By William J. Broad
Tuesday, December 30, 2008
The Swiss authorities have released from jail a man suspected of smuggling atomic technology to Libya and Iran as part of the nuclear black market of Abdul Qadeer Khan, officials and family members said.
The suspect, Urs Tinner, was freed Dec. 22 after more than four years in investigative detention, Swiss officials said Monday. They added that his brother Marco remained in jail because of worries that he still had access to nuclear-weapons secrets.
The developments mark a new phase in Switzerland's long efforts to prosecute the family of Swiss engineers, including the Tinner patriarch, Friedrich. All three are suspected of criminal export violations. The father was released from jail in 2006 pending legal action.
The Tinners are suspected of having worked for Khan, the Pakistani bomb pioneer who sold illegal materials to Libya, Iran and North Korea before Western nations disrupted his operations in 2003.
International arms inspectors and Western officials have long worried that blueprints for nuclear arms found on the Tinners' computers may have been sold to clients of the smuggling ring or copied and hidden for later sale.
In May, the president of Switzerland confirmed that the government had destroyed a trove of computer files and other material documenting the family's business dealings. He said that the action was taken to keep plans for nuclear arms and technologies from ever falling into terrorist hands.
But in interviews last summer with The New York Times, U.S. officials said they had urged the destruction less to thwart terrorists than to hide evidence of a secret relationship between the Tinners and the CIA. They said that the family provided a unique lens on the secret activities of Libya, Iran and Khan.
Last month, a lawyer for Urs Tinner filed a complaint with the European Court of Human Rights arguing that the long pretrial detention and the destruction of the files had breached his client's rights. He described the incarceration as "worthy of Guantánamo."
In Bern, Andreas Müller, the examining magistrate in the Tinner case who is assessing whether a trial is warranted, decided Dec. 19 that Urs and Marco Tinner should go free, officials said. Müller has said that the destruction of the Tinner files complicated the case's prosecution.
In an e-mail message, Müller said that Switzerland had not dropped possible charges of export violations against the two men but that the "time served in pretrial custody became unproportional" to the potential punishment.
If the Tinners are formally charged and their case goes to trial in Switzerland, they would face up to 10 years in prison if found guilty of breaking laws on the export of sensitive goods. Time in pretrial detention would count toward any possible sentence.
On Dec. 21, the Swiss attorney general intervened and asked for Marco Tinner to be kept in jail because of concerns that he still had information on how to make nuclear arms, officials said.
A family member, who spoke on the condition of anonymity, said that Marco Tinner's fate as a prisoner was still unclear but that the family might learn of developments in a few days. The whole episode, the relative added, "has been very, very painful for a lot of people."
The Associated Press
Tuesday, December 30, 2008
NEW YORK: An 85-year-old former U.S. Army mechanical engineer likely will get no prison sentence after admitting Tuesday he passed classified documents to the Israelis in the 1970s and '80s.
Ben-ami Kadish told U.S. Magistrate Judge Theodore H. Katz he believes he was promised the government will not seek a prison term when he is sentenced Feb. 13.
Assistant U.S. Attorney Iris Lan said prosecutors promised only that they would not oppose or challenge a sentence that included no prison time.
Kadish, a U.S. citizen who lives in New Jersey, pleaded guilty only to one of the four charges of conspiracy he originally faced.
He was accused of taking home classified documents from 1979 to 1985, when he worked at the Armament Research, Development and Engineering Center at the Picatinny Arsenal. The government said he let an Israeli agent photograph documents, including information about nuclear weapons, a modified version of an F-15 fighter jet and the U.S. Patriot missile air defense system.
Prosecutors said it appeared that Kadish, who was born in Connecticut but was raised in Palestine in an area the British government was trying to turn into a Jewish state, was motivated by a desire to help Israel.
The judge asked Kadish if he obtained the classified documents from the library of the Picatinny Arsenal and supplied them to Yossi Yagur, an Israeli government agent who had requested them.
Kadish, who worked there from 1963 to 1990, said he had.
The judge also asked if Kadish requested anything of value or received anything of value for the classified documents.
Kadish said he did not. He admitted that he provided the documents for the benefit of Israel.
Yagur, now retired and living in Tel Aviv, is the agent who obtained information from convicted Pentagon spy Jonathan Pollard, who is serving a life sentence for selling military secrets to Israel while working as an intelligence analyst for the Navy. Pollard's case damaged U.S.-Israeli relations and remains a sore point between the countries.
U.S. authorities say Kadish confessed to FBI agents that he had given Yagur between 50 and 100 classified documents and accepted no cash in return, only small gifts and occasional dinners for him and his family.
Kadish had told the FBI that he knew that one restricted document he provided to the agent included atomic-related information and that he did not have the required clearance to borrow it, according to a criminal complaint filed in the case.
Outside court on Tuesday, Kadish, asked if he was hopeful the spy case was over, said, "I hope so." His wife told him not to say any more.
Reuters
Tuesday, December 30, 2008
SEOUL: South Korea has been drawing up plans to buy the release of more than 1,000 of its citizens held in North Korea and repair strained ties through the massive aid for its impoverished neighbour, local media reported Tuesday.
The South wants to entice the North into freeing South Korean civilians it has abducted and prisoners it has held since the end of the 1950-53 Korean War through cash, materials and food, the daily Chosun Ilbo reported government officials as saying.
North Korea has cut almost all ties with the South in anger at the policies of President Lee Myung-bak, who took office in February and ended what once had been a free flow of unconditional aid to his prickly neighbour.
The Communist North and capitalist South are still technically at war, never having signed a formal peace treaty to end hostilities in 1953.
Analysts said the North's already staggering economy was dealt a blow by the loss of aid from the South and will be hit hard by a cut in aid to punish it for not living up to the terms of an international nuclear disarmament deal.
South Korea has repeatedly offered cash to the North to return its citizens but Pyongyang has not accepted, Yonhap news agency quoted officials as saying.
The South's Unification would not confirm the reports but said the return of its citizens from the North is one of its top policy concerns.
Yonhap said last week that the North, which denies holding South Koreans against their will, had approached Seoul about working out a plan to exchange South Koreans for cash and economic incentives.
Japan has hit North Korea with sanctions and suspended aid as it has called on Pyongyang to settle problems caused by its agents abducting Japanese nationals decades ago and holding them in the reclusive communist state.
North Korea, with an economy estimated at about $20 billion (13.8 billion pounds) a year, has lost out on at least $1 billion in aid the South had been supplying each year due to the strain in ties.
About two weeks ago, the United States called for a suspension of heavy fuel oil aid to the energy-starved North because at six-way nuclear talks this month Pyongyang did not agree to a system to check claims it made about its atomic arms program.
(Reporting by Jon Herskovitz and Kim Junghyun; Editing by Nick Macfie)
Reuters
Tuesday, December 30, 2008
By Kamran Haider
Pakistan urged India on Tuesday to reduce tension by deactivating its forward air bases and standing down troops, but New Delhi angrily rejected suggestions it was aggravating tension with its nuclear-armed rival.
A near-daily, frenzied exchange of words has added to bilateral tensions that touched the boiling point after last month's attacks in Mumbai in which 179 people were killed. India says the attackers were trained in Pakistan.
"I believe if India deactivates its forward air bases and similarly, relocates its troops to peacetime positions, that will be a positive step," Pakistani Foreign Minister Shah Mehmood Qureshi said in a televised address.
"I believe by this, the existing tension in the region will be reduced," he said, calling for resumption of a dialogue suspended by India after the Mumbai attacks.
Pakistan has condemned the Mumbai attacks and has denied any role, blaming "non-state actors."
But Indian Foreign Minister Pranab Mukherjee refuted suggestions India was mobilising its military and aggravating an already tense atmosphere.
"We have not escalated any tension, so where is the question of our de-escalation?" he told reporters, referring to Qureshi's suggestions on reducing tensions between the two neighbours.
Mukherjee told PTI news agency any military movement now was only part of routine annual winter exercises. India had earlier said its troops were on standby, although it said it had made no new deployments since the Mumbai attacks.
"There is no no question of mobilisation or escalation of tension," PTI quoted Mukherjee as saying.
As tension rose after the Mumbai attacks Pakistan cancelled army leave and moved a "limited number" of soldiers off the Afghan border "for defensive measures," military officials said.
The military has officially denied any build-up of forces on the Indian border, though a security official said some troops had been moved there.
"We have not done anything which can escalate the tension between India and Pakistan because from day one I am saying, this is not an India-Pakistan issue," Mukherjee told reporters.
"This is an attack perpetrated by elements emanating from the land of Pakistan and Pakistan government would take action.
"We are repeatedly saying that, yes, we will give you evidences, as earlier we have given you, but please act on it."
India, the United States and Britain have blamed the attacks on Pakistan-based Islamist group Lashkar-e-Taiba (LeT), set up by Pakistani security agencies in the late 1980s to fight Indian rule in the disputed Kashmir region.
The group was banned in Pakistan in 2002.
India is demanding Pakistan dismantle what it calls the infrastructure of terrorism and has put a "pause" on a four-year peace process that had brought better ties between the old rivals.
"It's our point of view that pressure and coercion do not improve relations between friends but make them complicated," Qureshi said.
"That will not benefit the two countries but those forces which tried to create tension and unease by this incident and put the peace of this region at stake."
(Reporting by Krittivas Mukherjee; Writing by Robert Birsel and Krittivas Mukherjee; Editing by Sugita Katyal)
RWE gets link for new nuclear plant
Reuters
Tuesday, December 30, 2008
LONDON: RWE npower has secured grid connection rights for a new nuclear power station at Wylfa in north Wales and acquired options to buy farmland close to the existing nuclear power station, the company said on Tuesday.
The UK arm of German utility RWE has been granted permission to feed 3.6 gigawatts of electricity into the national grid at the site on the island of Anglesey but will consult with local people before making any firm plans, the company said.
"We are serious and committed to progressing new nuclear options. Anglesey's nuclear heritage means it has great potential as a location for new nuclear build," RWE npower Chief Executive Andrew Duff said.
Duff called on the government to clear the way for investment in other types of generation to avoid a looming shortage of power plants before new nuclear plants are built.
"Nuclear energy can provide clean, secure and affordable electricity supplies in the mid and long term, but the country also needs early and significant investment in a diverse mix of power generation in order to reconcile climate targets and security of supply," he said.
"Without major investment in UK energy infrastructure over the coming years, the UK faces shortages in the approach to 2015."
The government wants to replace ageing and state-built atomic energy facilities, like the Magnox power station at Wylfa which is due to close in 2010, with new nuclear reactors built and run by the private sector.
France's EDF, the world's biggest nuclear power operator which is already building a new plant in Flamanville, France, has said it plans up to four reactors in Britain.
EDF bought land near Wylfa early this year but has since said it would rather build at two sites owned by British Energy, a company it is in the process of buying.
(Reporting by Daniel Fineren)
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At plant in coal ash spill, toxic deposits by the ton
By Shaila Dewan
Tuesday, December 30, 2008
In a single year, a coal-fired electric plant deposited more than 2.2 million pounds of toxic materials in a holding pond that failed last week, flooding 300 acres in East Tennessee, according to a 2007 inventory filed with the Environmental Protection Agency.
The inventory, disclosed by the Tennessee Valley Authority on Monday at the request of The New York Times, showed that in just one year, the plant's byproducts included 45,000 pounds of arsenic, 49,000 pounds of lead, 1.4 million pounds of barium, 91,000 pounds of chromium and 140,000 pounds of manganese. Those metals can cause cancer, liver damage and neurological complications, among other health problems.
And the holding pond, at the Kingston Fossil Plant, a TVA plant 40 miles west of Knoxville, contained many decades' worth of these deposits.
For days, authority officials have maintained that the sludge released in the spill is not toxic, though coal ash has long been known to contain dangerous concentrations of heavy metals. On Monday, a week after the spill, the authority issued a joint statement with the EPA and other agencies recommending that direct contact with the ash be avoided and that pets and children should be kept away from affected areas.
Residents complained that the authority had been slow to issue information about the contents of the ash and the water, soil and sediment samples taken in and around the spill.
"They think that the public is stupid, that they can't put two and two together," said Sandy Gupton, a registered nurse who hired an independent firm to test the spring water on her family's 300-acre farm, now sullied by sludge from the spill. "It took five days for the TVA to respond to us."
Richard Moore, the inspector general of the authority, said he would open an investigation into the cause of the spill, the adequacy of the response, and how to prevent spills from similar landfills at other authority plants, according to a report in The Knoxville News Sentinel.
Elevated levels of lead and thallium and what the Environmental Protection Agency called "very high" levels of arsenic have been found in water samples taken near the site of the spill.
Though the EPA, the Tennessee Department of Environment and Conservation and the authority have spoken daily about their efforts to monitor air, soil and water quality, complete results have been released for only two samples, both taken from a drinking water intake site that is upstream of the spill. The water there met drinking standards.
A test for heavy metals in water, soil or sediment should take two to eight hours, said Peter Schulert, the chief executive of the Environmental Science Corporation, an environmental laboratory near Nashville. "There's no reason why you couldn't have the results within a day," he said.
The data on the toxic compounds produced by the plant was filed with the EPA this year, said Barbara Martocci, a spokeswoman for the power authority. It was posted on the authority's Web site only in a section labeled "air quality."
At full strength, the plant uses 14,000 tons of coal a day and supplies enough electricity for 670,000 households. Its refuse, the ash, rose 55 feet above the banks of the Emory River, which flows into the Clinch River and then the Tennessee. Early last Monday, after a period of heavy rain, the earthen dike that contained the ash breached and 5.4 million cubic yards slid away, covering 300 acres in muck and knocking a nearby home off its foundation, according to the TVA's estimates. Mike Farmer, the Roane County executive, said three houses were left uninhabitable and 36 more residential properties had sustained damage.
The authority has been using backhoes and heavy equipment to clean up the ash and is building weirs, or underwater dams, to try to keep it from traveling downstream. Officials do not have an estimate of the cost of the cleanup or how long it will take, said a spokeswoman, Catherine Mackey.
The spill has reignited a debate over whether coal ash should be regulated as a hazardous waste. In 2000, the EPA backed away from its recommendation to do so in the face of industry opposition, promising instead to issue national guidelines for proper ash disposal, though it never did.
Stephen Smith, the executive director of the Southern Alliance for Clean Energy, a nonprofit policy group based in Knoxville, criticized the TVA for not providing more information to residents, including the sample results.
He also criticized the agency for increasing the flow of the Tennessee River to keep the ash from approaching the drinking water intake for Kingston, a town a half-mile up from the confluence of the Clinch and the Tennessee.
"They're actually moving the stuff further downstream, in order to protect the drinking supply at Kingston," he said.
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Guinea junta names civilian prime minister
Reuters
Tuesday, December 30, 2008
By Saliou Samb
Guinea's ruling military junta named banker Kabine Komara as prime minister on Tuesday, a week after it took control of the West African bauxite exporter.
The National Council for Democracy and Development (CNDD), which seized power on the death of President Lansana Conte, had promised to appoint a civilian prime minister.
Its leader, Captain Moussa Dadis Camara, has said he will not seek election to the presidency.
"Kabine Komara, former administrator at Eximbank, is named prime minister," said a CNDD statement broadcast on state radio, referring to the Egypt-based African Export-Import Bank.
Analysts say power remains concentrated in the hands of the military, and a key test of the CNDD's adherence to its rhetoric of reform will be the speed with which elections are organised.
The CNDD has pledged to hold elections in 2010, and named as one of its priorities fighting the corruption it said had become endemic under Conte.
"Kabine Komara is a competent man who has experience of administration and who knows the country," said Sekou Konate, general secretary of former ruling political party the Progress and Unity Party. "The junta has chosen him to assure the transition."
Komara arrived in Guinea late on Tuesday, and travelled to the Alpha Yaya Diallo military camp in Conakry, used as a base by Camara.
Neighbouring Senegal has endorsed the new administration, but the international community has demanded a return to constitutional rule.
On Monday, the African Union suspended Guinea, and the United States and European Union have condemned the military takeover, though Camara's coup has met with little internal opposition.
APPEAL FOR HELP
After meeting foreign ambassadors on Tuesday, Camara again appealed for international support for his fledgling government.
"You must help us put in place all the democratic principles, in a lasting manner," he said.
The Mauritanian ambassador said he supported the new Guinean authorities, and asked for more understanding of both Guinea and Mauritania, whose first democratically elected government was toppled by a military coup in August.
The CNDD, a group of young officers, is cementing its grip on power, having already appointed its members as defence and security ministers, and ordered 21 generals into retirement.
Listed as a senior director for projects and administrative services by African Export-Import Bank's website, Komara was one of the four men proposed as prime minister by unions after violent anti-government protests in 2007.
Local politicians said it was too early to tell what the appointment meant for Guinea.
"We are waiting for the composition of the government and for what the new prime minister says," said Sidya Toure, president of opposition party the Union of Republican Forces.
International mining firms such as Rio Tinto, Alcoa and United Company Rusal have invested billions in Guinea, the world's biggest exporter of aluminium ore bauxite, a gold producer and potentially a major source of iron ore.
The CNDD has said it will review the state's contracts with mining firms, without naming any companies or giving details.
(Reporting by Saliou Samb; Writing by Daniel Magnowski; Editing by Alison Williams)
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Thai prime minister inaugurates government despite protesters
By Seth Mydans
Tuesday, December 30, 2008
BANGKOK: Dodging protesters outside Parliament, Prime Minister Abhisit Vejjajiva gathered a quorum at the Foreign Ministry building Tuesday and delivered a policy speech inaugurating his already embattled new administration.
"The government has come into office at a time of conflict," he said. "This conflict has become the weakness of the country."
He said the conflict, which has paralyzed government and weakened the economy over the past year, must be resolved in order to meet the challenges of the global economic downturn and revive the country's crucial tourist industry.
The return of street politics on Monday, when demonstrators had forced a postponement of the parliamentary session, showed the difficulties Abhisit will face as he tries to restore stability.
Abhisit and lawmakers from his governing Democrat Party headed for Parliament on Tuesday morning in a convoy escorted by the police, but were blocked from entry by thousands of protesters demanding a new election.
They then detoured to the Foreign Ministry where a quorum of legislators had gathered.
Both the protesters and hundreds of riot police officers had spent the night outside Parliament after the inaugural session was postponed Monday by the blockade.
At one point, according to Reuters, the police tried to push open the gates to Parliament but were forced back inside by the massed protesters.
Abhisit, who was elected prime minister in a parliamentary vote two weeks ago, has asserted that no force would be used to disperse the protesters.
"We will keep negotiating and mediating," he said. "I beg everyone, including all the lawmakers and officials, to dedicate our holiday for the country in order to move our country forward."
The police were widely condemned in October for using force against protesters who opposed the previous government. They have acted with particular care since then.
Those earlier protesters, calling themselves the People's Alliance for Democracy, had demanded the resignation of a government allied to the former prime minister Thaksin Shinawatra, who was ousted in a coup in 2006.
Thaksin, a wealthy businessman, fled Thailand in August to avoid corruption cases against him but continues to exercise political power and to command the support of Thailand's rural majority.
The People's Alliance blockaded the prime minister's offices for three months and shut down Bangkok's airports for a week in early December, at one point forcing the cancellation of a parliamentary session with crowds similar to those being deployed on Tuesday.
In the end, however, they did not bring down the pro-Thaksin government. Instead, the government was removed from office by a court ruling that found the governing party had committed electoral fraud.
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Dairies to compensate victims in Chinese milk scandal
By David Barboza
Tuesday, December 30, 2008
SHANGHAI: A group of Chinese dairy companies accused of selling contaminated milk that killed six children and sickened nearly 300,000 others earlier this year has agreed to pay $160 million in compensation to the victims.
A spokeswoman for the China Dairy Industry Association said Tuesday by telephone that a fund had been established for the victims and that the payments would be made.
Liu Meiju, the secretary general of the association, declined to give further details. But China's state-controlled media reported earlier this week that a group of 22 dairy companies would make one-time payments to the families of the victims.
The settlement would amount to about $550 per victim, which is the equivalent of about three months' salary for the typical factory worker in southern China. The association has also agreed to make payments to care for victims who suffer from long-term effects from the poisonings, according to Xinhua, the official Chinese news agency.
A series of lawsuits has been filed by families of the victims, but none has been accepted by Chinese courts. The case, however, has drawn the attention of China's top leaders, who have vowed to crack down on food safety problems.
Last September, some of China's largest dairy producers were accused by the government of selling milk contaminated with melamine, an industrial chemical that is believed to cause kidney stones and other ailments. The food safety crisis led to one of the largest Chinese food recalls in decades and also led to global recalls of Chinese-made dairy products.
Later, animal feed and eggs produced in China were also found to contain high levels of melamine, an industrial chemical used to produce fertilizer and plastics.
In recent days, more than a dozen dairy middlemen have been put on trial and charged with endangering public security in the northern province of Hebei. They have been accused of intentionally contaminating dairy products with melamine in order to reap bigger profits. Because melamine is high in nitrogen, experts say it can be used to artificially inflate protein readings on milk powder.
In fact, some dairy producers and middlemen have admitted to using melamine as a cheap substitute to real milk powder.
On Wednesday, the former chairwoman of the Sanlu Group, one of the companies at the center of the scandal, is expected to go on trial for her role in the crisis. Sanlu, which is based in the city of Shijiazhuang in Hebei Province, filed for bankruptcy protection last week.
Genetic tests offer promise of personalized medicine
By Andrew Pollack
Tuesday, December 30, 2008
For more than two years, Jody Uslan had been taking the drug tamoxifen in hopes of preventing a recurrence of breast cancer. Then a new test suggested that because of her genetic makeup, the drug was not doing her any good.
"I was devastated," said Uslan, 52, who stopped taking tamoxifen and is now evaluating alternative treatments. "You find out you've been taking this medication for all of this time, and find out you are not getting benefit."
Uslan's situation is all too common — and not just among the hundreds of thousands of women in this country taking tamoxifen.
Experts say that most drugs, whatever the disease, work for only about half the people who take them. Not only is much of the nation's approximately $300 billion annual drug spending wasted, but countless patients are being exposed unnecessarily to side effects.
No wonder so much hope is riding on the promise of "personalized medicine," in which genetic screening and other tests give doctors more evidence for tailoring treatments to patients, potentially improving care and saving money.
Many policy experts are calling for more studies to compare the effectiveness of different treatments. One drawback is that such studies tend to be "one size fits all," with the winning treatment recommended for everybody. Personalized medicine would go beyond that by determining which drug is best for which patient, rather than continuing to treat everyone the same in hopes of benefiting the fortunate few.
The colon cancer drugs Erbitux and Vectibix, for instance, do not work for the 40 percent of patients whose tumors have a particular genetic mutation. The Food and Drug Administration held a meeting this month to discuss whether patients should be tested to narrow use of the drugs, which cost $8,000 to $10,000 a month.
And a genetic test might help doctors determine the optimal dose of warfarin, a blood thinner used by millions of Americans. Tens of thousands of them are hospitalized each year because of internal bleeding from an overdose or a blood clot from an inadequate dose.
"If you save one hospitalization for every 100 new warfarin users, you more than offset the cost of testing all 100," said Dr. Robert Epstein, the chief medical officer of Medco Health Solutions, which manages prescription plans for employers. The test typically costs $100 to $600.
For all the potential, experts see some formidable obstacles on the path to the promised land of personalized medicine.
"It's going to take 20 to 30 years for all this to fall into place," said Dr. Gregory Downing, who heads efforts by the Department of Health and Human Services to spur personalized health care.
The hurdles include drug makers, which can be reluctant to develop or encourage tests that may limit the use of their drugs. Insurers may not pay for tests, which can cost up to a few thousand dollars. For makers of the tests, which hope their business becomes one of health care's next big growth industries, a major obstacle is proving that their products are accurate and useful. While drugs must prove themselves in clinical trials before they can be sold, there is no generally recognized process for evaluating genetic tests, many of which can be marketed by laboratories without FDA approval.
Genentech, a developer of cancer drugs, petitioned the FDA this month to regulate such tests. It warned of "safety risks for patients, as more treatment decisions are based in whole or in part on the claims made by such test makers."
A cautionary case is Herceptin, a Genentech breast cancer drug that is considered the archetype of personalized medicine because it works only for women whose tumors have a particular genetic characteristic. But now, 10 years after Herceptin reached the market, scientists are finding that the various tests — some approved by the FDA, some not — can be inaccurate.
Moreover, doctors do not always conduct the tests or follow the results. The big insurer UnitedHealthcare found in 2005 that 8 percent of the women getting the drug had tested negative for the required genetic characteristic. An additional 4 percent had not been tested at all, or their test results could not be found.
Tamoxifen, the drug Uslan took, illustrates the promise and current limitations of genetic testing. In 2003, more than 25 years after tamoxifen was introduced, researchers led by Dr. David Flockhart at Indiana University School of Medicine figured out that the body coverts tamoxifen into another substance called endoxifen. It is endoxifen that actually exerts the cancer-fighting effect. The conversion is done by an enzyme in the body called CYP2D6, or 2D6 for short.
But variations in people's 2D6 genes mean the enzymes have different levels of activity. Up to 7 percent of people, depending on their ethnic group, have an inactive enzyme, Flockhart said, while another 20 to 40 percent have an only modestly active enzyme.
The implications were "scary," Flockhart said. Many women were apparently not being protected against cancer's return because they could not convert tamoxifen to endoxifen.
The economic implications could be just as scary to big pharmaceutical companies.
Tamoxifen, now a generic drug, costs as little as $500 for the typical five-year treatment. But most patients in the United States are currently treated with a newer, much more expensive class of drugs, called aromatase inhibitors, that cost about $18,000 over five years. Those drugs — made by AstraZeneca, Novartis and Pfizer — performed better than tamoxifen in clinical trials before the role of 2D6 was generally understood.
If only women with active 2D6 had been assessed, tamoxifen might have worked as well or better than the newer drugs, according to researchers at the Dana-Farber Cancer Institute in Boston.
But proving these suppositions and having them incorporated into medical practice have not been easy.
The FDA, in its meeting this month, said clinical trials were the ideal way to validate a test. But many test developers argue that trials would be too costly and time-consuming, so many tests are validated by reanalyzing patient data from old trials.
In the case of tamoxifen, Dr. Matthew Goetz of the Mayo Clinic and colleagues went back to an old trial and used stored tumor samples to test the 2D6 genes of each patient. The researchers reported in 2005 that 32 percent of the women with inactive 2D6 enzyme had relapsed or died within two years, in contrast to only 2 percent of the other women.
But while some subsequent studies have backed those conclusions, two had contradictory results. That leaves many experts hesitant to use the test, which costs about $300.
There are other complications. Dozens of variants of the 2D6 gene exist, and laboratories can differ in their interpretation of test results. And it is not always clear how to act upon the information the test provides.
Uslan, who lives in the Woodland Hills neighborhood of Los Angeles, is in a predicament since she stopped taking tamoxifen. The newer alternative, aromatase inhibitors, work only for postmenopausal women and she has not yet completed menopause. To take an aromatase inhibitor, she must have her ovaries removed or take a drug to induce menopause. Because both options are unattractive, many experts say there is no point testing premenopausal women for 2D6.
Such complexities are not confined to tamoxifen testing. The labels of about 200 drugs now contain some information relating genes to drug response, said Dr. Lawrence Lesko, the FDA's head of clinical pharmacology. But in many cases, he said, doctors are not told specifically enough what to do with the test results, such as how much to change the dose.
Despite all the obstacles, personalized medicine is coming. Even the drug companies, which have been worried that testing would reduce their sales, are starting to realize that their medicines might not be approved or paid for without better evidence that they work.
Last year, for instance, European regulators said Amgen's colon cancer drug Vectibix did not provide enough benefit to patients to be approved.
So Amgen reanalyzed the data from its clinical trial. After the results showed Vectibix worked better in patients whose tumors did not have a mutation in a gene called KRAS, the drug was approved for those patients only.
As for tamoxifen, an FDA advisory panel recommended two years ago that the 2D6 test be mentioned in the drug's label. But the agency itself was not persuaded there was enough evidence until just recently, Lesko said. "There's no 'one size fits all' for evidence that everybody buys into."
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OPINION
Cognitive enhancement
By Judith Warner
Tuesday, December 30, 2008
What if you could just take a pill and all of a sudden remember to pay your bills on time? What if, thanks to modern neuroscience, you could, simultaneously, make New Year's Eve plans, pay the mortgage, call the pediatrician, consolidate credit card debt and do your job - well - without forgetting dentist appointments or neglecting to pick up your children at school?
Would you do it? Tune out the distractions of our online, on-call, too-fast ADD-ogenic world with focus and memory-enhancing medications like Ritalin or Adderall? Stay sharp as a knife - no matter how overworked and sleep-deprived - with a mental-alertness-boosting drug like the anti-narcolepsy medication Provigil?
I've always said no. Fantasy aside, I've always rejected the idea of using drugs meant for people with real neurological disorders to treat the pathologies of everyday life.
Most of us, viscerally, do. Cognitive enhancement - a practice typified by the widely reported abuse of psychostimulants by college students cramming for exams, and by the less reported but apparently growing use of mind-boosters like Provigil among in-the-know scientists and professors - goes against the grain of some of our most basic beliefs about fairness and meritocracy. It seems to many people to be unnatural, inhuman, hubristic, pure cheating.
That's why when Henry Greely, director of Stanford Law School's Center for Law and the Biosciences, published an article, with a host of co-authors, in the science journal Nature earlier this month suggesting that we ought to rethink our gut reactions and "accept the benefits of enhancement," he was deluged with irate responses from readers.
"There were three kinds of e-mail reactions," he told me in a phone interview. "'How much crack are you smoking? How much money did your friends in pharma give you? How much crack did you get from your friends in pharma?"'
Americans' default setting on matters of psychotropic drugs - particularly when it comes to medicating those who are not very ill - tend to be, as the psychiatrist Gerald Klerman called it in 1972, something akin to "pharmacological Calvinism." People should suffer and endure, the thinking goes, accept what hard work and their God-given abilities bring them and hope for no more.
But Greely and his Nature co-authors suggest that such arguments are outdated and intellectually dishonest. We enhance our brain function all the time, they say - by drinking coffee, by eating nutritious food, by getting an education, even by getting a good night's sleep. Taking brain-enhancing drugs should be viewed as just another step along that continuum, one that's "morally equivalent" to such "other, more familiar, enhancements," they write.
Normal life, unlike sports competitions, they argue, isn't a zero-sum game, where one person's doped advantage necessarily brings another's disadvantage. A surgeon whose mind is extra-sharp, a pilot who's extra alert, a medical researcher whose memory is fine-tuned to make extraordinary connections, is able to work not just to his or her own benefit, but for that of countless numbers of people. "Cognitive enhancement," they write, "unlike enhancement for sports competitions, could lead to substantive improvements in the world."
I'm not convinced of that. I'm not sure that pushing for your personal best - all the time - is tantamount to truly being the best person you can be. I have long thought that a life so frenetic and fractured that it drives "neuro-normal" people to distraction, leaving them sleep-deprived and exhausted demands - indeed, screams for - systemic change.
But now I do wonder: What if the excessive demands of life today are creating ever-larger categories of people who can't reach their potential due to handicaps that in an easier time were just quirks? (Absent-minded professor-types were, for generations, typically men who didn't need to be present - organized and on-time - for their kids.) Is it any fairer to saddle a child with a chronically overwhelmed parent than with one suffering from untreated depression?
And, furthermore, how much can most of us, on a truly meaningful scale, change our lives? At a time of widespread layoffs and job anxiety among those still employed, can anyone but the most fortunate afford to cut their hours to give themselves time to breathe? Can working parents really sacrifice on either side of the wage-earning/life-making equation? It's disturbing to think that we just have to make do with the world we now live in. But to do otherwise is for most people an impossible luxury.
For some of us, saddled with brains ill-adapted to this era, and taxed with way too many demands and distractions, pharmacological Calvinism may now be a luxury, too.
Judith Warner writes Domestic Disturbances, a column at nytimes.com.
*************
OPINION
Waiting for an answer
By Elissa Ely
Tuesday, December 30, 2008
During the sainted years of psychiatry residency, we thought we were learning to be wise. There were many paths to wisdom, depending on your theoretical school. All had in common the act of listening. We practiced avidly. There were as many ways to listen as there were problems to hear: active listening, passive listening, metaphorical listening, listening in displacement. Analysts listen with evenly hovering attention, a term that used to cause me to squint from the dust the helicopter blades were kicking up.
The nonlistening part of the day was very busy: writing notes, reading charts, meeting supervisors, preparing seminars, answering phone calls. These were the years before BlackBerries, I-touches, cellphones and voice mail. They were even the years before answering machines. Instead, cubbyholes in the staff room were stuffed with pink memos written in the even hand of the department secretary. Few of us felt as calm as she seemed.
Between appointments, we would fan the memos out, and triage them based on degree of emergency: Suicidal? Homicidal? Out of medication? Canceling tomorrow? It helped decide how quickly we needed to return each call. Some of us called back with the birds in the morning. Some called late at night. Some waited a day or two. And some never called back at all.
One doctor was a wizard with medications, a genius. He treated cases no one else could, and his two beepers were always going off. But his pink memos could have held their breaths until they turned blue before he answered them. He never returned calls. He just didn't.
My home phone rang late one night. A manic patient, not on my caseload, was breathing fire on the other end. Apparently she needed to talk to a psychiatrist and, since hers never called her back, she was going through the phone book alphabetically, chasing down his colleagues. It was a logical approach, bound to succeed; there were 26 opportunities.
While I listened, half in sleep but with evenly hovering attention, she proceeded through the story of her life.
