines flight on December 22, 2001. This attack was near the eighth anniversary of Reid’s attempt. In addition, in August 2009, an al-Qaeda bomber from Yemen with PETN hidden in his underwear (originally thought to have been hidden inside his anal cavity) blew himself up near the Saudi deputy Interior Minister in charge of counter-terrorism, Prince Muhammad bin Nayef.
Verbally disruptive passenger incident
On December 27, 2009, two days after the original incident, the crew of another Flight 253 requested emergency assistance with a Nigerian passenger who they said had become “verbally disruptive”. The crew questioned the passenger after other passengers expressed concern that he had been in the lavatory for over an hour. It was later determined that the man was a businessman who had fallen ill from food poisoning during the flight, and did not pose any security risk.
Umar Farouk Abdulmutallab
Main article: Umar Farouk Abdulmutallab
Umar Farouk Abdulmutallab, the suspected bomber
The suspect in the attempted bombing was 23-year-old Nigerian Umar Farouk Abdulmutallab. The youngest of 16 children, Abdulmutallab’s father is Alhaji Umaru Mutallab, one of the richest men in Africa, former Chairman of First Bank of Nigeria, and former Nigerian Federal Commissioner for Economic Development. Abdulmutallab’s mother was born in Yemen and is the second of his father’s two wives. Abdulmutallab was initially raised in Kaduna, in Nigeria’s Muslim-dominated north, a place he returned to on his vacations.
In high school at the British International School in Lom, Togo, Abdulmutallab was known as a devout Muslim who frequently discussed Islam with schoolmates. He visited the U.S. for the first time in 2004. For the 2004-05 academic year, Abdulmutallab studied at the San’a Institute for the Arabic Language in Sana’a, Yemen, and attended lectures at Iman University.
He began his studies at University College London in September 2005, where he studied Engineering and Business Finance, and earned a degree in mechanical engineering in June 2008. He was president of the school’s Islamic society in 2006 and 2007, during which time he participated in, along with political discussions, such activities as martial arts and paintballing; at least one of the Society’s paintballing trips involved a preacher who reportedly said: “Dying while fighting jihad is one of the surest ways to paradise.” During those years, he “crossed the radar screen” of MI5, the UK’s domestic counter-intelligence and security agency, for radical links and “multiple communications” with Islamic extremists; none of the information was passed to American officials, due to concerns about breaching his human rights and privacy. His last known address was a 4 million apartment on Mansfield Street, Central London, close to Oxford Street.
On June 12, 2008, Abdulmutallab applied for and received from the U.S. consulate in London a U.S. multiple-entry visa, valid to June 12, 2010, with which he visited Houston, Texas, from August 117, 2008. From January 2009 to July 2009, he attended a master’s of international business degree program at the University of Wollongong in Dubai.
In May 2009 Abdulmutallab tried to return to Britain, ostensibly for a six-month “life coaching” program at what the British authorities concluded was a fictitious school; accordingly, his visa application was denied by the United Kingdom Border Agency. His name was placed on a UK Home Office security watch list, which meant he was not permitted to enter the UK, though he could pass through the country in transit and was not permanently banned. However, the UK did not share the information with other countries.
In July 2009, Abdulmutallab’s father agreed to his request of returning to the San’a Institute for the Arabic Language in Yemen to study Arabic from August to September of that year, and Abdulmutallab arrived in the country in August. “He told me his greatest wish was for sharia and Islam to be the rule of law across the world,” said one of his classmates at the Institute. However, Abdulmutallab ;left the Institute after a month, but remained in Yemen. Earlier, his family had become concerned in August when he called them to say he had dropped the course, but was remaining there. By September, he routinely skipped his classes at the institute and attended lectures at Iman University, which is suspected to have links to terrorism.
The San’a Institute obtained an exit visa for him at his request, and arranged for a car that took him to the airport on September 21, 2009 (the day his student visa expired), but the school’s director said, “After that, we never saw him again, and apparently he did not leave Yemen”. In October, Abdulmutallab sent his father a text message saying that he was no longer interested pursuing an MBA in Dubai, and wanted instead to study sharia and Arabic in a seven-year course in Yemen. His father threatened to cut off his funding, whereupon Abdulmutallab said he was “already getting everything for free”. He text-messaged his father, saying “I’ve found a new religion, the real Islam”, and ultimately, “You should just forget about me, I’m never coming back”, “Please forgive me. I will no longer be in touch with you”, and “Forgive me for any wrongdoing, I am no longer your child”. The family was last in contact with Abdulmutallab in October 2009.
On November 11, 2009, British intelligence officials sent the U.S. a message indicating that a man named “Umar Farouk” had spoken to Anwar al-Awlaki, a Muslim spiritual leader supposedly tied to al-Qaeda, pledging to support jihad, but the notice did not mention Abdulmutallab’s last name. His father made a report to two CIA officers at the U.S. Embassy in Abuja, on November 19 regarding his son’s “extreme religious views”, and told the embassy that Abdulmutallab might be in Yemen. Acting on the report, Abdulmutallab’s name was added in November 2009 to the U.S.’s 550,000-name Terrorist Identities Datamart Environment, a database of the U.S. National Counterterrorism Center. It was not added, however, to the FBI’s 400,000-name Terrorist Screening Database, the terror watch list that feeds both the 14,000-name Secondary Screening Selectee list and the U.S.’s 4,000-name No Fly List. Abdulmutallab’s U.S. visa was not revoked as well.
Yemeni officials said that he left Yemen on December 7 (flying to Ethiopia, and then two days later to Ghana). Ghanaian officials said Abdulmutallab was there from December 9 until December 24, when he flew to Lagos.
Two days after the attack, Abdulmutallab was released from the hospital in which he had been treated for burns sustained during the attempted bombing. He was then taken to the Federal Correctional Institution, Milan, a federal prison in Milan, Michigan.
Ties to Anwar al-Awlaki
Main article: Anwar al-Awlaki
Anwar al-Awlaki, who reportedly had ties to Umar Farouk Abdulmutallab
A number of sources reported contacts between Abdulmutallab and Anwar al-Awlaki, a Muslim lecturer and spiritual leader who is accused of being a senior al-Qaeda talent recruiter and motivator. Al-Awlaki, previously an imam in the U.S. who more recently has lived in Yemen, also has links to three of the 9/11 hijackers, the 2005 London subway bombers, a 2006 Toronto terror cell, a 2007 plot to attack Fort Dix, and the 2009 suspected Fort Hood shooter, Nidal Malik Hasan.
