The Douchebag Who Conned The World

Ben Bernanke, Bernie Madoff, Chris Cox, Citibank, Fairfield, Funds of Funds, Greenspan, Hedge Funds, Henry Paulson, Merrill, Spielberg, Summers

Stephen Foley (From New York)

The Independant

cox-hiresCHRIS COX

Investors around the world are counting the spiralling cost of the biggest fraud in history, a $50bn scam that has ensnared billionaire businessmen and tiny charities alike and whose tentacles have stretched further and deeper than anyone imagined.

The fallout from the arrest of the Wall Street grandee Bernard Madoff was continuing to grow last night, as institution after institution detailed the extent of their possible losses, and the victims in the UK were headlined by HSBC and the Royal Bank of Scotland, which is majority-owned by the British Government.

A charity set up by the Hollywood director Steven Spielberg was among those revealed to be among the victims, along with a foundation set up by Mort Zuckerman, one of the richest media and property magnates in the United States, dozens of Jewish organisations, sports team owners and a New Jersey senator.

But the biggest confessions were coming from Wall Street, from the City of London and from the headquarters of European banks and from banks around the world. They have poured billions of dollars into Mr Madoff’s too-good-to-be-true investment fund, which appeared to post double-digit annual returns come rain or shine.

RBS said that it could take a hit of £400m if American authorities find there is nothing left of the money Mr Madoff had pretended to be investing for many years. HSBC, Britain’s largest bank, said a “small number” of its clients had exposure totalling $1bn in Mr Madoff’s funds.

The Spanish bank Santander, which owns Abbey and the savings business of Bradford & Bingley in the UK, could be on the hook for $3.1bn. Japan’s Nomura said it has hundreds of millions of dollars at risk. City analysts said that even banks who invested only on behalf of clients could end up on the hook, because clients are almost certain to sue for bad advice.

Mr Madoff confessed last week that his business was “all one great big lie”. The investment returns were fake, and he had been paying old clients with money from new ones. In its conception, the scam is a classic. In its size, it is breathtaking, eclipsing anything seen before. He personally estimated the losses at $50bn, according to the FBI, and as investors owned up to their exposure yesterday that did not seem impossible. For 48 years, until Thursday morning, Mr Madoff was one of Wall Street’s best-respected investment managers, able to harvest money from a vast network of contacts and to trade on his name as a former chairman of the Nasdaq stock exchange.

His arrest has further shaken confidence in the barely regulated hedge fund industry, which is already suffering some of the worst times in its short history. Mr Madoff – who is now on a $10m bail and under orders not to leave the New York area – was able to operate his fraud under the noses of regulators for many years.

Mort Zuckerman, the owner of the New York Daily News and one of the 200 richest Americans, said that one of the managers of his charitable trust had been so taken by Mr Madoff that he invested $9bn with him, including all the money from Mr Zuckerman’s trust. “These are astonishing numbers to be placed with one fund manager,” he said. “I think we have another break in whatever level confidence needs to exist in money markets.”

Nicola Horlick, the British fund manager known as Superwoman for juggling her high-flying City career with bringing up five children, turned her fire on US regulators. Her Bramdean Alternatives investment fund had put 9 per cent – about £10m – with Mr Madoff. She told BBC Radio: “This is the biggest financial scandal, probably in the history of the markets.”

Day One Of Total Shutdown For All Chrysler Plants; Greatest Schmatest

Automakers, Chrysler, Detroit

KANSAS CITY ˜ STAR

DETROIT | In response to plunging vehicle sales, Chrysler said Wednesday that it would close all 30 of its North American factories for at least one month, starting at the end of this week.

All U.S. automakers have been taking bold steps as they have struggled to survive the recession. Chrysler and General Motors Corp. fear they might not have enough money to pay their bills in a matter of weeks and are attempting to avoid imminent collapse while the Bush administration ponders a rescue.