Truthfully, I was not without sympathy. She and I had something in common. Her doctor never answered my calls, either. I would write him messages on pink memos, requests for medication consultations or some other sort of help, and slip them into his cubbyhole. I would check a week later. They were gone, disappeared into memo neverland. Probably, I would leave him a message about this patient who called me, and he would get it, but he would not answer it. My messages and hers must have crossed in his cubbyhole all the time.
I figured there must have been some logic to his negligence that I was not grasping. It was a therapeutic technique. He was forcing us into self-reliance. He was a very, very smart man.
But he was not a good psychiatrist. Because how can you be a good psychiatrist if you don't call back? Over the years, that question has grown even broader and more imperative. How can you be a good plumber, banker, teacher, dogwalker, grandmother, librarian? Listening is a profound and intelligent activity, years of training and so on, but it is not the most important thing we do.
The most important thing we do - the wisest, the one that matters, and, without doubt, the one we will be remembered for - is to answer.
Elissa Ely is a psychiatrist.
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Ghana election cliffhanger to be decided Friday
Reuters
Tuesday, December 30, 2008
By Kwasi Kpodo
The outcome of Ghana's presidential run-off is too close to call and will be decided by voting on Friday in a single constituency where balloting has yet to take place, the electoral commission said on Tuesday.
In a twist to what was already a tense and closely fought race, the commission said the outstanding vote in the Tain constituency would determine the final result of the election in the West African state, the world's No. 2 producer of cocoa.
With votes counted from 229 of the 230 constituencies, John Atta Mills of the opposition National Democratic Congress (NDC) held a slender lead with 50.13 per cent of the votes, while Nana Akufo-Addo of the New Patriotic Party (NPP) had 49.87 percent.
Only 23,050 votes separated the two.
This made the race too close to call in the absence of Tain, which has around 53,000 registered electors and where voting did not take place in Sunday's run-off "due to circumstances beyond our control," election commission chief Kwadwo Afari-Gyan said.
"The results are so close that the outcome of the Tain constituency election could affect the eventual winner," Gyan said, adding the constituency, located in Ghana's central Brong Ahafo region, would vote on Friday.
Mills' supporters, who had already been celebrating his expected narrow victory, sang and danced around the commission headquarters, which was heavily guarded by police.
They remained confident, pointing out that in the inconclusive December 7 first round of voting, Mills' NDC had won Tain with a majority of around 2,000 votes.
"I'm not disappointed at all, I'm happy, because Mills is already a president and the whole of Ghana knows it. Tain is our territory and we are going to win there massively to make it a done deal," said NDC supporter, Kwako Assem, a taxi driver.
Ghana, on Africa's Gulf of Guinea, has enjoyed growth and stability in recent years, becoming an investors' favourite. The country, also a gold producer, will start producing oil in 2010.
POLARISING VOTE
Tuesday's announcement followed a tense wait at the commission, where thousands of Mills' supporters had gathered shouting "Change, change."
Gyan earlier met party and religious leaders to call for calm. Some banks and shops closed, fearing violence.
"These elections have really polarised us," NDC spokeswoman Hannah Tetteh said, adding Mills pledged to unite the nation if he won on Friday.
Armed soldiers and police, with water cannon and an armoured personnel carrier, held back the NDC supporters. Police fired shots into the air late on Monday to try to disperse them.
Akufo-Addo's NPP, which is also the party of outgoing President John Kufuor, complained of irregularities in results from some regions and said it would challenge them.
There were some reports of disorder in Sunday's vote. Many hoped Ghana's election could help salvage the battered image of constitutional democracy in Africa, tarnished by flawed elections in Kenya and Zimbabwe and military coups in Mauritania in August and in Guinea last week.
Observers from the European Union, the U.S.-based Carter Centre and the West African regional bloc ECOWAS said the run-off vote had been generally orderly and transparent.
The Eurasia Group risk consultancy, in a note by Africa analyst Sebastian Spio-Garbrah, predicted that Mills would be a "narrow electoral winner without a strong governing mandate."
Political analysts say the new president -- whoever he is -- will take over at a time when economic growth is expected to slow in the global downturn. He will have to deal with a growing budget and current account deficit, high inflation and unemployment and falling remittance and aid levels, they say.
Presidential rivals Mills and Akufo-Addo are both foreign-trained lawyers and both are aged 64.
(Writing by Pascal Fletcher)
******************
Hu visits China quake area again
By Edward Wong
Tuesday, December 30, 2008
China's president, Hu Jintao, visited a region of southwest China over the weekend that was hit hard by the earthquake last May, according to a report on Monday by Xinhua, the state news agency.
It was Hu's second visit to the area since May 16, when he flew to Sichuan Province to check on rescue efforts.
The earthquake rippled out from its epicenter in Yingxiu, in Sichuan Province on May 12, ultimately leaving 88,000 people dead or missing and five million homeless.
Hu has made his trips in the footsteps of Prime Minister Wen Jiabao, who has traveled to the earthquake region a half-dozen times and whose popularity has grown because of the visits.
Many survivors are still living in prefabricated homes with little heating in the depths of winter.
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Post-tsunami, a rebuilt life
The Associated Press
Tuesday, December 30, 2008
PETTIYADICHCHENI, Sri Lanka: Every morning and evening, Velmurugu Kangasuriyam gathers his 2½-year-old daughter and his wife and confronts the wreckage of his former life.
His wife, Thaya, lights an oil lamp on the mantel of a dark, bare concrete room. Kangasuriyam presses his hands together and closes his eyes. Little Theresa follows in imitation. For a long minute his new family stands in silent prayer.
Thaya places orange flowers in front of pictures of Hindu gods. She lays several more before a picture of Kangasuriyam's parents.
The last flowers sit in front of a photo of a woman in a striking red bridal sari: Devi, who was Kangasuriyam's wife for just 10 months before she died, along with his parents, three of his sisters and a brother, just over four years ago.
The tsunami that crashed over southern Asia on Dec. 26, 2004, and killed 230,000 people washed away nearly everything Kangasuriyam held dear. Sixteen close relatives were killed. His seaside village was razed, his house demolished, his business destroyed.
Four years later, with international aid and prodding from his remaining family, the 30-year-old has rebuilt his life. He has a new family. He has a bigger house in a resettlement village set back from the ocean.
He opened a new bicycle repair shop to replace the one where he worked alongside his father from boyhood.
A quiet man, Kangasuriyam says he is finally getting his life back in order.
"I want to be happy with what I have, and get over it," he said.
About 35,000 Sri Lankans died in the tsunami. More than half a million were left homeless.
Aid groups have since built more than 100,000 new homes, though several thousand families still remain homeless, according to the United Nations.
Many of the survivors have worked to rebuild their lives and carry on, though nearly all bear deep and permanent scars of the disaster.
For Kangasuriyam, the reminders are hard to escape.
Every Friday, as he returns from prayers at the Hindu temple, Kangasuriyam stops at the remnants of his old village, Passikudah, a few hundred meters from the beach in the Batticaloa district on Sri Lanka's east coast.
The house he lived in for 10 months with Devi is little more than two red steps leading to a cracked foundation and a jagged shard of wall.
His parents' home next door is a slab of concrete covered in thick black mud, rotting coconut husks and a tangled shrub and vines. He tries to keep the foundation clean, he said, but the jungle keeps reclaiming it.
His four sisters and three brothers lived nearby as well.
They were a close-knit family, Kangasuriyam said. After school, his nieces and nephews would play together outside. After dinner, everyone would converge on his parents' home to drink tea and gossip.
Growing up, he and his brothers all worked in their father's bicycle repair shop, learning how to rebuild a bike that had been dismantled down to its ball bearings. Eventually one brother left to become a postmaster, another a Hindu priest.
The third started his own bike shop, leaving Kangasuriyam, the youngest son, to drop out of school and help his father in his shop.
As his parents grew frail with age, it fell to Kangasuriyam to care for them. He could not do it alone, he said, so he asked his parents to arrange a marriage. He met Devi, from a village eight kilometers, or five miles, away, on their wedding day.
She was a good cook, always smiling and happy. She was kind and took such good care of his parents that when the newlyweds got into an argument, his mother took her side and hit him, he said.
Devi was a gifted storyteller, and their nieces and nephews flocked to their house. It did not hurt that she snuck them treats.
"He was extremely happy," said his brother, Sarawanamuttu. "In our whole village there was no one as good as her."
As Kangasuriyam thinks of his first wife, his eyes sink to the ground. He rubs his chin and scratches his lip in silence. She was four months pregnant, he said.
"Every time I remember that, it's very painful," he said.
His memories of the tsunami are confused, but Sarawanamuttu says the brothers were working together in his bicycle shop when villagers ran by screaming that the sea was coming.
Sarawanamuttu says he grabbed his daughter and ran for safety, while Kangasuriyam ran back toward the village to get his family.
His other surviving brother, Ganeshamurthi, the priest, says he was in the temple when the screaming started and saw Kangasuriyam running to the village. He grabbed him, but Kangasuriyam broke free and tried to get home.
Kangasuriyam says he ended up unconscious, hanging from the branches of a tree nearly 10 meters, or 30 feet, off the ground, and was taken to the hospital. It took days for the scale of his tragedy to emerge.
He hobbled down to the morgue and saw his father's body. Then, two of his sisters' bodies were brought in. The next day, they found his wife. In the days after, the bodies of nieces and nephews began appearing, he said. His mother was never found.
He stopped eating, talking and washing his clothes, Sarawanamuttu said. He would see his surviving nieces and nephews and wouldn't recognize them, he said. From their village of 800, 258 people died.
"He would cry from time to time. It wasn't only him, it was everybody," said his sister-in-law, Kumudawathi. "There was nobody to pay attention to him because everybody lost people and everybody was crying. There was no one to talk to and calm people down, because everybody lost someone."
Kangasuriyam moved with 2,000 other homeless to the yard of a Pentecostal church. His surviving sister and brothers kept him going, he said.
They pushed him to apply for housing in a resettlement village being built by an international aid group, and within months he became secretary of the residents' committee.
In lieu of payment for his new house, he had to help build it, and he threw himself into the work, he said. When it was done, he continued making bricks for his neighbors.
More international aid enabled him and Sarawanamuttu to open a new bike shop together. With aid groups donating hundreds of bicycles to tsunami victims, they suddenly were swamped with bikes to tune up.
The long hours of work on the house and in the shop helped Kangasuriyam cope with his loss, Sarawanamuttu said. "Those things got him involved in life again," he said.
But, "he is not back to normal, and sometimes he talks nonsense," the brother said.
He spent so much time at work that his brothers and sister decided he needed a new wife to care for him. They found Thaya, a woman from their village who had always had a crush on Kangasuriyam, seven years her junior. In May 2005, just five months after the tsunami, they were married. Theresa was born the following April.
The toddler struts around the house in the new neighborhood of Pettiyadichcheni, about a kilometer from the beach. As her father sits in one of the brown plastic chairs lining the living room walls, she stands between his legs and burbles playfully.
Many have told him Theresa looks just like 2-year-old Dilani, and he thinks, maybe, she is the reincarnation of his lost niece.
Ganeshamurthi says the little girl has restored some of his brother's faith and happiness. "He is beginning to forget his old life," he said.
But every day, at 6 a.m. and 6 p.m., the family enters the shrine room and offers prayers at the photos of his lost family. Kangasuriyam says it is important for Theresa to know what happened, and it is important that his parents and Devi not be forgotten.
Kangasuriyam and his brother spend their days working side by side in the bike shop. They never speak of the tsunami, Sarawanamuttu said. "Everybody knows what happened to everybody. There is no point in talking about it," he said.
****************
Crews recover 8th Canadian avalanche victim
Reuters
Tuesday, December 30, 2008
VANCOUVER, British Columbia: Search crews on Tuesday recovered the last of eight snowmobilers killed by avalanches in the Canadian Rocky Mountains, aided by one of just three men who survived the deadly slides.
The man was found buried under about 1.5 metres (5 feet) of snow in the same area where the seven other victims were recovered on Monday in a popular backcountry recreational area about 40 km (25 miles) southeast of Fernie, British Columbia.
The victims were all from the coal mining town of Sparwood, British Columbia, which has been hit hard by the Christmas holiday deaths of the men, most of whom were long-time residents of the small community.
"The community of Sparwood, I know, will be glad to have all of the bodies in and they'll get on with their grieving process," said Cpl. Chris Faulkner of the Royal Canadian Mounted Police. "They'll get on with their preparations for memorial services, and sometime in the next few days, few weeks, they'll get on with life as well."
Technicians used explosives to stabilise the snow around the accident site in southeastern British Columbia to protect search crews from further slides as they recovered the bodies on Monday and Tuesday.
The area has been hit by heavy snowfalls in recent days and is still considered dangerous.
The snowmobilers were struck by two separate snow slides on Sunday. The first buried seven members of the group, and the second struck while their companions were trying to dig them out.
Three men were eventually able to free themselves, but the threat of additional avalanches forced them to retreat before they could rescue anyone else.
Police said one of the survivors returned to the site on Tuesday to give crews a better idea where to find the final victim.
Friends of the men said they were all experienced in backcountry travel and aware of the risk of avalanches.
"It's just a sad thing," said Randy Roberts, whose son-in-law Danny Bjarnason was one of the victims "It's an accident that can happen at any time."
The men all carried radio beacons designed to aid searchers trying to find them in the snow.
Faulkner said that, while the avalanche was tragic, it was also unlikely to discourage residents of the region from enjoying their easy access to the wilderness.
"The chances of them being caught in one, while minimal, are always there. For the pleasure of being out there they're willing to take that chance," Faulkner said.
(Reporting Allan Dowd and Jeffrey Jones, editing by Rob Wilson)
Detroit's problems threaten gains of African-Americans
By Mary M. Chapman
Tuesday, December 30, 2008
DETROIT: Since millions of African-Americans began leaving Southern farms for Northern factories nearly a century ago in what is still known as the Great Migration, the destinies of many of them have been entwined with the auto industry's.
The car companies were hardly multiracial utopias, but they - especially Ford Motor - employed blacks when many industries would not.
Through the decades, the automakers and their higher wage scales provided a route to the middle class for many blacks, especially those with limited education, and their children.
Now, with Detroit reeling, many blacks find their economic well-being threatened.
By last month, nearly 20,000 black auto workers had lost their jobs, a 13.9 percent decline in employment since the recession began last December, according to government jobs data analyzed by the Economic Policy Institute, a liberal Washington research firm. That compares with a 4.4 percent decline for all workers in manufacturing.
"African-Americans earn much higher wages in the auto industry than in other parts of the economy, and the loss of these solid, middle-class jobs would be devastating," the Economic Policy Institute said in a report this month. "The motor vehicle and parts industry, a sector of the economy that has been particularly welcoming to African-Americans, is becoming a shrinking island of prosperity."
Claudia Perkins, 55, who has worked in the automobile industry for 33 years and is at the General Motors assembly plant at Lake Orion, Michigan, put it more bluntly. "If it wasn't for the factory, the average black would not have been able to survive all these years, especially without an education."
Blacks occupy most rungs of the car production ladder, from plant workers to white-collar employees to auto suppliers and car dealers.
Nelson White 3rd, an industrial materials analyst at Ford's transmission plant in Livonia, Michigan, said he was concerned that in the future other blacks would not receive the opportunities he has.
White started as an hourly worker in a Ford factory, attended college under a Ford program and made the leap to management in 1999. In May, he will graduate with a master's degree in organizational leadership.
"There's a saying that when America catches a cold, African-Americans catch the flu," White said.
As in most recessions, blacks have been hit harder than other workers. The overall unemployment rate for blacks increased to 11.2 percent in November, an increase of 2.8 percentage points over last year. By comparison, the national unemployment last month was 6.7 percent, up two percentage points from a year earlier.
In all, blacks made up 14.2 percent of the total automotive work force in 2007, according to the Economic Policy Institute report, compared with 11.2 percent of the overall U.S. work force. Blacks in the manufacturing and parts sector earned $17.08 an hour, compared with $15.44 an hour for blacks in all industries, the report said.
"Because African-Americans continue to have less education than other groups, the loss of high-paying manufacturing jobs has long been magnified in the black community," said Robert Scott of the Economic Policy Institute. "When benefits are considered, the auto industry is one of the best sources of jobs for workers without a college degree."
For instance, 21.9 percent of black workers in the country's overall work force have four-year college degrees, compared with 33.7 percent of whites in the entire labor force, Scott said.
Almost from the beginning, blacks found opportunities in the car companies when they did not find them in other industries. In the early 1940s, while many industries in the United States were enforcing or even creating segregated workplaces - U.S. Steel's factories and dormitories around Birmingham, Alabama, were an example - Henry Ford employed blacks and whites in the same plants.
Ford and other auto company owners pioneered the hiring of black workers, though many of them were often given the dirtiest jobs.
Perkins, the GM worker, was raised in Jemison, Alabama, about 45 miles, or 72 kilometers, south of Birmingham. She moved north in the 1950s with her parents, who found work in the booming auto industry.
Her mother took a job in Flint, Michigan, at AC Spark Plug, now owned by Delphi, while her father worked for 28 years at the Fisher Body plant of GM.
"There was always so much talk down South about the manufacturing jobs up here and how easy you could get a job," said Perkins, whose siblings and other relatives work in the auto industry. "People were excited about the pay, and after they'd get a job they would help their families back in the South. They would all the time drive their new cars down and show them off."
Perkins, however, resisted going to work in "some grungy factory." But after an aunt, who was a plant manager, persuaded Perkins to apply at AC Spark Plug, she gave in. "I made one paycheck and told myself I'd quit after one more, but that day never came," she said, chuckling.
Her earnings helped her buy a home and pay college expenses for her daughter, an Army major who received a teaching degree.
Thus far, Perkins has escaped the job cuts at GM.
As automakers and the overall economy contract, car dealerships are facing challenges as well, and black dealers are no exception.
About 150 of the country's 2,000 minority dealers have closed this year, and 300 more could shut by the middle of January, said Damon Lester, president of the National Association of Minority Auto Dealers.
About 95 percent of all minority dealers are first-generation owners, as opposed to 30 percent of the country's nonminority dealers, who are more established and have more clout at banks, Lester said. In these days of tight credit, that can make a big difference.
"Capitalization from a historical standpoint has always been an issue," he said. "Then, when a downturn occurs, black dealerships are less likely to weather economic storms."
All of Detroit's three automakers have minority dealer development programs, which historically have provided training, mentoring and startup loans to prospective dealers.
But as automakers eliminate some brands and models under the reorganization plans they have submitted to Congress, Lester said, those programs could suffer.
"A lot of minorities got their first opportunities through these programs," Lester said. "And that's a good thing. But we want to make sure those programs don't go away."
GM said it planned to continue its minority dealer development program, started in 1972, although the program will save money by using teleconferencing in place of some physical dealer meetings, said Susan Garontakos, dealer communications manager. Still, the company has told Congress it would cut its dealer network by 35 percent.
In Atlanta, Steve Harrell, who is black, said he hoped he would be one of the dealers left standing. Harrell, the president of Harrell Swatty, has 12 showrooms across the country, selling Ford, GM, Kia, Lexus, Nissan, Hyundai, Porsche and Subaru brands.
Harrell, a dealer for 21 years, said he expected his total showroom sales to drop to $200 million by the end of 2008, from $320 million in 2007. He has cut his staff to 375 from 600.
"All dealers are suffering," Harrell said, "but we were the last ones to the table, so our staying power, our ability to hang in there, is not as great as nonminorities." If his showrooms are unable to get loans within the next 60 days, "we could be extinct," he said.
So could some parts suppliers. There are roughly 60 black-owned parts suppliers in the United States, with a total of about $3.5 billion in sales. One is Leon Richardson, who owns a supply company, ChemicoMays, in Chesterfield, Michigan, that does 65 percent of its business with the automobile industry.
About 60 percent of its 200 employees are black, said Richardson, who is also chairman of the National Association of Black Automotive Suppliers.
"The credit market has always been extremely tight and difficult for black suppliers even before this meltdown. It was difficult for them to generate cash as it was, and it's going to be more difficult," Richardson said.
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Airlines step up search for viable biofuels
By Bettina Wassener
Tuesday, December 30, 2008
HONG KONG: Despite plunging oil prices, airlines are intensifying their search for alternative fuels to make flying more affordable and environmentally friendly for the long haul.
An early test of the commercial and technical viability of one such biofuel took place Tuesday in the skies above Auckland. Air New Zealand, the main New Zealand carrier, staged a successful test flight using oil derived from jatropha, a weed that can grow in arid conditions and produces inedible oil. That means it need not encroach on land or crops used for feeding the world's swelling population.
For two hours, pilots tested the oil, in a 50-50 blend with conventional jet fuel in one of the four Rolls-Royce engines powering a Boeing 747-400 aircraft - the first test flight by a commercial airline using jatropha oil.
"Today we stand at the earliest stages of sustainable fuel development and an important moment in aviation history," said Rob Fyfe, Air New Zealand's chief executive. The project has been 18 months in the works.
The results of the test flight - and two others by rival airlines in the United States and Japan in January - will be closely watched by an industry that is determined to wean itself from ultimately finite supplies of conventional crude oil and shift toward sources of renewable, low-emission fuels.
A big increase in crude oil prices - to more than $147 a barrel in July - provided a strong incentive for the industry to reduce its exposure to volatile oil prices as soon as possible.
But pressure to reduce carbon emissions also drove the search for alternatives. The International Air Transport Association, which represents 230 airlines, aims for its members to use 10 percent alternative fuels by 2017. The group also has the ambitious goal that airlines will be able to fly carbon-free 50 years from now, with the help of technologies like fuel cells and solar energy.
Such goals have ensured that research and development into greener flying have continued, despite the recent retreat in oil prices to $40 a barrel and despite shrinking demand as the global economy slows to a crawl.
Having conducted a series of tests Tuesday, Air New Zealand and its partners in the venture, the U.S. aircraft manufacturer Boeing, the British engine maker Rolls-Royce and the technology developer UOP, a part of the U.S. business Honeywell, will review the results "as part of our drive to have jatropha certified as an aviation fuel," said Captain David Morgan, the flight's chief pilot.
The hope is that the test results will lay the groundwork for jatropha to be available in commercially viable quantities in three to five years, executives of the companies said.
Virgin Atlantic in February became the first airline to test a commercial aircraft on a biofuel blend, using a 20 percent mixture of coconut oil and babassu oils in one of its four engines.
Two more airlines are to test their concoctions in quick succession next month. Continental Airlines on Jan. 7 will conduct a test flight powered by a blend involving algae and jatropha, the first biofuel flight by a commercial carrier using algae as a fuel source - and the first biofuel-powered demonstration flight of a U.S. commercial airliner.
And Japan Airlines is planning a test flight Jan. 30 from Tokyo using a fuel based on the camelina oilseed.
Together, the tests will try out not only different sources of alternative fuel, but also their use in an array of different engine types used by the world's airlines.
With the use of ethanol facing increasing criticism - it has been blamed for corn shortages that have led to food riots in parts of the world - hopes increasingly rest on inedible crops, like algae and jatropha, which can be grown without drawing on forested or arable land.
Unlike biofuels made from crops like soybeans and corn, jatropha needs little water or fertilizer and can be grown almost anywhere - even in sandy, saline or otherwise infertile soil. Each seed produces 30 percent to 40 percent of its mass in oil, meaning it has higher yield per acre than many other plant oils, experts say.
Still, even the potential use of jatropha has not been free of criticism, with some observers fearing that farmers could be tempted to substitute edible crops for jatropha in the hope of getting better prices.
Algae may be free of this potential problem, but research into algae is not as far advanced, said an Air New Zealand spokesman, Mark Street, explaining the airline's decision to focus on jatropha.
Air New Zealand, which aims to meet 10 percent of its fuel needs through sustainable biofuel by 2013, said the jatropha used on Tuesday's flight had been grown in Malawi, Mozambique and Tanzania.
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Gazprom pays price for its aggressive takeovers
By Andrew E. Kramer
Tuesday, December 30, 2008
MOSCOW: A year ago, Gazprom, the Russian natural gas monopoly, aspired to be the largest corporation in the world. Buoyed by high oil prices and political backing from the Kremlin, it had already achieved third-place ranking, by market value, behind Exxon Mobil and General Electric.
Today, Gazprom is deep in debt and negotiating a government bailout. Its market capitalization, the total value of all company shares, has fallen 74 percent since the beginning of the year. Instead of becoming the world's largest company, it has tumbled to 35th place by market value.
And while bailouts are increasingly common, none of Gazprom's big private-sector competitors in the West is looking for one.
That the largest state-run Russian energy company needs a bailout so soon after oil hit record highs last summer is a telling postscript to a turbulent period. Once the emblem of the pride and the menace of a resurgent Russia, Gazprom has become a symbol of the oil state's rapid economic decline.
During the boom times, Gazprom and the other Russian state energy company, Rosneft, became vehicles for carrying out creeping renationalization. As oil prices rose, so did the companies' stock prices. But rather than investing sufficiently in drilling and exploration, the Russian president at the time, Vladimir Putin, used them to pursue his agenda of regaining public control over the oil fields, and much of private industry beyond.
As a result, by the time the downturn came, the companies entered the credit crisis deeply in debt and with a backlog of capital investment needs.
Under Putin, now the prime minister, Gazprom and Rosneft are so tightly controlled by the Kremlin that the companies are not run by mere government appointees, but directly by government ministers who sit on their boards.
"They were as inebriated with their success as much as some of their investors were," James Fenkner, the chief strategist at Red Star, a Russian-dedicated hedge fund, said of Gazprom's ambition to become the world's largest company. "It's not like they're going to produce a better mousetrap," Fenkner said. "Their mousetrap is whatever the price of oil is. You can't improve that."
On Tuesday, the company said its profit in the second quarter had nearly tripled before oil prices fell in the third quarter. Gazprom said its net income climbed to 300 billion rubles, or $10.3 billion, in the quarter ended June 30, from 103 billion rubles during the period in 2007, Bloomberg News reported.
Investors are fleeing Gazprom stock, once such a favorite that it alone accounted for 2 percent of the Morgan Stanley index of global emerging market companies. Its share price has fallen more quickly than those of private-sector competitors. The company's debt, amassed while consolidating national control over the industry, is one reason.
After five years of record prices for natural gas, Gazprom is $49.5 billion in debt. By comparison, the entire combined public and private-sector debt coming due for India, China and Brazil in 2009 totals $56 billion, according to an estimate by Commerzbank.
Putin used Gazprom to acquire private property. In 2005 it bought the Sibneft oil company from Roman Abramovich, the billionaire and owner of the Chelsea soccer club in London, for $13 billion. In 2006 it bought half of Shell's Sakhalin-2 oil and natural gas development for $7 billion. And in 2007, it spent more billions to acquire parts of Yukos, the private oil company that collapsed in a politically tinged fraud and tax evasion case.
Rosneft is deeply in debt, too. It owes $18.1 billion after spending billions acquiring assets from Yukos. And in addition to negotiating for a government bailout, Rosneft is negotiating a $15 billion loan from the China National Petroleum Corp., secured by future exports to China.
Under Putin, more than a third of the Russian oil industry was effectively renationalized in such deals. But the Kremlin used more sophisticated tactics than President Hugo Chávez of Venezuela or President Evo Morales of Bolivia, who sent troops to seize a natural gas field in that country.
Regulatory pressure was brought to bear on private owners to encourage them to sell to state companies or private companies loyal to the Kremlin. The assets were typically bought at prices below market rates, yet the state companies still paid out billions of dollars, much of it borrowed from Western banks that called in the credit lines in the financial crisis.
Rosneft, which was also held up as a model of resurgent Russian pride and defiance of the West, having been cobbled together from Yukos assets once partly owned by foreign investors, was compelled to meet a margin call on Western bank debt in October.
Critics predicted the Russian policy of nationalization would foster inefficiency or at the very least disruption as huge companies were bought and sold, divided up and repackaged as state property. At stake were assets worth vast sums: Russia is the world's largest producer of natural gas and became the world's largest oil producer after Saudi Arabia reduced output this summer to support prices.
A deputy chief executive of Gazprom, Alexander Medvedev, predicted that the company would achieve a market capitalization of $1 trillion by 2014. Instead, its share price has fallen and its market capitalization is about $85 billion.
It is true that Gazprom is far from broke. The company made a profit of 360 billion rubles on revenue of 1,774 billion rubles in 2007, the most recent audited results released by the company.
Gazprom, meanwhile, says it will proceed with capital spending to develop new fields in the Arctic and continues to pour money into subsidiaries in often-losing sectors like agriculture and the media. It is also assuming, through its banking arm, a new role in the financial crisis of bailing out struggling Russian banks and brokerages.
Investors say an unwillingness to cut costs in a downturn is a common problem for nationalized industries, and another reason they have fled the stock. When oil sold for less than $50 a barrel in 2004, Gazprom's capital outlay for the year was $6.6 billion; for 2009, the company has budgeted more than $32 billion.
Gazprom executives say they are reviewing spending but will not cut major developments, including two undersea pipelines intended to reduce the company's reliance on Ukraine as a transit country for about 80 percent of its exports to Europe. Gazprom and Ukraine are again locked in a dispute over pricing that Gazprom officials say could prompt them to cut supplies to Ukraine by Thursday.
"All our major projects in our core business - upstream, midstream and downstream - will continue with very simple efforts to meet demand both in Russia and in our export markets," Medvedev said. Upstream is exploration and production, midstream is distribution and storage and downstream is refining and marketing.
But revenue is projected to fall steeply next year. Gazprom received an average of $420 per 1,000 cubic meters, or 35,000 cubic feet, for natural gas sold in Western Europe this year. That price is projected by Gazprom to fall to a range of $260 to $300 in 2009.
"For them, like everybody else, sober realism has intruded," Jonathan Stern, the author of "The Future of Russian Gas and Gazprom" and a natural gas expert at Oxford Institute for Energy Studies, said by telephone.
A significant portion of the Russian corporate bailout fund - about $9 billion out of a total of $50 billion - was set aside for the oil and natural gas companies. Gazprom alone is seeking $5.5 billion.
For a time, Gazprom,a company that evolved from the former Soviet ministry of gas, had been embraced by investors as the model for energy investing at a time of resource nationalism, when governments in oil-rich regions were shutting out the Western majors. In theory, minority shareholders in government-run companies would not face the risk their assets would be nationalized.
But with 436,000 employees, extensive subsidiaries in everything from farming to hotels, higher-than-average salaries and company-sponsored housing and resorts on the Black Sea, critics say Gazprom perpetuated the Soviet paternalistic economy well into the capitalist era.
"I can describe the Russian economy as water in a sieve," Yulia Latynina, a radio commentator on Echo of Moscow, said of the chronic waste in Russian industry.
"Everybody was thinking Russia had succeeded, and they were wondering, how do you keep water in a sieve?" Latynina said. "When the input of water is greater than the output, the sieve is full.
Everybody was thinking it was a miracle. The sieve is full! But when there is a drop in the water supply, the sieve is again empty very quickly."
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Gazprom keeps pressure on Ukraine
By Andrew E. Kramer
Tuesday, December 30, 2008
MOSCOW: Gazprom, the Russian natural gas monopoly, declined Tuesday to lift a threat to shut off all supplies of the fuel to Ukraine on Thursday, despite the Ukrainian government's offer to repay at least a portion of the country's debt.
The disagreement between Gazprom and Ukraine has, once again, made European countries edgy: About 80 percent of Russian natural gas exports to Europe pass through Ukraine and have been disrupted several times already by the turmoil of post-Soviet politics and economics.
Gazprom briefly followed through on such a threat in 2006. Then, the loss of pressure in the continent-wide natural gas pipeline system cascaded westward into Europe, resulting in shutoffs not only in Ukraine but as far away as Italy, embarrassing the Kremlin.
Gazprom maintains that Ukraine owes the company $2.1 billion for natural gas shipped in November and December, and for fines for late payment throughout the year.
Naftogaz, Ukraine's national energy company, said Tuesday that it had paid $1.5 billion into the accounts of RusUkrEnergo, the natural gas trading company based in Switzerland that Gazprom uses to supply Ukraine, settling the debt but not the fines.
A spokesman for Gazprom, Sergei Kupriyanov, said that the Russian company's trading agent had not received the money, and that it was unclear whether this payment would be sufficient. The two sides have also not agreed on a price for supplies in 2009.
"Let's first see the payment, then we can talk about what will happen next," Kupriyanov said.
Gazprom, hard hit by declining energy prices, is trying to squeeze more money from its customers in the former Soviet Union.
The dispute is also politically tinged.
Inside Ukraine, a strategically important nation of 46 million people that lies between European Union countries and Russia, the pricing negotiations for natural gas are a divisive issue for an already fractious government.
Ukrainian politicians say that Russia, which has openly claimed a political role for itself in the former Soviet space, has now seized on Ukraine's economic troubles to sow greater discount among the ruling parties. Ukraine is one of countries hit the hardest by the global recession, and the negotiations over fuel prices have added to the nation's difficulties.
The negotiations have coincided with a widening breach between the two most prominent leaders of the 2004 street protests known as the Orange Revolution: the prime minister, Yulia Tymoshenko, and the president, Viktor Yushchenko.
Once allies, the two are likely to compete against each other in presidential elections to be held next year or in 2010.
Tymoshenko has sought to broker a solution to the natural gas price dispute to position herself as the candidate better able to negotiate with Russia.
By taking a hard line in talks with the administration of Yushchenko, who leans closer to the West, Gazprom may undermine his already waning chances of success in future elections.
"They are playing on our internal disputes," said Vladimir Polokhalo, a member of the Ukrainian Parliament and an ally of Tymoshenko. "Gazprom is taking into account the situation in Ukraine, and of course, that weakens the government position."
Ukrainian authorities, meanwhile, say that they are better prepared for a possible shutoff this year than they were in 2006 because Naftogaz has stockpiled a vast reserve of 17 billion cubic meters, or 600 billion cubic feet, of natural gas, sufficient to meet the country's needs until the end of the heating season in April.