With a blog and a Facebook page, he has been described as the “bin Laden of the internet.”
Despite being banned from entering England in 2006, al-Awlaki spoke on at least seven occasions at five different venues around Britain via video-link in 2007-09. He gave a number of video-link lectures at the East London Mosque during this period. In one instance, the mosque provoked the outrage of The Daily Telegraph by hosting a video-teleconference by al-Awlaki in 2008, and former Shadow Home Secretary Dominic Grieve expressed concern over al-Awlaki’s involvement. On New Year’s Day 2009 the mosque played a pre-recorded video lecture by al-Awlaki, with a poster depicting New York in flames. He also gave video-link talks in England to an Islamic student society at the University of Westminster in September 2008, an arts center in East London in April 2009 (after the Tower Hamlets council gave its approval), worshipers at the Al Huda Mosque in Bradford, and a dinner of the Cageprisoners organization in September 2008 at the Wandsworth Civic Centre in South London (at which he said “We should make jihad for our brothers and an angel will make the same jihad for you”). On August 23, 2009, al-Awlaki was banned by local authorities in Kensington and Chelsea, London, from speaking at Kensington Town Hall via videolink to a fundraiser dinner for Guantanamo detainees promoted by Cageprisoners. His videos, which discuss his Islamist theories, have also circulated in England.
Representative Pete Hoekstra, the senior Republican on the House Intelligence Committee, said on the day of the attack that Obama administration officials and officials with access to law enforcement information told him “there are reports [the suspect] had contact [with al-Awlaki]…. The question we’ll have to raise is was this imam in Yemen influential enough to get some people to attack the U.S. again.” He added: “The suspicion is … that [the suspect] had contact with al-Awlaki. The belief is this is a stronger connection with al-Awlaki” than Hasan had. Hoekstra later said credible sources told him Abdulmutallab “most likely” has ties with al-Awlaki.
The Sunday Times established that Abdulmutallab first met and attended lectures by al-Awlaki in 2005, when he was in Yemen to study Arabic. The two are also “thought to have met” in London, according to The Daily Mail. Fox News reported that evidence collected during searches of “flats or apartments of interest” connected to Abdulmutallab in London showed that he was a “big fan” of al-Awlaki, as web traffic showed he followed Awlaki’s blog and website. CBS News and The Daily Telegraph reported that Abdulmutallab attended a talk by al-Awlaki at the East London Mosque (which al-Awlaki may have participated in by video teleconference).
University of Oxford historian, and professor of international relations, Mark Almond wrote that the suspect was “on American security watch-lists because of his links with … Al-Awlaki”.
CBS News said that the two were communicating in the months before the bombing attempt, and sources say that at a minimum al-Awlaki was providing spiritual support. According to federal sources, over the year prior to the attack, Abdulmutallab intensified electronic communications with al-Awlaki. One government source described intercepted “voice-to-voice communication” between the two during the fall of 2009, saying that al-Awlaki “was in some way involved in facilitating [Abdulmutallab]‘s transportation or trip through Yemen. It could be training, a host of things.”
Abdulmutallab reportedly told the FBI that al-Awlaki was one of his trainers when he underwent al-Qaeda training in remote camps in Yemen, and there were “informed reports” that Abdulmutallab met al-Awlaki during his final weeks of training and indoctrination prior to the attack. According to a U.S. intelligence official, intercepts and other information point to connections between the two:
“Some of the information … comes from Abdulmutallab, who … said that he met with al-Awlaki and senior al-Qaeda members during an extended trip to Yemen this year, and that the cleric was involved in some elements of planning or preparing the attack and in providing religious justification for it. Other intelligence linking the two became apparent after the attempted bombing, including communications intercepted by the National Security Agency indicating that the cleric was meeting with “a Nigerian” in preparation for some kind of operation.”
Yemen’s Deputy Prime Minister for Defense and Security Affairs, Rashad Mohammed al-Alimi, said Yemeni investigators believe the suspect traveled in October to Shabwa, where he met with suspected al-Qaida members in a house built by al-Awlaki and used by al-Awlaki to hold theological sessions, and that Abdulmutallab was trained and equipped there with his explosives. “If he went to Shabwa, for sure he would have met Anwar al-Awlaki,” al-Alimi said. Al-Alimi also said he believed al-Awlaki is alive. And Abdul Elah al-Shaya, a Yemeni journalist, said a healthy al-Awlaki called him on December 28 and said that the Yemeni government’s claims as to his death were “lies”. Shaya declined to comment as to whether al-Awlaki had told him about any contacts he may have had with Abdulmutallab. According to Gregory Johnsen, a Yemeni expert at Princeton University, Shaya is generally reliable.
At the end of January 2010, a Yemeni journalist, Abdulelah Hider Shaa, said he met with al-Awlaki, who said he had met and spoken with Abdulmutallab in Yemen in the fall of 2009. Al-Awlaki also reportedly said Abdulmutallab was one of his students, that he supported what Abdulmutallab did but did not tell him to do it, and that he was proud of Abdulmutallab. A New York Times journalist listened to a digital recording of the meeting, and said that while the tape’s authenticity could not be independently verified, the voice resembled that on other recordings of al-Awlaki.
Al-Qaeda involvement
On December 28, 2009, Obama in his first address said the incident “demonstrates that an alert and courageous citizenry are far more effective than anti-terrorist laws which wreak havoc on our basic freedoms.” On the same day, Al-Qaeda in the Arabian Peninsula (AQAP) announced that it was responsible for the attempted bombing. AQAP said that the attack, during “their (Christians) celebration of the Christmas holidays”, was to “avenge U.S. attacks on the militants in Yemen”. The NEFA Foundation posted the full al-Qaeda statement.