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With automakers suffering through the worst U.S. sales since World War II, Chrysler’s move — which will idle 46,000 workers — hinted at the dramatic actions that could follow soon without government aid.

Foreign automakers have been reacting to the slowdown, too. Toyota Motor Corp. said this week that it would delay work on a factory in Mississippi that would build the Prius hybrid.

Honda on Wednesday issued its third profit warning of the year, the latest sign of the drastic drop in demand that has hammered the global car industry.

Honda lowered its full-year forecast for net profits by 64 percent, to 185 billion yen ($2.11 billion), for the year ending March 31. That highlighted how tough the market has become as consumers, constrained by tight credit conditions and worried about the gloomy economic conditions, hold back spending even on the smaller and more fuel-efficient cars that had been expected to help Honda survive the current crisis better than many of its rivals.

Honda, Japan’s No. 2 carmaker, said it was cutting first-quarter production by 119,000 vehicles.

“Every day, the hardships we face are getting worse and worse. And there are no signs of recovery,” Honda President Takeo Fukui said at a news conference.

Nissan, Japan’s nation’s third-biggest automaker, added to the dismal news by saying it was reducing domestic production by an additional 78,000 vehicles and cutting 500 temporary workers.

As for Detroit, normally the Big Three automakers — Chrysler, Ford Motor Co. and GM — close their plants for about two weeks at the end of the year.

But following a 47 percent decline in sales last month, some Chrysler plants will be closed until February.

In addition, Ford said Wednesday that it would extend the holiday shutdown at most of its plants to a third week. The two exceptions, according to spokeswoman Angie Kozleski, are in Claycomo and Dearborn, Mich.

GM said last week that it would temporarily close 20 factories across North America and make sweeping cuts to its vehicle production. Many of those plants will be shut down for the month of January.

GM, attempting to cut costs, said Wednesday it was delaying construction of a new engine factory in Flint, Mich., in an effort to conserve cash.

The plant is to make 1.4-liter engines for the Chevrolet Cruze and the Chevy Volt plug-in electric car, two key products in the century-old automaker’s plan to turn itself around after relying on highly profitable truck and sport utility vehicle sales.

The plant’s engines will extend the range of the rechargeable Volt, GM’s high-profile, next-generation vehicle that will be able to travel 40 miles on electricity alone. They will also power the Cruze, GM’s new small car that is supposed to get around 40 miles per gallon.

GM announced plans in September for the new engine plant, but the company is delaying the purchase of big-ticket items needed to build the factory, such as structural steel, said GM spokeswoman Sharon Basel.

Compiled by The Star’s Greg Moore from The New York Times, The Associated Press, Bloomberg News, and the Detroit Free Press.

More Republicans For Obama's Cabinet

Barack Obama, Ken Salazar, Mary Schapiro, Repuublicans, Robert Gates, SEC, Vilsack

CHICAGO, Illinois (CNN)

artmaryschapirosecgiPresident-elect Barack Obama has picked GOP Rep. Ray LaHood of Illinois to be his nominee for transportation secretary, two sources told CNN on Wednesday.

Two Democratic sources also said Obama will tap Mary Schapiro to head the Securities and Exchange Commission.

Schapiro is CEO of the Financial Industry Regulatory Authority, the largest nongovernment regulator for all securities firms doing business with the U.S. public. She is a former SEC commissioner and served as chairman of the Commodity Futures Trading Commission in 1994 during the Clinton Administration.

Obama will formally announce his choice of LaHood, a seven-term congressman from Peoria, at a press conference in Chicago on Thursday morning, the sources said.

LaHood is well-respected by Democrats and Republicans on Capitol Hill.

One of LaHood’s closest friends in Congress, fellow Illinois Republican Tim Johnson, said LaHood “has the ability to work both sides of the aisle well” and called him “an extraordinarily talented legislator.”

Obama has so far chosen one other Republican for his Cabinet. Defense Secretary Robert Gates will stay on in the Obama administration.