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Ukraine Naftogaz says paid Russia gas debt
Reuters
Tuesday, December 30, 2008
KIEV: Ukraine's state energy firm Naftogaz said on Tuesday it no longer had debts for Russian gas, having paid $1.52 billion (1.05 billion pounds) to avoid a New Year cutoff of supplies.
"We have confirmation from banks that $1.522 billion is in the accounts of (gas supply intermediary) RosUkrEnergo," a spokesman told Reuters. "The payment has been made. Our debt has been paid off," he said.
Russia's gas export monopoly Gazprom has previously said Naftogaz owed more than $2 billion for gas this year. It threatened to cut off supplies, potentially affecting the smooth transit of gas to Europe.
(Editing by Tim Pearce)
Ted Lapidus, 79, French fashion designer, dies
The Associated Press
Tuesday, December 30, 2008
PARIS: Ted Lapidus, the fashion designer who redefined chic with the 1960s unisex look, has died in France. He was 79.
President Nicolas Sarkozy, in an homage to the designer, said Lapidus had "democratized French elegance and classicism" and "made fashion accessible to men and women in the street."
Lapidus died of pulmonary problems Monday afternoon at a hospital in Cannes, his sister Rose Torrente-Mett said. He had also suffered from leukemia.
Born Edmond Lapidus on June 23, 1929, in Paris, the son of a tailor, Ted Lapidus created his label in 1951, and in 1963 he became a member of the Paris fashion club that runs haute couture, La Chambre Syndicale de la Haute Couture.
The sandy-colored safari suit became emblematic of the modernist Lapidus style, with purist lines that swept the international fashion scene in the 1960s and 1970s.
At one point, Lapidus was referred to as "the poet of French couture," the statement by Sarkozy's office noted.
But Lapidus designed high fashion for only a brief portion of his career, preferring to put the accent on accessories early on. Today, the Ted Lapidus label lives mainly through the sale of accessories like fragrances and watches.
Olivier Lapidus, the designer's son, continued diversifying the label through new partnerships starting in 1982.
Amid a buildup of its forces, Israel ponders a cease-fire
By Ethan Bronner and Taghreed el-Khodary
Tuesday, December 30, 2008
JERUSALEM: With its punishing air attacks on Gaza about to enter a fifth day, its gunboats gathering near the Gaza port and its ground forces poised for imminent action, Israel said Tuesday that it was considering a 48-hour cease-fire that would also require Hamas to stop its rocket fire.
The idea was in an early stage, a result of a conversation between Foreign Minister Bernard Kouchner of France and Defense Minister Ehud Barak of Israel seeking at least a temporary pause in the fighting that would allow humanitarian relief to be delivered to the besieged coastal strip. Aides to Barak said he was interested in exploring it and would do so with Prime Minister Ehud Olmert and the rest of the cabinet on Wednesday.
"The leading option right now is still a ground invasion, but the target of this operation is an improved cease-fire, and if that can come without the invasion, fine," said a close aide to Barak, speaking on the condition of anonymity because he is not Barak's authorized spokesman. "But, of course, Hamas has to agree, and there has to be a mechanism to make it work."
In Paris, where Kouchner was meeting with his European Union colleagues over the Gaza crisis, he called publicly for a permanent cease-fire. A similar call came from the so-called quartet of powers focused on the region — the United Nations, the European Union, the United States and Russia.
President George W. Bush and Secretary of State Condoleezza Rice made phone calls to Israeli and Arab leaders to explore prospects for halting the fighting. They emphasized that any cease-fire should be "durable and sustainable," compelling Hamas to end its rocket attacks, a State Department spokesman said.
"That is different from the cease-fire that existed in the last six months," said the spokesman, Gordon Duguid, noting that Hamas had routinely violated the previous agreement by firing rockets into southern Israel.
The flurry of diplomacy appeared to be mostly byplay in Jerusalem and Gaza, as Israeli officials spoke of a continuing and expanding military operation, and Hamas vowed to step up its resistance. Israeli warplanes attacked tunnels used to smuggle supplies in southern Gaza and destroyed the home of a top militant leader.
Olmert told the Israeli president, Shimon Peres, that the airstrikes were the first of several planned phases, according to spokesmen for the officials. It was also clear that the number of targets available from the air was declining, making the likelihood of a ground offensive greater.
In Gaza, Hamas militants issued a taped statement vowing revenge for those killed in the Israeli air raids since Saturday and warning that a ground invasion would prove painful for Israel. Palestinian officials say that more than 370 people have been killed, among them, the United Nations says, at least 62 women and children and an unknown number of civilian men. Two sisters, ages 4 and 11, were killed in a strike in the north as concern was growing around the world that the assault was taking a terrible toll on civilians.
"It would be easier to dry the sea of Gaza than to defeat the resistance and uproot Hamas, which is in every house of Gaza," said the statement from the military wing of Hamas. It was played on Hamas's television station, which had been shut down by an Israeli missile but went back on the air by broadcasting from a mobile van. The statement added that if there was a ground invasion, "the children of Gaza will be collecting the body parts of your soldiers and the ruins of tanks."
Hamas continued to fire longer-range rockets at Israel, shooting deep into the city of Ashdod for a second day as well as into Beersheba, a major city in Israel's south, where one landed in an empty kindergarten classroom. There was a report of light injuries as well as a number of people in shock.
Israeli warplanes, returning repeatedly to the same section of Gaza City overnight, pummeled the main government complex with about 20 missiles, residents said Tuesday. The building had been evacuated since the start of the operation on Saturday, which also hit nearly all of Hamas's security complexes, its university and other symbols of its sovereignty and power.
The Nakhala family, which lives next to the compound, was inspecting the damage on Tuesday morning and recounting the utter fear and panic they all felt as the missiles hit.
"We have no shelters in Gaza," said the father, Osama Nakhala. "Where shall we go? I also have to worry about my mother, who is 80 years old and paralyzed."
His 13-year-old son, Yousef, was with him. When asked his view of the situation, Yousef took an unusual stand for someone in Gaza, where Israel is being cursed by most everyone. "I blame Hamas. It doesn't want to recognize Israel. If they did so there could be peace," he said. "Egypt made a peace treaty with Israel, and nothing is happening to them."
His brother Amjad, 16, disagreed and blamed the Palestinian president in the West Bank, Mahmoud Abbas, saying that he had sided with Israel.
Gaza City was entirely without electricity for the first time, the result of an air attack that hit the system's infrastructure. Repair workers said they were afraid to work because of the possibility of more raids.
The few open bakeries and grocery stores had lines stretching outside as people tried to stock up. But essentials, like diapers, baby food, bread, potatoes and fresh vegetables, were in short supply and costlier than normal.
Israel sent in about 100 trucks with emergency supplies of food and medicine, the military reported.
At the Hassouna Bakery near Shifa Hospital, about 100 men and 50 women waited in separate lines to buy bread. Amal Altayan was telling others in the line that she kept her cellphone in her pocket so that if an Israeli missile destroyed her house she would be able to phone for help. The other women mocked her, saying that if a missile hit her house, she would be gone. Showing familiarity with the kind of knowledge circulating in Gaza these days, Altayan replied, "It depends. If it is an F-16 I will turn into biscuits, but if it is an Apache I may have a chance."
Osama Alaf, 41, said he spent four hours waiting in line to buy bread. "I bought flour until now," he said. "I don't have cooking gas, but I make a fire out of cartons and paper and make bread that way." Asked whom he blamed, he said, "Israel, which is slaughtering us, and whoever is cooperating with Israel, like Egypt."
Anger at Egypt has grown across the Arab and Muslim worlds because it has declined to open its border with Gaza and is seen as cooperating with Israel.
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NEWS ANALYSIS
For Hamas, logic led to cease-fire's end
By Stephen Farrell
Tuesday, December 30, 2008
RAMALLAH, West Bank: On the wall of the Israeli government press office in Jerusalem on Monday was a stack of yellow Post-it notes pasted one on top of the next, with the number 10,048 scrawled on the top one. That was the number of Palestinian rockets and mortar shells fired into Israel from Gaza since 2001.
It was quickly out of date, and other Post-its will soon be stacked on top.
For Israel, the tally has prompted internal debate about how to counter the threat from Hamas's homemade rockets and those of other armed Palestinian factions.
For Hamas, the very existence of that number in an Israeli office is an achievement. As plumes of smoke rise from Gaza, it is Hamas that dominates the television news and newspaper headlines.
It is not only the publicity, but also the status conveyed on Hamas as the Palestinians' principal resistance. Its secular rival, Fatah, sits on the sidelines, marginal to the violence unfolding in Gaza, from which Hamas effectively expelled it at gunpoint in the summer of 2007.
The questions remain: Why did Hamas end its six-month cease-fire on Dec. 19? Will it — can it — unleash suicide bombers into Israel in retaliation? And will the devastation in Gaza make Palestinians fall into line behind Hamas, as they reliably have in the past, or will Hamas lose their support as Gazans count the escalating cost in blood and destruction?
Even knowing that retaliation was certain, Hamas seemed to end the cease-fire in part because of its longstanding discipline and consistency. For years it has preached to Palestinians the rejectionist credo that Fatah negotiated with Israel and got nowhere; Hamas's way of armed force, it argued year in and year out, was the only way.
And so it appears that Hamas turned its logic against its own cease-fire: Hamas's supreme leader, Khaled Meshal, said on Saturday that the truce had yielded few results. If there were no specific benefits — like freed prisoners or an end to Israeli blockages on Gaza — then the option, again, was a return to violence. It may also have calculated that the rockets into Israel — 60 in one day — would restore its status among Palestinians as the champion of "resistance" against the Zionist enemy, whose soldiers and settlers are no longer in Gaza within reach of Hamas's military wing.
A major question remains whether Hamas expected the shock-and-awe Israeli offensive that has left Gaza reeling.
The outcome, for the moment, is far from clear because neither side has yet deployed the full arsenal available to it.
Some in Gaza believe Hamas wants Israeli soldiers to enter the Gaza Strip, because it has had 18 months to smuggle weapons in through tunnels from the Sinai since it seized control of the territory from Fatah. For the last several years, after Israel's pullout from Gaza in 2005 and its erection of a barrier around the West Bank, it has been harder to strike at Israelis.
Israel, though, is aware of the risks and will not reflexively mount a large-scale military return to Gaza.
As Israeli tanks rumbled on the outskirts of Gaza and explosions and machine-gun fire echoed through the night late on Monday, it is too early to gauge the effect the renewed violence is having on Palestinian opinion. The key issue is whether Palestinians will blame Israel for raining fire down upon them, as Hamas hopes. Or blame Hamas for provoking it, as Fatah, Israel and its Western allies hope.
Right now Palestinians are blaming Israel, loudly.
This weekend, the Palestinian newspaper Al Hayat al Jadida printed a black front page with a headline blaring: "1,000 Martyrs and Wounded in Saturday Slaughter."
More important is whether once away from television cameras and foreign journalists, Palestinians will vote for Hamas in presidential and parliamentary elections, both scheduled roughly within a year.
At the Shuafat refugee camp on the northern outskirts of Jerusalem on Sunday, masked Palestinian youths burned tires and used slingshots to hurl stones at Israeli soldiers.
Mohammed, 13, predicted bloody Hamas reprisals. "Hamas will be the one that will bomb green Egged buses, and we will go back to the way it was," he said, referring to the Israeli bus carrier that is often a target of suicide bombers.
Others were more doubtful. Ahmad, 14, said he supported "neither one nor the other," complaining that Hamas and Fatah spent too much time fighting each other instead of working for Palestinian unity.
A few miles north in Ramallah anti-Israeli and American sentiment was high among a small crowd of protesters gathered, incongruously, beneath a Stars and Bucks Cafe. Even here, in Fatah's heartland, people said they admired Hamas for its willingness to take on a regional superpower.
Challenged on the point that firing highly inaccurate rockets from Gaza into Israel carried a huge cost in retaliation, one 30-year-old Palestinian who refused to give his name compared the attacks to the impotent yet defiant gesture of the Iraqi journalist Muntader al-Zaidi, who has become a folk hero across the Arab world for throwing his shoes at President George W. Bush.
Mustafa Saleh, 37, said: "I am originally Fatah and my voice will always be Fatah. But Hamas is resisting and we are a nation under occupation. I support the resistance, even here in the West Bank."
Hamas hopes such sentiments will bring it new supporters.
But as he watched the protesters go by, Mohanad Salah, 42, said that emotions would calm down. Palestinians were quite capable of wanting Hamas-style "resistance" with their hearts but peace talks with their heads, he said.
"The more military operations by Israel either here or in Gaza, the more it will make people go away from wanting agreements," he said.
"But you should know that even after Israel carried out this operation yesterday, if today it says 'We want a political solution, let's reach an agreement,' it would be completely accepted by the majority of the Palestinian people," Salah added.
Prime Minister Ehud Olmert's spokesman, Mark Regev, on Monday accused Hamas of inflicting suffering upon its fellow Palestinians. In a conference call with journalists he said the group was "holding hostage" ordinary Palestinians in Gaza just as it was a quarter of a million citizens in southern Israel.
But Hamas has in the past proved adept at deflecting such barbs. "Israel and America say no to Hamas. What do you say?" read one Hamas 2006 election banner. The Palestinians gave one answer then. Whether they give the same answer in 2009 or 2010 may depend on how the next few weeks play out.
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U.S. presses Israel on cease-fire
By Mark Landler
Wednesday, December 31, 2008
WASHINGTON: The United States is pressing Israel to call a cease-fire in its assault on Hamas militants in Gaza, officials said Tuesday, while enlisting Arab countries to press Hamas to do the same.
The intensive diplomacy is being led by Secretary of State Condoleezza Rice, who made a flurry of phone calls over the last 24 hours to Israeli and Arab leaders. The goal, said a State Department spokesman, Gordon Duguid, is a "reliable cease-fire, one that is durable and sustainable."
"That is different from the ceasefire that existed in the last six months," Duguid said, noting that Hamas routinely violated the previous agreement by firing rockets into southern Israel.
In the past few days, the Bush administration has said Israel was justified in retaliating against Hamas's attacks. The United States still holds Hamas responsible for the eruption of violence in Gaza, Duguid said. But the Bush administration has begun to increase pressure on Israel, as the death toll from the attacks surpassed 350, including 60 civilians, according to a United Nations estimate.
"We're working where we can have the best effect," said an administration official, speaking on condition of anonymity. "Other parties are working in areas where they have more influence than we do."
On Tuesday, President George W. Bush spoke by telephone with the president of the Palestinian Authority, Mahmoud Abbas. The two leaders agreed that if a cease-fire in Gaza was to be effective, "it must be respected by Hamas," said a White House spokesman, Gordon D. Johndroe. Bush also spoke with President Hosni Mubarak of Egypt, the White House said.
Also on Tuesday, Rice spoke to King Abdullah of Jordan and the foreign ministers of Egypt and Saudi Arabia, according to the State Department. The United States asked these Arab officials to use their influence with Hamas to halt its rocket attacks.
Rice placed new calls to the Israeli prime minister, Ehud Olmert, and the Israeli foreign minister, Tzipi Livni, with whom she has been in almost constant contact over the past three days.
With diplomatic efforts still under way, the State Department did not confirm reports in Israel that Washington was seeking a 48-hour cease-fire that would allow relief supplies to be delivered to stricken areas in Gaza. The pause would also give Hamas a last chance to stop its attacks.
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Fear and resolve as rockets head north into Israel
By Isabel Kershner
Tuesday, December 30, 2008
ASHDOD, Israel: A piercing shriek went up and a young woman fainted as the body, wrapped in a white shroud, was brought into the packed funeral hall.
On Tuesday, this fast-developing modern port city about half way between Gaza and Tel Aviv buried its first victim of a rocket attack: Irit Sheetrit, a 39-year-old mother of four.
The Katyusha-type rocket that killed her was fired on Monday night by Palestinian militants from Gaza; it was the first to have hit this city of more than 200,000, so far north of the Palestinian territory.
Over the weekend, Israel began its devastating air bombardment of Hamas targets in Gaza with the stated goal of stopping the incessant rocket fire that has plagued Israeli towns and villages close to the border for years.
More than 370 Palestinians have been killed in the Israeli assault so far, including at least 70 civilians. The militants have responded with increasingly advanced rockets that reach farther into the country with each passing day.
As the sun set on Tuesday, rockets started flying out of Gaza again, landing in new places like Kiryat Malachi to the northeast and Beersheba, the capital of Israel's south.
Yet even here, amid the sobbing of the mourners, many of them in a state of shock and disbelief, support for a sustained Israeli military campaign remained strong.
"Of course we support it," said Rosette Alalouf, a former colleague of Sheetrit at the funeral. "Do we have a choice?"
In his eulogy, Yehiel Lasri, the mayor of Ashdod, conveyed the prevailing spirit of resolve here. "Has not the time come to use full force and all the means at our disposal?"
Lasri added that he had watched as Sderot first came under rocket fire, then Ashkelon farther up the coast. "We hoped they would not get to Ashdod, but we did not delude ourselves," he said, noting that the authorities have been preparing for such a scenario for two years.
The ability of the civilian population to withstand heavy rocket fire, which Israel fully expected in the wake of its campaign, is a crucial part of the military equation. As Israeli Prime Minister Ehud Olmert put it at the weekly cabinet meeting on Sunday, "the patience, determination and stamina of the residents of the home front will, in the end, determine the ability" of Israel to attain its military and diplomatic goals.
Israeli officials say the preparations in that home front — which now includes hundreds of thousands of citizens in southern Israel — has saved many lives. Though four Israelis have been killed in rocket attacks since the start of the military operation, three of them on Monday, officials say the hundreds of rockets that have been fired could have exacted a much heavier toll.
All communities within a 25-mile radius of Gaza have sirens that serve as incoming rocket alerts, and while the Chanukah vacation officially ended on Tuesday, schools within rocket range remained closed. Pupils spent the day in shelters or at home.
Television and radio channels repeatedly broadcast instructions on how to behave in an alert. Those caught driving, for example, are told to get out of their cars and lie on the ground.
Sheetrit had been on her way home from the gym with her sister when the siren wailed. She managed to get out of the car and tried to take shelter in a bus station, but the rocket slammed down from the sky too quickly, too close.
The site of the landing has turned into something of a local destination. Curious residents came by on Tuesday, some taking photos on their cell phones. A group of children from a nearby apartment building searched a grassy verge for tiny metal balls and other bits of shrapnel that had scattered all around.
Two more rockets hit Ashdod in the evening, this time falling in open areas and causing no harm.
The center of town was unusually quiet on Tuesday, though stores remained open in a bid to maintain a sense of normalcy. Many of the adults seemed reconciled to the new situation, but said that the children were very afraid.
Zion Ben Abu, 45, the owner of a falafel shop, said he used to run a factory in an industrial zone on the Gaza border where dozens of Palestinians worked. He said he felt some sympathy for the ordinary Gazans, who "mostly want to send their kids to school and live quietly, like us."
The problem, he argued, were those on top, who left Israel no choice but to fight.
"I'm prepared to live like this for months as long as the army continues this aggressive line," said Oren Idelman, 33, an investment adviser at a nearby bank. The Gazans "have to understand that if we get hit, they get hit," he said.
In Netivot, an Israeli town east of Gaza, knots of people waited at bus stops with small suitcases when the Sabbath ended on Saturday evening, hours after a local man was killed in a rocket attack.
But nobody seemed to be speaking of leaving Ashdod, perhaps because of the shrinking number of places where it is safe to go.
"I've been here since 1976," said Avraham Ohana, an older resident. "We are used to wars. But they always used to happen somewhere else, far away."
As Ohana spoke, his brother called on his cell phone and urged him to come and stay with him in Haifa, about 80 miles to the north.
"I said 'what for? To be within range of Nasrallah's rockets?'" he joked bleakly, referring to Sheik Hassan Nasrallah, the leader of the militant Hezbollah organization in Lebanon that fired thousands of rockets into northern Israel during its war with Israel in 2006.
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Egyptians struggle over how to help Gaza
By Steven Erlanger
Tuesday, December 30, 2008
EL ARISH, Egypt: Egyptian ambulances have brought at least 43 wounded Palestinians from Gaza to the general hospital in this southern city, with 15 of them needing mechanical respirators to keep them alive, said Muhammad al-Gabr, a doctor who has been trying to keep them alive and get them to more sophisticated surgical hospitals in Cairo.
Nine remained here Tuesday, including a young boy. They all were in critical condition with blast and fracture wounds, and Gabr hoped to medivac them out Tuesday night. "The doctors in Gaza are very talented," he said with some admiration. "They've had a lot of experience."
He said that as far as he knew all the patients sent here were civilians.
He said he felt he was trying to do his part for Gaza, though he recognized that Egypt and its longtime president, Hosni Mubarak, faced a difficult political dilemma - needing to show solidarity with the Palestinians under attack while refusing to open the border between Egypt and Gaza to anything but carefully monitored humanitarian missions, like the 30 ambulances this reporter saw Tuesday heading toward Gaza.
"Gaza was part of Egypt if you go back in history, so there is a special feeling," Gabr said. "But we don't look at borders this way. We are helping the people."
But some here, where an important part of the economy is based on smuggling food, supplies, weapons and explosives to Gaza, feel that Egypt must do more while Gaza is under such heavy attack from Israeli warplanes.
"Egypt is helping the wounded and sending supplies for the people," said Hishmat Abu Bakr, 63, who fought in the Arab-Israeli wars of 1967 and 1973. "But we'd prefer bigger help. We'd like to break the border and go die there with our brothers."
Open criticism of Mubarak was rare Tuesday in southern Egypt, where the landscape and the architecture are nearly identical to that in Gaza. There is a heavy presence of police, military and secret police, the Mukhabarat, and numerous checkpoints along the roads on the way to Rafah, which has been declared a military zone.
President Bashar al-Assad of Syria and his ally, Sheik Hassan Nasrallah, the leader of Hezbollah in Lebanon, have called on Egypt to open the barriers to Gaza and the Egyptian people to break them down. But Mubarak's forces have already clashed with Palestinians trying to leave Gaza, and he has said that the border would remain closed.
Egypt would only reopen the Rafah crossing when the Palestinian faction Hamas reconciles with the Palestinian president, Mahmoud Abbas of Fatah, and allows him to reassert his authority over all of Palestine, including Gaza, Mubarak said Tuesday in a nationally televised speech.
"We in Egypt are not going to contribute to perpetuating the rift by opening the Rafah crossing in the absence of the Palestinian Authority and European Union observers," as called for in a 2005 agreement opening Rafah that was negotiated with Abbas, Israel and the United States.
Mubarak condemned Israel's "savage aggression," said Israel's "blood-stained hands are stirring up feelings of enormous anger" and called for an immediate cease-fire.
But in a riposte to Arab critics who live at a distance, Mubarak said: "We say to those who are trying to make political capital out of the plight of the Palestinian people that Palestinian blood has a price." He told the Palestinians "to restore your unity" and said he had warned Hamas leaders that ending the six-month truce with Israel would bring new Israeli attacks.
Bakr, the war veteran, refused to believe it when told of Mubarak's speech. "Mubarak could not say something so wrong," Bakr said. "The Palestinians are his brothers."
There have been attacks, meanwhile, on Egyptian diplomatic missions in Beirut and in Aden, Yemen. Egypt will act as host of a meeting Wednesday of Arab League foreign ministers before a summit meeting on Friday in Doha.
Muhammad Ahmad, 25, who owns the Farha(Happiness) dress shop, said he felt that Egypt was doing what it could. "If they open the border just like that, it will be chaos like last year," he said. "That's why we need an agreement. Here in El Arish we're so close to Gaza and yet there's nothing we can do. It's sad, but we're powerless."
Hassan Salem, 22, said he and Khaled Kamal, 25, had traveled the 35 kilometers, or 20 miles, from Rafah to this seaside city "to look at young women and to rest my head." Kamal said that when the Israelis were bombing near Rafah to try to destroy the smuggling tunnels that run between the Egyptian and Gazan side of the once-unified city, "we were almost knocked out by the noise."
Everyone in Rafah has family on both sides of the border, Salem said. "So there's a lot of worry - everyone on both sides of Rafah is worried."
They sat in a tea shop, eyes glued to Al Jazeera and its nonstop coverage of the wounded and dead in Gaza, with a special focus on two dead sisters, shown lying in shrouds side by side.
"When you see small children dying like that, why did they die?" Kamal said passionately. "What did they do?"
Both were careful in discussing the tunnels, but Salem said, with a bit of exaggeration: "Israel destroyed maybe 40 tunnels the other day, but there are a thousand."
His words were echoed by Ahmad Abdo, 43. "The tunnels are our lifeline," he said. "The Israelis bombed some, but they can't bomb them all. Their economy is our economy."
Salem said that all Arabs should help the Palestinians, but he was less clear about how.
As for Egypt, he said that Mubarak was "doing all he can to help them." Kamal remembered how Hamas blew up the border between Gaza and Egypt last year, and how the first days of celebration were followed by resentments and the denuding of southern Egypt of goods meant for Egyptians. "After three days, there was nothing left for us to buy," he said.
The military men in Rafah, Salem said, "are there to help." But then he said, neatly describing the Egyptian dilemma, "Of course, if the Palestinians push through, the military is also there to push them back."
Nadim Audi contributed reporting.
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Tensions worsen in Arab region
By Robert F. Worth
Tuesday, December 30, 2008
BEIRUT: After four days of Israeli strikes on Gaza, an outpouring of popular anger is putting pressure on American allies in the Arab world and appears to be worsening the region's internal divisions.
The sharpest rhetorical attacks have been aimed at Egypt, widely seen as having aided the Israeli assault through its closure of its Gaza border, preventing refugees from fleeing the fighting.
But as massive street demonstrations continued Tuesday from north Africa to Yemen, some marchers and opinion-makers also lashed out angrily at other moderate Arab governments - including Jordan and Saudi Arabia - for failing to take a stronger stand. Syria and Iran, meanwhile, have drawn praise for their militancy.
As the death toll in Gaza passed 370, President Hosni Mubarak of Egypt gave a televised address to defend his decision not to open the border with Gaza except for humanitarian purposes, and derided "those who are seeking political gains at the expense of the Palestinian people."
President Mahmoud Ahmadinejad of Iran, in an apparent reference to Egypt, said "those who link their interests to the interests of the Zionists will go to hell."
Although Jordan and Saudi Arabia have been careful not to blame Hamas, the violence has put them on the defensive.
"It's becoming clear that if you are silent, the Arab street is going to consider you part of the enemy," said Muhammad al-Masri of the Center for Strategic Studies in Amman. "There is no way to be in the middle."
That shift appears to be unraveling the tentative thaw over the past year, Masri said. Syria was reaching out to the West and holding indirect peace talks with Israel. Lebanon's political factions reached a peace deal. Syria and Saudi Arabia made gestures toward resolving their long-running feud.
Now the fault lines that were so painfully visible during the summer 2006 war between Israel and Hezbollah have reappeared. Syria has been pressing for an emergency Arab summit meeting, but Egypt and Saudi Arabia have resisted the call, apparently fearing they could be portrayed as appeasers.
Demonstrations continued Tuesday in Cairo, where marchers have been carrying banners for days with slogans like "Down with Mubarak" and "Where is the Egyptian Army?" Angry disputes have broken out in Parliament, with members of the Muslim Brotherhood - the ideological father of Hamas - accusing the leadership of colluding with Israel.
A crowd of protesters attacked the Egyptian Consulate in Aden, Yemen, on Tuesday, and 11 were arrested by the police. Egyptian embassies have been the scenes of attacks and protests throughout the region since Sunday.
Egypt is in effect trapped between Israel, with which it has a peace treaty, and Hamas, which enjoys popular support among Egyptians. The Egyptian government has struggled with its own Islamist opposition, and would clearly like to be rid of Hamas. But it faces tremendous popular anger if it appears to endorse violence against Palestinians.
The Gaza violence has exacerbated that dilemma. It has happened before, but now Hamas is ruling Gaza and is politically isolated from the West Bank - which puts more onus on Egypt.
"Egypt is very much cornered this time," said Hassan Nafaa, a professor of political science at Cairo University. "There's a perception that Egypt is leading the moderate Arab camp in this, and that the moderate camp has not been able to achieve anything."
Egyptian officials see the hand of Iran - a patron of Hamas - in the conflict. Iran was already pressing Egypt before the Israeli attack began, apparently eager to undermine Egypt's role as a mediator between the Palestinian factions. Demonstrators gathered in front of the Egyptian Embassy in Tehran on Dec. 17 to protest Egypt's position toward Hamas.
In recent days, government-allied newspapers in Egypt have lashed out at Iran and its ally Hezbollah, whose leader demanded that Egypt open its border.
For their part, TV stations and newspapers allied with Iran and Syria continued to portray Egypt as a traitor. There were also harsh words for other Arab states.
Egypt and Saudi Arabia "are even more excited about this war than they were during the 2006 war" between Israel and Hezbollah, said Ibrahim al-Amine, chairman of the board of Al Akhbar newspaper, which is aligned with Hezbollah. "Israel would be satisfied with a compromise, but the Arab regimes want to finish Hamas completely," he said.
Hwaida Saad contributed reporting.
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A captured Israeli soldier figures in military assessments and political calculus
By Isabel Kershner
Tuesday, December 30, 2008
JERUSALEM: A rare point of consensus in Israel, a normally fractious country, has been the desire to see Gilad Shalit, the Israeli corporal who has been held captive in Gaza for more than two years, return alive.
Yet when Israelis woke up on Monday to a report on Egyptian television that the soldier, now 22, had been hurt in the Israeli bombardment of Hamas facilities in Gaza over the last few days, the news was met with an almost stoic sangfroid. Despite very real fears for the soldier's safety and an instinctive understanding that the attack on Gaza involved a calculated risk for Shalit, many were also prepared for what could be emotional manipulations by the other side.
Hamas, the militant Islamic group that controls Gaza and is holding Shalit, has demanded the release of some 1,400 Palestinian security prisoners from Israeli jails, including many convicted of deadly terrorist attacks, for his return. The group's officials refused to confirm or deny the report that he was injured, which first cropped up on Islamist militant Web sites.
So far, if only out of respect for the soldier's family, Israeli leaders have tried to keep Shalit out of the political fray. But in a country where 18-year-olds are conscripted into the army and the military prides itself on never abandoning its own, his fate has gripped the nation.
The Israeli military said in a statement that the soldier, who was seized in a cross-border raid by Hamas and other militant groups in June 2006, was a "valuable asset" to Hamas; in the military's view, the group would do all it could to keep him alive.
During a special session about the Gaza crisis in the Israeli Parliament on Monday, the defense minister and leader of the Labor Party, Ehud Barak, addressed the soldier's parents, Aviva and Noam Shalit, saying, "I think it proper to emphasize here the strength of our commitment to Gilad's return home."
But only two weeks ago, Barak made it clear that a broad military assault on Gaza would be dangerous for the captive, saying "Gilad Shalit is one of the reasons" for favoring a truce. The army chief of staff, Lieutenant General Gabi Ashkenazi, told Army Radio last week that Shalit was a factor in Israel's calculations about Gaza.
To many Israelis, the government's decision to attack Gaza seemed a clear subjugation of Shalit's safety to broader military goals.
"I am not sure he'll be back," said Daphna Kaplansky, a volunteer gathering signatures on Monday for a petition urging the government to go ahead with the prisoner exchange in a tent set up outside Prime Minister Ehud Olmert's house since September. "He is in terrible danger now."
Shalit was last seen publicly being dragged into Gaza alive in 2006. A year later, Hamas released an audiotape of the soldier believed to be authentic; the family has since received letters written in what family members said was his hand.
When Israel agreed to a six-month truce with Hamas in June, Shalit's parents decried the fact that Israel had agreed to ease its sanctions on Gaza without securing his freedom.
Israel insisted it had made the truce contingent on movement in the case. But when Hamas declared the truce officially over 10 days ago, a senior Israeli official conceded that there had been no serious talks about the soldier and that Hamas had not even agreed to a Red Cross visit.
Even before the recent intensification of rocket fire out of Gaza, precipitating the Israeli military response, the soldier was being pulled into the campaign for elections set for Feb. 10.
Foreign Minister Tzipi Livni, who is running for prime minister, said this month that while all Israelis wanted to see Shalit returned safely, "it is not always possible to bring everyone back home."
With Livni cast by some opponents as heartless, Barak, a rival for the prime ministerial post, was accused of exploiting the issue by saying two days later that he was willing to take responsibility for the soldier.
Barak added: "We have a moral and authoritative obligation to bring him home alive and well, not at any price, but at any worthy and possible cost."
Columnists noted both were essentially saying the same thing.
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Israel and Hamas under pressure for Gaza aid truce
Reuters
Tuesday, December 30, 2008
By Nidal al-Mughrabi
Foreign powers stepped up calls on Israel and Hamas on Tuesday to halt hostilities after four days of Israeli air attacks on the Gaza Strip and rocket salvoes by the Islamist militants deep inside the Jewish state.
The Quartet of Middle East peace brokers -- the United Nations, United States, Russia and European Union -- urged an immediate cease-fire, a U.N. spokeswoman said after telephone consultations by the group's foreign ministers.
Israeli warplanes destroyed Hamas targets for a fourth day, including five ministerial buildings and a structure belonging to the Islamic University in Gaza City.
Medical officials put Palestinian casualties since the aerial onslaught began on Saturday at 384 dead and more than 800 wounded. A U.N. agency said at least 62 of the dead were civilians. Four Israelis have been killed.
Israeli media quoted Prime Minister Ehud Olmert as saying the Gaza offensive, launched by his centrist government six weeks before an election that opinion polls predict the opposition right-wing Likud party will win, was in "the first of several stages."