On January 24, an audio tape said to be from Osama Bin Laden praised the bombing attempt and warned of further attacks against America, but did not explicitly claim responsibility for it. The short recording that was broadcasted on Al Jazeera television, said: “The message delivered to you through the plane of the heroic warrior Umar Farouk Abdulmutallab was a confirmation of the previous messages sent by the heroes of the September 11.” An adviser to the U.S. President said he could not confirm whether the voice was actually that of bin Laden. In the past, the CIA has usually confirmed Al Jazeera reports on tapes attributed to bin Laden.
While in custody, Abdulmutallab told authorities he had been directed by al-Qaeda. He said he had obtained the device in Yemen, along with instructions from al-Qaeda as to how to use it and to detonate it when the plane was over U.S. soil. Abdulmutallab said he had contacted al-Qaeda through a radical Yemeni imam (who according to The New York Times on December 26 was not believed to be al-Awlaki) whom he had reached through the internet.
The New York Times reported on December 25 that a counter-terrorism official had told them Abdulmutallab’s claim “may have been aspirational”. But U.S. Representative Jane Harman] (D-Calif.), Chairman of the House Homeland Security Subcommittee on Intelligence, Information Sharing, and Terrorism Risk Assessment, said the following day that a federal official briefed lawmakers about “strong suggestions of a Yemen-al Qaeda connection” with the suspect. On January 2, 2010, President Obama said that AQAP trained, equipped, and dispatched Abdulmutallab, and vowed retribution.
In reaction to suggestions that the U.S. launch a military offensive against the alleged terrorists’ sanctuary in Yemen, The Washington Post noted that Yemeni forces equipped with U.S. weapons and intelligence had carried out two major raids against AQAP shortly before the bombing attempt, and that the terror group may have lost top leaders in a December 24, 2009, airstrike.
Jasper Schuringa
Jasper Schuringa, who was en route to Miami, Florida for a vacation, stopped the attack and got burn injuries in the process. He lives in Amsterdam, and was born in 1971 in Curaao, Netherlands Antilles. Schuringa is a graduate of Leiden University, Leiden. He is a film director of low-budget Dutch films for an Amsterdam-based media company, and was the assistant director for National Lampoon’s Teed Off Too.
Dutch Deputy Prime Minister Wouter Bos phoned Schuringa on behalf of the Dutch government the day after the attack, and conveyed the government’s compliments and gratitude for Schuringa’s part in overpowering the suspect. Dutch Member of Parliament Geert Wilders called Schuringa “a national hero” who “deserves a royal honor”, which Wilders said he would ask the Dutch government to award. According to the Dutch newspaper De Volkskrant, Queen Beatrix expressed her feelings of gratitude towards Schuringa. The Dutch poet Nico Dijkshoorn compared Schuringa to both Superman and Hans Brinker.
On February 10, 2010 Schuringa announced that Reinout Oerlemans Eyeworks will make a documentary about Schuringa act during the flight. Schuringa, who is a filmmaker himself, will be closely involved in the production.
Reactions and investigations
Governments
United States
Barack Obama discusses the incident with National Security Council chief of staff Denis McDonough at the Kailua Winter White House on December 29, 2009.
The U.S. investigation into the incident is being managed by the Detroit Joint Terrorism Task Force, which is led by the FBI and includes U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement, the Federal Air Marshal Service, and other law enforcement agencies. Among other questions, they are attempting to answer the following: what training did Abdulmutallab receive, who else (if anyone) was in the training program, are others preparing to launch similar attacks, was the attack part of a larger (possibly worldwide) plot, was it a test run, who assisted him, who gave him the chemicals, who sewed the explosives in his underwear, who further radicalized him, who sent him on his way, and how was he able to smuggle the explosives past airport security.
President Barack Obama was notified of the incident by an aide while on a vacation in Kailua, Hawaii, and spoke with officials from the Department of Homeland Security. He instructed that all appropriate measures be taken in response to the incident. While the White House called the attack an act of terrorism, U.S. Attorney General Eric Holder has not declared the incident an official terrorist act.
Representative Hoekstra said that Detroit may not have been singled out for the attack, but the focus may have simply been to attack a destination with many international travelers. The attack occurred over the city because the plane had not flown over U.S. land prior to that time. In addition, it was suggested that it is possible that the attack was a test to see if such materials could pass through screening, and how much damage the blast would cause. The U.S. is examining what information it had before the attack, why its National Counterterrorism Center did not put together the warning from Abdulmutallab’s father and intercepts by the National Security Agency (NSA) of conversations among Yemeni al-Qaida leaders about a “Nigerian” to be used for an attack (months before the attack took place), and why the suspect’s U.S. visa was not revoked after his father’s warning. Abdulmutallab’s name had come to the attention of intelligence officials many months before that, but no “derogatory information” was recorded about him. A Congressional official said that Abdulmutallab’s name appeared in U.S. reports reflecting that he had connections to both al-Qaeda and Yemen.
One U.S. intelligence officer said on December 30: “Abdulmutallab’s father didn’t say his son was a terrorist” when he visited the U.S. Embassy in Nigeria, “let alone planning an attack. Not at all. I’m not aware of some magic piece of intelligence that suddenly would have flagged this guyhose name nobody even had until Novembers a killer en route to America, let alone something that anybody withheld.” Representative Hoekstra questioned, however, why the apparent links were not put together before the attack took place, saying: “You would think if you did a Google search on these different threads, it would bring these things together quickly. There are organizations that deal with massive amounts of data in real time every day. Talk to MasterCard.”
On January 7, 2010, James L. Jones, the national security advisor, said Americans would feel “a certain shock” when a report detailing the intelligence failures that could have prevented the Christmas Day attack were released that day. He said that President Obama would be “legitimately and correctly alarmed that things that were available, bits of information that were available, patterns of behavior that were available, were not acted on.”
United Kingdom
Prime Minister Gordon Brown said that the UK would take “whatever action was necessary”. The day after the attack, British police searched a family-owned flat at which Abdulmutallab had lived while in London.
