A Place in the Auvergne, Friday, 26th December 2008

Pakistan moves some troops from western border

By Richard A. Oppel Jr. and Salman Masood
Friday, December 26, 2008
ISLAMABAD: Pakistan has begun moving some troops away from its western border with Afghanistan, where the United States has pressed it to combat Taliban militants, and has stopped many soldiers from going on leave amid rising tensions with India, senior Pakistani officials said Friday. But by late in the day, there was little evidence to indicate whether the redeployment involved large numbers of troops.
The decision to restrict leave for soldiers was taken "in view of the prevailing environment," namely the deteriorating relations with India since the Mumbai terrorist attacks last month, a senior Pakistani military official said. He added that the Pakistani Air Force was "vigilant" and "alert" for the same reason. A second Pakistani military official would also not say where the forces were being sent but confirmed the troop movements and the restrictions on leave, saying, "There's an obvious reason for that."
Yet little else was clear by late Friday, and it was not immediately evident whether the troop movements reflected any serious worry on the part of the Pakistani military, or whether it was intended more to send a message to the Indian government.
The two Pakistani military officials offered little detail about the specific reasons for the troop movement or about its size, and they were careful and measured, as if reading from a script. They said nothing harsh or critical about India, even though they were speaking with the guarantee that their names would not be used.
One of the officials confirmed that troops were being drawn from northwestern Pakistan, where the military is fighting Taliban militants on several fronts. He also said that "essential troops in limited numbers are being pulled out of areas where no operations are being conducted," or where winter weather had already limited their ability to maneuver.
But two Pakistani intelligence officials - one from military intelligence and one from Inter-Services Intelligence - suggested the situation was more serious and said some troops were indeed moving toward the Indian border.
One of the intelligence officials described the situation as "tense" and said intelligence intercepts had led Pakistani officials to worry that India might launch a strike inside Pakistan as soon as within the next three or four days. Troops on the border have been told to be on alert, the official said. The second intelligence official estimated the chance of armed conflict as about one in three.
A third Pakistani official said that for the past week the air force had been in a "point defense" posture, standing ready to defend specific key defense installations and cities - including Islamabad, Rawalpindi and Lahore as well as the Kahuta nuclear weapons laboratory. The forces include two squadrons of F-7 and F-16 fighters, the official said, adding that pilots were sleeping in uniform with their boots on.
The Associated Press quoted two Pakistani intelligence officials as saying that the Pakistani Army's 14th division was being sent to Kasur and Sialkot, near the Indian border and that around 20,000 troops were being redeployed. However, neither the scale nor ultimate destination of the troop movement could be confirmed.
The redeployment came as the Indian authorities warned their citizens not to travel to Pakistan, citing reports that Indian citizens had allegedly been arrested in Pakistan in connection with a bombing in Lahore. In India, Prime Minister Manmohan Singh summoned the leaders of his country's armed forces on Friday.
The developments added to the simmering tensions between the two nuclear-armed neighbors one month after the three-day terror assault in Mumbai left 171 people dead. Indian and American intelligence officials have attributed the Mumbai attacks to a Pakistani militant group that has long had ties to the Pakistan intelligence service. But Pakistani leaders reject that argument, saying that they have been shown no evidence proving who carried out the attacks.
The troop movements away from northwestern Pakistan, if they later prove to be significant in size, may also deepen concerns among American officials about Pakistan's commitment to battling Taliban militants in the country's lawless western frontier regions.
If troops are being sent toward the Indian border, the action is in contrast to efforts this month to cool hostilities between the two countries, which have fought three wars since 1947.
Two weeks ago, for example, Pakistani officials went out of their way to play down as "inadvertent" two incursions of Indian warplanes into Pakistani airspace. Their response to the airspace violations - which the Indian military denied - won praise from United States leaders even as Pakistani officials privately said the incursions were likely a test or provocation.
For its part, India on Friday accused Pakistan of "diverting attention" from terror to war, but Indian officials refused to comment on the reports of troop movements inside Pakistan.
In advising against travel to Pakistan, Indian officials said there had been reports in the Pakistani news media of arrests of Indian citizens in Lahore and Multan. But they took pains not to blame the elected civilian government in Pakistan. "It seems that this is the work of other agencies in Pakistan that operate outside the law and civilian control," a Foreign Ministry spokesman said.
The Indian foreign minister, Pranab Mukherjee, met with his counterpart from Saudi Arabia, among Pakistan's staunchest allies, as part of India's worldwide diplomatic campaign to put pressure on Pakistan to quash terrorist groups operating on its soil. Mukherjee has all along blamed "elements in Pakistan" for the Mumbai attacks last month and told reporters in New Delhi on Friday that his country had evidence, ranging from ship's logs to satellite phone records.