Israel says its air bombardments are aimed at ending rocket attacks launched from Gaza, which have caused panic for months in areas where one-eighth of its population lives.
Two rockets fired from the Gaza Strip hit the city of Beersheba on Tuesday, 42 km (26 miles) inside Israel, police said -- the deepest such attack yet by militants, who have launched more than 400 rockets across the border since Saturday, according to an Israeli military assessment.
Three Israelis were killed by rockets on Monday but there were no reports of serious casualties inside Israel on Tuesday.
FOOD AND POWER LOW
In Gaza, basic food supplies were running low and power cuts were affecting much of the territory. Hospitals lacked at least 80 essential medicines as well as scores of instruments, Health Ministry official Muawiyah Hassanein said.
French Foreign Minister Bernard Kouchner proposed Israel accept a 48-hour truce to allow aid into Gaza. France said it would host Livni on Thursday and an Israeli official said French President Nicolas Sarkozy might visit Jerusalem next Monday.
EU foreign ministers called late on Tuesday for an immediate and lasting truce and for humanitarian aid to be let into Gaza.
The EU said it would work with other members of the Quartet, and send a delegation of ministers to the region shortly.
Turkey, Egypt and several other Arab governments are also pursuing their own initiative calling for a cease-fire and reopening of Gaza's crossings with Israel, diplomats said.
Olmert met Defence Minister Ehud Barak and Foreign Minister Tzipi Livni late on Tuesday to discuss the initiatives, Israel Radio said.
Olmert's spokesman Mark Regev said Israel supported the idea of letting aid into Gaza.
"We want to see convoy after convoy of humanitarian support and we are willing to work closely with all relevant international parties to facilitate that goal," he said.
"At the same time, it is important to keep the pressure up on Hamas, not give them a respite, time to regroup and reorganise."
About 1.5 million Palestinians live in Gaza, which has one of the highest population densities and growth rates in the world. Most Gazans live on less than $2 a day and up to 80 percent are dependent on food aid, according to aid groups.
Hamas seized Gaza from Palestinian President Mahmoud Abbas's secular Fatah faction in fighting in June 2007. The Islamists have rejected international demands to recognise Israel, renounce violence and accept existing interim peace deals.
"VICTIM AND JAILER"
Hamas was cool to the idea of a truce. It said the onus was on Israel to stop firing and lift the blockade of Gaza.
"You can't equate the victim and the jailer," Hamas spokesman Fawzi Barhoum told reporters. "What is required at this time is an Arab and international effort to stop the (Israeli) aggression and open the (border) crossings."
The White House said President George W. Bush had spoken to Abbas and Palestinian Prime Minister Salam Fayyad on Tuesday to discuss how to end the violence.
According to internal Israeli assessments, the air offensive has destroyed a third of the Hamas rocket arsenal but the faction's guerrilla army remains largely intact, Israel's Channel 10 television reported.
"None of us can say how long it will take," Israeli President Shimon Peres said after being briefed at the Defence Ministry about Israel's deadliest Gaza campaign since the 1967 Middle East war, when the territory was captured from Egypt.
Barak said he would seek Israeli cabinet approval for the mobilisation of 2,500 army reservists, compounding an earlier call-up of 6,500 reservists for the garrison on the Gaza border.
Turkish Prime Minister Tayyip Erdogan was due in Syria and Jordan on Tuesday. Al Arabiya television said he would meet Khaled Meshaal, the exiled Hamas leader living in Damascus, although Erdogan's office said no such meeting was scheduled.
Palestinian officials said Abbas would meet Erdogan in Jordan in the evening.
In northern Gaza, two Palestinian sisters were killed in an air raid near their home, medical workers said. The area has been a launching ground for cross-border rocket attacks.
"We are living in horror, we and our children. The situation is not just bad, it is tragic," said Gazan Abu Fares, standing outside his home near the rubble of a building bombed overnight.
(Additional reporting by Adam Entous and Dan Williams in Jerusalem, Writing by Jeffrey Heller; Editing by Andrew Dobbie and Kevin Liffey)
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OPINION
Why Israel feels threatened
By Benny Morris
Tuesday, December 30, 2008
LI-ON, Israel: Many Israelis feel that the walls - and history - are closing in on their 60-year-old state, much as they felt in early June 1967, just before Israel launched the Six-Day War and destroyed the Egyptian, Jordanian and Syrian armies in Sinai, the West Bank and the Golan Heights.
More than 40 years ago, the Egyptians had driven a UN peacekeeping force from the Sinai-Israel border, had closed the Straits of Tiran to Israeli shipping and air traffic and had deployed the equivalent of seven armored and infantry divisions on Israel's doorstep. Egypt had signed a series of military pacts with Syria and Jordan and placed troops in the West Bank. Arab radio stations blared messages about the coming destruction of Israel.
Israelis, or rather, Israeli Jews, are beginning to feel much the way their parents did in those apocalyptic days. Israel is a much more powerful and prosperous state today. In 1967 there were only some 2 million Jews in the country - today there are about 5.5 million - and the military did not have nuclear weapons. But the bulk of the population looks to the future with deep foreboding.
The foreboding has two general sources and four specific causes.
The general problems are simple. First, the Arab and wider Islamic worlds, despite Israeli hopes since 1948 and notwithstanding the peace treaties signed by Egypt and Jordan in 1979 and 1994, have never truly accepted the legitimacy of Israel's creation and continue to oppose its existence.
Second, public opinion in the West (and in democracies, governments can't be far behind) is gradually reducing its support for Israel as the West looks askance at the Jewish state's treatment of its Palestinian neighbors and wards. The Holocaust is increasingly becoming a faint and ineffectual memory and the Arab states are increasingly powerful and assertive.
More specifically, Israel faces a combination of dire threats. To the east, Iran is frantically advancing its nuclear project, which most Israelis and most of the world's intelligence agencies believe is designed to produce nuclear weapons. This, coupled with Iranian President Mahmoud Ahmedinejad's public threats to destroy Israel - and his denials of the Holocaust and of any homosexuality in Iran, which underscore his irrationality - has Israel's political and military leaders on tenterhooks.
To the north, the Lebanese fundamentalist organization Hezbollah, which also vows to destroy Israel and functions as an Iranian proxy, has thoroughly rearmed since its war with Israel in 2006. According to Israeli intelligence estimates, Hezbollah now has an arsenal of 30,000 to 40,000 Russian-made rockets, supplied by Syria and Iran - twice the number it possessed in 2006. Some of the rockets can reach Tel Aviv and Dimona, where Israel's nuclear production facility is located. If there is war between Israel and Iran, Hezbollah can be expected to join in. (It may well join in the renewed Israeli-Palestinian conflict, too.)
To the south, Israel faces the Islamist Hamas movement, which controls the Gaza Strip and whose charter promises to destroy Israel and bring every inch of Palestine under Islamic rule and law. Hamas today has an army of thousands. It also has a large arsenal of rockets - home-made Qassams and Russian-made, Iranian-financed Katyushas and Grads smuggled, with the Egyptians largely turning a blind eye, through tunnels from Sinai.
Last June, Israel and Hamas agreed to a six-month truce. This unsteady calm was periodically violated by armed factions in Gaza that lobbed rockets into Israel's border settlements. Israel responded by periodically suspending shipments of supplies into Gaza.
In November and early December, Hamas stepped up the rocket attacks and then, unilaterally, formally announced the end of the truce. The Israeli public and government then gave Defense Minister Ehud Barak a free hand. Israel's highly efficient air assault on Hamas, which began on Saturday, was his first move. Most of Hamas' security and governmental compounds were turned into rubble and several hundred Hamas fighters were killed.
But the attack will not solve the basic problem posed by a Gaza Strip populated by 1.5 million impoverished, desperate Palestinians who are ruled by a fanatic regime and are tightly hemmed in by fences and by border crossings controlled by Israel and Egypt.
An enormous Israeli ground operation aimed at conquering the Gaza Strip and destroying Hamas would probably bog down in the alleyways of refugee camps before achieving its goal. (And even if these goals were somehow achieved, renewed and indefinite Israeli rule over Gaza would prove unpalatable to all concerned.)
More likely are small, limited armored incursions, intended to curtail missile launches and kill Hamas fighters. But these are also unlikely to bring the organization to heel - though they may exercise sufficient pressure eventually to achieve, with the mediation of Turkey or Egypt, a renewed temporary truce. That seems to be the most that can be hoped for, though a renewal of rocket attacks on southern Israel, once Hamas recovers, is as certain as day follows night.
The fourth immediate threat to Israel's existence is internal. It is posed by the country's Arab minority. Over the past two decades, Israel's 1.3 million Arab citizens have been radicalized, with many openly avowing a Palestinian identity and embracing Palestinian national aims. Their spokesmen say that their loyalty lies with their people rather than with their state, Israel. Many of the community's leaders, who benefit from Israeli democracy, more or less publicly supported Hezbollah in 2006 and continue to call for "autonomy" (of one sort or another) and for the dissolution of the Jewish state.
Demography, if not Arab victory in battle, offers the recipe for such a dissolution. The birth rates for Israeli Arabs are among the highest in the world, with 4 or 5 children per family (as opposed to the 2 or 3 children per family among Israeli Jews).
If present trends persist, Arabs could constitute the majority of Israel's citizens by 2040 or 2050. Already, within five to 10 years, Palestinians (Israeli Arabs coupled with those who live in the West Bank and Gaza Strip) will form the majority population of Palestine (the land lying between the Jordan River and the Mediterranean).
Friction between Israeli Arabs and Jews is already a cogent political factor. In 2000, at the start of the second intifada, thousands of Arab youngsters rioted along Israel's major highways and in Israel's ethnically mixed cities.
The past fortnight has seen a recurrence, albeit on a smaller scale, of such rioting. Down the road, Israel's Jews fear more violence and terrorism by Israeli Arabs. Most Jews see the Arab minority as a potential fifth column.
What is common to these specific threats is their unconventionality. Between 1948 and 1982 Israel coped relatively well with the threat from conventional Arab armies. Indeed, it repeatedly trounced them. But Iran's nuclear threat, the rise of organizations like Hamas and Hezbollah that operate from across international borders and from the midst of dense civilian populations, and Israeli Arabs' growing disaffection with the state and their identification with its enemies, offer a completely different set of challenges. And they are challenges that Israel's leaders and public, bound by Western democratic and liberal norms of behavior, appear to find particularly difficult to counter.
Israel's sense of the walls closing in on it has this past week led to one violent reaction. Given the new realities, it would not be surprising if more powerful explosions were to follow.
Benny Morris, a professor of Middle Eastern history at Ben-Gurion University, is the author, most recently, of "1948: A History of the First Arab-Israeli War."
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OPINION
Undermining peace
By Marwan Bishara
Tuesday, December 30, 2008
NEW YORK: Israel might be targeting Hamas, but its bombardment of Gaza is undermining the Palestinian president, Mahmoud Abbas. Moreover, if this explosive microcosm of the greater Middle East blows up, it will destroy the incoming Obama administration's chances for a fresh start for peace in the region.
Behind the Israeli government's military escalation lie cynical electoral calculations and a flawed strategic rationale. It is common knowledge in Israel that the ambitious foreign and defense ministers - Tzipi Livni and Ehud Barak - who head the coalition parties Kadima and Labor respectively - are all too aware that the assault on Gaza will help them to succeed Prime Minister Ehud Olmert in the February elections.
Defense Minister Barak, the architect of the Gaza campaign, has seen his poll approval ratings double in recent days. But with each Israeli vote he earns, support among the Palestinians for Abbas erodes.
Israel has based its assault on Gaza on three principles: Israel has the right to defend its citizens against rocket attacks; it aims to empower Palestinian and Arab moderates; and it hopes to protect the peace process against the forces of extremism.
Let's dissect these justifications.
Israel certainly has a right and responsibility to defend its citizens, but so do the Palestinians. If the killing three Israelis and terrorizing thousands of others justifies the heavy shelling of Gaza, surely the killing of some 350 Palestinians in three days - in addition to 500 others over the last year - justifies Palestinian retaliation.
Why should the holding of an Israeli soldier unleash the dogs of war, the Palestinians ask, when holding thousands of Palestinians, many detained indefinitely without trial, goes unchecked?
Israel asserts that it is ready to end the occupation only through negotiated settlement, but it criticizes Abbas for being indecisive and soft on terror. Thus comes Olmert's attempt to strengthen Abbas by breaking and removing Hamas from power and handing him a pacified Gaza Strip.
Here, the parallels with Israel's 2006 war are sobering. The Israeli bombardment of Lebanon to destroy Hezbollah instead weakened the pro-Western government of Prime Minister Fouad Seniora. If Israel fails in Gaza as it did in Lebanon, Hamas, like Hezbollah, will come out stronger and more popular as the defender of the homeland, rendering Abbas and his Fatah party a political sitting duck.
If Israel succeeds in defeating Hamas amid heavy Palestinian casualties, Abbas will be seen as an Israeli accomplice. Any attempt by his forces to enter Gaza on the footsteps of the Israeli military would unleash a bloodbath, fueling further radicalization among the Palestinians and the demise of Abbas's authority.
Considering that great human toll in either scenario, Olmert's assertion that Israel has no quarrel with the people of Gaza rings hallow. In fact, the escalation of fighting is an extension of their collective punishment for daring to vote overwhelmingly for Hamas against the more secular Fatah party in the Palestinian elections of 2006.
Although my network, Al Jazeera English, has been the only TV outlet broadcasting internationally from the strip since the blockade began, the Arab world has been awash with images of the suffering people are enduring there. Israel's disproportionate use of force against the 1.5 million Gazans, half of whom are children, is widely portrayed as a war crime that undermines America and its friends in the region.
It should therefore come as no surprise to the Israeli prime minister that the people of Gaza, 85 percent of them refugees, do have a quarrel with Israel, which has occupied their land for 40 years.
Israel's leaders have been trying hard to justify the heavy toll among the Palestinians and the humiliation of the Palestinian Authority as a necessary price to pay for defeating terrorism and strengthening the U.S.- sponsored peace process. But no one has shown as much commitment to the peace process as the Palestinian president.
Since he brokered the Oslo accords and played a key role in reaching six interim agreements with Israel, Abbas has hedged all his bets on America and Israel, but to no avail. Although President Bush and Olmert embraced Abbas in public as he sacrificed Palestinian national unity and resistance to occupation, the expansion of Jewish settlements and Israeli incursions have left him empty-handed.
When Israel finally disengaged from the Gaza Strip in 2005, it re-deployed unilaterally - with no coordination whatsoever with its Palestinian partner. The pullout was not done as a good-will gesture to Abbas. It was made because the densely populated strip, which comprises 2 percent of historic Palestine and 20 percent of all Palestinians, had become a security and demographic nightmare.
The failure of the American-sponsored Annapolis framework to bring about a peace agreement has helped bolster Hamas, leaving the Palestinian president ever-more vulnerable. Unless the international community puts a prompt end to Israel's onslaught, brokers an expanded cease-fire and lifts the Gaza blockade, the world will be left with a great humanitarian and strategic mess.
Alas, those who shouted "Obama inshallah" a few weeks ago are today burning U.S. and Israeli flags on the streets of Gaza and in capitals around the globe.
Marwan Bishara is a senior political analyst for the Al Jazeera English network. The opinions expressed here are his own.
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EDITORIAL
There's plenty of blame to go around for Gaza's war
Tuesday, December 30, 2008
Israel must defend itself. And Hamas must bear responsibility for ending a six-month cease-fire this month with a barrage of rocket attacks into Israeli territory.
Still we fear that Israel's response - devastating airstrikes that represent the largest military operation in Gaza since 1967 - is unlikely to weaken the militant Palestinian group substantially or move things any closer to what all Israelis and all Palestinians need: a durable peace agreement and a two-state solution.
Israel must make every effort to limit civilian casualties. The leaders of Hamas, especially those safely ensconced in Damascus, are unconcerned about their people's suffering - and masters at capitalizing on it.
Before the conflict spins out of control, Egypt, Saudi Arabia and other Arab countries will have to find ways to cajole or more likely threaten Hamas (or its patrons in Syria and Iran) to accept a new cease-fire.
President Bush and Secretary of State Condoleezza Rice should be pressing Cairo and Riyadh to use all of their influence with Hamas, and they should be pressing Israel to exercise restraint.
By Monday, some 350 Palestinians - mostly Hamas security forces - were reported killed. A Hamas security compound was among dozens of structures pummeled in the attacks, and the group's leaders were supposedly driven into hiding. The Israeli defense minister, Ehud Barak, promised a "war to the bitter end."
We hope he does not mean a ground war. That, or any prolonged military action, would be disastrous for Israel and lead to wider regional instability. Barak and Israel's foreign minister, Tzipi Livni, both candidates to succeed Prime Minister Ehud Olmert in elections set for February, must not be drawn any further into a competition with the front-runner, Benjamin Netanyahu, over who is the biggest hawk.
There can be no justification for Hamas' attacks or its virulent rejectionism. But others must also take responsibility for the current mess. Hamas never fully observed the cease-fire that went into effect on June 19 and Israel never really lived up to its commitment to ease its punishing embargo on Gaza. When the cease-fire ran out, no one, including the Bush administration, made a serious effort to get it extended.
Meanwhile, the peace process Bush launched with such fanfare in Annapolis last year is moribund. There is plenty of blame to go around for that, too. Olmert's government failed to halt settlements and give the Palestinian president, Mahmoud Abbas - Hamas' sworn enemy - the support he needed. Bush refused to press Olmert to do what was needed but politically unpalatable. Arab leaders never did enough to boost Abbas, or to persuade or pressure Hamas to cut its ties with Iran and join peace efforts.
Rice once hoped to make a Middle East peace her legacy. It is too late for that. But she should do her job. That means getting on a plane for Cairo and Riyadh - now - to enlist their help in brokering a new cease-fire. Then it will be up to President-elect Barack Obama to quickly pick up the pieces and fashion a Middle East peace strategy that may actually bring peace.
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LETTERS
Blaming Israel and Hamas
Tuesday, December 30, 2008
Blaming Israel and Hamas
Israel's horrific bombardments on Gaza are war crimes pure and simple. Collective punishments leveled on a civilian population violate international law and deserve universal condemnation. The U.S. government should not only distance itself from Israel's reprehensible actions, but also use its diplomatic clout to prevent such attacks in the future.
L. Michael Hager Washington
'Warning: Please stop."
That's what Israel has been saying for the last several years, hoping to discourage Hamas from firing rockets on a daily basis, terrifying Israeli civilians in the southern towns of Sderot and Ashkelon.
If Hamas had stopped the rockets, Israel would have had no reason to attack Gaza. But all of Israel's warnings, requests, threats and restraint have failed.
Now after being bombarded with thousands of rockets, Israel is finally rightfully defending its own citizens. No country in the world would do otherwise.
Hamas has relentlessly and brutally set up rocket launchers in the midst of Gazan homes - thus deliberately putting the Palestinian civilian population in maximum danger.
Hamas is to blame for causing Palestinian dead and wounded.
June Brott, Oakland, California
President Bush seems to have approved Israel's use of tons of bombs to solve its conflict with Hamas. In addition, Bush laid blame on Hamas. He cautioned the Israelis to avoid destroying the lives of civilians. Are laying blame and bombing effective methods to resolve conflict? Bush's comments and policy reveal a shocking lack of imagination.
Carol Adamson, Stockholm
The Israeli defense minister, Ehud Barak, justified air strikes on Gaza by saying his country wants to "totally change the rules of the game." Which "game" and what "rules" was he talking about?
Moreover, Tzipi Livni, the Israeli foreign minister, said that the military strikes would continue until the southern Israelis no longer feel threatened by rockets from the Gaza Strip. In fact, that day will never arrive if military tactics are not given up. Bombs and shells never bring peace; they fuel further hatred and instability.
Ashwani SharmaGhaziabad, India
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Warrants expected to slow arrests in Iraq
By Campbell Robertson
Tuesday, December 30, 2008
BAGHDAD: In late November, around the time the security agreement between the American and Iraqi governments was ratified, an order came down to Charlie Company at their Sadr City outpost.
In accordance with the agreement's new rules on searches and detentions, troops from Charlie Company - or Company C of 1st Battalion, 35th Armor Regiment - were to begin operating under a policy called "warrant-based targeting."
Up to that time, Lieutenant Jamen Miller's platoon had been the most prolific in the company when it came to arrests, nabbing more than half of those captured in the past seven months. But he soon found himself explaining to an Iraqi officer that, yes, a certain man that his platoon had declined to arrest was a bad guy, but that nothing could be done yet without a warrant.
"The gears of the system," Miller said of those first few days, "looked like they were coming to a halt."
In many ways, Sadr City, the sprawling Shiite quarter in northeastern Baghdad, is on the front line of the recent security agreement.
Security has improved enormously in the eight months since Sadr City was a battle zone, but insurgents are still taking cover in the vast slum, and the holdouts are being tracked down, one by one.
Joint Iraqi-American patrols, as mandated by the agreement, which goes into effect on Thursday, are already becoming the norm. And units based here are adjusting to the new rules for finding and holding detainees, including the necessity of warrants.
"It's all being defined as we go," said Major Rich Ramsey, who works on a task force that is addressing some of the changes with the 3rd Brigade Combat Team in Baghdad.
American commanders said they welcome the rules as signs of Iraq's growing stability. But as details are being worked out, some soldiers are worried about obstacles they could present.
After years of quick-response raids, American troops are having to adjust to gumshoe work, which involves lots of conversations with civilians about who has done what in the neighborhood. Though a judge makes the decision on what is needed for a warrant, it typically requires at least two sworn statements by witnesses to a crime, American officers said.
Many of these witnesses will have to testify before Iraqi investigators, judges or members of the security forces, depending on a trust that has been violated countless times in the past, often violently. An Iraqi who had been kidnapped earlier this year told Miller recently that he would sign a statement against his captors, as long as his identity was kept from any Iraqi. That will probably cease to be an option now that Americans must conduct all operations with Iraqi forces.
Obtaining warrants can be a frustratingly long process. Lieutenant Guy Allsop of Charlie Company said that he had submitted 18 warrant requests since the agreement had been passed. Weeks later, one had been approved.
After an arrest, the detainee has to be turned over to Iraqi authorities within 24 hours, and the Iraqis have to bring the case to a judge, who rules on whether the detainee should be held or released.
Some Iraqi Army officers said they worried about the new rules.
"There will be more steps," said Major Hasoon Hussein al-Zoubadi, an officer whose unit shares an outpost with Charlie Company. "It will make it harder for us and easier for the Mahdi army."
Actually, the agreement changes almost nothing for the Iraqi security forces; they are supposed to have been operating under the warrant-based system since 2007. The agreement just applies their rules to the Americans, though the frequently close relationship between the two armies can muddle the different operating procedures.
Guidelines have come down from division headquarters throughout December, indicating that there may be more breathing room than originally appeared, calming the concerns of officers like Miller.
A warrant is still needed for an arrest, the company was told, but something called a detention order could be obtained, sort of a warrant after the fact.
This option, which still requires that evidence be presented to a judge within 24 hours, was spoken of with relief by American officers, who worried that targets could escape capture while detective work was being done.
The security agreement also states that a warrant is not needed to search a house in "cases of actual combat operations," or when troops are in immediate danger, exceptions that could be interpreted broadly.
But there is no question that Charlie Company's freedom to operate is going to be curtailed, at least somewhat. With that in mind, 1st Battalion has been trying to complete missions, like general house-to-house searches, that will soon become far more complicated, if not impossible.
In mid-December, scouts from the battalion were trying to gather statements for a warrant on a man considered a valuable target, when they happened upon him by chance. So they did what they have been doing freely for nearly six years but would be much trickier on Thursday: They detained him on the spot.
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Trial delayed for shoe-tossing journalist
The Associated Press
Tuesday, December 30, 2008
BAGHDAD: The trial of a journalist who has been hailed as a hero in the Arab world after throwing his shoes at President George W. Bush was postponed Tuesday pending a review of the case by a higher court, a spokesman for Iraq's Higher Judicial Council said.
The trial of Muntader al-Zaidi was to begin Wednesday on charges of assaulting a foreign leader, which his defense team said carried a maximum sentence of 15 years. But the court spokesman, Abdul-Sattar Bayrkdar, said that the trial has been postponed until an appellate court rules on what charges the journalist should face.
Bayrkdar said the defense team was seeking a lesser charge. Two of his lawyers said they want a reduced charge of insulting a foreign leader - which carries a maximum sentence of three years.
"There is a difference between assault and insult, al-Zaidi wanted to express his objection to the occupation. So the case is within context of an insult and not an intention to kill," his lawyer, Diaa al-Saadi, told Associated Press Television News.
If the appellate court decides to reduce the charges, then Saadi said Zaidi could be released on bail. It was unclear when the appellate court would issue its ruling.
Zaidi threw his shoes at Bush during a Dec. 14 joint news conference with Prime Minister Nuri Kamal al-Maliki. The gesture of contempt for the U.S. invasion and occupation of Iraq made Zaidi a folk hero in Iraq, and thousands of people have demonstrated for his release.
"According to the appeals raised by Muntader al-Zaidi's lawyers to the Federal Appeals Court, the Central Criminal Court has decided to postpone the trial sessions until the Federal Appeals Court issues a decision about these appeals, then another date for the trial will be set," Bayrkdar said.
Before the postponement was announced, one of Zaidi's lawyers had said that he expected a lengthy trial and a sentence of no less than three years if he is convicted.
Zaidi's brother, Dhargam al-Zaidi, said that the family would turn to an international court if they found the Iraqi jurisdiction system "biased and unfair."
"If the Iraqi jurisdiction system will be fair and transparent then it's fine, but if it will be politicized," he said, then "we will rely on an international court."
The case transformed Zaidi from a little-known television journalist into an international celebrity for defying the U.S. leader, but it also embarrassed Maliki, who was standing next to Bush when the shoes were thrown.
Last week the Iraqi leader sought to undermine the journalist's popularity by saying the he had confessed that the mastermind of the attack was a militant known for slitting his victims' throats.
Maliki said that in a letter of apology to him, Zaidi wrote that a known militant had induced him to throw the shoes. The alleged instigator has never been identified, and neither Maliki nor any of his officials have provided further explanation. The letter was never made public.
The journalist's family denied the claim and alleged that Zaidi was tortured into writing the letter.
His brother Uday al-Zaidi said he met the journalist in prison about a week after the incident and that there had been no regret for throwing the shoes.
He claimed his brother had a missing tooth and cigarette burns on his ears. He also said his brother told him that jailers also doused him with cold water while he was naked.
The investigating judge, Dhia al-Kinani, has said that the journalist was beaten around the face and eyes when he was wrestled to the ground after throwing the shoes.
There has been no independent corroboration that Zaidi was abused in custody, and Iraqi officials have denied this.
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Fewer journalists killed in 2008
Reuters
Tuesday, December 30, 2008
By Anna Willard
Fewer journalists were killed this year doing their jobs than in 2007 due to a big fall in the number of deaths in Iraq, a media watchdog said on Tuesday.
Sixty journalists around the world died in 2008 down from 86 in 2007, the Paris-based Reporters Without Borders (RSF) said in an annual report, adding that the decline in fatalities did not signal an improvement in global press freedom.
"The figures may be lower than last year's, but this should not mask the fact that intimidation and censorship have become more widespread, including in the West," the RSF report said.
"The quantitative improvement in certain indicators is often due to journalists becoming disheartened and turning to a less dangerous trade or going into exile," it added.
Iraq remained the deadliest country for reporters with 15 deaths over the past 12 months, but that was down significantly from 47 in 2007 and 46 in 2006.
Although violence has dropped sharply in Iraq five years after a U.S.-led invasion, car bombs, suicide attacks and assassinations are still routine.
After Iraq, Pakistan, the Philippines and Mexico were the most dangerous countries for reporters, while the death toll in Africa dropped from 12 in 2007 to 3 in 2008.
RSF said this was because many journalists there had simply stopped working, with news media gradually halting coverage of war zones such as Somalia."
The report also found that fewer journalists were detained, censored, kidnapped, physically attacked or threatened in 2008.
Some 673 journalists were arrested this year compared to 887 in 2007 and 29 were kidnapped against a previous 67.
But the watchdog said censorship and intimidation were still widespread. "As the print and broadcast media evolve and the blogosphere becomes a worldwide phenomenon, predatory activity is increasingly focussing on the Internet," it added.
RSF said for the first time in 2008, a man acting as a "citizen journalist" was killed.
Chinese business man Wei Wenhua was beaten to death in rural China after he filmed police clashing with villagers over a disputed garbage dumping site. Four security officers were later jailed for up to six years for their role in the killing.
RSF said China was at the forefront of Internet repression, with 10 cyber-dissidents arrested, 31 physically attacked or threatened, and at least three tried and convicted. In all, 38 reporters were arrested in China, many linked to the Olympics.
Online censorship was recorded in 37 countries, with China, Syria and Iran leading the way. In Myanmar, outspoken journalists and bloggers were jailed in a crackdown by the military government.
"Every year, repressive governments acquire new tools that allow them to monitor the Internet and track online data," RSF said.
(Editing by Crispian Balmer)
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Marines prepare to leave Falluja
By Timothy Williams
Tuesday, December 30, 2008
FALLUJA, Iraq: In Falluja, a town that rises abruptly out of the vast Syrian Desert an hour west of Baghdad, nearly every building left standing has some sort of hole in it.
Mosques are without their minarets. Apartment walls have been peeled away by artillery shells. A family's kitchen is full of tiny holes made by a fragmentary grenade .
Of all the places fighting has raged since the American invasion nearly six years ago, Falluja — the site of two major battles and the town where American security contractors were killed and their bodies hung from a local bridge — stands out as one of the bloodiest and most intractable.
This month, as the last American marines prepare to leave Camp Falluja, the sprawling base a few miles outside of town where many of the American troops who fought the two battles were stationed, Falluja has come to represent something unexpected: the hope that an Iraqi town once at the heart of the insurgency can become a model for peace without the United States military.
As part of the reduction of United States troops from Iraq, by Thursday there will be few marines left in or around this mostly Sunni city of about 300,000 people. The closing of Camp Falluja is one of the most prominent symbols yet that America's presence in the country, which at times had seemed all encompassing, is diminishing.
As recently as a year ago, the base closing was cause for alarm. The calm that seemed to have taken hold here was fragile enough that both Iraqi and American officials feared the potential consequences of the marines' departure.
Today they look forward to it.
"That will make our job easier," said Colonel Dowad Muhammad Suliyman, commander of the Falluja Police Department. "The existence of the American forces is an excuse for the insurgents to attack. They consider us spies for the Americans."
To be sure, the threat of violence has not vanished. But the police said they were proud that a place that suffered a major attack a week just a few years ago has had only two in the last six months.
The view that the town is better off taking care of itself was echoed by residents, even in the neighborhood hit by the most recent big attack, in early December, when suicide truck bombers linked to Al Qaeda in Mesopotamia killed 19 people, wounded dozens of others, and leveled nine houses and two police stations.
"Our sons will take care of the security issue," said Khalil Abrahim, 50, a resident of the neighborhood, as he walked over the rubble of his house, wondering aloud how he could afford to rebuild. "They can do a better job."
Camp Falluja will be handed over to the Iraqi Army, with most of its marines relocated to Al Asad Air Base, about 90 miles to the west. A smaller contingent will remain at nearby Camp Baharia.
The move reflects the confidence of the American command that major violence will not return here.
"It won't happen again because the Iraqis don't want it to happen again," said Colonel George Bristol, the bald, heavily muscled commanding officer of the First Marine Expeditionary Force Headquarters Group at Camp Falluja.
"We've certainly turned a page," he said. "The conditions are now there where we can close it and turn it over to the people who fought beside us. It's a great thing. If you look at the city, it has really come to life."
The city, which had been emptied of much of its population before the second Battle of Falluja in November 2004, now bustles with people, its streets filled with honking cars inching their way to the Old Bridge that spans the placid, green Euphrates River.
In a small building at the foot of the bridge, freshly painted green, not far from where the bodies of two Blackwater security guards were hung, Falluja has established an Office of Citizen Complaints.
At the elementary school where in 2003 members of the 82nd Airborne Division fired on protesters — some of whom may have been armed — killing 17 people, dozens of girls were at play during recess. A sign out front said the school was a voter registration center for the coming provincial elections.
Not far away, a restaurant named KFC — not affiliated with the American fast-food chain but adorned with unlicensed pictures of Sanders — sells a fried chicken lunch for about $3.50.
All around the city, people are rebuilding houses and clearing away rubble.
If a rocket-propelled grenade launcher symbolized Falluja during the height of the insurgency, its new symbol may well be the broom. They are sold in bunches at roadside markets, and are in almost constant use by workers in bright orange jumpsuits trying to keep the town's narrow roads free of desert sand.
At Camp Falluja, Major James Gladden and Master Gunnery Sergeant Ray SiFuentes are overseeing the dismantling of a base that had once been home to 14,000 marines and contractors.
The 2,000-acre post had its own fire department, water treatment plant, scrap yard, voter registration booth, ice-making factory, weather station, prison (for insurgents), beauty shop, power plant, Internet café, Turkish bazaar and dog catcher.
Its chapel could fit 800 marines for religious services, a Toby Keith concert or a performance by the Philadelphia Eagles cheerleaders, all of which were held there.
"We had basically everything a small town had," said Gladden, 34, who is known by other marines as the mayor of Camp Falluja. "Everything except fast-food outlets," he said, which were deemed too unhealthy.
There are only 200 marines left now, and about 170 truckloads a day leave the base, most headed for other United States military installations.
Even the gaggle of geese from the camp's artificial pond, which some marines had adopted as pets, has been taken away. One by one, they were trapped and set loose at a larger pond at Camp Baharia.