Netherlands
A Dutch military police spokesperson said that Abdulmutallab did not go through passport control at Schiphol, where large numbers of passengers are processed en-route to North America from Africa, and the Dutch counter-terrorism agency NCTb said that it had started a probe into where the suspect originated. A preliminary investigation, however, found no security lapses, and despite being listed as having a potential terrorism connection, the suspect had a valid U.S. visa. Dutch officials also said that they will now use 3D full-body scanning X-ray technology on flights departing to the U.S. Body scanners are being implemented despite concerns from privacy advocates. Dutch officials said that security must take priority over the privacy of the individuals being scanned. The developer of the technology said the scanned imagery does not compromise individuals’ privacy, as the imagery resolution is too low to display the body in anatomical detail; but that it would certainly detect non-metallic objects under clothing, such as powdered explosives.
Members of the Second Chamber (Lower House) of the Dutch parliament demanded an explanation from Minister of Justice Hirsch Ballin, asking how the suspect managed to smuggle explosives on board, despite Schiphol’s reportedly strict security measures.
Nigeria
The incident raised concern regarding security procedures at Nigeria’s major international airports in Lagos and Abuja, where tests for explosive materials are not conducted on carry-on baggage and shoes, and where bags are allowed to pass quickly through X-ray scanners. In response to strong international criticism, Nigerian civil aviation officer Harold Demuran announced that Nigeria will also set up full-body scanning X-ray machines in Nigerian airports.
Canada
In response to the incident and to comply with new US regulations, the Canadian Government will install full body scanners at major airports. This technology is used in secondary screening of passengers. The first 44 scanners were planned to be installed at airports in Vancouver, Calgary, Edmonton, Winnipeg, Toronto, Ottawa, Montreal, and Halifax.
Delta Air Lines
Delta Air Lines, which owns Northwest, said its Detroit group did not handle security for the flight. It released a statement calling the incident a “disturbance,” and saying that Delta was “cooperating fully with authorities”.
According to an internal communication to employees, Delta’s CEO Richard Anderson was upset that another terrorist incident such as this could reoccur, especially after the September 11 security reinforcements put in place around the globe: “Having this occur again is disappointing to all of us… You can be certain we will make our points very clearly in Washington.”
Security firms
In January 2010, ICTS International, a security firm that provides security services to Schipol airport, and G4S (Group 4 Securicor Aviation Security B.V.), another security firm, traded blame over the security oversight, as did authorities at Schiphol Airport, the Federal Aviation Authority, and U.S. intelligence officials. According to Haaretz, the failure was two-fold: An intelligence failure, as Obama stated, in the poor handling of information that arrived at the State Department and probably also the CIA from both the father of the would-be bomber and the British security service; and a failure within the security system, including that of ICTS. Abdulmutallab’s “age, name, illogical travel route, high-priced ticket purchased at the last minute, his boarding without luggage (only a carry-on), and many other signs should have been sufficient to alert the security officers and warrant further examination of the suspect. However, the security supervisor allowed him to get on the flight.”
Criminal charges
Prison grounds at Federal Correctional Institution, Milan, where Abdulmutallab is incarcerated
On December 26, a criminal complaint was filed against Abdulmutallab in the United States District Court for the Eastern District of Michigan, charging him with two counts: placing a destructive device in, and attempting to destroy, a U.S. civil aircraft. The U.S. Attorney’s Office assigned to the case federal prosecutors Jonathan Tukel (chief of the counter-terrorism unit) and Eric Straus (former chief of the same unit). Abdulmutallab was arraigned and officially charged by U.S. District Court Judge Paul D. Borman later the same day at the University of Michigan Hospital.
On January 6, 2010, a federal grand jury indicted Abdulmutallab on six criminal counts including attempted use of a weapon of mass destruction and attempted murder. “Not guilty” pleas were entered on the behalf of Abdulmutallab at the hearing. If Abdulmutallab is convicted on the charges he could face a life sentence plus 90 years. He faced his first court hearing, a detention hearing, on January 8, 2010. A former federal prosecutor told the Detroit News that “there’s no chance of getting this guy bond in a million years”.
Aftermath
Effect on travel
The U.S. government did not raise the Homeland Security Advisory System terrorist threat level, orange at the time (high risk of terrorist attacks), following the attack. However, the Department of Homeland Security said that additional security measures would be in place for the remainder of the Christmas travel period. The TSA detailed several of the measures, including a restriction on movement and access to personal items during the last hour of flight for planes entering U.S. airspace. The TSA also said that there would be more officers and security dogs at airports.
On December 28 Transport Canada announced that for several days it would not allow passengers flying to the U.S. from Canada a carry-on bag, with some exceptions. British Airways said that passengers flying to the U.S. would only be permitted one carry-on item. Other European countries increased baggage screening, pat-down searches, and random searches for passengers traveling to the U.S. A spokesperson for the Dutch airport used by the attacker said that heightened security would be in place for “an indefinite period”. However, in spite of the extra measures said to have been put in place to prevent a follow-up attack, Stuart Clarke, a photoreporter from the British newspaper Daily Express claimed to have smuggled a syringe containing fluid, and which could have contained a liquid bomb detonator onto another plane. On January 3, 2010, Clarke said he boarded a jet from Schiphol Airport bound for Heathrow Airport just five days after the Christmas Day terror attack, and that the airport appeared to have imposed no additional security, such as precautionary pat-downs which could easily have discovered the syringe which he claimed he kept in his jacket pocket throughout.
On December 27, a Lufthansa flight headed for Detroit was diverted to Iceland when it was discovered to be carrying a bag from a passenger who was not on the plane. In addition, a passenger on a Baltimore-to-New York flight was detained when a firecracker was discovered in the seat he had used.
U.S. political fallout
Beginning on the day of the incident, Obama was kept informed via secure conference calls and follow-up briefings.
White House Press Secretary Robert Gibbs and Secretary of Homeland Security Janet Napolitano said several times on Sunday talk shows that “the system had worked”, a statement that engendered some controversy. The next day they retracted the statement, saying that the system had in fact “failed miserably.” According to Napolitano, her initial statement had referred to the rapid response to the attack that included alerts sent to the 128 other aircraft in U.S. airspace at the time, and new security requirements for the final hour of every flight, rather than the security failures that allowed the attack to happen.
The day after the attack, the U.S. House Homeland Security Committee and Senate Commerce, Science, and Transportation Committee both announced that they would hold hearings in January 2010 to investigate how the device passed through security, and whether further restrictions should be placed on air travel; the Senate hearings began on January 21.