Earlier on Wednesday, Obama announced former Iowa Gov. Tom Vilsack as his choice for agriculture secretary and Colorado Sen. Ken Salazar as his choice for secretary of the interior.

“Together they will serve as guardians of the American landscape on which the health of our economy and the well-being of our families so heavily depend,” Obama said at a news conference in Chicago.

Vilsack was a high-profile supporter of Sen. Hillary Clinton during the presidential primaries after he briefly sought the Democratic presidential nomination.

Vilsack has championed the development of ethanol, an alternative energy, in Iowa — something that coincides with Obama’s vision for an energy-independent future, and something he can promote from the Department of Agriculture.

Vilsack, who dropped out of the presidential race in February 2007, is the fourth former presidential rival to join Obama’s team.

Vice president-elect Joe Biden; Hillary Clinton, Obama’s pick for secretary of state; and Bill Richardson, Obama’s pick for secretary of commerce, also sought the Democratic presidential nomination.

“With the appointments I announced earlier in the week, and with those I am announcing today, I am confident that we have the team we need to make the rural agenda America’s agenda, to create millions of new green jobs, to free our nation from its dependence on oil and to help preserve this planet for our children,” Obama said. VideoWatch Obama name Salazar and Vilsack to his team »

Salazar, Obama’s choice for secretary of the interior, has focused on public land and energy resource issues as a first-term senator from Colorado. He is the second Latino to be named to Obama’s Cabinet.

Obama said Wednesday he was confident that under Salazar, the Interior Department would become more proactive instead of “sitting back, waiting for whoever has most access in Washington to extract what they want.”

Salazar is a member of the Senate Committee on Energy and Natural Resources and has developed a reputation as a strong advocate of reducing the country’s dependence on foreign oil.

A fifth-generation Coloradan, Salazar was elected to the Senate in 2004 and quickly made a name for himself in immigration reform.

He was a key member of a bipartisan Senate group that put together the Comprehensive Immigration Reform Act of 2007, which would have beefed up border security and increased the number of Border Patrol agents, but also would have created a guest worker program.

That program would have allowed migrants to work temporarily in the Untied States. The most controversial aspect of the bill was the creation of a pathway to legalization and eventual citizenship for the estimated 12 million illegal immigrants already in the country, an idea that critics dismissed as “amnesty.” The bill failed to make it through Congress.

Salazar’s appointment would not jeopardize the balance of power in the Senate. Colorado Gov. Bill Ritter, a fellow Democrat, would name his replacement. iReport.com: Chatting with Salazar

Also on Wednesday, White House spokeswoman Dana Perino announced that Obama will meet for a second time with President Bush. The meeting also will include the three living former presidents.

President Bush will be host at a lunch with Obama and former Presidents Jimmy Carter, George H. W. Bush and Bill Clinton on January 7, Perino said.

Obama proposed the meeting with the former presidents to Bush when the two met in the Oval Office on November 10, two sources said.

The high-powered meeting is another sign of how closely the Obama and Bush teams have been working to try to make sure the first post-9/11 transfer of power goes smoothly.

“It’s been unbelievably cooperative,” said one Democratic official, who was not authorized to speak publicly about the conversations between Bush and Obama.

Bernie Madoff's Son Mark Worked For New SEC Head

Andrew Madoff, Bernie Madoff, Madoff, Mark Madoff, Obama, Peter Madoff, Schapiro, SEC

New SEC chief gave Bernard Madoff’s son a job

Rosie Lavan
TIMES ONLINE
mad-money

Mary Schapiro, Barack Obama’s choice to lead the Securities and Exchange Commission (SEC), previously appointed one of Bernard Madoff’s sons to a regulatory body that oversees American securities firms.