A good deal of packing up involves making sure nothing is left behind that later could be used against American forces. Obsolete armor for trucks, ballistic glass plates for Humvees and concertina wire are cut to pieces. Thousands of mammoth concrete barriers are being trucked to other military bases.
Back in town, where residents have been required to be fingerprinted and to submit to iris scans, Hashim Harmoud, 69, a caretaker at a mosque that had been said to be a center for insurgent activity, said he was thankful for the city's newfound peace.
But as testament to the town's dual nature, he was hesitant to discuss an insurgency that could rise up again at a moment's notice. "Al Qaeda?" he asked, a bit cagily. "I don't know anything about them. I go from the mosque to my house, and that's all."
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EDITORIAL
Shifting troop targets
Tuesday, December 30, 2008
The new security agreement with Iraq heralds an overdue end to President Bush's ill-advised war. But while it calls for U.S. combat forces to be out of the cities by June and all forces to withdraw from the country by the end of 2011, there is disquieting talk in Washington of having tens of thousands of troops stay longer and slyly redefining their missions.
The year ahead presents tough challenges in Iraq. The improved security environment masks pitfalls - more political than military - that could again increase tensions.
Bush's goal of a model democracy in Iraq - never realistic - remains elusive. A new report by the U.S. Institute of Peace found that "as the threat of state collapse has receded, the risk of an increasingly repressive and authoritarian Iraqi regime has come to the fore." Iraq's governing parties still resist sharing power.
Bush and President-elect Barack Obama must do whatever they can to strengthen institutions that can stabilize Iraq, starting with ensuring that provincial elections, set for Jan. 31, and national elections, expected by the end of 2009, are as free and fair as possible. But Iraqi leaders do not seem sufficiently committed to the task. U.S. officials already are jockeying with the security agreement deadlines to compensate for Baghdad's failings.
Even Obama, who campaigned on withdrawing all combat troops within 16 months (roughly May 2010) has signaled flexibility by saying he will listen to his generals.
What are the generals saying? The commanders' new military plan reportedly would leave troops in place beyond Obama's timetable. And there is talk about redefining solders as "trainers" or "advisers" so that they do not have to leave the cities in June.
If conditions deteriorate, Washington may have to slow the withdrawal pace. But, for now, we urge Obama to stick to his campaign pledge to pull combat troops out in 16 months. Some residual forces may be needed after 2011 for training and counterterrorism missions, but the number should be as small as possible. That would keep the pressure on Iraqis to assume greater responsibility for their country.
The sooner Iraqis do that, the sooner all American troops can come home, an overtaxed U.S. military can be repaired and additional forces can be reassigned to Afghanistan, where the threat from extremists is greatest.
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Rare suicide bombing in Iran kills 4
By Nazila Fathi
Tuesday, December 30, 2008
TEHRAN: Employing a tactic not seen in Iran before, a suicide bomber affiliated with a Sunni militant group killed four people and wounded 12 in an attack early Monday in Saravan, a southeastern city, the official IRNA news agency reported.
The group, Jundallah, has attacked Iranian armed forces and Revolutionary Guards in the past. But this was the first time it had used a suicide bombing similar to those in Iraq, Afghanistan and Pakistan.
"This group has killed many innocent and defenseless civilians in the past, and the security forces have killed their members," IRNA reported without providing further information.
The news agency did not disclose details about the attack, but according to unofficial news Web sites in Iran, a suicide bomber drove into a security forces headquarters in Saravan around 7:30 a.m. local time. Jundallah claimed responsibility for the attack, IRNA reported. It was not clear whether the casualties were civilians or members of the security forces.
Jundallah said in a statement posted by one of the Web sites that the attack was in retaliation for the authorities' destruction of a Sunni religious school in Zabol, a southeastern city. It also said the suicide bomber was Abdol-ghafoor Rigi, the brother of the group's leader.
Iran says the group, led by Abdolmalek Rigi, is a terrorist organization with links to Al Qaeda. The group has claimed responsibility for previous attacks, including one on a bus carrying members of the Revolutionary Guards in 2007.
Early this month, the authorities said that the group killed all 16 of the border guards it kidnapped in June. Jundallah had demanded the release of 200 of its prisoners in return for the border guards.
The authorities have accused Britain and the United States of supporting Jundallah to destabilize the Islamic Republic.
The first deputy chief of judiciary, Ebrahim Raisi, said this month that Iran had documents showing that "Britain and America supported Rigi's terrorist group with arms and information," IRNA reported.
The group is active mostly in a southeastern province, Sistan va Baluchestan, near the border with Afghanistan and Pakistan, where the majority of people are Sunni Muslims. Iran is predominantly Shiite. Jundallah says it is fighting discrimination against Sunnis by the Iranian authorities.
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Pakistan closes NATO supply line to Afghanistan
By Richard A. Oppel Jr. and Pir Zubair Shah
Tuesday, December 30, 2008
ISLAMABAD, Pakistan: Backed by helicopter gunships, tanks and artillery, Pakistani security forces on Tuesday shut down a crucial supply line for NATO forces fighting in Afghanistan as they launched an offensive against Taliban militants who dominate the Khyber Pass region.
NATO uses the Khyber Pass, an ancient trade and military gateway that cuts through the mountains on the Pakistan-Afghanistan border, to transport the majority of provisions for troops fighting the resilient Afghan insurgency. Supplies are ferried from Karachi in Pakistan 700 miles north to Peshawar, and then trucked 40 miles westward through the pass and into Afghanistan.
But Taliban militants, including forces led by an upstart lieutenant to the warlord Baitullah Mehsud, have taken over the area between the pass and Peshawar, and now routinely attack convoys with rocket-propelled grenades and Kalashnikov rifles.
Many drivers in the convoys have already quit making the trip because the route is so deadly. Militants also ransacked a half-dozen supply depots in Peshawar this month, burning 300 cargo trucks and Humvees destined for NATO troops.
The attacks — and the Pakistani government's inability to quell them — have sent American military officials scrambling to secure other supply routes into Afghanistan through Russia and Central Asia. NATO officials said that they believed that shutting down the route through the Khyber Pass during the military offensive that began Tuesday would not deprive them of necessary supplies.
"Over all, it's a temporary irritation," said a NATO spokesman in Kabul, Captain Mark Windsor of the British Royal Navy. "There will obviously be a minor effect in the short term, but it's for the long-term good of our operation."
However, Tariq Hayat, the top civilian official in the Khyber Agency, the formal name for the Pakistani district between the Khyber Pass and Peshawar, said there was no timetable for the operation, which he said would continue until "I am satisfied that the area is clear of all lawless and miscreant elements." Hayat declined to say how many troops were involved in the offensive, but he said they were drawn almost entirely from the country's paramilitary Frontier Corps. Pakistani Army soldiers are standing by in reserve should they be needed, he said.
He said that there had been no casualties during the offensive among Pakistani forces but that he had received a report that several children and a woman had been killed by an artillery shell.
Ibrahim Khan, who lives near the supply route in the village of Jamrud, said troops came through his village at 3:30 a.m., using loudspeakers to warn residents to stay inside. Helicopter gunships patrolled all day until the afternoon, he said.
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U.S. plans to expand its Afghan lifelines
By Thom Shanker
Tuesday, December 30, 2008
WASHINGTON: The United States and NATO are planning to open and expand supply lines through Central Asia to deliver fuel, food and other goods to a military mission in Afghanistan that is expected to grow by tens of thousands of troops in the months ahead, American and alliance diplomats and military officials say.
The plan to open new paths through Central Asia reflects an American-led effort to seek out a more reliable alternative to the route from Pakistan through the strategic Khyber Pass, which was closed Tuesday by Pakistani security forces when they opened an offensive against militants in the region.
The militants have shown they can threaten shipments through the pass into Afghanistan, burning U.S. cargo trucks and Humvees over recent weeks. More than 80 percent of the supplies for U.S. and allied forces in Afghanistan now flow through Pakistan. But the new arrangements could leave Washington more reliant on cooperation with such authoritarian countries as Uzbekistan and Tajikistan, which have poor human rights records.
The officials said delicate negotiations were under way not only with the Central Asian states bordering Afghanistan, but with Russia as well, to work out the details of new routes. The talks show the continued importance of U.S. and NATO cooperation with the Kremlin, despite tension over Russia's August war with Georgia and other issues.
U.S. officials said they were trying to allay Central Asian concerns by promising that the supplies would be hauled only by commercial companies and would not include weapons or munitions. Officials also said that no additional U.S. bases would be required.
Some of Afghanistan's neighbors, in particular Kyrgyzstan, already serve as staging areas for U.S. supplies bound for Afghanistan, and officials involved in the talks said those countries appeared eager to increase their role, both to help bring stability in the region and to benefit commercially from the arrangement.
Turkmenistan, Uzbekistan and Tajikistan share Afghanistan's northern border and have road transport routes into Afghanistan.
Kyrgyzstan, farther to the north, allows U.S. military cargo planes access to its airfields, in a deal that has become more important since 2005, when the government of Uzbekistan ordered the United States to leave a base there in a dispute over human rights issues.
U.S. and NATO officials said concerns about Uzbekistan's rights record were less important to the negotiations because no new bases were under discussion and any increased supply shipments would be handled by contracts with commercial trucking companies.
Among other states, Kazakhstan is viewed as an important supply hub, while the Caspian Sea port of Baku, Azerbaijan, could be a transit point for shipments of fuel and other goods arriving from Europe by sea or by rail.
General Duncan McNabb, chief of the U.S. military's Transportation Command, quietly visited nations along Afghanistan's northern border last month, said U.S. military officials who declined to identify the countries by name because of diplomatic sensitivities.
"These countries of Central Asia recognize that this is their struggle, too, in Afghanistan," said one State Department official, who added that those border nations had responded positively to talks on "how to improve, regularize, expand and find additional routes in."
NATO officials said the attacks in Pakistan had not yet presented a strategic threat to U.S. supply lines, but they said planning for alternative routes was warranted.
"We always want flexibility," said General John Craddock, NATO's military commander. "There is work ongoing in NATO to see what can be done about alternative lines of communication."
President-elect Barack Obama has said that he intends to send more U.S. troops to Afghanistan in the months ahead, and Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, said this month that 20,000 to 30,000 U.S. troops could be added to the mission, with a large portion being sent in the first six months of next year.
About 31,000 U.S. troops are now in Afghanistan, including 14,000 who are part of a NATO-led mission that has more than 51,000 troops. The other 17,000 U.S. troops operate independently of NATO to carry out combat, counterterrorism and training missions.
The increase outlined by Mullen could nearly double the size of the U.S. presence, which would require not just more war-fighting equipment, food and fuel, but large increases in lumber, concrete and other construction materials to build barracks and support structures.
Officials said that because of Afghanistan's land-locked status and its relatively primitive infrastructure of roads, it costs several times more to sustain an individual soldier there than in Iraq.
Major General Michael Tucker, deputy commander of U.S. forces in Afghanistan, said, "There's a very huge building campaign that has already begun" to prepare for the arrival of those additional troops.
Under plans described by the American military, a goal would be to purchase significant amounts of supplies locally from those Central Asian economies.
Other supplies could be shipped to Central Asia by air, but heavy construction equipment and fuel would be sent by rail to Central Asia, where it would then be loaded on trucks for the final journey.
Some supplies could be sent directly from Europe or through Baltic ports, then sent overland along Russia's well-developed rail system to Central Asia. Russia today is the principal source of fuel for the alliance's needs in Afghanistan, and the Kremlin already allows shipment of other nonlethal supplies bound for Afghanistan to travel across Russian territory by ground.
In a new development, NATO and Russian representatives are discussing whether the alliance might be allowed to move military equipment through Russian airspace, alliance officials said.
"Talks are now under way for a NATO-wide air transit for military goods, not specified as nonlethal," said James Appathurai, NATO's chief spokesman. He added: "Those talks are going well. The Russian Federation has publicly and repeatedly made it clear that this is an issue of strategic interest to them, and that despite disagreements we have over other issues, this area of cooperation has been walled off and preserved. We expect it to be deepened."
Richard A. Oppel Jr. contributed reporting from Islamabad.
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Somali's resignation may have come too late
By Jeffrey Gettleman
Tuesday, December 30, 2008
NAIROBI: Abdullahi Yusuf Ahmed, the cantankerous president of beleaguered Somalia, resigned Monday. The question is, will it make a difference?
Could it be the death knell of Somalia's transitional government, whose zone of control is down to a few city blocks in a country nearly as big as Texas? Or will it be the government's saving grace?
For weeks, Western diplomats, Somali elders and United Nations officials have been crossing their fingers that Yusuf, widely blamed for trying to block a peace deal with Somalia's increasingly powerful Islamist insurgents, would step aside.
One of Somalia's top warlords, Yusuf never seemed able to shake his warlord ways. Western diplomats have accused him of favoring his clan at the expense of all others, enabling corruption and too often trying to solve knotty political problems, which called for a little finesse, with the business end of a machine gun.
Kenyan officials even threatened sanctions against him this month, calling him "an obstacle to peace" and warning that unless he changed tack, he would no longer be welcome in Kenya. That was a serious threat because Yusuf, who claims to be 74 but is widely believed to be several years older, has gone to Kenya several times for lifesaving medical treatment for an ailing liver.
In stepping down, Yusuf said he could not unite Somalia's feuding leaders, news agencies reported, and as soon as he resigned, the United Nations' top official for Somalia, Ahmedou Ould-Abdallah, said that "a new page of Somalia history is now open."
But what will be written on it?
The scramble to succeed Yusuf could set off an ugly clan-based political melee. By contrast, the prime minister and other top officials could give the post to a moderate Islamist leader, who might be the unifying figurehead that Somalia so desperately needs.
Or it may simply be too late because so much of the country has already fallen into the hands of powerful, hard-line Islamists - some of whom behead opponents and have stoned to death a teenage girl who said she had been raped.
Rashid Abdi, a Somalia analyst at the International Crisis Group, which tracks conflicts worldwide, said Yusuf's resignation was "good news" because "it may create the opportunity to put a more conciliatory figure in charge of the government."
That figure could be someone like Sheik Sharif Sheik Ahmed, a respected, moderate Islamic cleric who has struggled to walk the tightrope between negotiating with the transitional government and being dismissed as a sellout.
Sharif's faction signed a power-sharing agreement with the transitional government this year, despite the president's objections, and many Somalis are hoping the deal will stick.
"If that power-sharing deal is applied, it will help a lot," said Muhammad Dheere, a pharmacist in Mogadishu, Somalia's battle-scarred capital. "Then the other problems could finish soon."
Somalia certainly has a lot of them. Famine is steadily creeping toward millions of people. Pirates off the coast have netted countless headlines and as much as $100 million in ransoms. Violence is rising again and finding new forms, with Islamist factions now fighting one another to take over the areas the government no longer controls.
Over the weekend, in two towns, a moderate Islamist group routed the Shabab, one of the nation's most fearsome and radical Islamist militias. But the Shabab were fighting back fiercely on Monday, and they also took over a UN food distribution office, imperiling a critical lifeline.
The thousands of Ethiopian troops who have been in Somalia for two years are threatening to leave any day now. If they do, the transitional government may have no one to protect it from Islamist insurgents, except a relatively small contingent of African Union peacekeepers and a few ragtag Somali militiamen.
It will not be easy finding someone qualified - and willing - to serve as president, considering all this. The transitional government, created four years ago (with Yusuf at the helm) as a temporary solution until Somalia could hold elections, is carefully balanced on a formula that divides power among four major clans.
One considerable strike against Sharif is that he is not only from the same clan, but from the same subclan as the prime minister, who is well regarded and not believed to be going anywhere.
Many people expect that the next president could come from the same clan as Yusuf, to minimize clan friction. The speaker of Parliament will take over the presidency for one month until the legislature elects a new president.
But after nearly 18 years of unbridled anarchy, many Somalis have lost hope.
"Somalis are a God-forsaken nation," said Abdirizak Adam Hassan, a Canadian-Somali who used to work with Yusuf and is now looking for a job. "They are so oblivious to what is happening. One tribe, one religion, one language, one culture - but they don't see what unites them, they only see what divides them. Maybe on the outside, to the international community, the resignation will matter. But not on the inside."
Mohammed Ibrahim contributed reporting from Mogadishu, Somalia.
*******************
U.S. defense contractors vying for cyberscurity deals
Bloomberg News
Tuesday, December 30, 2008
WASHINGTON: Lockheed Martin and Boeing, the world's biggest military companies, are deploying forces and resources to a new battlefield: cyberspace.
The U.S. military contractors, eager to capture a share of a market that may reach $11 billion in four years, have formed new business units to tap increased spending designed to protect U.S. government computers from attack.
Boeing, based in Chicago, set up its Cyber Solutions division in August "because of a realization by the company that it's a very serious threat," Barbara Fast, vice president of the unit, said. "It's not a question of if we'll be attacked but when, and so how will we be prepared." Lockheed, based in Bethesda, Maryland, started its cyberdefense operation in October.
President George W. Bush revealed his national cybersecurity plan in January to be supervised by the Department of Homeland Security, after an increasing number of attacks on U.S. government and private sector networks by groups linked to foreign governments, organized crime gangs and hackers. In a Dec. 8 report, a panel of experts urged President-elect Barack Obama to create a White House office to oversee the effort.
The number of security breaches of computer networks reported to the Computer Emergency Readiness Team of the Homeland Security Department almost doubled to 72,000 in the fiscal year ended in October from about 37,000 the previous year, a spokeswoman for the agency, Amy Kudwa, said.
U.S. government spending to secure military, intelligence and other agency computer networks is forecast to rise 44 percent to $10.7 billion in 2013 from $7.4 billion this year, according to a report by the market forecaster Input.
Security-system spending will grow 7 percent to 8 percent annually, "significantly faster" than information technology, which has increased about 4 percent a year in the past five years, said John Slye, an analyst for Input.
In addition to traditional defense contractors, established providers like McAfee and Symantec are also expected to compete for the work.
In the past 18 months, Raytheon, based in Waltham, Massachusetts, acquired the network security providers Oakley Networks, SI Government Solutions and Telemus Solutions, said Steve Hawkins, Raytheon vice president for data security. To meet the likely increase in demand, Raytheon plans to add 300 security engineers in 2009 to its pool of 600 technicians, he said.
****************
New focus on behavior as U.S. airport security evolves
By Joe Sharkey
Tuesday, December 30, 2008
A man wearing a private security uniform with a great big badge pinned to his maroon coat provided a timely lesson in security recently at the airport in Newark.
"It don't fit, and you can't take it on," this fellow rudely told a young woman who was kneeling on the floor at the entrance for the security line trying to repack her carry-on bag. She looked about 17 years old, maybe 5 feet tall and 100 pounds, but he stood over her and her disheveled bag like a prison guard.
She was crying. Belongings spilled out of her bag as she struggled to find a way to make it fit into the metal frame that airlines sometimes use to demonstrate what size bag can be carried on. A child's frilly white party dress fell onto the dirty floor.
"All she needs is a plastic bag to put her extra stuff in," someone said.
I spotted a trash can with a clean liner and handed it to her for her extra things. So now the carry-on slipped into the frame and the private security guard, aware of the hostile glares coming from those of us in line he would not have had the courage to hassle arbitrarily, backed off and waved the girl on.
I'm making two points. One, the girl's carry-on bag was, by general agreement among those in line, of reasonable size. None of the rest of us, mostly male adults, had been required to have our carry-ons measured, with all the commotion that requires. And two, once we arrived at the official counter farther ahead, we were greeted by a courteous Transportation Security Administration officer, who carefully checked credentials and looked us in the eye. The contrast between the private guard and the U.S. government employee doing a professional job was obvious.
Now, anyone who has read this column for the last 10 years knows that I have not been shy about criticizing airport security or the security agency. In 2004, this is where you read about appalling instances of female travelers being arbitrarily groped during security pat-downs. We've regularly looked at theft, rudeness, ridiculous policies and the rapid growth of a shockingly expensive bureaucracy (the current budget is about $6.8 billion).
Still, every frequent traveler I know says that the security checkpoint experience has greatly improved in recent years. For this week and next, I've conducted basically an exit interview with Kip Hawley, administrator of the agency since July 2005, who is leaving the job in a few weeks.
Hawley, who like his predecessors is regularly pummeled by bloggers who ridicule agency procedures as mere "security theater," has been deliberately redefining and retraining the agency to approach security in a more holistic way.
Congress and the news media regularly set up howls on those occasions when some reporter sneaks a box cutter through security. But no security expert today believes — given reinforced cockpit doors and vigilant passengers ready to pounce — that an airliner might ever again be hijacked by some deluded soul armed with a box cutter.
Box cutters and lots of other things are still prohibited contraband, of course. But, in general, the thinking in airport security is more geared toward understanding how would-be terrorists behave and situational awareness, and officers are being trained that way.
"In the hurly-burly and the infinite variety of travel, you can end up with nonsensical results in which the TSA person says, 'Well, I'm just following the rules,' " Hawley said. "But if you have an enemy who is going to study your technology and your process, and if you have something they can figure out a way to get around, and they're always figuring, then you have designed in a vulnerability."
Depending on more technology, better intelligence and more intensive training of screeners to "think and engage with customers," the agency is working on what it calls a "checkpoint evolution." Part of that evolution is to maintain a calm, orderly environment at checkpoints — because disruptions themselves provide opportunities for a would-be terrorist, he said.
(The private guard making that young woman empty her belongings on the floor at the Newark checkpoint is a good example of a needless disruption.)
Hawley said his main concern was the use of multiple improvised explosive devices simultaneously in multiple aircraft, as well as the constant probing of the system for vulnerabilities.
"These are not dark, shadowy forces," he said. "They are named individuals, with cells and know-how and training camps and active plot lines. We're in an everyday multiple-stream world. And our own rigidity can itself be a vulnerability."
The Associated Press
Tuesday, December 30, 2008
MOSCOW: President Dmitri Medvedev signed a law Tuesday extending presidential terms from four years to six, in a move seen as paving the way for Vladimir Putin's return to the presidency.
Medvedev's final endorsement of the legislation followed its quick approval by the Kremlin-controlled Parliament and all of Russia's 83 provincial legislatures. The change will not apply to Medvedev's current term, which is due to end in 2012.
Putin, barred constitutionally from seeking a third straight term as president, tapped Medvedev, his protégé, as his successor, ensuring a landslide victory. Putin then became prime minister and leader of the United Russia party, which dominates Parliament.
Putin remains popular and is still seen as the man calling the shots in Russia. But the rush to amend the Constitution just months after Medvedev's election has led to speculation that Putin wants to return to office now - before the financial crisis erodes his popularity.
Most analysts expect Medvedev would step aside if Putin asked him to do so. But some think the president could try to strengthen his position at Putin's expense as Russians become increasingly angry over economic difficulties.
Medvedev appeared to issue a veiled criticism of his mentor's course Monday, when he said that the cabinet's anti-crisis program was "well-balanced but not ideal."
"Medvedev may wait until Putin loses his popularity as the economy worsens by the day and dismiss him," an independent political analyst, Dmitri Oreshkin, was quoted by online Gazeta.ru as saying.
But Igor Bunin, head of the Center for Political Technologies, said Putin and Medvedev would try to preserve their alliance because its collapse could incapacitate the government.
Medvedev also turned his attention Tuesday to foreign affairs, once again expressing hope that Russia and the United States could mend ties frayed by disputes over U.S. missile defense plans and Russia's war in Georgia in August.
In a New Year's wish to President-elect Barack Obama, Medvedev suggested that the two nations could expand their cooperation on the basis of "pragmatism and a balance of interests."
The Associated Press
Tuesday, December 30, 2008
MOSCOW: An ailing former executive of the dismantled oil company Yukos who was jailed in 2006 was freed Tuesday after posting a $1.8 million bail, his lawyer said.
Vasily Aleksanian, currently in a Moscow clinic being treated for AIDS and cancer, faces money laundering and embezzlement charges in a host of criminal cases against Yukos and its jailed founder, Mikhail Khodorkovsky.
The trial of Aleksanian, a 36-year-old U.S.-trained lawyer, was suspended in 2008 and he was moved to a clinic in February while lawyers demanded his release on health grounds. He is now partially blind.
"The guards around his bed have been dismissed," Drew Holiner, Aleksanian's lawyer at the European Court of Human Rights, said by telephone. "But he is still in serious condition."
The Strasbourg-based court last week condemned Aleksanian's detention and ordered him released on humanitarian grounds.
Aleksanian and his lawyers will now be able to make sure he is tended to by the best doctors, something they were previously not permitted to do, Holiner said.
Aleksanian had been a vice president at Yukos and was a lawyer for Khodorkovsky, who is serving an eight-year sentence in a Siberian prison on fraud and tax evasion charges.
Once Russia's largest oil producer, Yukos was broken up and sold off in auctions in what was seen as the Kremlin's punishment for Khodorkovsky's political ambitions. Most of the company's assets were purchased at bargain prices by state-owned corporations.
The Moscow City Court set bail for Aleksanian in December, but rights groups condemned the amount as unreasonably high. His lawyers posted pleas and bank account details on Web sites to try to raise the sum.
Rights activists were initially doubtful that Aleksanian would be able to raise bail because the legal onslaught against Yukos left it bankrupt.
Holiner said he did not know who the private donors were or how many contributed.
"That's a private matter," he said.
Holiner said he viewed his client's release, despite the huge bail, as Russian compliance, which "has to be welcomed."
The treatment of another Yukos lawyer, Svetlana Bakhmina, also has attracted wide attention. Bakhmina became pregnant while in custody and her supporters had called on President Dmitri Medvedev of Russia to grant her amnesty.
She was recently transferred to a clinic near Moscow and gave birth to a girl last month.
By Nazila Fathi
Tuesday, December 30, 2008
TEHRAN: The authorities have stormed the private office of the Iranian Nobel Peace Prize laureate, Shirin Ebadi, seizing her computers and her clients' documents.
Ebadi, who is the country's most prominent human rights activist and an outspoken critic of the government, has recently come under increasing pressure from the government. The move Monday appeared to be part of an effort to limit her activities leading up to the presidential election in June.
This month, the authorities shut down her Center for Defenders of Human Rights, a coalition of human rights groups and other political activists whose members were planning to celebrate the 60th anniversary of the UN Declaration on Human Rights.
In an interview by telephone, Ebadi said that five men from the judicial authorities arrived at her office Monday afternoon, claiming they had a warrant to take her computers and documents to investigate whether she had evaded her taxes. Last week, the tax authorities went to her office to examine all her financial documents, she said.
Ebadi said she had resisted giving up her clients' files, which she said contained confidential information. But, after a five-hour ordeal, she was forced to surrender them, she said.
"I am not in a position to say what was the reason they came to my office today, but I know that those men who came knew they were not here for any tax-related issues," she said.
Pressure on rights activists has increased since the election of President Mahmoud Ahmadinejad in 2005.
Ebadi received the Nobel Peace Prize for her efforts for democracy and human rights in 2003.
Ebadi's prize was a source of pride for activists, who later came together to form the Center for Defenders of Human Rights. Among other causes, the center has criticized the increasing number of executions by the government, including those of juveniles.
Other activists said they believed the government intended to intimidate all rights groups, not only that of Ebadi.
"I think they wanted to send a message to all of us," said one women's rights activist who spoke on the condition of anonymity for fear of retribution. "The government does not like it when different groups with different ideologies and affiliations come together around a movement or a project. They wanted to stop this."Plan would cut subsidies
Ahmadinejad has presented an economic package to Parliament that will cut subsidies in the coming months, The Associated Press reported from Tehran.
The bill - if approved - is certain to raise prices and fuel inflation. It is also likely to further anger Iranians in a year when Ahmadinejad is up for re-election.
Ahmadinejad maintains that plummeting oil prices have made his plan inevitable. It includes scrapping costly subsidies for fuel, water and electricity.
Iran is already suffering under a 28 percent inflation. That, along with Ahmadinejad's failed election promises to bring oil revenues to every Iranian family, will hamper his 2009 re-election bid.
To compensate for the cut in subsidies, Ahmadinejad wants the government to pay the needy in cash.
The Associated Press
Tuesday, December 30, 2008
BANJUL, Gambia: Two British missionaries were sentenced Tuesday in Gambia to one-year jail terms with hard labor for criticizing the tiny West African country's government.
David and Fiona Fulton pleaded guilty last week to charges of sedition, and asked the court for a lenient sentence.
The pair, who have worked in Gambia for years, were arrested late last month in the predominantly Muslim nation after allegedly sending a letter to individuals and groups criticizing the government.
Gambia, a sliver of land within Senegal, has been ruled by the regime of Yayha Jammeh since he grabbed power in a 1994 coup.
Judge Edrissa Mbai said Tuesday the couple had shown no respect for Gambian authority or for Jammeh.
"In this country there is a law that one has to obey, whether Gambian or non-Gambian," Mbai said in the packed courtroom in the capital, Banjul.
The Fultons had originally maintained their innocence, but changed their plea at a hearing last week in which David Fulton apologized to the Gambian public and to Jammeh.
Defense lawyer Antoumane Gaye told the court his clients had been working to help Gambia for years, and asked that they be spared jail time.
It was not immediately clear where in Gambia the Britons would serve their sentences.
The two had been held separately — David Fulton in solitary confinement at Gambia's high-security Mile Two prison, and Fiona at a police station, according to the Web site of the Westhoughton Pentecostal Church in the northern English town of Bolton. The church has supported the couple in the past and is lobbying for their release.
Gambia is a former British colony, and critics say its people have limited freedom of expression under a repressive government.
The Associated Press
Tuesday, December 30, 2008
A prominent Zimbabwean activist and 31 others, some with bloodied and swollen faces, appeared in court on Monday in connection with a supposed plot to oust President Robert Mugabe by force.
The activist, Jestina Mukoko, and the other defendants arrived at the Harare magistrates court in leg irons and handcuffs.
Judge Mishrob Guvamombe said that they should remain in custody until Wednesday but that they could receive medical treatment from private doctors in prison.
Their lawyers had asked for them to be transferred to a hospital for treatment. The group has been charged with recruiting fighters to overthrow Mugabe.
The reported plot has been widely dismissed by opponents of the government as fabricated amid an increasing clampdown on dissent.
By Diana B. Henriques
Tuesday, December 30, 2008
NEW YORK: A U.S. District Court in New York will be the forum this week for three important issues affecting investors caught in the widening scandal surrounding Bernard Madoff, accused of operating a $50 billion Ponzi scheme.
Most important, Judge Louis Stanton of the court, who is handling the civil case against Madoff, is being urged to consider broadening the protections normally available to investors in failed Wall Street firms to allow for the "devastating" circumstances.
Stanton had established Wednesday as the deadline for Madoff to provide U.S. government securities regulators with a full accounting of his and his New York firm's assets - from real estate to art works to bank accounts. Regulators were to notify the judge if the report was not filed on time.
And finally, the court has been notified by the trustee overseeing the liquidation of Madoff's brokerage firm that the first mass notification to customers of the firm should be mailed out by the end of next week.
These developments in the civil case are paralleling a U.S. government criminal case accusing Madoff of securities fraud, based on accounts that he confessed to his sons on Dec. 10 that his entire business was "a lie" and a giant Ponzi scheme. According to court filings, Madoff himself put the losses as high as $50 billion.
Because Madoff operated a brokerage firm, some of his direct investors may be covered by the Securities Investor Protection Corp., or SIPC, a U.S. government fund created to cover fraud losses in brokerage accounts.
But many victims were not direct customers of the brokerage firm, Bernard L. Madoff Investment Securities. Instead, they had invested in "feeder funds," some of them operated by well-known Wall Street figures, which in turn invested with Madoff.
In a letter posted in the court docket on Monday, one of those indirect investors - Daniel Goldenson of Bremen, Maine - urged Stanton to consider looking past those feeder funds to the individuals ultimately affected by Madoff's collapse. They, not just the feeder funds, should be considered direct customers of Madoff's firm, Goldenson argued.
He acknowledged in his letter that a strict reading of the SIPC guidelines would not treat him as a customer. "But in this devastating case we feel it is appropriate to broaden investors eligibility beyond direct investments," Goldenson wrote.
"Please consider broadening access to SIPC for all individuals who lost so much or all of their life savings," he concluded. "This was an intertwined system of deceit and theft within our financial markets that has left retirees like ourselves having to sell our homes and raise money any way we can."
Stanton acknowledged the letter, but simply cited the early stages of the case and the complex legal issues that surround eligibility for brokerage-account protection without indicating if he would consider Goldenson's request.
Stephen Harbeck, the president of the SIPC, said during an interview that he could not predict whether the judge would follow Goldenson's suggestion. The crucial step now, he said, was for affected investors to submit their claims, so that they were on the record as the legal issues were being worked out.
That process is ready to move forward, as the trustee working for the SIPC has notified the court that he is ready to send out the first published and mailed notices to Madoff customers by Jan. 9.
Given early accounts that the records for Madoff's money management clients were found in considerable disarray, the announcement came earlier than many lawyers in the case had expected and would speed up the day when the legal issue of SIPC coverage could be considered in court.
That speed has come with a price tag. Stanton on Tuesday approved the payment of $28 million in expenses relating to the Madoff liquidation. The money is to cover salaries and benefits of employees continuing to work at Madoff's revenue-producing trading business.
The funds were sought under an agreement with Bank of New York Mellon, which holds three of the five bank accounts identified in court papers as belonging to Madoff or his firm.
Reuters
Tuesday, December 30, 2008
By Grant McCool
Confessed swindler Bernard Madoff faces a Wednesday deadline to tell regulators how much he is worth and where his money and other assets are, but it will likely be a longer wait before his investors, seeking to recover billions of dollars, learn the tallies.
Investigators from the U.S. Securities and Exchange Commission -- which is under fire for missing a purported decades-long $50 billion (34.6 billion pound) Ponzi scheme to fleece wealthy individuals and charities alike -- will take weeks to pore over the assets, liabilities and property declared by Madoff, 70.