"Instead of diverting attention from the real issue, they should concentrate on how to fight against terrorism and bring to book the perpetrators of the Mumbai attack," Mukherjee said.
Indian officials including Singh have repeatedly said that they are not keen to go to war.
Nor has the political opposition pressed for military action in response to the siege of Mumbai.
Somini Sengupta contributed reporting from India.

0440

China puts 6 on trial over tainted milk scandal
The Associated Press
Friday, December 26, 2008
BEIJING: Trials opened Friday in China for six people accused of making and selling the industrial chemical at the center of a tainted milk scandal that has been blamed for killing six children and sickening nearly 300,000 others.
Among those in court Friday was the owner of a workshop that was allegedly the country's largest source of melamine, the substance responsible for the health crisis that also saw Chinese food products pulled from stores worldwide, state media said.
The police say that Zhang Yujun, 40, ran a workshop on the outskirts of Jinan in eastern Shandong Province that manufactured and sold a "protein powder" composed mainly of melamine and malt dextrin, the official Xinhua news agency reported. The powder was added to watered-down milk to make it appear to have a higher protein content.
Prosecutors at Shijiazhuang Intermediate People's Court accused Zhang of producing 776 tons of the additive powder from October 2007 through August 2008, making it the largest source of melamine in the country. He allegedly sold more than 600 tons with a total value of 6.83 million yuan, or $1 million, the court was told.
In the same case, a second man, Zhang Yanzhang, 24, was accused of buying and reselling 230 tons.
Chinese state television showed both men in court in handcuffs with their heads bowed while being questioned by three judges.
An official at the publicity office of Hebei Supreme Court confirmed that the trial started Friday but refused to give his name or other details.
Four other men were being tried in three separate courts across Hebei Province for adding the chemical to raw milk and then selling it to Sanlu Group, the main company involved in the scandal, according to Xinhua.
Melamine can artificially inflate protein levels and was apparently added to watered-down milk to fool quality inspectors into thinking the protein content was normal, while also increasing profit.
Zhang Heshe and Zhang Taizhen were accused of adding 35 kilograms, or 77 pounds, of the "protein powder" to 70 tons of raw milk and then selling it to Sanlu. Yang Jingmin and Gu Guoping were also charged with adding 24 kilograms and 16.7 kilograms of melamine, respectively.
The verdicts will be announced at an unspecified date, Xinhua reported.
The dairy company Sanlu, which is based in Shijiazhuang, confirmed this week that it was bankrupt.
Xinhua reported Thursday that Sanlu had 1.1 billion yuan of net debt and that a branch of the Shijiazhuang City Commercial Bank was the creditor that applied to a court to have Sanlu declared bankrupt.
It said the intermediate court in Shijiazhuang had accepted the filing. Xinhua said Sanlu owes a creditor 902 million yuan that it borrowed this month to pay for the medical treatment of children sickened after drinking the company's infant formula and for compensation of the babies' families.
Wang Jianguo, a spokesman for the Shijiazhuang city government, said the money was given to the China Dairy Industry Association for medical care and compensation fees for victims, according to a transcript of a news conference he gave Thursday. A woman who answered the phone Friday at the association refused to answer any questions.
The issue of compensation for the families of the children sickened or killed has become a sensitive one, with courts so far not accepting any lawsuits filed by the families.
The Legal Daily newspaper reported that Tian Wenhua, Sanlu's chairwoman and general manager, would go on trial Wednesday in Shijiazhuang for "selling fake and shoddy products."
Sanlu, like a number of major Chinese dairies, had been exempt from government inspections because it was deemed to have superior quality controls - until high levels of the industrial chemical melamine were found in its baby formula and other products in September. Several other dairies were also found to have sold tainted goods.
Melamine poses little danger in small amounts, but larger doses can cause kidney stones and renal failure.

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In technology, an effort to help the Japanese fishing industry
By Martin Fackler
Friday, December 26, 2008
OTOSHIBE, Japan: The Shinei Maru No. 66 looks like the dozens of other fishing boats moored in this Japanese harbor. But its builders say it is the world's first hybrid fishing trawler. Switching between oil and electrical power for propulsion, it uses as much as one-third less fuel than conventional boats.
"It's like a Prius for the sea," said Tadatoshi Ikeuchi, 62, the boat's owner and captain.