Four days after the attack, Obama said publicly that Abdulmutallab’s ability to board the aircraft was the result of a systemic failure that included an inadequate sharing of information among U.S. and foreign government agencies. He called the situation “totally unacceptable.” He ordered that a report be delivered detailing how some government agencies had failed to share or highlight potentially relevant information about the suspect before he allegedly tried to blow up the airliner. Two days later Obama received the briefing, which included statements that information about the suspect had failed to cross agency lines, and that the failures to communicate within the U.S. government had led to the threat posed by Abdulmutallab not being known by certain agencies until the attack. Obama said he would meet with security officials and specifically question why Abdulmutallab was not placed on the U.S. no-fly list, despite the government having received warnings about his potential al-Qaeda links.
Under new rules prompted by the incident, airline passengers travelling to the U.S. from 14 nations would undergo extra screening: Afghanistan, Algeria, Cuba, Iran, Iraq, Lebanon, Libya, Nigeria, Pakistan, Saudi Arabia, Somalia, Sudan, Syria, and Yemen. The inclusion of non-Muslim Cuba on the list was criticized.
Account of pre-boarding event
Kurt Haskell, a U.S. passenger on Flight 253, said he saw two individuals approach the boarding agent at Schiphol, in Amsterdam. One was a “poor-looking black teenager around 16 or 17″ whom Haskell claims was Abdulmutallab. The second man was a “sharp-dressed” Indian man around 50 years old who spoke “in an American accent similar to my own.” According to Haskell, the Indian man attempted to negotiate with the airline employee to allow Abdulmutallab to board without a passport. Haskell claimed that the older man said: “He’s from Sudan. We do this all the time”, to which the employee responded by referring them to management.
A U.S. Customs and Border Patrol official and spokesman in Detroit confirmed that there were not any Sudanese refugees on the plane. The Dutch counter-terror agency said that Abdulmutallab presented a valid Nigerian passport and U.S. entry visa when he boarded Flight 253, and after reviewing more than 200 hours of security camera recordings, did not find any indication that Abdulmutallab had accomplices at the airport or that he acted suspiciously there. Haskell suggested authorities should, “Put the video out there to prove I’m wrong.”
Federal agents said they were attempting to identify a man who, according to passengers on the flight, helped Abdulmutallab change planes in Amsterdam. U.S. authorities had initially discounted the passenger accounts, but the agents later said there was a growing belief that this man played a role to make sure Abdulmutallab “did not get cold feet”.
See also
Detroit portal
Aviation portal
Yemeni al-Qaeda crackdown
2001 shoe bomb plot
2006 Transatlantic Aircraft Plot
List of accidents and incidents on commercial airliners
List of terrorist incidents, 2009
“Flying while Muslim”
References
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Sep 3rd
Bharatbook.com is proud to announce the new report “Telecommunications Report UAE” (http://www.bharatbook.com/detail.asp?id=19088).
Independent 5-year telecommunications forecast for the UAE.
Original telecommunications market research and telecommunications sector trend analysis for the UAE’s telecommunications industry.
Competitive intelligence, regional telecommunications company rankings and SWOT analyses on international and domestic telecommunications companies in the UAE.
The UAE Telecommunications Report has been researched at source and features latest-available data covering all headline indicators; 5-year industry forecasts through end-2012; company rankings and competitive landscapes covering leading multinational handset manufacturers and equipment vendors, domestic fixed-line and mobile operators, and analysis of latest industry news, trends and regulatory developments.
UAE Telecommunications Report provides industry professionals and researchers, operators, equipment suppliers and vendors, corporate and financial services analysts and regulatory bodies with independent forecasts and competitive intelligence on the telecommunications industry in the UAE.
Key Benefits of Report
Benchmark It’s Independent 5-Year Telecommunications Industry Forecast for the UAE to test other views – a key input for successful budgeting and strategic business planning in the UAE telecommunications market. Target Business Opportunities & Risks in the UAE’s Telecommunications Sector through our reviews of latest industry trends, regulatory changes, and major deals, projects and investments in the UAE.
Exploit Latest Competitive UAE Telecommunications Intelligence & company SWOTS on your competitors and peers through company rankings by sales, market share, investments and leading products and services.
Coverage
Executive Summary
Summary of It’s key industry forecasts and trend analysis, covering ICT, fixed-line, mobile and internet markets, and headline news of key industry events from the latest quarter.
Market Overview
At-a-glance outlook of the structure, size and value of the industry, including an overview of key players and a snapshot of regional penetration rates for fixed-line, mobile and internet markets.
Business Environment Rankings
It provides a cross-border analysis of telecoms regulatory systems across regional markets, and their investor prospects, discussing the merits and downfalls of each country’s business environment, and ranking them in order of competitiveness. The rankings take into account industry factors, such as Market Maturity, Growth Potential, Competitive Environment and Licensing Framework in addition to It’s political and economic risk ratings.
It 5-Year Industry Forecast
Historic data series and 5-year forecasts to end-2012 for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast.
Fixed-Line Telephony – Telephone Lines (’000); Telephone Lines/100 Inhabitants;
Cellular Telephony – Phone Subscribers (’000); Mobile Phone Subscribers/ 100 Inhabitants; Mobile Phone Subscribers/100 Fixed Line Subscribers;
Internet Markets – Internet Users (’000); Internet Users/100 Inhabitants; Broadband Internet Subscribers (’000); Broadband Internet Subscribers/100 Inhabitants;
Multimedia Markets – PCs (’000); PCs/100 Inhabitants; TV households (’000s); Pay-TV subscribers (’000s); Pay-TV subscribers/100 inhabitants; Cable TV subscribers (’000s); Direct-to-Home Subscribers (’000s)
It 5-Year Macroeconomic Forecast
It forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.
Competitive Landscape & Rankings
Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts.
Company Profiles & SWOTS
Company profiles, including SWOT (strengths, weaknesses, opportunities and threats) analyses, fully researched senior executives and contact details, business activity, leading products and services, and a record of all recent foreign direct investments and projects.