A spokesman for the SEC declined comment. In general, the regulator is not required to immediately publicly file such disclosures with the courts.
Legal experts said Madoff, a former chairman of the NASDAQ stock market who was arrested and charged with securities fraud on December 11, would be better off declaring everything in this early stage of the parallel criminal and civil investigations.
"I find it hard to believe that he doesn't have anything that is hidden someplace," said Ellen Zimiles, chief executive of Daylight Forensic & Advisory LLC in New York, which works with corporations on compliance.
"If he is trying to do the right thing here he should put everything down. If it is found later that he has assets that are not included in that and someone finds them in some other manner, then that is going to be perjury, adding to his troubles," said Zimiles, a former federal prosecutor.
On December 18, U.S. District Court Judge Louis Stanton, who is handling the civil case, ordered Madoff and his Bernard L. Madoff Investment Securities LLC to provide the SEC "on or before December 31 a verified written accounting of all assets, liabilities and property currently held, directly or indirectly."
The order said this included bank accounts, brokerage accounts, investments, business interests, loans, lines of credit and "real and personal property, describing each asset and liability, its current location and amount."
Madoff's lawyer -- Ira Lee Sorkin, himself a former head of the New York office of the SEC from 1984 to 1986 -- could not be reached for comment on Tuesday.
Authorities said in court documents that Madoff confessed to running a Ponzi scheme with $50 billion in losses. Ponzi schemes are investment frauds in which early investors are paid with money from new clients.
Madoff is under house arrest in his Manhattan apartment on $10 million bail and he has not appeared in court to formally answer the charges.
Scores of wealthy people, banks, universities and charities all over the world say they are victims, but the exact amount of money lost is not yet known in what could be the largest fraud in Wall Street history.
Finding the money is a priority for investigators who want to recover as much as possible for those apparently duped by Madoff. On Tuesday, a bankruptcy court judge approved the transfer of $28.1 million to the trustee overseeing the liquidation of Madoff's firm from a bank account held by Madoff or his firm.
"This is one of many steps that Trustee Irving H. Picard has taken and will continue to take to collect all available assets of Bernard L. Madoff Investment Securities LLC for the future use of satisfying customer claims and other purposes," the trustee and the Securities Investor Protection Corp said in a statement.
The non-profit SIPC was created by Congress in 1970 to maintain reserves to help investors at failed brokerage firms.
The SIPC expects it will take several years to find the money in remote locations and sort through investor losses.
"We're looking everywhere for all assets," said Richard Bernard, a lawyer representing the court-appointed trustee.
A French hedge fund manager distraught over losing his own and clients' money apparently committed suicide in his New York office on December 23.
"There are a number of rich, angry investors who want to recover their losses," said Douglas Hirsch, a lawyer investigating civil lawsuits on behalf of investors who put their money in funds that in turn entrusted it with Madoff.
Since the Madoff scandal broke, these "feeder funds" have been sued in federal court by people seeking class action, or group status, for those ensnared in the purported fraud.
Investors have written to the judge in the civil case asking him to consider broadening access to the SIPC to any investor whose money ended up with Madoff, even indirectly.
"This was an intertwined system of deceit and theft within our financial markets that has left retirees like ourselves having to sell our homes and raise money any way we can," Daniel and Suzanne Goldenson of Bremen, Maine, wrote in a letter to Judge Stanton that was entered in the record.
The judge acknowledged the letter without indicating whether he would consider the request, according to court documents.
The cases:
USA v. Madoff 08-02735, U.S. District Court, Southern District of New York (Manhattan)
Securities and Exchange Commission v. Madoff et al 08-10791, U.S. District Court, Southern District of New York (Manhattan)
Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 08-01789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
(Reporting by Grant McCool and Emily Chasan; Editing by Gary Hill)
The Associated Press
Tuesday, December 30, 2008
WASHINGTON: The top accountant in the Securities and Exchange Commission's enforcement branch is leaving for a private sector job next month, in what could herald a wave of departures from the embattled agency.
The SEC said Tuesday that Susan Markel, chief accountant in the agency's division of enforcement, is taking a job in the corporate investigations practice of AlixPartners, a turnaround consulting firm.
Her departure comes as President-elect Barack Obama's SEC chairman-designate, Mary Schapiro, is likely to face pressure to bring sweeping changes to the agency, said James Cox, a Duke University law professor and securities law expert.
The SEC has come under fire for failing to detect signs that major Wall Street companies were in trouble. The commission also has been criticized for ignoring allegations brought to SEC staff about the Wall Street money manager Bernard Madoff's businesses. Madoff has been accused of engaging in a massive fraud that may end up costing investors $50 billion.
With the SEC under intense scrutiny from the incoming administration and lawmakers on Capitol Hill, more high-level staff changes could be in the works, Cox said.
For current staffers, it is often better "to leave on your own accord than to face the awkwardness of being asked to leave," he said.
Markel has been at the SEC since 1994, working on the agency's inquiries into Xerox, Cendant, WorldCom and Cardinal Health.
Linda Chatman Thomsen, director of the SEC's Division of Enforcement, praised Markel saying in a statement that "her instincts are superb and her investigative abilities are unparalleled."
Obama has promised a tougher regulatory and enforcement approach after he takes office on Jan. 20.
"Instead of appointing people with disdain for regulation, I will ensure that our regulatory agencies are led by individuals who are ready and willing to enforce the law," Obama said in December.
Meanwhile, the SEC also said Tuesday that it obtained a court order to halt an alleged pyramid scam that collected more than $23 million from Haitian-American investors.
The SEC said investors in the scheme were promised a 100 percent return on their investments within 90 days. In reality, the Florida-based operator of the alleged fraud had lost at least $18 million over the past year and siphoned off at least $3.8 million for personal use, the SEC said in court documents.
By Mark McDonald
Tuesday, December 30, 2008
HONG KONG: It has become one of the New Year traditions in the New China: a stern, old-school warning from the Communist Party about corruption.
The party's Central Commission for Discipline Inspection issued its annual broadside to government and party officials this week, a mind-your-manners reminder about bribes and malfeasance. The warning this year focuses on illegal business deals, and it is hardly a coincidence that the state-run news media are now full of stories about public officials brought low by shady schemes.
Fancy cigarettes were Zhou Jiugeng's undoing.
Zhou, a government real estate manager in the city of Nanjing, was spotted smoking Nanjing Imperial 95 cigarettes, which go for 150 yuan a pack, or about $22 - certainly an extravagance for a midlevel official like him.
The state-run China Daily newspaper said Internet sleuths - using what is known in China as a "human flesh search engine" - posted photographs online of Zhou smoking the luxury cigarettes. He also appeared to be wearing a $14,600 Vacheron Constantin watch, and the paper reported that "Zhou was also found to be driving a Cadillac to work."
Zhou, 48, was fired from his post on suspicion of "embezzling public funds to pursue a luxurious personal lifestyle," according to China Daily.
The upcoming Chinese Lunar New Year, inaugurating the Year of the Ox, falls on Jan. 26, 2009. The holiday season is a time for traveling, visiting friends and relatives, holding elaborate dinners, and giving gifts, particularly red-and-gold envelopes containing cash.
The official Chinese news agency, Xinhua, quoted the party commission's new circular that reminds officials to "live a frugal life and rule out extravagance and waste."
"Feasts, sightseeing and gift-giving with government money are absolutely forbidden."
That advisory was followed by a report Monday in China Daily that 40 government officials in Nanjing are under investigation over accusations that they accepted gifts worth $21,000 from a local toy company during the last New Year holiday.
The scandal came to light, a Nanjing newspaper said, when unpaid suppliers stormed and ransacked the offices of the toy company, which had gone bankrupt. A list of the government officials and their gifts was found by chance in a drawer. The gifts reportedly included cash, shopping cards and designer clothing.
Each New Year's corruption circular seems to strike a different theme. In 2005, officials were cautioned about gambling overseas. In 2006, it was bribes through wedding or funeral gifts. Last year, sightseeing tours at public expense.
The party also announced last week that nearly 151,000 government officials had been penalized in the year ending in November on various corruption and bribery charges.
Gan Yisheng, deputy secretary of the discipline inspection commission, said at a news conference last Friday that 4,960 of these were senior officials, Xinhua reported.
Among those whose ox was gored: a deputy mayor of Beijing, the former general manager of the oil and chemical giant Sinopec, the vice chairman of the Communist Party in Henan Province, and the vice chairman of Guangxi Zhuang Autonomous Region.
Cai Wenlong, 55, a senior government official and the board chairman of several state-owned companies in Anhui Province, received a suspended death sentence last week for embezzlement. State media reported that Cai had stolen or mishandled about $5 million, and that he had lost more than $43.8 million investing state funds in the stock and futures markets.
Two senior Communist Party members also have been expelled from the party for overstaying their visas in France, according to Xinhua. One of the officials has returned to China; the other has not.
In addition, Huang Songyou, a former vice president of the Supreme People's Court, also remained under investigation, said Gan, of the discipline inspection commission. Huang was removed in October for taking bribes, Xinhua reported, making him the highest-ranking judicial official to be fired for corruption since 1949.
Reuters
Tuesday, December 30, 2008
KAILUA, Hawaii: U.S. President-elect Barack Obama said on Tuesday he agreed that Senate Democrats "cannot accept" any move by Illinois' scandal-tarred governor to name a replacement for Obama's Senate seat.
Obama said he was disappointed that Gov. Rod Blagojevich -- who has been accused of trying to sell the vacant Senate seat -- had appointed former state attorney general Roland Burris to fill the vacancy.
"Roland Burris is a good man and a fine public servant, but the Senate Democrats made it clear weeks ago that they cannot accept an appointment made by a governor who is accused of selling this very Senate seat," Obama said in a statement, adding that he agreed with this position.
"I believe the best resolution would be for the Governor to resign his office and allow a lawful and appropriate process of succession to take place."
(Editing by Jackie Frank)
The Associated Press
Tuesday, December 30, 2008
WASHINGTON: When the first of many loud alarms sounded on the space shuttle Columbia, the seven astronauts had about a minute to live, though they didn't know it.
The pilot, William McCool, pushed several buttons trying to right the ship as it tumbled out of control. He didn't know it was futile. Most of the crew were following NASA procedures, spending more time preparing the shuttle than themselves for the return to Earth.
Some weren't wearing their bulky protective gloves and still had their helmet visors open. Some weren't fully strapped in. One was barely seated.
In seconds, the darkened module holding the crew lost pressure. The astronauts blacked out. If the loss of pressure didn't kill them immediately, they would be dead from violent gyrations that knocked them about the ship.
In short, Columbia's astronauts were quickly doomed.
A new NASA report released Tuesday details the chaotic final minutes of Columbia, which disintegrated over Texas on Feb. 1, 2003. The point of the 400-page analysis is to figure out how to make NASA's next spaceship more survivable. The report targeted problems with the spacesuits, restraints and helmets of the Columbia crew.
Many of the details about the astronauts' deaths have been known — they died either from lack of oxygen during pressure loss or from hitting something as the spacecraft tumbled and broke up. However, the new report paints a more detailed picture of the final moments of the Columbia crew than the broader investigation into the accident five years ago.
Astronaut Pam Melroy, deputy study chief, said the analysis showed the astronauts were at their problem-solving best trying to recover Columbia, which was starting to crack up as it re-entered Earth's atmosphere with a hole in its left wing, damage that had occurred at liftoff. "There was no way for them to know that it was going to be impossible."
The crew had lost control of the motion and direction of the spacecraft. It was pitching end-over-end, the cabin lights were out, and parts of the shuttle behind the crew compartment — including its wings — were falling off.
"It was a very disorienting motion going on," NASA deputy associate administrator Wayne Hale said in a telephone conference call. "There were a number of alarms going off simultaneously. The crew was trying very hard to regain control. We're talking about a brief time in a crisis situation."
The NASA study team is recommending 30 changes based on Columbia, many of them aimed at the spacesuits, helmets and seatbelts for both the shuttle and the next space capsule NASA is building. Since the accident, NASA has quietly made astronauts put more priority on getting their protective suits on, Melroy said.
NASA's suits don't automatically pressurize, "a basic problem of suit design and it is one we intend to fix with future spacecraft," Hale said.
Had the astronauts had time to get their gear on and get their suits pressurized, they might have lived longer and been able to take more actions. But they still wouldn't have survived, the report notes.
The report lists events that were each potentially lethal to the crew: Loss of cabin pressure just before or as the cabin broke up; crew members, unconscious or already dead, crashing into objects in the module; exposure to a near vacuum at 100,000 feet (30,500 meters); and crashing to the ground.
Killed in the Columbia disaster along with pilot McCool, were commander Rick Husband, Michael Anderson, David Brown, Kalpana Chawla, Laurel Clark, and Israel's first astronaut, Ilan Ramon.
Columbia was the second space shuttle NASA has lost. The hole in its wing was caused by a piece of foam insulation that broke off the fuel tank and slammed into it at launch. The shuttle Challenger blew up shortly after liftoff on 1986, also claiming seven lives. Investigators in both accidents pointed to a NASA culture of ignoring problems that later turned fatal.
Dr. Jonathan Clark, a former NASA flight surgeon and husband of Laurel Clark, praised NASA's leadership for the report "even though it says, in some ways, you guys didn't do a great job."
"I guess the thing I'm surprised about, if anything, is that (the report) actually got out," said Clark, who was a member of the team that wrote it. "There were so many forces" that didn't want to produce the report because it would again put the astronauts' families in the media spotlight.
Some of the recommendations already are being applied to the next-generation spaceship being designed to take astronauts to the moon and Mars, said Clark, who now works for the National Space Biomedical Research Institute at Baylor College of Medicine in Houston.
Kirstie McCool Chadwick, sister of William McCool, said a copy of the report arrived at her Florida home Tuesday morning but she had not read it.
"We've moved on," Chadwick said. "I'll read it. But it's private. It's our business ... Our family has moved on from the accident and we don't want to reopen wounds."
NASA held the report till after Christmas at the request of the families.
John Logsdon, who was a member of the original Columbia accident investigation board, questioned the need for the report, saying, "Those people are dead. Knowing in specifics how they died should be a private matter."
But for friends of the astronauts working on the investigation, confirming that the crew didn't suffer much "is a very small blessing," Melroy said.
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Correspondent Mike Schneider in Orlando, Florida, contributed to this report.
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On the Net:
The NASA report: http://www.nasa.gov/news/reports/index.html
By John Schwartz
Tuesday, December 30, 2008
NASA has named the rocket Ares I, as in the god of war — and its life has been a battle from the start.
Ares I is part of a new system of spacecraft being designed by the National Aeronautics and Space Administration to replace the nation's aging space shuttles. The Ares I and its Orion capsule, along with a companion heavy-lift rocket known as the Ares V, are meant for travel to the Moon and beyond.
Technical troubles have dogged the design process for the Ares I, the first of the rockets scheduled to be built, with attendant delays and growing costs. And in an age of always-on communication, instant messages and blogs, internal debate that once might have been part of a cloistered process has spilled into public view.
Some critics say there are profound problems with the design that render the Ares I dead on arrival, while other observers argue that technical complications crop up in any spacecraft development program of this scope.
The issues have become a focus of the members of the presidential transition team dealing with NASA, and the space program could undergo a transformation after Barack Obama takes office.
During his campaign, Obama expressed support for NASA and criticized the five-year gap between the scheduled end of the space shuttle program in 2010 and the planned debut of the first components of the new system, which NASA has given the overall name Constellation, in 2015. (During the pause in American flights — a Bush administration plan to conserve money during the development process — the United States will depend on Russia and its Soyuz spacecraft for trips to the International Space Station.)
But NASA, which has a $17 billion annual budget and most likely would face higher expenses if the gap is to be narrowed and the new program kept on track, will be competing for money as the new administration faces urgent and expensive crises.
The Obama transition team, in meetings and requests for information from NASA, contractors and others with a stake in the process, has asked whether increased financing can narrow the five-year flight gap by speeding development of the new spacecraft. The advisers have also asked what the costs and consequences might be of continuing to fly the shuttles for at least one or two additional flights, or even to keep flying them until the next system is ready.
The team has also asked whether the development program is truly in trouble and, if so, whether the Ares I should be modified or replaced by rockets used by the Air Force to launch satellites, or the Ariane 5 rocket from Europe.
While some involved in developing the rockets have read volumes into the questions, a spokesman for the transition team, Nick Shapiro, said that "the role of the agency review teams is not to make recommendations on any of the issues they are reviewing. They are fact-finding and preparing the full range of options for consideration by the incoming appointees."
Nonetheless, tensions have increased between the incoming administration and the management of NASA, whose administrator, Michael Griffin, is fighting to keep the program on course. If he is not reappointed by Obama, his term will end Jan. 20.
John Logsdon, a space historian at the Smithsonian Institution, said Griffin was fighting for a program "which he's put his whole reputation on." On the other hand, Logsdon said, a new president needs to press and probe. "Any administration making a choice that's going to last for a generation needs to make that choice for itself," he said.
A New Direction
In an enormous barnlike building at the Kennedy Space Center earlier this year, officials proudly showed off a prototype of the heat shield of the new Orion capsule, a rounded disc some 15 feet across. Startlingly large but oddly prosaic — it looked like nothing so much as a gigantic muffin top — it served as a powerful symbol for those at the space center. It meant the first pieces of test hardware were moving from computer screens to reality.
Metal, as they say, is being bent.
President George W. Bush announced the new direction for the space program in January 2004, nearly a year after the loss of the shuttle Columbia underscored the risks inherent in the spacecraft — especially the potential for debris to strike it during launching. In 2005, NASA lifted the curtain on the Constellation program, with the Orion capsule that would ride on top of its rocket, Ares I, out of the way of launch debris. It would be capable of carrying six astronauts; Apollo held three.
The Ares rockets are very different — both from the shuttle and each other.
Ares I, uses as its first stage a lengthened solid rocket booster like the ones used by the shuttle. The second stage is a rocket that will burn liquid hydrogen and liquid oxygen, as the shuttle's main engines do. Atop the stack will sit the Orion capsule.
The first test of an unmanned Ares I could take place next summer. The test, however, will use a spacecraft that is very different from the Ares I to come. It will involve a solid rocket booster of the same length that the shuttle uses, and the second stage and capsule will be dummies. Four more test flights are scheduled before the rocket is used beginning in 2015.
The Ares V is a much brawnier rocket designed to send equipment to the Moon and beyond. Its first stage includes two solid rocket boosters and a liquid-fueled set of six rocket engines.
The design process has run into technical problems. Orion is far heavier than the Apollo capsule and weight issues have required redesigns of both the capsule and the rocket, further complicating technical issues. Engineers have also had to come up with ways to dampen potentially dangerous vibrations along the shaft of the rocket as the solid rocket engine empties.
Some inside the development program have complained that it is run with a my-way-or-the-highway attitude that stifles dissent and innovation. Jeffrey Finckenor, an engineer who left NASA this year, sent a goodbye letter to colleagues that expressed his frustrations with the program. "At the highest levels of the agency, there seems to be a belief that you can mandate reality," he wrote, "followed by a refusal to accept any information that runs counter to that mandate." The letter was posted to the independent NASA Watch Web site.
Finckenor has refused to comment further.
Leroy Chiao, a retired astronaut who flew three shuttle missions and served aboard the space station, said that the 2004 announcement by Bush of NASA's new direction "was a time of great optimism." Chiao is not involved with the Constellation project today, but he said it was clear from some of the leaked discussions that "the program has not panned out as I, and the vast majority of people, had hoped."
Sunny Assessments
NASA officials say the Constellation program is actually coming along well. In an interview in November, Griffin said, "I can't imagine somebody thinks you're going to develop a new space transportation system and encounter no challenges." The ones NASA is encountering, he said, are "routine in the extreme."
Douglas Cooke, a leading space agency official on the Constellation program, told reporters this month that the weight and vibration issues were well on their way to being fixed. And Neil Otte, the launching chief engineer for the Constellation rockets, said that solving tough problems was what engineers did for a living. When they encounter a particularly difficult challenge, he said, their attitude is, "Hey, it's starting to get fun now, and we're earning our money."
Nonetheless, the chorus of naysayers that has arisen online, and even within NASA, often has a favorite alternative in mind. There is momentum behind using Atlas and Delta rockets developed for satellite delivery, which proponents say could quickly be fitted with the Orion capsule.
Griffin has proposed using satellite launchers for human flights in the past, a process known as "human rating" that involves upgrades to the safety and reliability of the craft. This year, he told French lawmakers that it would be a "small step" from today's French Ariane 5 rocket, which has launched a cargo craft to the International Space Station, to "an independent European human spaceflight capability." But he opposes the plan to use the military rockets and has said that the switch would lead to delay and cost increases while risking safety.
Otte said using military rockets would be far more complex than simply putting a capsule on top of off-the-shelf equipment. Rockets built for satellites would have to be extensively modified before putting humans aboard.
A second group of engineers favors plans for a follow-up system, called Direct 2.0, that is drawn largely from old NASA plans that had been abandoned. Ross Tierney, a spokesman for the group pushing Direct 2.0, said, "Let's have an independent review and check them all out."
"We're confident of what the numbers are going to be, and that we'll come out on top," he said.
But that concept has gained few followers, and in April, Richard Gilbrech, NASA's associate administrator for exploration systems at the time, testified before the House Subcommittee on Space and Aeronautics that "we can't justify, based on laws of physics, the performance" claimed by the plan's proponents.
Edward F. Crawley, a senior professor of aeronautics and astronautics at the Massachusetts Institute of Technology, said that the Ares I was not perfect, but that when seen in the context of its use of components from the shuttle program, military systems and the coming Ares V, it was the product of sensible choices. "I don't have any reason to believe there are major technical issues to block its success," he said.
Building a new rocket "is a hard thing," Crawley said, and initial test flights often end in embarrassment or even disaster because everything in a very complex system has to go right. "It's one strike and you're out," he said. "If you put every day of its development under a microscope, you'll find plenty of things to write about."
To Keep Flying or Not
When Obama decides what to do about space, he might also decide to narrow NASA's five-year flight gap simply by flying the space shuttles past the Bush administration's 2010 deadline.
Pressure has grown to keep the shuttles flying. In July, former Senator John Glenn of Ohio said in testimony before the House Science and Technology Committee that he favored flying the shuttles until the Constellation craft were ready to fly. "I never thought I would see the day when the world's richest, most powerful, most accomplished spacefaring nation would have to buy tickets from Russia to get up to our station," said Glenn, the first American to orbit the Earth.
Continuing shuttle flights has also been proposed by the New Democracy Project, a group with strong ties to John Podesta, a co-chairman of the Obama transition team.
To Griffin, though, such proposals threaten to scuttle the new space program by hijacking billions of dollars that could go to Constellation development. He also argues that the shuttle's considerable risks make it unsafe to continue flying it. In an interview in November, Griffin defended the program he has put in place.
"U.S. civil space policy, in terms of its goals, was headed in the wrong direction after the Nixon administration," he said. Today, with the nation talking about going back to the Moon, exploring near-Earth asteroids and even going to Mars, "that's the right path for us to be investing in," he said.
Crawley of MIT said he would like to see a panel of "unbiased and wise people" under the new administration weigh NASA's plans against the alternatives while keeping in mind the broad range of budgetary, workforce and technical issues. "I don't frankly know what the answer is," he said, "but I know it's a lot closer and a lot more complicated answer than the one playing out in the media and the blogs."
And then, Crawley said, get on with it. The space program's $17 billion annual budget is small in comparison with other elements of the nation's spending. But its payoff, he noted, can be big. If the new president seeks to stimulate the economy with "domestic high-technology jobs that provide stable and rewarding employment," he said, "space would be a well-placed investment."
By Susan Dominus
Tuesday, December 30, 2008
NEW YORK: When a certain kind of client calls Michael Madigan these days, the two of them speak in a local dialect that could be described as business euphemism. The client doesn't say he's been laid off; he says, "It looks like we'll be wrapping things up here." Madigan doesn't talk about how he can help that client start over; he talks to him about "business alternatives."
Madigan, 27, is the guy who manages the tech guy - he's the client services director at Chelsea Technologies, a small operation that specializes in providing information technology services to hedge funds and small investment funds around the city.
To the average white-collar worker, the tech guy occupies a slot somewhere between the plumber and the in-house counsel - he is there to serve but holds a worker's professional well-being in his highly skilled hands. He sometimes has access to highly confidential documents and must be discreet. He must inspire confidence. He must speak the local dialect. He must respond with speed.
Madigan, who once worked on the floor of the New York Stock Exchange, understands all that. He started paying attention in November when two former clients called him to say they'd be wrapping things up at their offices and needed help setting up home offices so they could do some trading on their own. In December, he got a flurry of calls saying the same thing, enough that last week, his firm started aggressively marketing "robust, versatile solutions for the home office known as Chelsea Home Office Solutions."
Included in the various packages, Madigan said, is help with one of the first needs a newly out-of-work hedge funder usually asks for: e-mail.
E-mail? The same men (and like the tech guys, they're mostly men) who were managing millions upon millions of other people's dollars can't be relied upon to set up their own e-mail accounts?
"A lot of these guys are used to working in investment houses where they have chefs coming and making them omelets in the morning and baking them cookies in the afternoon, and all that," Madigan said. Maybe they could, or maybe they couldn't, figure out how to set up a secure, backed-up account that syncs with their BlackBerry and has a professional-sounding name. Either way, he said, they're used to a certain level of service.
Madigan also found that many of his new home-office clients don't want any old Gmail account. They want an e-mail account that looks and works and feels just like the one they had in their office, a level of familiarity that's not just efficient but comforting. And that's true for their other computer systems as well, right down to which corner of the screen they'll see their instant messenger icon pop up. "We're selling them that 'big bank' feel," said Madigan, who also helps set up his clients with computers with the power to handle market data feeds and high-volume printers. "Oftentimes they're trying to look like a bigger operation, with a more professional approach," Madigan said.
For the most part, said Madigan and Adam Cabezas, a client services engineer with Chelsea Technologies, the newly unemployed hedge funders they've met haven't seemed demoralized by the turn of events. "The typical person I'm seeing is somebody who's been a go-getter his whole life," said Cabezas, who has been spending time with the clients at their homes, helping them arrange their new lives. "They're definitely in reaction mode - they want a fast turnaround. That's the way they've been trained, and that's the way they've lived their whole lives. They're very optimistic."
If anything, said Madigan, he urges his employees to bring an even higher level of professionalism into the homes of their clients, all in the name of maintaining that investment bank feel in an alternative setting. He requires his workers to take their shoes off before entering clients' homes (God knows how much their carpets cost), and to avoid using their bathrooms, waiting instead for a lunch break outside the home.
The systems Madigan sets up may ultimately boil down to a series of brilliantly arranged zeros and ones, but he understands that part of his business - part of so many businesses - is creating an illusion, in this case, a new one that replicates, as closely as possible, the old one. Many of his new clients will probably spend some of their solitary lunch breaks pondering just how much illusion is good for business, and at what point it teeters into dangerous folly.
When setting up home offices, Madigan's colleagues enter into people's private domains and sit with them for hours, talking through the various systems, explaining how they work and how to respond when something fails. His code of professionalism requires that the tech specialists try to avoid personal conversations, but every once in a while, after all those hours of working in tandem, they can't avoid it. Cabezas was getting ready to leave one former banker's apartment after setting up the last system for a home office when the client confessed that he was really going to miss having co-workers, that collegiality, that sense of community. Cabezas assured him that with instant messaging and e-mail and video conferencing, he'd surely feel in touch - in technology, the promise of comfort.
By Bob Driehaus
Tuesday, December 30, 2008
DUBLIN, Indiana: Former Senator Tom Daschle, whom President-elect Barack Obama has called the "lead architect" of the new administration's efforts to expand health insurance and rein in medical costs, attended a community meeting here where he received an earful about expenses that were too high and coverage that was too little.
Dolly Sweet, 79, said she beat breast cancer 20 years ago but was now battling lung cancer without the drug her doctor had prescribed. Sweet told Daschle that after covering her radiation treatment, Medicare would not pay for follow-up treatment with the drug Tarceva, which would have cost $32,000 a year.
"Then what happened?" Daschle asked.
"I'm still here," she replied. "You always look over your shoulder and see someone else who's worse off."
The gathering in this small eastern Indiana town was one of thousands on health care being held around the country at the behest of the Obama transition team, and the first attended by Daschle, whom Obama has chosen to be secretary of health and human services and director of the new White House Office of Health Reform.
Daschle was joined at the meeting, which was held at the town's firehouse, by several dozen other people. Among them were doctors and administrators from Reid Hospital in nearby Richmond, who told of patients who were flooding the emergency room there because they did not have primary care doctors or insurance coverage.
"Our population hasn't grown, yet our emergency department census has more than doubled," Michael Baldwin, the department's director, said of changes over the past 24 years. "Everyone used to have his own doctor. Now little more than half do."
Joseph Fouts, one of the area's few general practitioners, said he dealt nearly every day with patients who had found jobs carrying health benefits but who were denied coverage because of what insurers determined to be pre-existing conditions. In a recent case, Fouts said, a child of one such person was denied coverage for a cold prescription because he had a cold last year.
After listening for nearly 90 minutes, Daschle said the system could be changed by citizens' participation. "When we combine all the stories we heard in this small town of Dublin and multiply that by 300 million people, we can begin to imagine the scope of the problem," he said. "But I'm hopeful that the country has come together to say: 'Enough already. We have to fix this."'
By Carl Hulse
Tuesday, December 30, 2008
WASHINGTON: Republican congressional leaders are trying to pressure Democrats to be more open about the drafting of a huge economic recovery bill that Democrats hope to pass in the first days of the Obama administration.
Senator Mitch McConnell of Kentucky and Representative John Boehner of Ohio, the Republican leaders of the two chambers, called Monday on Democrats to hold hearings on the emerging legislation and not schedule any votes on the bill until it had had at least a week of public review.
"A trillion-dollar spending bill would be the largest spending bill in the history of our country at a time when our national debt is already the largest in history," McConnell said in a statement. "As a result, it will require tough scrutiny and oversight. Taxpayers, already stretched to the limit, deserve nothing less."
He and Boehner were careful not to say they would oppose a measure that some economists have said is necessary to prevent an even deeper recession. But they warned Democrats against loading the legislation with provisions they called wasteful.
"We must act in a responsible way that helps get our economy moving again, not with more pork-barrel spending that does nothing but give taxpayer money to special interests and campaign contributors," Boehner said in a statement.
The Democrats, who have been trying to assemble the framework of an economic recovery plan in concert with representatives of President-elect Barack Obama, said they were willing to work with Republicans and would try to reach agreement on a process for weighing and acting on the measure.
"As families across America continue to struggle, it is essential that we pass legislation to help create jobs and get our economy back on track," said Jim Manley, senior communications adviser to Senator Harry Reid of Nevada, the majority leader. "Senator Reid understands that the only way that we can do so is with the cooperation of Senate Republicans, and he intends to work on a bipartisan basis to pass an economic recovery package."
The Republican demand for transparency was an opening salvo in what could be the first major fight over the economic plan that lawmakers are preparing to take up when the 111th Congress convenes Jan. 6. The maneuvering may be one of the best options open to the minority party, given reduced Republican ranks in both the House and Senate.
Estimates of the price tag for the economic plan vary widely, but David Axelrod, a senior adviser to Obama, said Sunday that a cost of $675 billion to $775 billion had been discussed.
Democrats have spoken only broadly about how the money would be spent on public works and energy projects.
Reuters
Tuesday, December 30, 2008
BERLIN: German Chancellor Angela Merkel said Wednesday she would press for stronger international financial regulations, saying the global economic crisis created an opportunity for more controls and greater transparency.
In a speech for broadcast on New Year's Eve released in advance, Merkel said her government would raise spending on infrastructure and education to stimulate growth, but warned she would not be pushed into heavy stimulus spending.
"The world is learning its lessons from the financial crisis," said Merkel, adding that the "financial excesses" and irresponsible behaviour of some bankers and managers were to blame for the crisis.
"The world has lived beyond its means," she said.
Merkel, who has indirectly criticised the United States and Britain for thwarting earlier efforts to tighten controls and introduce more transparency, said she would press for international organizations to clamp down.
"The opportunity created by this crisis is for the introduction of international rules that are based on the principles of the 'social market economy'," she said, referring to the German economic model with its heavy state intervention.
"I'm not going to let up until we've achieved our goal of getting these rules in place," Merkel said.
"The state is the guardian of the economic and social order. Competition must have a sense of proportion and social responsibility. These are the principles of the social market economy. They're in force in Germany but that's not enough.
"These guiding principles must be followed worldwide."
Merkel, whose annual address will be broadcast on German television on New Year's Eve, said the government would expand roads and railways and improve communications and be looking to protect and create jobs.
Schools, training centres and universities would be the focus of new spending, Merkel said.
But she added that Germany, where the crisis has not hit as hard as elsewhere, would not be pushed into stimulus measures of the same scope as in some other countries.
"The government is acting with determination and completeness," said Merkel, in an apparent response to criticism at home and abroad that she has dithered. "But I'm not going to make any decisions based on who screams the loudest."
(Writing by Erik Kirschbaum; Editing by Jon Boyle)
Tuesday, December 30, 2008
HONG KONG: Not a day goes by without Japan's so-called "lost decade" being wheeled out in support of pleas for bigger and faster injections of government money into wobbly financial systems and weakening economies. Japan's allegedly inadequate response to the bursting of its asset bubble 18 years ago is said to have led to years of deflation, government deficits and minimal economic growth. Today Japan's stock prices are still one quarter of their 1990 peak. According to this wisdom, Japan is the example to be avoided unless the U.S. and others are to have their own decades of deflation and decline.
But is it? Could the assumption be an inflationary trap? Could the Japanese have been wiser than you think?