Until very recently, commercial fishermen around the world have been laboring under the weight of high fuel prices. In Europe earlier this year, fishermen expressed their frustration by blockading ports to protest prices and taxes. In the United States, Governor Sarah Palin of Alaska, the former Republican vice presidential nominee, has called for low-interest loans to help Alaskan fishermen buy fuel-efficient engines.
Japan, meanwhile, is searching for high-technology solutions. The hybrid boat engine, which is still a prototype, is part of a multimillion-dollar government-led effort to rescue the Japanese fishing industry from energy costs, which are likely to resume their increase once the global recession ends and demand revives.
As part of the two-year-old program, the Japanese are also testing biofueled marine engines, computer-engineered propeller designs and low-energy LED lights on squid boats, which use bright lights to lure their catch.
There is a vast international market for such solutions. Many Japanese boat engines that use computers to improve fuel efficiency are already popular with American fishermen. And Yamanaka, the Tokyo-based maker of the hybrid engine for the trawler, which is called the Fish Eco, says the United States and Europe are large potential markets.
The Agriculture and Fisheries Ministry in Japan, which has led development of the new technologies, will subsidize their introduction as part of a $700 million aid package announced in July to help the fishing industry.
Modernization of this ancient profession seems the natural answer here to the commercial fishing crisis, which predates the steep rise (and recent fall) of fuel prices. Japan gave the world both sushi and the hybrid car. But fishermen say they doubt the effort will be enough to break the deep sense of malaise that has started to afflict fishing communities like this one in northern Japan.
After decades of sending its fleets to the far corners of the globe, and paying high prices for tuna and other premium fish for sashimi in global markets, Japan appears to many to be letting its fishing industry sink. The number of commercial fishermen has shrunk by 27 percent in the past decade, to 204,330 last year, hurt by declining birthrates and migration of young people to the cities, according to the National Federation of Fisheries Cooperative Associations, an industry group representing fishermen.
The federation warns that rising fuel costs could prompt an additional 25,000 to 45,000 fishermen to hang up their nets. Before the recent decline in prices, boat fuel, known as heavy fuel oil, accounted for 20 percent to 30 percent of a fisherman's total costs in Japan, almost double the proportion three years ago.
The fishermen cannot pass on the increase to consumers in the form of higher seafood prices for fear of losing sales to less expensive imports from competitors like China and Vietnam.
They also worry that higher seafood prices would only intensify the shift in Japanese consumer tastes away from a traditional seafood-centered diet - a trend known as "sakana banare," or flight from fish.
"Higher fish prices will just encourage Japanese to eat more hamburgers and fried chicken," said Nobuhiro Nagaya, a managing director at the fisheries federation.
The average Japanese eats about 94 grams, or 3.3 ounces, of fish a day.
Gloomy sentiments about the future of Japan's industry are shared by officials at the Agriculture and Fisheries Ministry.
While their multimillion-dollar projects recall the government-orchestrated technology drives of previous decades, when Japan rose to global dominance in industries like semiconductors and supercomputers, officials express far more modest expectations today in an era of tight budgets.
"Technology cannot be the only answer," said Kazuo Hiraishi, an assistant chief in the ministry's maritime technology research division. "But Japan's excellence in electronics and energy-saving should be of some help to our fishermen."
While fishermen in countries like France, Spain and Ireland have staged disruptive demonstrations, protests in Japan have been more sedate, though still large.
Last summer about 200,000 fishing boats stayed in port on a one-day strike, and thousands of fishermen gathered for a rally in Tokyo.
The government responded two weeks later with the $700 million aid package, under which it promised to pay 90 percent of fuel price increases since December, but only to fishermen who found ways to reduce their consumption. The package also contained subsidies to help fishermen buy efficient new engines, like the hybrid.
A $250,000 subsidy from the Agriculture Ministry, for example, meant that Ikeuchi, the hybrid boat's captain, paid only $650,000 for the trawler, the same price as for a conventional boat.
Ikeuchi said his fuel use had dropped to about 285 liters a day, or 75 gallons, cutting his daily bill by about $100.
The propulsion system switches between a 650-horsepower heavy oil motor, which powers the main engine, and a 150-horsepower heavy oil motor, which turns a generator that runs a smaller electric engine for use when the boat moves slowly.
When Ikeuchi showed off the boat, which he uses to hunt for scallops, Pacific cod and kelp, the only visible difference from other boats in this small, man-made harbor was its dashboard, with small touch-controlled screens - high-tech devices for a craft made mostly of traditional-looking wood and steel.
Still, many fishermen who walked over to take a peek at the boat doubted it would be enough to save their industry.