Executive Summary
The Sector At A Glance
Key Insights On The Telecomunications sector of United Arab Emirates
The future of the UAE’s fixed-line market is expected to be one of continued slow growth, at odds with our earlier expectations that the sector would begin to flatten out, and eventually dip. Annual growth has remained fairly consistent over the past few years, with 2004 experiencing growth of 4.6%, followed by 2005 growth of 3.5% and 4% in 2006, taking the total fixed-line subscriber base to 1.28mn users. Our confidence that the market will continue growing derives from the ban on Voice over Internet Protocol (VoIP) services by the telecoms regulatory body, and until such a time when use of VoIP is allowed, customers will have little alternative than to use services as provided by Etisalat and du. This forms the Telecommunications Regulatory Authority’s (TRA) method of protecting its domestic companies and industry. Etisalat has sought to encourage usage in the international long distance (ILD) market by offering the corporate sector a 35% discount. We are now forecasting that fixed-line will grow at a consistent rate, in line with previous movements in the market, to achieve a penetration rate of 28.6% by the end of this year.
Further, the dominant operator is also seeking an aggressive strategy towards its broadband market position, with newcomer du currently trialling WiMAX. Etisalat set a precedent in the UAE with the announcement that it would reduce broadband tariffs – one of the highest in the region – and on a par with regional peers such as Bahrain’s Batelco. The operator is hoping that it will be able to make an early entry into the triple-play arena, with a well-established base across the mobile and fixed-line sectors, and ahead of newcomer du. To this end, it has also been pursuing a fibre-optic cable project, and recently added a new agreement to its existing portfolio with a US$400mn joint venture linking the Middle East, India and Western Europe.
Even as the operator branches out into the triple-play arena, it is well aware of the saturated nature the mobile market presents, leading it to pursue an international expansionist strategy. Two likely takeover candidates are Algérie Télécom, which is also the sole owner of mobile operator Algeria’s No.2 Mobilis and Kuwait’s Wataniya (it failed in its objective here). Having said that, Etisalat will need to be vigilant over its domestic market – newcomer du is more than likely set to take subscribers away from the market, given its 100% penetration rate, with MNP facilitating the move. The 31-year absence of an alternative service provider is more than likely to have made customers keen to try out a new provider, and unless it is able to provide a good level of service and high network quality, Etisalat could soon find itself permanently losing market share. To this end, Etisalat has sought to satisfy UAE customers, who are technologically more savvy than other users in the region given the modern technological infrastructure they enjoy, leading with the announcement this quarter that the migration to Next Generation Networks (NGN) had begun, with around 10% of its existing network to be NGN-ready by YE07.
For more information kindly visit: http://www.bharatbook.com/detail.asp?id=19088
Sep 3rd
What are sovereign wealth funds? They are the assets of sovereign countries that have been earned. Instead of holding them in government bonds as they once did countries are investing part of the money in stocks and commodities on a global basis.
The Saturday, May 26 Financial Times devoted a large section to an issue I have mentioned several times; the 2.5 trillion dollars of sovereign wealth funds from China, Norway, Saudi Arabia, United Arab Emirates and many other countries [about 16 in all] that is to be invested globally. In addition, there is probably twice that much money sitting in these countries’ reserves that have not yet been earmarked for global stock, bond and real estate investing.
Let me put it another way, these countries and others will use their capital to invest in stocks, bonds and commodities. Gone are the days when they would just buy government bonds with this type of money. Now they are putting it where it will earn better returns.
THE MAJOR INFLUENCES OF THIS NEW TREND
1. Countries that have to sell bonds to finance budget deficits will have to raise interest rates to get their bonds sold.
2. Countries that can grow will attract these assets to their financial markets.
3. The commodities which will are needed to fuel this growth will also benefit. For example, it takes little imagination to realize that base metals and energy will be purchased. Suppose we are China, and we know that we will be using a lot of energy and base metals to build out our economy for the next fifty years, why not buy the stocks that will produce these things? Since we will be making them profitable why not participate in the profits?
4. Richer people in the developing world and richer central banks in the developing world will hedge their currency assets against losses in depreciating currencies by holding precious metals. Demand for precious metals will continue to rise.
This gigantic pool of capital will change the way investing is done for years to come. It will be a lever to substantially raise the value of the growing stock markets of the world. It will also be used to raise the value of the commodities that will be in demand…such as energy, base metals and precious metals.
For more information on Global investment visit http://www.howtoinvestglobally.com
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Sep 3rd
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Sep 2nd
You can enjoy plenty of online savings when you do all your banking on the web. Not only will you not have to stand in line on paydays and before vacation weeks, you can access all your account information just by clicking a few buttons. You can enjoy many online savings when you begin to do your banking in just this way.
There are those people who are completely satisfied having an online savings account. They are not utilizing all that is available when they do it just this one way. You can do all your checking online as well, and save fees and avoid late payments on bills you have often racked up plenty of fees.
If you are searching for the services that will best suit your personal or business finances, you need look no further than online savings from banking. You can find an online checking account that will not charge a fee for utilizing their services. They may even pay a high yield on the money you have in your checking account balance.
Banks are offering more and more online savings as incentives to get you to start online banking right now. Right now, today, you can get a high yield savings account that is available to you online. There are unique features that come with the High Yield Savings account. You usually receive checks for you to access your money. You won’t want to do that in order to get the most from your investment.
What a high yield savings account can offer you online is a higher APY or Annual Percentage Yield, than you can earn from a bank that is made from mortar and bricks. You will be rarely charged fees for minimum balance requirements as well as fees for a balance that doesn’t meet the lowest requirements. You can just about open a High Yield Savings account with the measly sum of one dollar.
With online banking, you can link your many accounts and see all balances that are available to you at all times with just a click. You can soon become master of your financial future, using all the tools online that can offer you savings in areas you would have never thought to look.
Many features people like about a High Yield Savings Account are that they typically allow unlimited access to account linking. This allows you to manage many different accounts with a lot more flexibility. You can just pass money through your account and completely bypass the use of snail mail entirely.
Some of the drawbacks to this system are that they have a long time that they hold deposits. Sometimes it can be as long as ten days. Many people cant wait that long, especially since companies they are paying are waiting far shorter time periods for their checks to clear.
If you have ever used a High Yield Savings Account, you can have your opinions heard by sharing your experiences with other readers who are looking for the same online savings that you are.