It has emerged that in 2001, Ms Schapiro, currently chief executive of the Financial Industry Regulatory Authority (Finra), employed Mark Madoff to serve on the board of the National Adjudicatory Council — the division that reviews disciplinary decisions made by Finra.

Mr Madoff is under house arrest in his $7 million Manhattan apartment and will be electronically tagged after he failed to secure further signatories to guarantee his $10 million bail.

Both sons have emphatically denied any involvement in what could be the biggest fraud perpetrated by an individual.

However, the link with Mark Madoff may prove controversial for Ms Schapiro and the President-elect, who has moved fast to replace Christopher Cox, the current head of the SEC. The watchdog has came under fire for failing to detect Mr Madoff’s activities.

Earlier this week, Mr Cox admitted the regulator had repeatedly failed to follow up on tip-offs about Mr Madoff’s business dealings.

At the time of Mark Madoff’s appointment, Ms Schapiro was serving as president of the National Association of Securities Dealers (NASD), according to the Wall Street Journal, which was consolidated with the New York Stock Exchange Member Regulation in 2007 to form Finra.

She has served as a commissioner of the SEC under three administrations since the 1980s: President Reagan appointed her in 1988, she returned for the first President Bush in 1989, and she was named acting chairman by President Clinton in 1993.

Ms Schapiro chaired the Commodities Future Trading Commission in the mid-1990s, during the downfall of Barings Bank, and first joined NASD in 1996 as president of regulation.

Mr Madoff was himself closely involved in NASD, the self-regulatory organisation for brokers and dealer firms, in the 1970s.

The NASD went on to found Nasdaq, the screen-based equity exchange, in 1971, and Mr Madoff became its chairman in 1990.

Mark Madoff began working at his father’s firm, Bernard L. Madoff Securities, in 1986. He was the third member of Mr Madoff’s family to join the business, following his uncle, Peter Madoff, and his cousin, Charles Wiener, son of Bernard’s sister, Sandra. Andrew Madoff, his younger brother, followed in 1988, and Roger and Shana, children of Peter Madoff, joined in the 1990s.

It emerged yesterday that Shana Madoff’s relationship with her husband, Eric Swanson, is at the centre of an SEC probe. Mr Swanson is a former SEC attorney.

In a profile of the Madoff family, published in 2000, Mark Madoff said: “What makes it fun for all of us is to walk into the office in the morning and see the rest of your family sitting there. That’s a good feeling to have. To Bernie and Peter, that’s what it’s all about.”

Last week, Mark Madoff, with his brother, Andrew, were understood to have approached the authorities after their father apparently confessed to orchestrating a $50 billion securities fraud.

Here's a Fella (GW Bush) Who is Probably Responsible For Close to a Million Iraqi Deaths

Bush, Iraq, John Tully

shoe-throwing

Here’s a fella (GW Bush) who is probably responsible for close to a million Iraqi deaths and you’ve got assbite American media-types pontificating on teevee about how outrageous it is that this man, who has lost family members to Bush’s folly would be so full of sadness and anger that he would have the audacity to direct his vitriol at exactly the man responsible-..hard to believe.

John Tully

Dodd Seeks Details on How SEC Missed Madoff’s ‘Massive’ Fraud

Hedge Funds, Madoff, Wall Street

Bloomberg

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By Jesse Westbrook and John Tucker

Dec. 16 (Bloomberg) — Bernard Madoff’s financial records were “utterly unreliable” and will take six months to sort out, said Stephen Harbeck, president of the Securities Investor Protection Corp.

“There are some assets, but I have no idea what the relationships of the assets available are to the claims against them,” Harbeck said on Bloomberg Television. “The records are utterly unreliable on this case.”

His comments came as Bank Medici AG of Austria became the latest lender to reveal a loss from Madoff’s alleged $50 billion fraud. Two funds at the Viennese bank, 75 percent owned by Chairman Sonja Kohn, invested $2.1 billion entirely in Madoff’s firm, the bank said today. It joined institutions and wealthy individuals from Tokyo to Paris. New York’s Yeshiva University lost as much as $140 million, the student newspaper said.