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Nissin Foods to buy stake in Russian noodle maker
Reuters
Friday, December 26, 2008
TOKYO: Nissin Foods Holdings Co, the top instant noodle maker in Japan, said on Friday that it would buy a one-third stake in the largest instant noodle group in Russia for about $296 million.
Japanese food companies have been stepping up overseas acquisitions in the face of weak growth prospects at home as the population ages.
Earlier this week, the largest Japanese beer maker, Asahi Breweries, said it had agreed to buy Cadbury's Schweppes soft drinks business in Australia for about $810 million in what would be the company's biggest acquisition.
Nissin, the maker of Cup Noodles, said it would buy the 33.5 percent stake in Angleside, the holding company for the instant noodle maker LLC Mareven Food Central, in steps starting in January through the purchase of new shares.
The Russian group controls 41 percent of the country's instant noodle market, Nissin said.
Russia is the world's ninth-largest instant noodle market with annual consumption of about 2 billion servings, and the Japanese company said it saw an opportunity in the fast rise in sales of higher-end items there.
Japan is the No. 3 market with 5.4 billion servings, after China and Indonesia, according to Nissin.
Shares of Nissin had fallen 0.9 percent to ¥3,160 by the midday break, underperforming a 1 percent rise in the benchmark Nikkei average.

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Save the environment - eat kangaroo, groups say
By Meraiah Foley
Friday, December 26, 2008
SYDNEY: How many kangaroo steaks will Australians eat this holiday season? Not enough, according to a growing body of academics who say that giving up beef and lamb for kangaroo would reduce Australia's greenhouse gas emissions and ease pressure on a drought-stricken land.
The bounding marsupial is one of Australia's most emblematic symbols. It stands opposite an emu on the country's coat of arms, and its silhouette adorns the tail wing of the national airline.
It is a common misconception that an animal this iconic, so uniquely associated with a single country, must be endangered. Indeed, many Australian marsupials have fared badly in the centuries since European settlement, but several species of grass-eating kangaroo have actually benefited from the mass clearing of bushland for the grazing of sheep and cattle.
The number of kangaroos in Australia ranges from 15 million to 50 million each year, depending on climatic conditions, compared with about 80 million sheep and 25 million meat cattle, according to government estimates. Beef and lamb are still preferred among meat-loving Australians, but some scientists say there is a strong case for making wild kangaroo the new red meat of choice.
Cattle and sheep are major emitters of methane, one of several greenhouse gases associated with global warming. Flatulent livestock produce nearly 70 percent of Australia's agricultural emissions, which make up 11 percent of the country's total, according to the department of climate change.
Kangaroos, in contrast, emit negligible amounts of methane, thanks to special bacteria in their stomachs that aid in the digestion of grass.
One team of scientists in the northeastern state of Queensland is currently trying to find a way to harvest these bacteria and transfer them to the stomachs of beef and sheep. But others say the answer is more straightforward: Eat less beef and lamb, more kangaroo.
It is not a new concept. Environmentalists have long touted kangaroo as an ecologically sound alternative to hard-hoofed livestock, which erode Australia's drought-parched soils and damage its delicate waterways. But the push to address climate change has given new impetus to an old idea.
"For most of Australia's human history - around 60,000 years - kangaroo was the main source of meat. It could again become important," said a widely read government report on the possible approaches to tackling climate change that was released in September.
Under a global emissions trading scheme, where there is a price placed on the production of carbon, methane and other greenhouse gases, the abundance of available kangaroo meat "could be a source of international comparative advantage for Australia in livestock production," the report said.
But replacing cows and sheep with kangaroo is not an easy proposition.
First, there is the question of how many kangaroos would have to be killed to get the same amount of meat produced by larger livestock, such as cattle. According to Meat and Livestock Australia, an industry body representing producers, it would take 80 million kangaroos - or more than three times the current wild population - to make as much meat as is now produced with the slaughter of around 8 million cows a year.
But if ranchers reduced their cattle holdings, the population of wild kangaroos would probably explode because the two animals tend to feed on the same pastures, according to a paper published by two Australian researchers, George Wilson and Melanie Edwards, in the August edition of Conservation Letters, the journal of the U.S.-based Society for Conservation Biology.
Using mathematical modeling, the researchers looked at the regions of Australia where meat kangaroos are currently harvested and found that the marsupials' numbers could reach as high as 200 million by 2020 if ranchers dramatically reduced sheep and cattle numbers.
Kangaroos are a protected species in Australia, and they cannot be commercially farmed. Instead, the government sets an annual quota of wild animals that can be killed by professional hunters. Wilson and Edwards, who run a wildlife consultancy, said farmers would have to form cooperatives to share the profits from harvesting free-ranging kangaroo that could not be tagged and fenced.