Sep 2nd
There are a whole range of reasons why all South Africans should support proudly South African products but the main spin off of the Nedlac initiative is to create more jobs within our country’s borders.
The vast majority of South Africans want to make a positive difference in our infant democracy and buying products or services emblazoned with the Proudly South African logo is one simple way of making our economic clout count.
To be part of the Proudly South African campaign, manufacturers and service providers have to follow strict criteria that include
It has been estimated that between five and twenty-two new jobs are created for each R1 million spent on locally produced products and when we take a quick look at unemployment statistics in SA and the impact it has on crime, then each and every one of us should make a concerted effort to buy Proudly South African.
The battle against unemployment
Whether the Proudly South African campaign had any impact on the latest unemployment statistics is unknown, although the positive newsflash is that unemployment levels sank to 23% in September 2007, a record low since the 2001 inception of the Labour Force Survey.
According to Statistics South Africa, a total of approximately 13.2 million people were employed, a net gain of over 430 000 jobs. The nation’s unprecedented growth has been tagged as the driving force behind job creation – in the past six years South Africa’s burgeoning economy has added over 2.1 million jobs and counting!
Crime busting
There is an indisputable link between unemployment, poverty and crime and if we are serious about making this dynamic and potentially great country one of the leaders in the global village, then these three disaster areas have to be curbed, and quickly.
South Africans have been held hostage by the electrifying crime wave that has engulfed the country for quite some time now and each and every one of us is aware of the damage it has caused to investor confidence. Quite simply, without substantial investment, South Africa is in danger of becoming just another average African state. The good news is that crime is on the decline, with a 6.4% drop overall.
In a nutshell then, the Proudly South African campaign is really a loyalty programme with the entire population of South Africa, all 48 million of us, as members. There is no doubt that if we continue to support South African goods and services, the lives of all South Africans will improve immeasurably.
Sep 2nd
*** A ForexTutor.us Special Report ***
Is foreign exchange trading a true get rich quick scheme? Foreign exchange trading, or Forex, is a real opportunity to get extremely wealthy in a very short amount of time. How?
The key is leverage.
Some Forex brokers allow you a leverage ratio of 200:1. That is the equivalent of investing $1,000 into a $200,000 asset, and an asset that you could turn around and trade within seconds for a quick profit if done correctly!
Forex trading involves dealing in international currencies. Here, one can sell currency of one country to buy that of another. The trader deals in Foreign Exchange [Forex] at the most appropriate time to profit from the transaction. Good ability to forecast plays a vital role here. One may wonder how Forex trading can be such a lucrative earning opportunity since fluctuations in exchange is so little.
But remember, when done in big volumes, a minor change can mean a lot. There are many non-monetary advantages to it as well. Anyone who wants to deal in Forex can do so, since only the basic knowledge is required for it.
Is foreign exchange trading a true get rich quick scheme? Foreign exchange trading, or Forex, is a real opportunity to get extremely wealthy in a very short amount of time. How?
The key is leverage.
Some Forex brokers allow you a leverage ratio of 200:1. That is the equivalent of investing $1,000 into a $200,000 asset, and an asset that you could turn around and trade within seconds for a quick profit if done correctly!
Forex trading involves dealing in international currencies. Here, one can sell currency of one country to buy that of another. The trader deals in Foreign Exchange [Forex] at the most appropriate time to profit from the transaction. Good ability to forecast plays a vital role here. One may wonder how Forex trading can be such a lucrative earning opportunity since fluctuations in exchange is so little.
But remember, when done in big volumes, a minor change can mean a lot. There are many non-monetary advantages to it as well. Anyone who wants to deal in Forex can do so, since only the basic knowledge is required for it.


Sep 1st
There are many ways to finance your business. Your own money that you have saved over time is the most obvious, but if that is not available then other sources must be found. Relatives and friends could be a source for temporary funds, but usually not long-term loans. Reliable long-term financing of a business is something that all businesses face at sometime during their life.
Cash flow
Cash flow is without a doubt is the biggest problem that all businesses must face. It does not matter the size of the company. The bigger the business, the bigger the cash flow problem. A growing young business is very likely to experience cash flow problems. The luxury of ready cash is one that comes with time and success for a business. In the meantime there is a need to get short term financing so the business can operate. If the owner’s savings have already been tapped, then other sources must be found. If the owner has a good credit rating then the bank may consider a signature loan to the individual and not to the business. The bank could also give a revolving line of credit that is backed by real estate or stocks.
SBA loans and factoring
Another way to get financing is to see if you can qualify for a SBA loan. This loan is again made to the individual and not the business. These are not quick to get or easy to get for the business borrower. Without some assets, you are not likely to qualify for such a loan. Further down the list of ways to get money for the business is to factor your account receivables. This can be easily done if you are selling to quality clients. Each factoring company has its own rules and what invoices they will accept for loans. These loans are limited only by the amount of your invoices and their quality. If all of your jobs are custom in nature, then you could demand a 50% deposit on all work you accept.
Angel financing
Another source of money is seeking out what is known as angel financing. This money comes from wealthy investors who are seeking out promising young companies that should prosper if they have the money that is needed. There are several advantages to this financing, as it does not have to be repaid until the company is taken public or becomes so successful that the angel can be bought out. When you accept an angel you in affect take on a partner. This is not all bad as the angel could have contacts to grow your business. Successful individuals like this cannot only bring in capital, but also business expertise that could help your business grow faster and with a more solid base.
You can find these angels by looking on the Internet or asking bankers or brokers in your area. They exist everywhere, but are usually found in bigger cities.
Bring in a partner
You can advertise for a partner to come in and help you grow the business. There are people in every city that are looking for a business opportunity that have money for the right situation. This is a longer-term answer that should be considered only if you feel the person that you are considering would be someone you could live with. Do not swap a temporary problem for one that will be long term in its effect. Partners in a business are similar to partners in a marriage. There are good unions and bad ones. You never know for sure what you are getting until later.