U.S. Senate Banking Committee Chairman Christopher Dodd, meantime, told the Securities and Exchange Commission to explain how it failed to detect the “giant Ponzi scheme.”

Dodd, a Connecticut Democrat, “is seeking more information from the SEC about this case,” Kate Szostak, the senator’s spokeswoman, said in a statement late yesterday. “Senator Dodd is concerned not only about the people caught up in this reported scheme who may have been misled, but how such a massive fraud could have gone undetected.”

2005 SEC Review

Madoff, 70, was arrested Dec. 11 after he told his sons that Bernard L. Madoff Investment Securities LLC was a “giant Ponzi scheme,” the SEC said. Clients facing losses range from a Fairfield, Connecticut, pension fund to hedge funds and New York Mets owner Fred Wilpon’s Sterling Equities Inc.

The SEC hadn’t inspected Madoff’s investment advisory business since he registered the firm with the agency in September 2006, two people familiar with the matter said. The SEC tries to inspect advisers at least every five years and to scrutinize new firms in their first year of registration, former agency officials and securities lawyers said. Harbeck’s SIPC is liquidating the firm.

SEC examiners reviewed Madoff’s brokerage business in 2005 after an investment manager, writing to the agency, and press reports questioned the validity of his investment returns. The SEC’s enforcement division completed an investigation involving the company last year without bringing a claim.

Peter Madoff Subpoenaed

One of Madoff’s sons, Peter Madoff, was today subpoenaed by Massachusetts Secretary of State William Galvin, according to a copy of a court filing. The son was chief compliance officer at Madoff’s firm, the filing said. Galvin is also seeking documents from Marcia Beth Cohn, chief compliance officer of Cohmad Securities Corp., located at the same address as Madoff’s firm, the filing said.

Galvin became involved after Tremont Group Holdings Inc., a hedge-fund firm owned by Massachusetts Mutual Life Insurance Co., revealed that it had $3.3 billion invested with Madoff. The investment amounted to more than half Tremont’s total assets, a person familiar with the matter said.

The SEC was already under fire before Madoff’s alleged fraud came to light. The collapses of investment banks Bear Stearns Cos. and Lehman Brothers Holdings Inc. this year tarnished the SEC’s reputation and lawmakers such as Dodd and Senator Charles Grassley, an Iowa Republican, have questioned its vigilance in enforcing securities laws.

SEC spokesman John Nester didn’t return a phone call and e- mail seeking comment.

Separately, Madoff made $182,250 in campaign donations since 1993 to federal candidates, the political parties, and securities industry’s political action committee, according to the Center for Responsive Politics. He gave $100,000 to the Democratic Senatorial Campaign Committee, including $25,000 in September. He contributed to both Democratic and Republican members of Congress.     

Iraq Man Who Threw Shoes at George W. Bush Beaten in Jail

Stories
news1

BBC

Shoe thrower ‘beaten in custody’

The brother of the Iraqi journalist who threw his shoes at US President George W Bush has said that the reporter has been beaten in custody.

Muntadar al-Zaidi has suffered a broken hand, broken ribs and internal bleeding, as well as an eye injury, his older brother, Dargham, told the BBC.

Mr Zaidi threw his shoes at Mr Bush at a news conference, calling him “a dog”.

The head of Iraq’s journalists’ union told the BBC that officials told him Mr Zaidi was being treated well.

The union head, Mouyyad al-Lami, said he hoped to visit his colleague later.

An Iraqi official said Mr Zaidi had been handed over to the judicial authorities, according to the AFP news agency.

Earlier, Dargham al-Zaidi told the BBC’s Caroline Wyatt in Baghdad he believed his brother had been taken to a US military hospital in the Iraqi capital.

A second day of rallies in support of Mr Zaidi have been held across Iraq, calling for his release.