Such a major shift would "require cultural and social changes," Wilson and Edwards conceded, as well as significant incentives to encourage ranchers to embrace new forms of animal husbandry.
There is also the matter of taste.
One might expect a furry, hopping marsupial to taste something like rabbit. In both flavor and texture, however, kangaroo is closer to beef, though it has a richer, gamier taste. With less than 3 percent fat, kangaroo is extremely lean and must be cooked with a delicate touch or it becomes tough and rubbery.
A recent study by the University of New South Wales found that 80 percent of Australians were open to the idea of eating kangaroo, though only 16 percent said they ate it at least four times a year.
"There certainly is a resistance to people purchasing it raw and knowing what to do with it," said Peter Ampt, an agricultural scientist who heads the Future of Australia's Threatened Ecosystem program at the University of New South Wales. "There is an element of 'What do I do with it?"'
The kangaroo meat industry is currently worth about $110 million a year, compared to the $11 billion market in Australia for beef and lamb. But even if Australian consumers were willing to adjust their palates to favor kangaroo, skeptics like the National Farmers Federation argue that foreign consumers would simply turn elsewhere for their beef and lamb. Australia is one of the world's largest exporters of red meat, so critics say a shift away from Australian meat would simply push livestock-related methane emissions elsewhere.
"The reality is that kangaroo meat currently has a very limited market," the federation said in a statement. "Farmers will respond to marketplace demand, but the market is not indicating that it will accept kangaroo meat in large quantities - let alone as a substitute for beef or lamb."
For Ted Younger, who runs a small ranch in southeastern New South Wales, the idea has merits but is mostly academic in the absence of significant government incentives.
"I think it's a marvelous idea if it could ever get off the ground," Younger said. But pointing to a lack of government incentives to encourage ranchers away from traditional farming, he said, "I think that being able to husband kangaroos in any viable way is a long way off."

Many schools still unsafe in quake aftermath, China says
By Andrew Jacobs
Friday, December 26, 2008
BEIJING: Government officials have acknowledged in the most definitive report since the devastating earthquake in Sichuan Province in May that many school buildings across the country are poorly constructed and that 20 percent of primary schools in one southwestern province may be unsafe, according to a description of the report published by the state media Friday.
The Ministry of Education report is a rare government admission about substandard school construction. The issue has been a sensitive one since May, when an earthquake in Sichuan Province killed 88,000 people, many of them children crushed in the rubble of shoddily built schools.
The report called on the central government to quickly fund the reconstruction of vulnerable schools, especially those in rural areas and western parts of the country that are seismically unstable. Lu Yongxiang, vice chairman of the National People's Congress Standing Committee, said in an interview with the China News Service that Beijing would increase construction subsidies by 25 percent to 150 percent, depending on the region.
Lu was quoted as saying that nearly 2.5 percent of all primary and middle schools in China have structural problems, on a built area equal to 33.5 million square meters, or 360 million square feet.
He added that 90 percent of these schools are in rural areas and the earthquake-prone west of the country. The China News Service report singled out Yunnan Province, just south of Sichuan, as having some of the most structurally unsound schools, including 20 percent of the province's primary schools and 11 percent of its middle schools.
His point was underscored just hours after the report was made public. On Friday morning, a 4.9-magnitude earthquake shook Yunnan Province, injuring nine people, according to Xinhua, the official news service.
In Sichuan, many parents of students killed in May continue to press their demands for an investigation into the widespread school collapses. Earlier this month, a group of parents whose children died at a primary school in Fuxin filed a lawsuit against government officials and a construction contractor. The suit, filed Dec. 1, asked for $1.1 million in damages and a public apology.
But last week a judge at the Intermediate People's Court in the city of Deyang rejected the lawsuit, saying the court was hamstrung by a government directive from on high.
In the weeks after the earthquake, the government promised to punish those responsible for poorly built schools, but the government has not made public any progress in this direction.
The number of students who died on May 12 is unknown, although estimates suggest the figure may be as high as 10,000. In his comments to the state media, Lu, the standing committee vice chairman, opened a small window into that mystery: He said that 14,000 schools in Sichuan had been damaged by the earthquake last May.

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Thousands evacuated after quakes hit SW China
Reuters
Friday, December 26, 2008
BEIJING: Three earthquakes jolted China's southwestern provinces on Friday, injuring 19 people and forcing the evacuation of tens of thousands more, state media said, citing local authorities.