There are many criticisms that can be made of official Japan's failure to recognize the extent of post-bubble, asset-price declines and their impact on banks, consumer confidence and corporate balance sheets. Much government spending that was supposed to spur demand went on economically wasteful pork-barrel projects and bridges to nowhere. Politics and bureaucracy thwarted structural reforms.
But before foreigners jump to too many conclusions about Japan's failures, they would do well to look at the data of Japan's actual performance during the "lost" years.
Japan never had a major post-bubble crisis, just years of gradual adjustment. Deflation of consumer prices did occur for a number of years but it was never above 0.9 percent in any one year and cumulatively was no more than 6 percent. This relatively modest if lengthy level of deflation, common in the 19th century, should only be viewed as dangerous by nations whose financial and debt structures are geared to price inflation. In Japan, consumer prices are now at the same levels as in 1992. Nominal returns on savings have been low but positive in real terms - in other words, better than in the United States since 2000.
A significant part of the deflationary pressure can also be attributed not to post-bubble financial policies but to the near doubling of the yen's value forced on Japan by the Plaza Accord in 1985. Appreciation culminated in a peak of 85 to the dollar in 1995 compared with 240 a decade earlier.
Japan's GDP performance looks worse than its peers partly because Japan's population has barely grown over this time and has begun to shrink while most other developed countries still have population growth. For sure, Japan has a serious demographic problem - which Germany and Italy will soon emulate - but that is a different issue and one that financial policies cannot address.
When measured against other developed countries in per capita terms Japan's overall performance has been moderate rather than bad. It was very weak in the late 1990s, with two years of contraction, when the East Asian crisis led to sharp export contraction. But for this decade so far, Japan's per capita growth has exceeded that of the United States, Germany and France. Of the major developed nations it was only exceeded by Britain, which was boosted, until recently, by financial services and household borrowing booms. Japan's cumulative per capita growth this decade has been 13.7 percent compared with 12.5 percent for the United States.
Roughly the same results are shown if one measures Japan's per capita income on a purchasing-power parity basis. European Union data for 1998-2007 indicate that Japan's fell slightly, compared with the United States and Britain but gained on Germany
Indeed, perhaps the only overall conclusion that can be drawn from the data is that the United States and Britain became ever more reliant on foreign capital to finance their growth and consumption while Japan, like Germany, continued to show the savings excess needed by countries with rapidly aging populations. Contrary to the United States, growth today was being sacrificed for security tomorrow. The government borrowed heavily, but from Japanese, not foreigners. Meanwhile, Japan continued to accumulate foreign assets. In other words the Japanese may have been behaving in a much more rational manner than they are given credit for.
By learning the wrong lessons from Japan, the United States and others are stoking renewed inflation and putting off the years of savings needed by their aging populations.
By Martin Fackler
Tuesday, December 30, 2008
TOKYO: It was erected in a city still scarred by war, on the grounds of an ancient Buddhist temple, using steel from scrapped American battle tanks. But when finished in 1958, Tokyo Tower gripped Japan's imagination by pointing the way to a brighter future.
The 333-meter, or 1,093-foot, structure, which resembles the Eiffel Tower but with orange and white stripes, was the world's tallest self-supported steel structure, a title it still holds. That, and the fact it was used to broadcast color television, then in its infancy, made the tower an instant symbol of the nation's peacetime ambitions to excel in technology.
While it never gained the global recognition of its Parisian twin or the Statue of Liberty, the tower remains a landmark in this now affluent, sprawling city. But after a half century, the aging spire is no longer as prominent, or inspiring, as it once was.
Tokyo Tower turned 50 last week amid a wave of nostalgic national media coverage. Television news showed grainy black-and-white film of the tower, describing it as part of a bygone era of heady achievements that also included Japan's bullet train and the 1964 Summer Olympics in Tokyo.
Indeed, the tower seems to have won a new place in the national imagination, this time as a monument to a sepia-toned past. The change comes at a time when Japan as a whole seems to have lost confidence in its future, or has even resigned itself to slow decline.
The change also underscores a broader point: How the passage of time can shift the meaning of national symbols - even ones as large as Tokyo Tower.
"Tokyo Tower stood for a dream of the future, but that dream is gone," said Masanori Nakamura, a professor emeritus of history at Tokyo's Hitotsubashi University. "Tokyo Tower offers no more dreams, just as Japan has no more dreams."
In recent years, Tokyo Tower has become harder to spot among the city's growing number of ever more boldly designed glass skyscrapers.
In 2011, it will lose its long-held distinction as the city's tallest structure to a new television tower, the awkwardly named Tokyo Sky Tree, which will be 610 meters, nearly twice as high as Tokyo Tower.
Still, the tower, which has drawn some 157 million tourists since it opened, maintains a grip on the city's imagination. Last Tuesday, some 20,000 visitors turned up for the 50th birthday, lining up for hours to take elevators to one of the tower's two observation decks.
Its owner, Nippon Television City, gave Tokyo Tower a $6.5 million makeover for the occasion with a new nighttime illumination scheme, the Diamond Veil, featuring 276 lights in seven colors.
Visitors to the tower and nearby residents explained its appeal in affectionate terms, describing it as an old friend who had stood with them through decades of breathtaking social and economic transformation.
"For my father's generation, Tokyo Tower was the symbol of the new Tokyo that they wanted to build," said Midori Tajima, 60, who owns a camera shop near the tower. "But for my generation, it has watched over us during 50 years when everything else seemed to be changing."
Tajima, who as a fourth grader watched the tower being built, celebrated the anniversary by displaying old photographs in her shop, including one from 1958 that showed the structure rising over a jumble of wooden homes and now-vanished cable cars.
When completed, the tower stood almost 274 meters above the Japanese capital's next highest structure at the time, the Parliament building.
As it was being erected, rumors abounded that Hawaii would be visible from the top, older residents say.
Before his death in 1986, the tower's creator, Hisakichi Maeda, a former owner of the right-leaning newspaper Sankei Shimbun, called the soaring structure "a triumph of Japanese technology."
The tower cost $8.4 million at the time and used scrapped Korean War tanks, one of the few sources of quality steel at the time.
The recent nostalgia boom has led to a revival in the tower's popularity. After more than a decade of slowly dwindling visitors, the number has risen by roughly 50 percent in the past three years to some 3.2 million last year, Nippon City said.
This nostalgia boom has partly been fueled by a flurry of recent novels and movies that featured the tower. (One of its first cinematic appearances was in "Mothra," a 1961 black-and-white monster film in which the tower was toppled by a giant caterpillar.)
In the recent books and films, the tower often appears as a metaphor for what this graying nation feels it has lost in recent decades: the shared sense of purpose and youthful optimism that drove its economic miracle, or even the simpler lifestyles before Japan became an economic superpower.
So keen is interest in the tower's history that the owner has begun asking the workers who built it to come out of retirement and talk to schools, tour groups and the press. One is Goro Kiryu, 76, who says tightening bolts on the tower's steel girders felt like just another job at the time, though one that involved unusual heights and fearful winds.
"At the time, everyone was just working hard to improve our lives," Kiryu said. "Now I realize that Tokyo Tower was my life's main work."
The company is hoping the nostalgia boom will also help keep the tower profitable, after television networks started announcing that they would switch their broadcasting to the Sky Tree. Fearful of also losing tourists to the taller new rival, Nippon City says it will renovate the tower's outdated attractions to play up the history angle.
"Tokyo Tower is a part of Tokyo's history," said Tatsuo Matsuzawa, a managing director. "We want it to survive another 50 years."
By Jack Healy
Tuesday, December 30, 2008
NEW YORK: Home values in the 20 largest U.S. metropolitan areas dropped at a record pace in October as the fallout from the financial collapse reverberated through the housing market, according to data released Tuesday.
The price of single-family homes fell 18 percent in October from a year earlier, according to the closely watched Standard & Poor's/Case-Shiller home price index. All 20 cities reported annual price declines in October. Prices in 14 of the 20 metropolitan areas surveyed fell at a record rate. "October was clearly the free-fall month," said David Blitzer, chairman of the index committee at Standard & Poor's.
Adding to a gloomy economic picture, the Conference Board reported Tuesday that its consumer confidence index, after rising moderately in November, declined to an all-time low in December. The index now stands at 38.0, down from 44.7 in November.
Home prices, after increasing steadily through the first part of the decade, have fallen every month since January 2007, their slide accelerating as troubles in the housing market infected the broader economy and brought down financial firms.
Prices are falling at their fastest pace on record, a sign that the housing market is a long way from recovery.
"It is unlikely that we are anywhere near a bottom in nationwide home prices," Joshua Shapiro, chief United States economist at MFR, a New York-based economic consulting firm, wrote in a note.
The 10-city index dropped 19.1 percent in October, its largest decline in its 21-year history, and the new numbers show that the cities that played host to the greatest excesses of the housing boom are suffering the deepest drops.
Prices in Las Vegas and Phoenix fell by nearly a third in October from 2008. Home prices fell 31 percent in San Francisco and 29 percent in Miami. Prices in New York declined 7.5 percent in October from the same month a year ago.
Fourteen of the 20 cities in the Case-Shiller survey posted double-digit declines for the year. The relative winner was Dallas, which had the smallest yearly decline, of 3 percent.
Drops in England and Wales
House prices in England and Wales fell by 12.2 percent in November compared to the same month a year ago, according to a government report released Tuesday, The Associated Press reported from London. It was the biggest drop since the price survey began in 2000.
The average home in England and Wales now costs £161,883, or $234,696, down more than £20,000 from November 2007, the Land Registry said in its house price survey.
The Land Registry said sales volumes have also fallen dramatically over the past year, with an average of 48,599 house sales going through each month in the June-to-September period - less than half the average monthly sales volume of 115,697 a year earlier.
The article blaming President Bush for the housing-bubble crash, "Bubble fed on Bush's vision - and his ambition" (Dec. 22), managed to plow through dozens of paragraphs without mentioning the main reason we are in this mess: The Community Reinvestment Act originally passed by a Democratic-controlled Congress under Jimmy Carter in 1977 and vigorously reinforced under the Clinton administrations. This omission defies belief.
It was the CRA, a Democrat-conceived and imposed, market-skewing piece of legislative folly, that spawned the whole orgy of subprime lending that has gotten us into the global financial mess we're in today.
To publish a long article on the subprime housing disaster that blames Bush and never mentions the CRA is akin to writing an article on the causes of the Civil War that blames Lincoln while never mentioning such small details as the Kansas-Nebraska Act or the Dred Scott decision.
Jack Jolis, Brasschaat, Belgium
The article blaming President Bush for the housing meltdown is disturbing. Many articles from your own archives dispute the contention that Bush is responsible for today's troubles.
For example, the article "Fannie Mae Eases Credit To Aid Mortgage Lending" (Sept. 30,1999), which is available on the New York Times Web site, highlights the fact that the Clinton administration was the first to push lending to subprime mortgage applicants.
The 1999 article clearly explains that Fannie Mae's then-new practice could lead to financial trouble for the U.S. government. Here is a passage from that piece: "'From the perspective of many people, including me, this is another thrift industry growing up around us,' said Peter Wallison a resident fellow at the American Enterprise Institute. 'If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry."'
Jared Reeder Greensboro, North Carolina
By John Leland
Tuesday, December 30, 2008
When Marci Needle and her husband began to contemplate divorce in June, they thought they had enough money to go their separate ways. They owned a million-dollar home in Atlanta and another in Jacksonville, Florida, as well as investment properties.
Now the market for both houses has crashed, and the couple are left arguing about whether the homes are worth what they owe on them, and whether there are any assets left to divide, Ms. Needle said.
"We're really trying very hard to be amicable, but it puts a strain on us," said Ms. Needle, the friction audible in her voice. "I want him to buy me out. It's in everybody's interest to settle quickly. That would be my only income. It's been incredibly stressful."
Chalk up another victim for the crashing real estate market: divorce.
With nearly one in six homes worth less than the mortgage owed on it, according to Moody's Economy.com, divorce lawyers and financial advisors throughout the country say the logistics of divorce have been turned around.
"We used to fight about who gets to keep the house," said Gary Nickelson, president of the American Academy of Matrimonial Lawyers. "Now we fight about who gets stuck with the dead cow."
As a result, divorce has become more complicated and often more expensive, with lower prospects for money on the other side. Some divorce lawyers say that business has slowed down, or that clients are deciding to stay together because there are no assets left to help them start over.
"There's an old joke," said Randall Kessler, Ms. Needle's lawyer: "Why is a divorce so expensive? Because it's worth it. Now it better really be worth it."
In a normal economy, couples typically build equity in their homes, then divide that equity in a divorce, either after selling the house or with one partner buying out the other's share. But after the recent boom and bust cycle, more couples own houses that neither spouse can afford to maintain, and that they cannot sell for what they owe on it. For couples already under stress, the family home has become a toxic asset.
"It's much harder to move on with their lives," said Alton Abramowitz, a partner in the New York firm Mayerson Stutman Abramowitz Royer. "I'm in the middle of several cases where it's virtually impossible right now to get a good read on what the real estate is worth," he added. "All of a sudden, prices are all over place, people aren't closing, and it becomes virtually impossible to judge how far the market has fallen, because nothing is selling."
For John and Laurel Goerke, in Santa Barbara, Calif., the housing market crashed in the middle of what Mr. Goerke said was an orderly legal proceeding. At the height of the market, Mr. Goerke said, they had their house appraised at $2.3 million, which would have given them about $1 million to divide after paying off the mortgage. But by the time they sold last year, the value had fallen by $600,000, cutting their equity by more than half.
"That changed everything," said Mr. Goerke, who is now nearly two years into the divorce process, with legal and other fees of several hundred thousand dollars. "The prospect of us both being able to buy modest homes was eliminated. The money's not there."
Now, with both spouses living in rental properties, their lawyers still cannot agree on what their remaining assets are worth. Their wealth is ticking away at $350 an hour, times two.
"It's got to end," Mr. Goerke said, "because at some point there's nothing left to argue about."
For other couples it does not have to end. Lisa Decker, a certified divorce financial analyst in Atlanta, said she was seeing couples who were determined to stay together even after divorce because they could not sell their home, a phenomenon rarely seen before outside Manhattan.
"We're finding the husband on one floor, the wife on the other," Decker said. "Now one is coming home with a new boyfriend or girlfriend, and it's creating a layer to relationships that we haven't seen before."
In California, James Hennenhoefer, a divorce lawyer, said couples were taking advantage of the housing crisis to save money by stopping their mortgage payments but continuing to live together for as long as they can. "Most of the lenders around here are in complete disarray," Hennenhoefer said.
"They're not as aggressive about evictions" he said. "Everyone's hanging around in properties hoping the government will buy all that bad paper and then they'll negotiate a new deal with the government. They just live in different parts of the house and say, We'll stay here for as long as we can, and save our money, so we have the ability to move when and if the sheriff comes to toss us out."
Hennenhoefer said this tactic worked only with first mortgages; on second and third mortgages, the lenders pursue repayment even after the homeowners have lost the home.
Dee Dee Tomasko, a nursing student and mother in suburban Cleveland, expected to leave her marriage with about $200,000 in starter money, primarily from the marital home, which was appraised at about $1 million in 2006. By the time of her divorce last year, however, the house was appraised at $800,000; her share of the equity came to about $105,000.
Though she is relieved to be out of the marriage, Tomasko said, if she had known how little money she would get, "I might have stuck with it a little more, I don't know. Maybe it would've made me think a little harder."
For divorcing spouses with resources, though, there can be opportunities in the falling housing market. Josh Kaufman and his wife bought a new, 6,500-square-foot, or 600-square-meter, house outside Cleveland on 5.5 acres, or 2.2 hectares, with four bedrooms and two three-car garages that was worth $1.5 million at the height of the market. When they divorced in June, Kaufman knew his wife could not afford to carry the home. The longer the divorce process continued, the more the house depreciated; by the time he assumed the house, its appraised value was half what the couple had put into it; he did not pay her anything for her share.
"From a negotiating standpoint we knew that she couldn't afford to stay in it," Kaufman said. "It appeared as an opportunity to turn the negative situation around. There was no emotion involved. It was a business decision on what made most financial sense. It wasn't an attempt to take advantage of someone."
Still, his lawyer, Andrew Zashin, said, "He bought this house at a bargain basement price."
For Nancy R., who spoke on condition of anonymity because her colleagues do not know her marital status, the impediments to divorce are visible every time she opens her door.
"There's three other houses for sale on our same road," she said. "There's no way our house would sell."
For now the couple are separated, waiting for real estate prices to recover. But for Ms. R., that means remaining financially dependent on her husband. He moved out; she remains in the house.
"I still feel kept in certain ways, and I don't want to rock the boat," she said. "And it's draining. So suddenly, when there's an economic crunch, we're paying for two places."
The same dynamics that marked their marriage now hang over their separation, she added.
"He has the ultimate control," she said. "We can't sell the house, and whatever settlement I get depends on a good relationship with him, based on his good will. The lines get blurry and confused quickly, which makes emotions fly easily. Any icing on the cake is going to come from his good will, and that means being the peacemaker. I'm the underdog in this situation. We're basically forced to remain in a relationship after we've decided to end it."
U.S. consumer confidence and home prices hit grim records
Reuters
Tuesday, December 30, 2008
By Burton Frierson
The U.S. economy extended its run of record-breaking dismal data on Tuesday, with consumer confidence and home prices registering a pair of grim milestones.
U.S. consumer confidence fell to a record low in December as the worst job market in 16 years hammered sentiment, the Conference Board business research firm said.
The dour sentiment has had a harsh impact on spending. The U.S. holiday shopping season has been the worst since at least 1970 due to the recession, the International Council of Shopping Centres said.
Prices of U.S. single-family homes in October posted a record fall of 18.0 percent from a year earlier, according to the closely watched Standard & Poor's/Case-Shiller Home Price Indices.
Business activity in the U.S. Midwest continued to shrink in December but at a less severe rate than expected, and input prices fell sharply.
The data was the latest reminder that the U.S. economy is in for a tough slog after a year-long recession, which many expect to continue during the first half of 2009.
"Really at this point we are not going to be seeing anything fundamentally positive from the U.S. for the time being," said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon in New York.
On Wall Street, stocks closed higher despite the weak data. U.S. government bonds, which are highly sought after by investors during troubled economic times such as these, also rallied.
The Institute for Supply Management-Chicago business barometer rose to 34.1 for December from 33.8 in November. The reading was better than the 33.0 economists had forecast, but was still well below the 50 level that separates expansion from contraction.
"RAPID AND STEEP DETERIORATION"
The Conference Board said its Consumer Confidence Index fell to 38.0 in December from a slightly downwardly revised 44.7 in November.
The median forecast of economists polled by Reuters was for a reading of 45.0. Their 62 forecasts ranged from 40.0 to 51.1.
"The further erosion of the Consumer Confidence Index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008," said Lynn Franco, director of the Conference Board's Consumer Research Centre.
"The overall economic outlook remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half."
Chief among consumers' woes has been spiralling job losses in recent months.
U.S. employers axed 533,000 jobs from payrolls in November alone, the most in 34 years, according to Labour Department data released earlier this month.
The Conference Board data reflected this, with its "jobs hard to get" index rising to 42.0 in December -- the highest since December 1992. That was up from 37.1 in November.
Not surprisingly, consumers also rated their present situation poorly, with the index of this measure tumbling to 29.4 -- its lowest since April 1992 -- from November's 42.3.
Sales at U.S. chain stores fell 1.8 percent in the week ended December 27 compared with the previous year, while sales fell 1.5 percent compared with the prior week, according to the ICSC-Goldman Sachs Weekly Chain Store Sales index.
The ICSC expects holiday sales in November and December to fall 1.5 percent to 2 percent versus the year-ago period. That would represent the first decline since the ICSC began tracking holiday sales in 1969.
"BEAR MARKET CONTINUES"
The Standard & Poor's/Case-Shiller composite home price index of 20 metropolitan areas fell 2.2 percent in October from September. The price drops, both on a year-over-year and month-over-month basis, came in worse than expected, based on a Reuters survey of economists.
S&P said its composite index of 10 metropolitan areas dropped 2.1 percent in October from September for a 19.1 percent year-over-year drop, also a record.
Many economists say arresting the slide in home prices is key to halting the economy's slump, which was caused by the bursting of this decade's housing bubble.
"The bear market continues; home prices are back to their March, 2004 levels," David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said in a statement.
(Additional Reporting by Ros Krasny in Chicago, Julie Haviv and Nick Olivari in New York; Editing by Dan Grebler)
By Stephanie Rosenbloom
Tuesday, December 30, 2008
NEW YORK: A rash of retailing bankruptcies is expected in the new year, but as the clock winds down on one of the weakest U.S. holiday shopping seasons in decades, the fallout has already begun.
On Monday, Parent Co., an Internet retailer of children's products, had the dubious distinction of becoming the first well-known retailer to file for Chapter 11 bankruptcy protection after Christmas. The company made the filing along with nine of its subsidiaries, including eToys and BabyUniverse. Many analysts did not expect bankruptcy filings to begin until January or early February.
Michael Wagner, chief executive of Parent, called the bankruptcy filing "an unfortunate but necessary and responsible step to preserve the company's value for our stakeholders in light of the ongoing challenging retail environment."
Challenging is hardly the word. This year, retailers including Circuit City, Boscov's, Sharper Image, Mervyns, Linens 'n Things, Whitehall Jewelers and Steve & Barry's filed for bankruptcy protection.
That is very likely the tip of an iceberg that extends to Europe as well.
On Tuesday, the photography studio Olan Mills joined the list of British retailers falling victim to the downturn in consumer spending.
The company, which filed for administration, a form of creditor protection, has 34 studio locations across England and Wales, many of them within baby goods retailer Mothercare stores.
In the past month the list of British companies that have filed for administration include the retailer Woolworths, the furniture group MFI, the designer fashion group USC, the tea and coffee merchant Whittard of Chelsea and the music chain Zavvi.
Back in the United States, AlixPartners, a restructuring firm, estimated that during the next 24 months there would be a fourfold increase in the number of U.S. retailers in deep distress - companies that do not have enough working capital or are unable to finance their debt.
"Unfortunately, this is the new normal," said Matthew Katz, a managing director in the retailing practice of AlixPartners, which studied more than 180 companies.
Retailers had one of the worst holiday shopping seasons in decades, with sales falling by double digits in nearly all categories, including apparel, luxury goods, furniture, and electronics and appliances, according to SpendingPulse, a report by MasterCard Advisors that estimates retail sales from all forms of payment.
Like many retailers, Parent was hit hard by the freeze-up in consumer spending. To attract consumers during the critical Christmas shopping season, eToys offered up to 60 percent off more than 1,300 toys and games, including brands like Hannah Montana, My Little Pony and TMX Elmo.
Parent, based in Denver, is majority owned by D.E. Shaw. The company, which listed assets of $20.6 million and debt of $35.7 million, is seeking permission for a $10.9 million loan from a Shaw affiliate to keep operations running while it seeks a buyer.
Like luxury retailing, the toy sector was once considered insulated from the economic downturn. But no more. James Lewellis, a retailing research associate at Needham, said recently that toy retailers have too much inventory and have had to significantly cut prices.
"It's all about liquidity," Katz said. "What retailers are trying to do is turn their inventory into working capital and use that to fund the operation and to fund the debt load. And without that your lifeline is soft or gone."
By Matt WoolseyForbes.com
Tuesday, December 30, 2008
There's a gravitas to a retail address on New York City's Fifth Avenue, the city's most famous shopping strip - especially at 57th Street, where you'll find Bergdorf Goodman and Tiffany & Co. But along with that gravitas comes a hefty price: Those two luxury retailers are sitting on the world's most expensive addresses.
In Pictures: World's most valuable commercial addresses
Even at a time when the commercial and residential real estate markets nearly everywhere else have fallen apart, the price per square foot in these and other luxury retail locations remains sky high thanks to a lack of available locations and plenty of demand.
The average going rate on Fifth Avenue, between Central Park and 42nd Street, reached $1,850 per square foot this year, making it the most expensive stretch of addresses in the world, according to Cushman Wakefield, an international real estate investment group. And while tough economic times might encourage retailers to try and renegotiate their leases in other prime shopping locations, such as Ginza in Tokyo, it's unlikely there's going to be much wiggle room on Fifth.
"There's only going to be one opening on Fifth this year, at 666 Fifth Ave.," says Gene Spiegelman, executive director of retail services at Cushman & Wakefield. "There's no one that needs to make a deal or get out of its space for 2009."
Price Drops Beyond Fifth
While Spiegelman remains upbeat about top-flight addresses holding their value, he says to expect price drops and negotiations to be a major theme for 2009 essentially everywhere other than Fifth Avenue, from New York's Madison Avenue, only a few blocks away, to Via Condotti in Rome.
"The market is clearly going through a correction, and it's two-fold," says Jeffrey Roseman, executive vice president of Newmark Knight Frank Retail, the New York arm of the London-based firm. "Prices were artificially inflated to begin with, and with everything that's going on, spending is down."
One place where the drop in spending has caused a drop in retail real estate values is New Bond Street in London, where prices are already down from last year. Between 2006 and 2007 retailers paid $813 per square foot on average per year - now they pay $810. In massive, multifloor stores like Asprey or Ralph Lauren, that $3 difference adds up.
The drop wasn't caused purely by a slowdown in spending, but also because the pound has lost juice to other major currencies this year - down to as low as $1.49 against the dollar from as high as $2 in late 2007. Add in the British recession, and it's easy to see why property values are softening.
Even though London has seen a slide, many other high streets have - thus far - resisted markdowns. Having a shop on Via Montenapoleone in Milan or Avenue des Champs-Elysees in Paris, with the Guccis and Louis Vuittons as neighbors, costs $983 and $1,134 per square foot, per year, respectively.
Waiting To Pounce
Only time will tell if those particular addresses will remain so expensive. What isn't hard to determine, however, is that one man's price drop is another's opportunity.
Some companies, like clothing retailer Forever 21, have seized on the opportunity of a slipping market. The chain scooped up a 90,000-square-foot property in New York's Times Square in November that had previously been occupied by Tower Records. The location will be Forever 21's largest and the company is paying only $809 per square foot for it.
"For retailers able to get into New York for 20 percent less than it was a year ago, I think you'll see it pick up," says Roseman. "Once the base is set, which I'm not sure it is yet, then it will be time to jump back."
But it's not just about Forever 21 selling clothes at its new location; it's about advertising.
Most forecasts project a fall for ad spending in 2009, a core method for retailers to reach customers. According to ZenithOptimedia, a London ad industry research firm, overall spending will trend down 0.2 percent worldwide with 5.7 percent drops in North America and Western Europe. A highly visible shopping location can make up for the exposure lost by a cut in ad budgets.
In Pictures: World's most valuable commercial addresses
"If you look at Regent Street, Bond Street, Champs-Elysees, Causeway Bay - all have the benefit that they're international branding opportunities," says Spiegelman. "Particularly in a market where people are cutting back on advertising, if you have prime real estate, that's a great branding opportunity."
In other words, these locales aren't simply about the relatively small number of people who shop at them; they're about nearly everyone walking by them. Which is why the most expensive addresses stay so expensive.
By Elisabeth Malkin
Tuesday, December 30, 2008
MEXICO CITY: Twice in the last three decades, Mexico has demonstrated that one country's profligacy and mismanagement can spell economic catastrophe beyond its borders.
In 1982, the country defaulted on its foreign debt and set off a Latin American debt crisis that led to a decade of anemic growth across the region. In 1994, the peso collapsed and halted capital flows to emerging markets around the world, until the Clinton administration arranged a $50 billion Mexican bailout.
But this recession, it is the profligate United States pulling down fiscally disciplined Mexico.
Like a host of middle-class countries, from South Africa to Brazil, Mexico is credited by economists with prudent economic policies that reduced debt and tamed inflation, but that has not saved any of them from the pain of a global recession. Billions of dollars have been pulled from emerging markets as investors seek the safest haven, which is still considered to be U.S. Treasury bills.
When the American economy began to spiral downward, officials here argued that Mexico's hard-won macroeconomic stability would protect it.
Now, as each week brings more bad news from the United States, those forecasts seem quaintly optimistic. The North American Free Trade Agreement, or Nafta, which so tightly bound Mexico and the United States and turns 15 on Thursday, is helping drag Mexico down with the United States just as it helped bolster it when times where good north of the border.
When the American economy was growing, successive governments here counted on foreign investment and exports to generate growth. Exports account for almost a third of Mexico's gross domestic product. But more than 80 percent of them go to the United States, and when American consumers stop buying, there is no market for Mexican-made big-screen televisions, auto parts or expensive winter fruit.
"In the face of the most serious contraction in decades, it is hard to imagine that Mexico will avoid recession too," said Gray Newman, Latin American economist for Morgan Stanley in New York.
The effect on Mexico is becoming clear. Unemployment is at the highest level in eight years. The peso has fallen 25 percent, leading to a spike in the price of imports, hurting consumers and businesses that reply on imported goods. Exports, industrial production and retail sales have all fallen in the last few months.
Although the government has yet to change its growth forecast of 1.8 percent for next year, private analysts say Mexico's economy will not grow at all in 2009. In the worst case, the economy could contract as much as 1.7 percent, according to BBVA Bancomer, Mexico's largest bank.
Bad economic news dominates the media. Every morning for the last few weeks, the influential radio journalist Carlos Puig has invited business owners to call in and describe their troubles. "The last thing we Mexicans lose is hope," said one caller, Faustina García, manager of a small building supplies company, Bester Mexicana, before beginning a passionate plea for government aid.
After a decade of sound economic management, Mexico's government does have some room to maneuver. Next year the government will run its first budget deficit in five years as it increases spending to give the economy a push. It is also taking on new loans from the World Bank and the Inter-American Development Bank to support social and environmental projects. The central bank has almost $85 billion in reserves to defend the peso and room to bring down interest rates.
On top of that, the finance ministry has dealt with the economy's most glaring vulnerability — the dependence on oil export revenue to finance almost 40 percent of the country's budget.
When Mexican crude was selling at $130 a barrel last summer, officials began selling Mexico's future 2009 exports at $70 a barrel, a price that seemed wildly conservative in those heady days. In the fall, the congress estimated a $70 price for its 2009 budget projections. The government usually locks in the price of its future production by buying options to sell oil at a certain price. When the market price rises above the option price, the government loses money. When the price falls, as it has, the government makes a profit.
Buying the options cost the government $1.5 billion last summer, but at the current price, now below $30, Mexico would stand to earn more than $10 billion. That money would go to job creation plans in infrastructure, tourism and small business.
Mexico's caution is a contrast to the policies of Latin America's other main oil exporter, Venezuela. Under President Hugo Chávez, the Venezuelan economy has become more dependent on oil revenue to finance his social programs.
Analysts say that the Mexican government has taken the right steps but warn that more may be needed in the next couple of months.
"At the moment they have done what they can do to face the crisis," said Jorge Máttar, the representative in Mexico for the Economic Commission for Latin America and the Caribbean, or Eclac. But the effect of the recession in the United States is so large that the measures so far will only be a palliative, he said. In essence, there is only so much the government can do if exports plunge and factories close.
There are other worries. Even though the oil price Mexico will get is locked in at $70, the amount of crude Mexico can pump is not. On Dec. 22, the state oil monopoly Pemex announced that production had fallen 9.3 percent for the year though November. Exports dropped 17.3 percent.
If the economy contracts, tax revenue will most likely fall. And even though Mexico's finances are sound enough that it could borrow more to finance further spending increases, Newman of Morgan Stanley argues there will not be many buyers for emerging market debt.
The government will face particular pressure to continue to increase its social programs as the recession hits the poor hardest — and midterm elections approach in July.
Over the last few years, Mexico and Latin America have finally managed to achieve some success in reducing poverty. Eclac estimates that the percentage of poor in the region has dropped to 33 percent, from 44 percent, since 2002. Extreme poverty has also fallen, to 13 percent, from about 19 percent.
In Mexico, a government program that provides payments to five million families to keep their children in school and take them to clinics regularly has been responsible for much of the improvement in extreme poverty.
Remittances from relatives working in the United States have also helped reduce poverty in many regions, but those have dropped nearly 2 percent this year.
"There have been substantial gains by the main Latin American countries from the mid-1990s to 2006," said Santiago Levy, a vice president at the Inter-American Development Bank in Washington, who started the Mexican program 11 years ago. "It would be very, very sad if this was lost."
He recommends that governments shift their spending over to infrastructure projects that create jobs, like building much-needed rural roads. Governments should subsidize employers not to lay off workers and offer temporary scholarships to poor families so that they do not pull their children out of school, he said.
But Levy warns against any temptation to loosen the disciplined fiscal policies that Mexico and other developing countries have kept over the last years. "Those gains were very hard to get," he said. "We know how to preserve them. And we know how to avoid falling back."
breakingviews.com
Tuesday, December 30, 2008
Which currency will be a safe harbor of value in 2009? It is not an easy contest to call. Dollar, yen, euro, pound: each has structural deficiencies and plenty of room to leak value. But in this contest of inadequate defenses, some harbor is bound to prove better.
Recent history teaches caution. In 2008, there was extreme currency volatility and an apparent disconnect between fundamentals and prices. The dollar plunged until August - and then rallied hard, even as the U.S. economy sank, before stalling in December. The yen powered up late in the year from multiyear depths, in spite of Japan heading towards recession.
The currency fight is not straightforward, especially in this time of global financial crisis. Deleveraging, forced liquidation, flows to havens: these are undercurrents that are powerful yet not so easily seen.
The dollar, still the world's reserve currency, has on the surface four huge forces against it: the cutting of benchmark interest rates to zero; huge boosts to the money supply through so-called quantitative easing; spiraling government deficit and debt; and an external deficit that remains close to 5 percent of gross domestic product.