Meanwhile, offers to buy the shoes are being made around the Arab world, reports say.

Hero figure

Mr Zaidi told our correspondent that despite offers from many lawyers his brother has not been given access to a legal representative since being arrested by forces under the command of Mowaffaq al-Rubaie, Iraq’s national security adviser.

The Iraqi authorities have said the 28-year-old will be prosecuted under Iraqi law, although it is not yet clear what the charges might be. Iraqi lawyers have speculated that he could face charges of insulting a foreign leader and the Iraqi Prime Minister, Nouri Maliki, who was standing next to President Bush during the incident. The offence carries a maximum penalty of two years in jail.

Our correspondent says that the previously little-known journalist from the private Cairo-based al-Baghdadia TV has become a hero to many, not just in Iraq but across the Arab world, for what many saw as a fitting send-off for a deeply unpopular US president.

As he flung the shoes, Mr Zaidi shouted: “This is a goodbye kiss from the Iraqi people, dog.”

Dargham al-Zaidi told the BBC that his brother deliberately bought Iraqi-made shoes, which were dark brown with laces. They were bought from a shop on al-Khyam street, a well-known shopping street in central Baghdad.

However, not everyone in Iraq has been supportive of the journalist’s action.

Speaking earlier in Baghdad, Mouyyad al-Lami described Mr Zaidi’s action as “strange and unprofessional”, but urged Mr Maliki to show compassion.

“Even if he has made a mistake, the government and the judiciary are broad-minded and we hope they consider his release because he has a family and he is still young,” he told the Associated Press news agency.

“We hope this case ends before going to court.”

Abducted by insurgents

The shoes themselves are said to have attracted bids from around the Arab world.

According to unconfirmed newspaper reports, the former coach of the Iraqi national football team, Adnan Hamad, has offered $100,000 (£65,000) for the shoes, while a Saudi citizen has apparently offered $10m (£6.5m).

The daughter of Libyan leader Muammar Gaddafi, Aicha, said her charity would honour the reporter with a medal of courage, saying his action was a “victory for human rights”. The charity called on the media to support Mr Zaidi and put pressure on the Iraqi government to free him.

Mr Zaidi, who lives in Baghdad, has worked for al-Baghdadia for three years.

Muzhir al-Khafaji, programming director for the channel, described him as a “proud Arab and an open-minded man”.

He said that Mr Zaidi was a graduate of communications from Baghdad University.

“He has no ties with the former regime. His family was arrested under Saddam’s regime,” he said.

Mr Zaidi has previously been abducted by insurgents and held twice for questioning by US forces in Iraq.

In November 2007 he was kidnapped by a gang on his way to work in central Baghdad and released three days later without a ransom.

He said at the time that the kidnappers had beaten him until he lost consciousness, and used his necktie to blindfold him.

Mr Zaidi never learned the identity of his kidnappers, who questioned him about his work before letting him go.

At Strange Welcoming Ceremony in Iraq, Shoes Fly and President Bush Ducks

George W. Bush, Iraq
BBC NEWS

Shoes thrown at Bush on Iraq trip

A surprise visit by US President George Bush to Iraq has been overshadowed by an incident in which two shoes were thrown at him during a news conference.

An Iraqi journalist was wrestled to the floor by security guards after he called Mr Bush “a dog” and threw his footwear, just missing the president.

The US president has now continued to Afghanistan to inspect troops there.

He arrived before dawn at Bagram air force base, and is due to hold talks with President Hamid Karzai.

Earlier in Baghdad, Mr Bush and Iraqi PM Nouri Maliki signed the new security agreement between their countries.

The pact calls for US troops to leave Iraq in 2011 – eight years after the 2003 invasion that has in part defined the Bush presidency.

Speaking just over five weeks before he hands over power to Barack Obama, Mr Bush also said the war in Iraq was not over and more work remained to be done.