An earthquake measuring 4.9 on the Richter scale struck at 4:20 a.m. (8:20 p.m. British time Thursday) about 10 km (6.2 miles) from Ruili, a town on the China-Myanmar border, Xinhua said, citing the province's earthquake monitor.
The quake destroyed the city government's old office building and prompted the evacuation of about 30,000 people, Xinhua said, citing the local Communist Party chief.
Authorities were distributing supplies, Xinhua said.
Another tremor measuring 4.3 on the Richter scale jolted Yiliang county near provincial capital Kunming at 2:19 a.m., damaging more than 100 houses, affecting some 1,200 people in eight villages. No casualties were reported, Xinhua said.
A third quake measuring 4.0 on the Richter scale struck neighbouring Guizhou province at about 8 p.m., Xinhua said. No casualties were reported.
"We have phone called all the 26 townships and received no report of casualties or house collapses. Traffic and telecommunications are running as normal," Sha Xiangui, the local Communist Party chief of Luodian country, where the earthquake occurred, was quoted as saying.
China is still struggling to build housing and infrastructure for millions of people made homeless by the May 12 Sichuan earthquake which killed 80,000 people.
(Reporting by Ian Ransom and Jacqueline Wong; Editing by Jon Boyle)


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Victims of 2004 tsunami remembered
The Associated Press
Friday, December 26, 2008
BANDA ACEH, Indonesia: The victims of the Indian Ocean tsunami of 2004 were honored by thousands of mourners who prayed, burned candles and shared meals on beaches from Indonesia to India on Friday, the fourth anniversary of the disaster.
For many, the modest ceremonies were a time to reflect on their lives and weigh progress in rebuilding homes and communities wiped out by the enormous waves that proved deadly and destructive in a dozen nations.
Ibrahim Musa, a 42-year-old civil servant in the hard-hit Aceh Province of Indonesia, said it felt like yesterday that his family was taken by the sea.
"Even after four years, I cannot forget how I lost hold of my wife and baby," he said. "I have tried in vain to look for them for three years. Now I have no choice but to accept their departure as destiny."
Musa gathered with thousands of others along the Aceh coast, where a massive earthquake triggered the tsunami that killed more than 230,000 people, of which more than 120,000 were in Indonesia.
Siti Hasnaini, 40, who still lives with her two sons and husband in a temporary shelter, prayed "for my daughter who was washed away with my house."
Homes for Hasnaini and nearly 900 other families are scheduled to be completed by February, a month before the Indonesian government winds up its reconstruction mandate, said a government spokesman, Juanda Djamal.
Total spending has reached $5.48 billion, 70 percent of which was paid through foreign donations, and more than 124,000 houses have been built, he said.
On Thai beaches, where thousands of people died, family members and friends of gathered for services, including one in the sand under palm trees held before hundreds of spectators.
Paulette and Bauke Van den Wyngaard, a Dutch couple who return to Patong beach every year to visit the spot where they survived the deadly waves, were among them.
"We were lucky to survive. Others were not as lucky," said Paulette, who was pulled from the raging water by a hotel worker.
In Sri Lanka, the government declared two minutes of silence for the thousands of people killed there as well as other victims of natural disasters.
The "Queen of the Sea," a coastal train toppled by the tsunami, was repaired and made its first trip in four years Friday, riding the same route where more than 1,000 of its passengers were killed in 2004.
In India, where thousands also perished, interfaith prayers and a moment of silence were held.
Hundreds of thousands of homes, schools, hospitals and businesses have been rebuilt across the region in the largest relief operation ever seen.

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Working to reclaim the starry night in Death Valley
The Associated Press
Friday, December 26, 2008
DEATH VALLEY NATIONAL PARK, California: High atop Dante's View, overlooking sheets of salt flats and ribbons of sand dunes, Dan Duriscoe shined a laser beam at the North Star and steadied his digital camera at the starry heavens.
Click. The sky looks dark.
Duriscoe panned the camera toward the light factory of Las Vegas, 85 miles, or 135 kilometers, away but peeking out like a white halo above the mountains in the eastern horizon.
Click. The sky is on fire.
"You can see the Luxor vertical beam," said Duriscoe, pointing to a time-exposure shot on his camera-connected laptop showing the famous searchlight of the pyramid-shaped Vegas Strip hotel. "That's the brightest thing out there."
Acclaimed for its ink-black skies, Death Valley, a desert basin that is the hottest place in North America, also ranks among the nation's unspoiled stargazing spots. But the vista has grown blurry in recent years.
The glitzy neon glow from Las Vegas and its burgeoning bedroom communities is stealing stars from the park's eastern fringe. New research reveals that light pollution from Las Vegas increased 61 percent between 2001 and 2007, making it appear brighter than the planet Venus on clear nights as seen from Dante's View, a popular vantage point in Death Valley National Park, which encompasses the Death Valley basin.