These risk sending the dollar to multi-year lows yet again. Were other countries without serious problems, that would be likely - and it may indeed occur. But other factors may weigh against it.
The desperate times for the countries that consumed their way into trouble - the United States and Britain - are also desperate times for their suppliers. Germany, the world's biggest exporter, will suffer a big contraction in GDP in 2009 - a fall of 2.7 percent, according to the Kiel Institute. China, the second biggest, has cut interest rates five times since mid-September and announced a fiscal stimulus of $580 billion. Japan's exports were down by 26.7 percent in November on a year earlier.
Yet the yen is close to a 13-year high against the dollar, partly because traditionally low Japanese rates are now matched by novel but just as exiguous interest rate policy in the United States. The yen's recent rally is also partly technical. For years, speculators borrowed in yen in order to finance the purchase of higher-yielding currencies and assets. They have recently beat a rapid retreat. When all those so-called carry trades are reversed, the yen could therefore suffer, especially if other economies show signs of recovery.
For the euro, too, the slowdown in global trade brings risks. The European Central Bank has been slow to cut rates. But as unemployment takes its toll, it is likely to follow its peers in Japan, the United States and Britain in moving the overnight policy rate down to very low levels. Moreover, euro-zone economies face their first test by recessionary fire. That may inspire countries which once devalued in hard times - like Spain and Italy - to think about leaving the common currency. Even vague talk of departures would unsettle the markets and undermine the euro's appeal.
The ECB's sluggishness, too, could hurt the euro if recession looks to be deepening and persisting. Nor will a strong euro help exports or recovery, especially as the currencies of so many of its important customers are weak.
Britain is in that group. Recovery there is not near at hand. The pound has plummeted against the euro and yen, and also the dollar. Britain has all the fiscal and monetary deficiencies of the United States, but the pound has none of the dollar's reserve status. Its path remains down. Parity with the euro looks inevitable. The more exciting question is how close the pound, worth $2 as recently August, might come to parity with the dollar.
That suggestion may seem outlandish. But suppose the huge fiscal and monetary stimulus creates a revival of some sort in the U.S. economy. Then the euro could fall to, say, $1.20. If the euro has climbed to a value of £1.05, the pound would buy just $1.14 - not far from parity.
So is the dollar the best bet in 2009? A currency supported by a zero interest rate, a deficit-ridden government and a recession-stricken economy ought not to be. And might not be. The currency risks that investors will run in 2009 will again be frightening. Finding a safe currency is almost as hard as finding a safe bank. - Ian Campbell
By Natalie Harrison and Jane BairdReuters
Tuesday, December 30, 2008
LONDON: Sifting through often nondisclosed loan covenants is the arduous task facing anyone wanting to predict which company will be the next to collapse under its debt burden.
As the credit crisis enters its next year, most publicly available information - like bond redemption calendars or default risks in credit default swap markets - signals bankruptcies will be on the rise. But the data are inconclusive when it comes to singling out individual names, so bankruptcy watchers will shift their focus to loan covenants, which offer early warning signs that companies face potential problems in repaying bonds or loans.
"Clearly, covenant breaches and defaults in 2009 will be more of a concern," high yield credit strategists at Barclays Capital said in their outlook for 2009.
Viable companies breaching covenants will move into debt restructurings, resetting covenants at a higher cost, while banks will allow other companies to fail.
Seat Pagine Gialle, an Italian multimedia company, agreed last week with its top creditor, Royal Bank of Scotland, to pay a one-time fee of €9 million, or $12.9 million, and between 0.75 and 1 percentage point more in interest in exchange for more flexible covenants. Analysts believe that more companies are likely to ask for waivers in the next few weeks.
Covenants included in loan documentation may refer to minimum levels of cash flow or interest coverage or maximum levels of leverage and capital expenditure.
Other covenants may include negative pledges, in which borrowers are not allowed to pledge security over assets, and limits are put on the amount of new debt raising, assets sales or the use of the proceeds of asset sales.
The ratings agency Moody's is forecasting that 12.5 percent of European companies with speculative-grade credit ratings will default by the end of November 2009, up from 1.3 percent in the previous 12 months.
And Standard & Poor's estimates that at least 60 European companies will default within the next 12 months, affecting as much as €25 billion worth of debt, and a similar number in 2010, making it the worst period on record.
The Barclays pan-European high yield index shows there are €9.1 billion worth of bonds maturing in 2009, the vast bulk of which are for companies whose ratings have sunk rapidly to speculative grade from investment grade.
More than 20 European companies, including Ineos Group, HeidelbergCement and Virgin Media, have already asked for waivers on loan covenants since the start of the credit crisis.
Companies under pressure from covenants will try to avoid technical or actual default by asking lenders for waivers. While most requests have been granted to date, companies may not be equally successful in 2009.
"We expect negotiations to become increasingly difficult as more issuers potentially run into problems over the course of 2009 in a weak economic environment," Société Générale credit analysts said in a recent note.
The world of leveraged loans - which back private equity buyouts - does not look any prettier. Relatively few leveraged loans are set to mature in 2009 and 2010 at $4.2 billion and $7.3 billion, respectively.
But the number jumps to $21 billion in 2011 and more than doubles to $57 billion in 2012, Reuters data show.
Reuters
Tuesday, December 30, 2008
DUBLIN: Global economic growth is expected to be very weak in 2009, European Central Bank Governing Council member John Hurley said on Tuesday.
"Problems in financial markets are affecting the real economy across the world and global growth is expected to be very weak in 2009," Hurley said in an article in the Irish Times newspaper to mark 10 years of the euro as a common currency.
Speaking of the euro zone in a separate interview last week, Hurley said the area's economy was contracting and would also shrink in 2009 while inflation was expected to weaken further.
Earlier this month, ECB staff sharply revised down the outlook for economic activity in the euro zone next year. They forecast gross domestic product would fall as much as 1 percent in 2009, having previously predicted growth of between 0.6 and 1.8 percent.
Listing the advantages of euro zone membership, Hurley, who is also Ireland's central bank governor, said the greater stability of medium and long-term inflation expectations had been impressive as commodity prices fluctuated widely.
"Over the next decade I have no doubt that the euro will establish itself further as an alternative reserve currency," Hurley said in the Irish Times article.
(Reporting by Andras Gergely; Editing by Kazunori Takada)
Reuters
Tuesday, December 30, 2008
By Claudia Parsons
Another day, another batch of warning signs indicating the world will enter 2009 in the throes of a sharp economic slowdown, with governments scrambling to find ways to boost lending and spur growth.
Oil and gold prices dipped on Tuesday, pressured by the gloomy global economic outlook which outweighed tensions in the Middle East due to Israel's assault on the Gaza Strip.
Tuesday brought more dismal economic news in the United States, with single-family home prices down 18 percent in October from a year earlier and consumer confidence plunging to a record low due to severe job cuts.
U.S. retailers are also suffering. The International Council of Shopping Centers said the U.S. holiday shopping season was the worst since at least 1970 due to the recession, heavy discounting and harsh winter weather.
"Really at this point we are not going to be seeing anything fundamentally positive from the U.S. for the time being," said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon.
But U.S. stock indexes ended more than 2 percent higher, cheered by news that the government expanded its bailout of the auto industry, pumping $5 billion (3.4 billion pounds) into General Motors' auto and mortgage financing arm GMAC.
GMAC and its parent GM, the biggest U.S. automaker, announced programs to make it easier for car and truck buyers to get financing, a day after the U.S. government funding was announced.
The U.S. government agreed on December 19 to rescue GM and Chrysler LLC with up to $17.4 billion in loans to help stave off a collapse that would have cost hundreds of thousands of jobs in an economy already deep in recession.
The pressure on companies was highlighted by data from Reuters Loan Pricing Corp showing U.S. loan issuance in 2008 tumbled 55 percent to the lowest since 1994.
2009 GROWTH SEEN WEAK
New data on Tuesday also showed lending to euro zone companies and households stagnated in November to the weakest result on record, bolstering expectations the European Central Bank will keep cutting rates to ward off a deeper recession.
"Problems in financial markets are affecting the real economy across the world and global growth is expected to be very weak in 2009," ECB Governing Council member John Hurley said in the Irish Times.
He did not give a global figure but the ECB has already cut its forecast for the euro zone, predicting a 1.0 percent fall in gross domestic product next year.
Retail spending in the euro zone fell for the seventh straight month in December, French unemployment jumped sharply and the head of the German exporters' association, BGA, forecast exports will fall next year for the first time since 1993.
European stocks were on track for a 46 percent loss in the full year when trading ends on Wednesday, while on Wall Street, the benchmark S&P 500 is down about 40 percent, making 2008 one of its worst years ever.
The euro continued its recent surge against the pound and the dollar. The contrast of aggressive monetary easing in the United States with a more cautious ECB is lending support to the euro while hurting the greenback, analysts said.
REAL ECONOMY HIT
Analysts forecast more pain for consumers and investors in 2009, but said hopes of more government rescue packages were helping to shore up financial markets for now.
Daily newspaper Sankei Shimbun said Japan's government and central bank hope to launch a $110 billion scheme by the end of March to buy bad loans and other financial assets from banks.
Japan's gross domestic product has likely shrunk in the fourth quarter by an annualized 12.1 percent, which would be its sharpest contraction in 34 years, Barclays Capital said.
"Everyone's pinning their hopes on economic stimulus policies by the United States and possibly China," said Tomomi Yamashita, a fund manager at Shinkin Asset Management.
Tokyo stocks ended higher on their last trading day of 2008, capping a grim year which saw the Nikkei index plunge 42 percent, the biggest loss in its 58-year history.
"2008 was the year of the serpent, everyone got bitten," said Paul Biddle, a fund manager with Souls Funds Management in Australia.
China announced a 4 trillion yuan (406 billion pound) stimulus package last month to tackle a sharp slowdown that many economists forecast could cut growth next year to less than 7.5 percent, the country's lowest since 1990.
In a sign of shrinking economic activity across borders, international airlines saw a huge 13.5 percent fall in cargo traffic in November and a drop of 4.6 percent in passengers, industry group IATA said.
The Associated Press
Tuesday, December 30, 2008
BELGRADE, Serbia: The president of Serbia dismissed the country's army chief Tuesday, days after the army chief charged the country had no strategy for defense.
President Boris Tadic said in a statement that he was replacing Gen. Zdravko Ponos. The statement gave no reason for the dismissal. It said a deputy commander will take over until a new army chief is named.
Last week, Ponos lashed out at the Defense Minister Dragan Sutanovac, an ally of Tadic. Ponos was quoted by Serbian news organizations as criticizing the military budget and saying Serbia had no defense strategy. He also alleged that reform of the army had been halted.
The clash fueled opposition criticism of the government and added weight to allegations that the country's security system was under threat.
In an interview on Serbian state television late Monday, Tadic said both Ponos and Sutanovac bore responsibility for the disagreement. But he said Ponos should not have criticized the defense minister publicly.
Ponos became the Serbian army commander in 2006. He launched pro-Western reform of the Balkan country's military and restored relations with NATO, which had been strained since the 1999 U.S.-led bombing of Serbia over the country's actions in its breakaway province of Kosovo.
Reuters
Tuesday, December 30, 2008
BUENOS AIRES: Argentine builders stumbled across the wreck of an 18th century Spanish galleon while digging the foundations for a riverside high-rise building in Buenos Aires, archaeologists said on Tuesday.
Experts combing the remains of the ship said they did not expect it to contain treasure, but so far they have discovered several canons and well-preserved earthenware jars that were probably used to store olive oil.
The remains of the galleon were found on a building site close to the shores of the River Plate and archaeologists from Buenos Aires city government think the boat was probably shipwrecked some 300 years ago.
"You can see it's very old and we think it dates from the 1700s, although it's also possible that it's from the 1600s," said archaeologist Marcelo Waissel.
"I don't think there's any treasure, but what there will be is a nice collection of artefacts," he told local television, adding it was the first time such a discovery had been made in the city.
Workmen were helping the investigators retrieve artefacts from the site and Waissel said the city government would ensure that the discovery was preserved even though the construction of the building will continue.
"The building's going to go ahead and the area will be protected so the archaeologists can carry on recovering bits of what's been found," Buenos Aires Mayor Mauricio Macri told reporters at the site in the Puerto Madero district, an area of former docks and reclaimed land that has been redeveloped with offices, apartments and upmarket restaurants in recent years.
(Reporting by Karina Grazina; Writing by Helen Popper; Editing by Cynthia Osterman)
Reuters
Tuesday, December 30, 2008
A Turkish court sentenced a man to four years in prison on Monday for stabbing an Italian Catholic priest in 2007.
The man, Ramazan Bay, told a court in western Turkey that he had stabbed the priest, Adriano Franchini, after seeing news reports of other attacks against Christians, including the shooting death of Andrea Santoro, an Italian Catholic priest, in the Turkish Black Sea city of Trabzon in 2006.
Father Franchini survived the attack.
The small Christian community in Turkey, a Muslim nation, has been the target of several attacks over the past few years.
The Associated Press
Tuesday, December 30, 2008
BRUSSELS: A Flemish Christian Democrat, Herman Van Rompuy, was named Belgian prime minister Tuesday to head a revived five-party coalition in a country facing recession and a bank crisis.
Van Rompuy replaces a fellow party member, Yves Leterme, who resigned on Dec. 19 over allegations of political meddling in the bailout of Fortis, the stricken bank.
King Albert "received Mr. Herman Van Rompuy this afternoon at the Chateau de Laeken and named him prime minister," the palace said in a statement. The swearing-in ceremony followed and the parliamentary vote of confidence will take place Friday.
The five parties that had made up Leterme's government renewed their coalition after a three-hour meeting Tuesday.
It is likely that the new government, which is nearly identical to its predecessor, will continue that government's policies. Van Rompuy was expected to take over his predecessor's plan for battling a looming recession caused by the global financial crisis.
He will also have to show sensitivity in handling the strained relations between Flanders, Belgium's richer, more populous Dutch-speaking region, and its Francophone area.
"Nothing is simple in our country, but what is important is that we have a government to lead with seriousness, stability and serenity," said Elio di Rupo, leader of the Francophone Socialist Party.
Van Rompuy will be the third prime minister since general elections in June 2007 in the linguistically divided country that is host to the main European Union institutions and to NATO.
"I think we have a good formula to have a government this year," said Didier Reynders, leader of the Francophone Liberal Party, who will stay on as finance minister.
Van Rompuy, 61, has the reputation of being both an intellectual and a budgetary hard-liner. He was budget minister from 1993 to 1999 and sharply reduced public debt in his first year in office.
Along with helping the economy, his other task will be to sort out the Fortis debacle. The bank's shareholders won an appeal court ruling this month, freezing the group's breakup by the Dutch, Luxembourg and Belgian governments and the latter's sale of Fortis assets to BNP Paribas.
Leterme's government had planned a €2 billion, or $2.9 billion, package of measures to increase growth, including tax cuts, lower energy costs and accelerated infrastructure projects.
That government collapsed after the Supreme Court said there were clear indications of political meddling in a court ruling over the bailout of Fortis.
Belgium's coalition comprises the Flemish Christian Democrat Party, Flemish Liberal Party, Francophone Liberal Party, Francophone Christian Democrats and Francophone Socialist Party.
After consulting political leaders, Van Rompuy said Christian Democrats, Liberals and Socialists must continue in power for the sake of continuity.
Holding new elections followed by government formation talks can take months.
After the June 2007 elections it took Leterme six months to form a government owing to bickering among Dutch and French-speaking parties over how to resolve regional autonomy issues.
By Brent Staples
Tuesday, December 30, 2008
The remake of "The Day the Earth Stood Still" is a sentimentalized take on the 1951 classic. The new version has its uses, so see it. Then rent the original and watch it late at night - the way bleary-eyed adolescents did when it could be seen only on grainy broadcasts in the wee hours of the morning.
I compared the two earlier this month, watching the vintage version for the first time in at least 25 years. I was reminded of how deeply it had insinuated itself into the DNA of popular culture. I also thought of Norma Desmond, the fallen movie idol in "Sunset Boulevard," who said of her spent career: "I am big. It's the pictures that got small."
Digital effects have revolutionized the monster, science-fiction and superhero genres, making the films larger than ever visually. But the same effects have whittled away at the acting space, making the movies smaller in the dramatic sense.
The minimalist - and altogether cool - effects in the 1951 film leave lots of room for the performers. Michael Rennie is aces as Klaatu, the brainy, handsome and thoroughly polite alien who threatens to eliminate every creature on the planet - kittens, puppies and cute little babies included - if earthlings become a danger to the galaxy.
Watching the movie as a middle-aged man, I saw what I lacked eyes to see as a 12-year-old. There is no shred of sentimentality in Rennie's performance. He is a congenial exterminating angel, dropping round for tea to tell of horrors to come.
Rennie's Klaatu is God-fearing, emotionally sophisticated, superior to but indistinguishable from the earthlings among whom he walks.
That's an open-minded characterization at the start of a decade dominated by redbaiting and fear of outlanders in general.
Keanu Reeves' Klaatu is numbingly monotonic. He is emotionally underdeveloped, and suffers from a robotic flatness of affect.
Instead, the scriptwriters gave him powers that are predictably demonstrated through pricey special effects that do not sustain dramatic momentum. With all this digital sleight of hand, the performers are reduced to the equivalent of bystanders at a fireworks show.
By making the new Klaatu emotionally naïve, the writers make him subject to earthling tears and cuddly puppy influences that would have cut no mustard with the Klaatu of old. This emotional vulnerability allows for a great deal of unjustified optimism about the human race's ability to change its destructive behavior.
It is nearly impossible to recast a movie that is so deeply embedded in pop cultural understanding. The virtue of the new Klaatu is that he points us back to the original.
Brent Staples is a member of the New York Times editorial board.
Reuters
Tuesday, December 30, 2008
HANOI: At least four people were killed during a raucous night of partying in the streets of Vietnam after the national football team won its first international title, a newspaper reported Tuesday.
Three men died in traffic accidents Ho Chi Minh City and another was hit and killed by drag racers in the neighbouring province of Ba Ria-Vung Tau after Vietnam beat Thailand on aggregate to win the Southeast Asian championship Sunday, Thanh Nien Daily reported.
In Hanoi, hundreds of thousands of people jammed the city to celebrate the win, waving flags, singing songs, banging pots and pans, and zipping up and down streets on motorbikes.
Other cities up and down the football-loving country saw similar scenes of jubilation.
Hospitals in Vietnam's commercial hub, Ho Chi Minh City, had received 183 emergency cases of people injured in the partying up to Monday morning.
Hospitals in Hanoi treated 63 cases of people injured in traffic accidents, including three skull fractures, the newspaper said.
(Reporting by John Ruwitch; Editing by Greg Stutchbury)
By Peter Berlin
Tuesday, December 30, 2008
For anyone still clinging to the illusion that sport can ever hope to disentangle itself from politics or economics, 2008 was a sobering year.
It was a year in which politics and money loomed over sport. It was also a year in which those off the field of play - the administrators, the drug testers, the scientists, the engineers and, of course, the lawyers - were often as much in the headlines as those who ran or swam or hit balls.
For the first half of the year, the Olympic torch relay wound around the world to a steady beat of political protest. Many Western leaders flirted with boycotting the opening ceremony under pressure over a host of politically awkward issues involving China.
The Chinese government responded by twisting arms. In the end, Gordon Brown, the British prime minister, and Angela Merkel, the German chancellor, were the only notable absentees at the opening ceremony.
Michael Phelps and Usain Bolt may have made the headlines on the track and in the pool, but the abiding visual images of the Games may well have been the backdrops against which they performed. The Water Cube and the Bird's Nest, and particularly the opening ceremony there, offered eye-catching demonstrations of what can be achieved with imagination, hard work and an almost unlimited budget by a government that never has to worry about what opponents or voters might say.
The Chinese offered a late sop to those who hoped the Games might bring liberalization. Chinese citizens would be allowed to apply for permits to vent grievances at protest parks. It seemed a well-calculated public relations gesture; a chance to show off an old woman protesting about an unfair eviction to the hungry cameras of the world media. No one, however, seems to have told the security services of the public relations potential. They refused every application to protest, and even carted some of the applicants off to jail.
The International Olympic Committee cherishes the idea that the 1988 Games helped usher South Korea toward democracy. In Beijing the transaction seems to have worked the other way. When the Western media started asking embarrassing questions about the protest parks, the IOC, taking its cue from the host, agreed to call off one of its daily briefings, muttering that sports and politics should not mix.
Of course, the Games might have started the hidden erosion of the monolithic Chinese state. Certainly the debate on the IOC's political responsibilities continues to rumble on.
That is not the only area in which the Beijing Games just will not go away.
The IOC has announced it will retest 400 samples from the games for CERA, an advanced blood-doping product.
In this it is following the lead of French authorities. A test for CERA was not available during the Tour de France. When it was developed, French testers took samples out of storage and promptly busted four riders, including three rising stars - Riccardo Ricco, Bernard Kohl and Stefan Schumacher - who tested positive.
It was a victory for the men in white coats. But the steady drip, drip of tainted blood is taking its toll. The Gerolsteiner team, for which Schumacher, a German, and Kohl, an Austrian, rode, folded, as did another German team, T-Mobile. German television announced it would not cover next year's tour.
The most successful performance-enhancing Olympic product is still legal, for the time being. The year brought 108 world records in swimming. The scientists at Adidas deserve as much of the credit as the swimmers in the water. The vast majority of the records were set in the Adidas LZR suit.
The governing body of world swimming, FINA, has commissioned a study. It would not be surprising if the lawyers got involved, yet again. But 2008 has been another good year for lawyers in sport.
Michael Vick, a former Pro Bowl quarterback, was back in court last week with the latest installment of the dog-fighting case that put him in a federal prison. Plaxico Burress, who caught the winning pass in January's Super Bowl, engaged a lawyer after shooting himself in the leg in a New York nightclub.
The future of the America's Cup remains mired in New York courts. The willingness of Ernesto Bertarelli, owner of Allinghi, and Larry Ellison, a perennial challenger with BMW Oracle, to spend up to $70 million each on one yacht-racing series may suggest that they both have too much money. Their willingness to hurl even more of it at high-priced lawyers seems to be definitive proof.
But it is the drug users who are keeping the lawyers busiest.
Marion Jones was sentenced to six months in jail. Her former coach, Trevor Graham, was jailed as well. Roger Clemens, the former pitcher, has initiated a defamation suit against a former trainer, Brian McNamee, who accused the pitcher of taking drugs.
The year ended with a court in Minnesota refusing to allow the National Football League to punish five players who had tested positive for a banned masking agent. The most striking element of the case was not that the NFL, like a host of other sports bodies around the world, had messed up the handling of drug tests. It was that, unlike other sports bodies, the NFL believes a positive test merits only a four-week ban.
Sports was not immune either to the bloodier end of politics. The Dakar rally was called off in January after apparent threats from groups linked to Al Qaeda.
Cricket also suffered, though less directly. Pakistan did not play a home test match all year because other teams are too scared to visit. The series between England and India was delayed and then shifted to other venues after the attacks in Mumbai in November.
Security remains a costly, and necessary, obsession for the organizers of big sports events, even as they struggle to cope with straitened times.
Vladimir Putin's pet project, the Winter Olympics in Sochi in 2014, suffered doubly in 2008: suddenly on the edge of a war zone and caught in the Russian financial meltdown.
It is not the only planned sporting set piece beset by problems. The organizers of the London Games in 2012 had spent their time in Beijing busily dialing down expectations even before the downturn increased the need for retrenchment.
The Euro 2012 soccer tournament is caught in both a political and economic vise. One host, Ukraine, is struggling to pay for its stadiums. The other, Poland, is caught in a corruption scandal.
The Polish government, unhappy with its soccer federation's inaction over a match-rigging scandal, threatened to depose the soccer leadership. FIFA, the governing body of world soccer, insists its sport is above national governments and defended its own by threatening to suspend Polish soccer.
Allegations of game-rigging were not confined to Polish soccer. Steaua Bucharest was docked seven points by the Romanian league for trying to fix a match. Giorgio Galimberti, an Italian tennis player, was suspended for 100 days for gambling on his matches. Tim Donaghy, a former NBA referee, was sentenced to 15 months in jail for gambling on games.
The sums involved for corrupting the spirit of sport were often tiny. But as the year ends with a recession looming, macroeconomics has become a driving worry across a range of sports.
The women's golf tour, the LPGA, will have three fewer tournaments in 2009, Nascar is cutting jobs, the world rallying championship is down to two team sponsors. General Motors is cutting its sports sponsorship, but other bailout beneficiaries remain prominent spenders on sport. The New York Mets are moving to a stadium named for Citibank. Manchester United still carries the name AIG on its shirts as part of a $99 million, four-year deal with American International Group.
Even before soccer's January transfer window opens, Real Madrid has announced the signing of Lassana Diarra and Klaas-Jan Huntelaar. Meanwhile, its baseball counterpart, the New York Yankees, committed $400 million to sign four players in barely a week earlier this month. The Yankees will also move into a new, and more profitable, stadium made possible by public funding next season. The club also has happy memories of the Great Depression. They won five world series in the 1930s.
The more sanguine of sports managers insist that clubs, their sponsors and the broadcasters who show their games, will thrive in a recession as people save money by staying at home and watching television. If they are right, maybe it is best that sports strive to preserve the illusion that they can somehow escape these politically and economically testing times.
By Rob Hughes
Tuesday, December 30, 2008
LONDON: Sports, and the people who play them, sometimes assume such importance to society, to life, that nations lose a sense of proportion over them.
Through Sunday night into Monday morning, thousands of Vietnamese filled the streets of Hanoi and Ho Chi Min City to celebrate their team's winning the Southeast Asian soccer championship, the nation's first international title ever.
"We have a huge, huge party going on here," said Henrique Calisto, the Portuguese responsible for choosing and coaching one team out of 86 million in Vietnam.
And then, by all accountants, Calisto disappeared in the celebrating mass in Hanoi.
At roughly the same hour, Steven Gerrard, an English player so famous that they would recognize him from Liverpool to Laos, was under arrest in a local police cell. Gerrard, too, had something to celebrate Sunday.
He is the driving force of Liverpool, the team he joined as a schoolboy, and after dedicating his youth and now the first decade of his manhood to one paramount quest - winning England's Premier League for his club - Gerrard believes that for the first time in his era he is captain of a team capable of achieving that.
Gerrard is now a rarity in English pro soccer, a thoroughly local man leading a team of global talents. He has won Europe's major trophy, the Champions League in spectacular fashion, but he craves to his competitive soul winning the domestic league.
Sunday belonged to "Stevie G."
His performance, and the two goals he struck as he raised Liverpool to a 5-1 away victory at Newcastle, were so impressive that even the opposing team's manager, Joe Kinnear, lauded Gerrard.
"He was magnificent," said Kinnear. "It isn't nice being on the end of it, but that was one of the best individual performances I have seen in a long time."
Gerrard said very little. The folks trying to seek him out to give him the Man of the Match champagne, and the journalists waiting to interview him, were told he was in the ice bath, presumably for some niggling sore.
Before his team took the plane home to Liverpool, however, Gerrard had emerged and spoken soberly, quietly, almost boringly of sensing within the dressing room that he is now part of a group of players who are giving themselves "a great chance" of going all the way in a title race dominated for the past 19 years by Manchester United, Arsenal and Chelsea.
"We have big players here," Gerrard said. "If we keep playing like this then we will be there. This is the best team I have played with, but consistency is the key. If we want to stay top, we have got to deal with the pressure."
The natural caution in Gerrard, the longing to win this thing, is a process of growing up in a tough suburb of a city that weans its children on soccer.
Gerrard makes £120,000 per week in a contract that has until 2011 to run, but riches have not quenched his almost frightening amalgam of physical and mental determination - as anyone who witnessed him leading by example to turn his team around after it trailed 3-0 to AC Milan at half time in the European Cup Final in Istanbul three years ago can testify. Liverpool leveled the scored at 3-3 and won in a penalty shootout.
He is a soldier in a soccer uniform; a warrior player driven first and foremost to win for his club.
If anything scares him, as he suggested after the game in Newcastle, it is something beyond his control going wrong to jeopardize Liverpool's chances of achieving his dream.
Later that night, in fact at 2.30 am Monday, Gerrard himself became the figure that jeopardizes the team. He was taken into police custody after a bar brawl that ended with a disc jockey's being treated in hospital for facial wounds.
The media staked out the police station. The Paparazzi snapped shots of Gerrard's Bentley parked outside the night club, and his wife, the model and fashion columnist Alex Curran visiting the police station in her own Bentley.
It was not until the early hours of Tuesday that Gerrard, and two other men who are not famous players, were formerly charged with assault and affray. They were released on bail and will appear before magistrates on Jan 23.
Anything else to do with that night is speculation. None of us know, and until the hearing we have no special right to know, what took place in that bar.
Gerrard knows the pitfalls and the traps of international stardom. His choice for winding down after two emphatic victories in three days after Christmas, was a night out with the boys while his wife and two young children slept in the home that, because of threats that come with fame, is a guarded mansion.
Critics ask what a professional athlete was doing in a night club at 2.30 a.m. Gerrard's likely answer is that he, like others in England whose league plays right through the festive period, and had done his work.
He was not expected to play this coming Saturday in the FA Cup at Preston, a team not in Liverpool's league. The Cup is third in Liverpool's priorities after the Premiership and Europe.
Gerrard, a role model in his city, will do well to avoid the front pages of British newspapers, which on Tuesday displaced wars and growing unemployment to tell at great length the story of an arrest about which nothing is known.
The newspapers also carried, but only briefly, the story of another soccer player, a 20-year-old who lost control of his Mercedes sports car and killed a father of five children on Christmas Day, appeared down the front page
That player, Jordan Robertson, was charged on suspicion of dangerous driving and bailed until the New Year. His career is in the shadows of Gerrard, and has been loaned out by his club, Sheffield United, to another lower-division team, Southampton.
Whatever their level, players are under scrutiny even off duty. Lee Woon-Jae, South Korea's national goalie and its hero of the 2002 World Cup, last month finished a 12-month ban imposed by his national association after he was seen drinking in an Indonesian night club during the 2007 Asian Cup.
He publicly confessed his "error" and was allowed to play for his club Suwon Samsung Bluewings, eventually winning back his national jersey in November when the ban expired.
Last week, Lee was named Korea's player of 2008.
"I can't believe that I am deserving of this prize," he said. "I will try to show the fans what I can do in the future."
In Liverpool, or Jakarta, there is no hiding place for the modern superstars.
Reuters
Tuesday, December 30, 2008
LONDON: The number of Britons visiting shopping streets leapt 12.8 percent in the week beginning December 22 compared with a similar period last year, market researchers Experian said on Tuesday.
The data add to signs that deep discounting finally lured cash-strapped consumers back into the shops in the days immediately before and after Christmas.
"Retailers attracted a frenzy of shopping activity last week showing that the lure of sales and deep discounting still works to draw consumers to the shops," Experian analyst Anita Manan said in a statement.
But she said the rise was distorted by the timing of Christmas, with this year's period including three pre-Christmas shopping days compared with just one last year.
The increase, which follows declines of 11.6 percent and 7.1 percent in the previous two weeks, was also unlikely to continue, she added.
"This recent surge in shoppers to the high street may be short lived as reality kicks in for consumers who will face the first credit card bill of the year, together with job insecurities and recession worries impacting confidence, which may force consumers to tighten their purse strings," Manan said.
"High street retailing is changing, as a new breed of savvy shoppers grow to be more comfortable with shopping last minute and using multiple channels to fulfil their needs."
(Reporting by Mark Potter; Editing by David Cowell)
Reuters
Tuesday, December 30, 2008
LONDON: Sterling hit a record low on a trade-weighted basis and a 6-1/2 year low against the dollar on Tuesday, nagged by a grim outlook for the economy in thin trade as the year draws to a close.
The pound hovered close to record troughs against the euro, keeping parity with the common currency in sight on the view that the economy will deteriorate further, keeping intact the prospect of more aggressive interest rate cuts in Britain than in the euro zone.
Further bearish news on the economy emerged on Tuesday, with the Land Registry reporting a 12.2 percent annual fall in house prices in England and Wales during November.
The pound dropped to 73.6 against a basket of currencies, its lowest on daily records held by the Bank of England which date back to 1990 as market participants took advantage of thin liquidity to push the currency lower.
"It is the holiday-thinned liquidity environment which is driving sterling down and taking currency pairs to extremes," Tullett Prebon G7 market economist Lena Komileva said.
At 12:42 p.m. British time, the pound was steady against the dollar at $1.4500 after earlier hitting a 6-1/2 year low of $1.4385 according to Reuters data.
The euro rose 1.2 percent against the pound to 97.63 pence, a whisker below Monday's high of 98.0 pence hit on Reuters dealing data.
The euro has soared by over 30 percent against the pound this year -- jumping more than 18 percent so far this month alone -- and most in the market see it as only a matter of time before the two currencies hit parity.
"People see the opportunity to test parity in these thin trading conditions," State Street foreign exchange strategist Lee Ferridge said.
"The deteriorating fiscal situation is becoming a major worry for the UK and this leaves the pound vulnerable," he added.
The International Monetary Fund warned on Monday that countries would need aggressive fiscal stimulus to bolster their economies, but analysts fear high government debt levels will limit room for additional measures.
Meanwhile, lower interest rates compared with in the euro zone provided further reason to sell sterling against the euro, analysts said.
The Bank of England has slashed interest rates by 300 basis points since October to 2 percent in an attempt to shore up the economy, leaving them lower than 2.5 percent in the euro zone, with more cuts expected in the new year.
The Bank's aggressing easing has caused yields on10-year government bonds to fall faster than their counterparts in the euro zone, pushing the spread between the two to its narrowest in six years according to Reuters charts.
(Reporting by Jessica Mortimer; Editing by Ruth Pitchford)
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