His previously unannounced visit came a day after Defence Secretary Robert Gates told US troops the Iraq mission was in its “endgame”.

‘Size 10’

In the middle of the news conference with Mr Maliki, Iraqi television journalist Muntadar al-Zaidi stood up and shouted “this is a goodbye kiss from the Iraqi people, dog,” before hurling a shoe at Mr Bush which narrowly missed him.

Showing the soles of shoes to someone is a sign of contempt in Arab culture.

With his second shoe, which the president also managed to dodge, Mr Zaidi said: “This is for the widows and orphans and all those killed in Iraq.”

Mr Zaidi, a correspondent for Cairo-based al-Baghdadiya TV, was then wrestled to the ground by security personnel and hauled away.

“If you want the facts, it’s a size 10 shoe that he threw,” Mr Bush joked afterwards.

Al-Baghdadiya’s bureau chief told the Associated Press that he had no idea what prompted Mr Zaidi to attack President Bush, although reports say he was once kidnapped by a militia and beaten up.

“I am trying to reach Muntadar since the incident, but in vain,” said Fityan Mohammed. “His phone is switched off.”

Correspondents said the attack was symbolic. Iraqis threw shoes and used them to beat Saddam Hussein’s statue after his overthrow.

‘American security’

Mr Bush’s first stop upon arriving in Baghdad was the Iraqi presidential palace in the heavily-fortified Green Zone, where he held talks with President Jalal Talabani.

“The work hasn’t been easy but it’s been necessary for American security, Iraqi hope and world peace,” Mr Bush said during his talks with Mr Talabani.

The Iraqi president called Mr Bush “a great friend for the Iraqi people, who helped us liberate our country”.

The BBC’s Humphrey Hawksley, in Baghdad, says the key issue at present is exactly how American troops will withdraw within the next three years and what sort of Iraq they will leave behind.

The US media has just published details of a US government report saying that post invasion reconstruction of Iraq was crippled by bureaucratic turf wars and an ignorance of the basic elements of Iraqi society.

The report is circulating among US officials in draft form, says the New York Times.

It reveals details of a reconstruction effort that cost more than $100bn (£67bn) and only succeeded in restoring what was destroyed in the invasion and the widespread looting that followed it, the newspaper said.

Troop promises

Mr Bush’s visit, unannounced in advance and conducted under tight security, follows the approval last month of a security pact between Washington and Baghdad that calls for US troops to be withdrawn from Iraq by the end of 2011.

US troops are first to withdraw from Iraqi cities, including Baghdad, by June next year.

Defence Secretary Gates said on Saturday that “the process of the drawdown” had begun.

“We are, I believe, in terms of the American commitment, in the endgame here in Iraq,” he told US troops at an airbase near Baghdad.

Mr Gates has been picked to stay on as defence secretary by President-elect Barack Obama.

President Bush leaves the White House in less than six weeks. He said in a recent interview with ABC News that the biggest regret of his presidency was the false intelligence that Iraq had weapons of mass destruction.

Finding these was one of the key justifications for the invasion. None were ever found.

Mr Obama has promised to bring home US combat troops from Iraq in a little over a year from when he takes office in January.

More than 4,200 US troops and tens of thousands of Iraqi civilians and security personnel have been killed since the invasion in 2003.

There are currently about 149,000 US soldiers in Iraq, down from last year’s peak of 170,000 after extra troops were poured in to deal with a worsening security situation.

As Mr Bush arrived in Baghdad, Gen David Petraeus, the head of the US Central Command, which includes Iraq, said attacks in the country had dropped from 180 a day in June 2007 to 10 a day now.

In a sign of modest security gains in Iraq, Mr Bush was welcomed with a formal arrival ceremony – a flourish that was not part of his previous three visits.

He arrived in the country on Air Force One, which landed at Baghdad International Airport in the afternoon, after a secretive Saturday night departure from Washington on an 11-hour flight.