Duriscoe, a soft-spoken scientist with the National Park Service, is part of a roving U.S. government team of night owls whose job is to gaze up at the sky and monitor light pollution in national parks.
"What is alarming to me is: What's going to happen three or four generations from now if this growth of outdoor lights continues?" he asked.
Amid such concerns, Death Valley, the largest national park in the contiguous United States, has set an ambitious goal: It wants to be the first official dark-sky national park.
Since the dawn of civilization, humans have been enthralled by the night sky's romantic mystique. Early seafarers relied on stars to steer their ships. Farmers looked toward the night sky for clues on when to plant and harvest crops. Ancient cultures spun mythologies while staring at the cosmos.
Civilization is also the chief reason why the night sky is vanishing in many corners. As the world's population grows, so do the number of lamp posts. In many North American cities and suburbs, lighted shopping strips, twinkling auto malls and flashy billboards are common sights.
It is estimated that about one-fifth of the world's population and more than two-thirds of U.S. residents cannot see the Milky Way from their backyards.
Furthermore, studies have shown exposure to artificial lights can interrupt animals' biological clocks and disrupt ecosystems. Migratory birds have been known fly directly into skyscrapers after being confused by their blinding lights. Last year, the cancer research arm of the World Health Organization listed the graveyard shift, where workers toil under artificial lights, as a probable carcinogen.
The International Dark-Sky Association, a nonprofit based in Arizona whose slogan is "Carpe Noctem," has noticed an increased awareness about the perils of light pollution but acknowledged that there is a limit to promoting dark skies.
"I don't think you can get Paris to turn off the Eiffel Tower or persuade Times Square to turn off all of its lights," said Pete Strasser, the association's managing director.
The same could probably be said for Las Vegas, the sparkly desert playground where neon signs blend into the natural landscape.
"It's part of the whole ambiance. It's the selling point of Las Vegas," said Barbara Ginoulias, director of comprehensive planning for Clark County, Nevada, where Vegas is located. Still, she added, "We're certainly cognizant of light pollution, and we try to address it in the best way."
Ginoulias's department oversees unincorporated parts of Clark County, which are required to shield outdoor lights or cast the light downward. Next month, the county commission will consider an ordinance that would set lighting standards on digital billboards on Interstate 15, which runs along the Vegas Strip.
As for the main drag, Las Vegas Boulevard, Ginoulias said that signs were reviewed case by case. Newer signs tend to be less flashy or not have the glaring white background, she said.
With no control over the Vegas glow, park rangers at Death Valley are looking inward to fix the light problem as they pursue their goal of becoming the first dark-sky national park in the United States.
To gain that distinction, the park must shield or change out two-thirds of its existing outdoor light fixtures. Death Valley has about 700 lights in its 3.3 million acres, or 1.3 million hectares, including parking lot lightpoles, floodlights, fluorescent tubes and egress lights next to doors. Only about 200 lights meet the sky-friendly standard.
At the Furnace Creek Visitor Center, located 190 feet, or 57 meters, below sea level, the pedestrian walkway leading to the front entrance is lined with overhead rows of fluorescent tubes under a canopy.
From Dante's View at night, the visitor center appears as dancing white and blue dots.
"This is a really bright spot in the park," said Terry Baldino, chief of interpretation at Death Valley. "All the campgrounds have to share their night sky with the lights here. If we can reduce that, then we're going to improve their night stay."
The park has replaced some fixtures with tin can-shaped designs that focus light onto the ground instead of sideways or upward.
Rangers are also debating whether to turn off outdoor lights in some cases. "We're doing little by little," Baldino said.
So far, Natural Bridges National Monument in Utah and Cherry Springs State Park in Pennsylvania are the only two parks in the United States certified by the International Dark-Sky Association as dark-sky enclaves.
This autumn, the group gave a tentative nod to the Geauga Park District's Observatory Park, 40 miles east of Cleveland, for its work to preserve darkness over the observatory and nearby park land.
Despite Death Valley's lighting challenges, city dwellers from all over still flock to the park to take in the view.
On a recent December evening, a couple from northern Los Angeles admired the star-studded sky from Zabriskie Point, a popular lookout just south of the visitor center.
"You don't see this in L.A.," said Karen Zimmerman, 49. "You forget how many stars there are."
As Zimmerman spoke, a hazy glare could be seen from a distance.