Private personal loans can be obtained, but the interest rate that will be charged will be higher than what the bank will charge. Second mortgages on real estate are usually rather easy to obtain if there is sufficient equity in the property. The problem with all of these loans is they are made to the owner and not the business. If the business fails, the owner is still liable for the loan. When a business is very successful the banks and other lenders will make the loan to the business without the backup of the owner. But that will not be the case with a young growing business.
There are many options for raising money to finance a business. The problem with all of them is they depend on having assets, good credit or significant cash flow when compared with the loan size. There are very few options that do not tie up the business’s assets and the owner’s. Few lenders will make loans to the business by itself. One of the few loans made to the business is factoring loans. Using the invoices as collateral for the loans makes this possible.
Private offering to friends
Another method to raise money is to make a private offering of stock to a small group of investors. This is easier said than done, but it is possible if you have the right group of people available. It has to be a small group or it would be considered a public offering and not a private investment. The rules are very stringent on this type of stock offering. Get good advice before you attempt it.
A business cannot thrive if it is under financed for long periods of time. This problem must be resolved and the sooner the better. The struggle to live within the cash flow stream is one that all businesses face and it can make it extremely difficult for the business to prosper if they are always fighting the finance battle.
Solving this problem is worth the time and trouble, as it will allow the business to have some breathing room and enjoy its growth. All possible solutions should be explored, as some are more of a fit than others. Obtaining fresh capital is always the way to go if the payback is not onerous. Getting the money is always the goal, but it has to make economic sense over the long run. Be careful not to jump from a small fire to a big fire that can consume you and your business in debt.
Once the financing issue is under control, a business owner has the capability of growing the business in a manner that is sustainable. This is the goal of every business. Financial control is a precursor to successful growth, which can be carried forward into the future. When financing concerns are put in their place, the business will be able to grow with fewer problems or at least not those of a severe financial nature. Cash flow must always be watched and managed so the bills can be paid in a timely manner. Maintaining a good credit rating is always in the company’s best interest.
Seller Financing
Up to 90% of businesses sold are financed in some way, by either the seller or from other outside sources. Usually sellers do this when a buyer has difficulty qualifying for a conventional loan or meeting the purchase price. Read our article on the seller financing basics for more information.
Conclusions
Financing a business is never easy and a young business faces even more difficult problems to overcome. If the owners have money then the problem is fairly easy to solve. If there are no assets or extra money available all sorts of schemes will need to be played out in order to live with money short falls. Short-term money will need to be found from many sources. The ideas presented have been used by many businesses to overcome short-term money crunches. Surviving over time seems to allow the company more room. Every money crunch that is resolved will ease the problem for few days or even weeks. As a business grows, the money problems will always be there, but maybe not as severe in nature.

Sep 1st
Mutual Funds Are the Way to Go for IRA-401K Funding
From 1991-2007 I increased my 401K plan over 3,000% using company stock and mutual funds, ETF’s are popular, but are passive, index managed vehicles with subpar gains most of the time and hard to pick if you do not know what sector is hot.
Believe me, I did not earn a fortune in the insurance industry during the 1990’s and mid-2000’s. Religious payroll contribution of 6% did the trick. Plus I was in the hot service sector and my company stock increased 1200% in one case and another 500% in the other when my division was spun off. Sure, lucky me, but the 2000’s brought on a private equity firm buyout of my spun off division and mutual funds were the only game in town: between 2001-2007 I increased my portfolio 11.36% annually with just Fidelity mutual funds in the Mid-Cap Value arena and the Large Cap Value arena.
The next 3-5 years looks good for stocks after we get over this final hump of the recession and the Fed starts to slowly raise interest rates in a timely manner. Company stock should do well and a 25% allocation in a 401K plan would be a prudent choice.
As far as mutual funds, I would go with a mix of Mid-Cap and Large Cap Value…the two areas that take off after a recession as new monies are put to work in R&D at small to medium sized firms and Value stocks in the Large Cap arena are the hottest new thing. Slow and steady investment and dollar cost averaging never hurt anyone, especially the 20 and 30 somethings who have time to over come downturns in the economy.
But you might be saying, why is this 50’s something guy smiling after the Financial Crisis of 2008? Because I was 90% cash since late 2007! After the Dow backed down from 14,000 level, I knew the party was over for a while. One thing all investors should have is a stop in mind for ANY investment be it investment monies or 401K monies.
The market contracts regularly on a 5%-10% correction basis and then snaps back; once the correction hits an 11% or 12% correction, the next move is a 20% correction or greater like we experienced in the Fall of 2008 and the Spring of 2000.
Watch your investments monthly or better yet bi-weekly and have a level when it dips go mainly to cash while being eligible to remain in the mutual funds you are in. Hopefully, your 401K plan is good and matches not only company stock but mutual fund contributions as well.
Become a student of the market! Its hard to do I know with a full-time job and family.
Learn and prosper!
Check out my websites: www.make100percent.com and www.thetradersalliance.com . Also look into the following mutual funds: FLPSX, FCNTX, FDVLX and TAVFX for the Value mix I spoke of earlier. These are the funds I was in and the funds that I am still invested.
Steven Kinney is a day trader and internet marketer with various websites: www.make100percent.com, www.thetradersalliance.com and www.makeingmoneyonamazon.com.

www.EmploymentCrossing.com Boston’s Fidelity Investments is considering reducing head count as it suffers negative cash flow in its stock mutual funds, according to the Wall Street Journal. Layoffs could include as many as 4000 employees, or about 9% of Fidelity’s work force, and would affect a number of Fidelity units, including its core investment-management arm. Layoffs are rampant in the mutual fund industry, as investors have been pulling money out of stock funds in record amounts. Mutual-fund companies earn much of their money from fees assessed as a percentage of assets, meaning that market declines and redemptions of fund shares have a direct impact on the bottom line. Janus Capital Group of Denver is cutting 9% of its work force. New York’s AllianceBernstein says layoffs are “unavoidable,” and Kansas City’s American Century may reduce staff. Investors have been taking money out of more volatile stock funds, which typically have higher fees and are the most profitable products sold by fund companies. With the Standard & Poor’s 500-stock index down 36% so far in 2008, net redemptions from stock mutual funds have been on track to hit an all-time high this month, analysts say this week’s 11% increase in the index could check some of the redemptions and bring a little relief to fund compa
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Sep 1st