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Thousands mourn Guinea dictator
The Associated Press
Friday, December 26, 2008
CONAKRY, Guinea: Allies of the dictator who ruled Guinea for nearly a quarter-century mourned him Friday, but the leader of the coup that followed his death did not attend the ceremonies.
The coup leader, Captain Moussa Dadis Camara, had promised a "grandiose funeral" for Lansana Conté a day earlier and in a broadcast called on Guineans to show up en masse.
Tens of thousands of mourners packed a stadium where Conté's body was brought after a eulogy in Parliament. The junta's No.2 leader was there - the only coup representative seen Friday. Camara's absence surprised many mourners and caused widespread speculation about the reason.
Colonel Toto Camara, who is not related to the coup leader, did not explain why Captain Camara was not in attendance but said the junta "reassures the people of Guinea that we will guarantee your well-being."
Conté's body was being taken next to Conakry's Grand Mosque before interment in his village about 100 kilometers, or 60 miles, away.
Conté died Monday after ruling this West African nation since seizing power in a 1984 coup after the death of his predecessor. He was widely seen as corrupt and authoritarian. Hours after the announcement of Conté's death, Camara's group declared a coup. He declared himself Guinea's interim leader, promising not run in an election he says will be held in December 2010.
The service at Parliament was heavily attended by members of Conté's former government, including the deposed prime minister, Ahmed Tidiane Souaré, who surrendered to coup leaders and stepped down on Thursday along with dozens of other government leaders.
Sitting in the front row was Facinet Touré, Conté's comrade-in-arms during the 1984 coup that brought him to power. "I ask the people of Guinea to forgive the general for all that he did that was not good," Touré said.
Conté's coffin sat on a stage with two of his three wives, who wore dark sunglasses and clutched tissues. Also attending were the presidents of Sierra Leone, Liberia and Guinea-Bissau, along with and Jean Ping, chairman of the African Union Commission.
Presidential guards used belts to beat back mourners who wanted to push their way in.
Aboubacar Somparé, the leader of Parliament, who had been next in line to be president under the Constitution, remained at large following the expiration of a deadline that coup leaders set for government members to present themselves.
The European Union has urged Guinea to hold "democratic and transparent" elections within the first three months of 2009.
The United States said the military must restore civilian government as swiftly as possible.
"We reject the announcement by elements of the Guinean military that elections will not be held for two years, and we call for an immediate return to civilian rule," the U.S. Embassy said in a statement.
President Kgalema Motlanthe of South Africa, chairman of the 15-nation Southern African Development Community, described the coup as "an affront to peace, stability and democracy."
A French Foreign Ministry spokesman, Frédéric Desagneaux, said foreign diplomats would meet Saturday in Conakry, the Guinean capital.
Guinea has been in rocky waters for years. It had immense promise at independence, with gold, diamonds, verdant banana fields, seemingly limitless aluminum ore and rivers ideal for hydropower. It was considered one of the gems in the French colonial crown. But its economy has rapidly deteriorated, and its 10 million people are among the world's poorest.
Guinea slipped into obscurity under its first ruler, Ahmed Sékou Touré, a revolutionary who espoused Marxist policies and shut out the West. After Touré died in 1984, Conté's military coup was very similar to the one that took place this week.








Winter cold puts a chill on green energy
By Kate Galbraith
Friday, December 26, 2008
Old Man Winter, it turns out, is no friend of renewable energy.
This time of year, wind turbine blades ice up, biodiesel congeals in tanks and solar panels produce less power because there is not as much sun. And perhaps most irritating to the people who own them, the panels become covered with snow, rendering them useless even in bright winter sunshine.
So in regions where homeowners have long rolled their eyes at shoveling driveways, add another cold-weather chore: cleaning off the solar panels. "At least I can get to them with a long pole and a squeegee," said Alan Stankevitz, a homeowner in southeast Minnesota.
As concern has grown about global warming, many utilities and homeowners have been trying to shrink their emissions of carbon dioxide — their carbon footprints — by installing solar panels, wind turbines and even generators powered by tides or rivers. But for the moment, at least, the planet is still cold enough to deal nasty winter blows to some of this green machinery.
In January 2007, a bus stalled in the middle of the night on Interstate 70 in the Colorado mountains. The culprit was a 20 percent biodiesel blend that congealed in the freezing weather, according to John Jones, the transit director for the bus line, Summit Stage. (Biodiesel is a diesel substitute, typically made from vegetable oil, that is used to displace some fossil fuels.)
The passengers got out of that situation intact, but Summit Stage, which serves ski resorts, now avoids biodiesel from November to March, and uses only a 5 percent blend in the summertime, when it can still get cold in the mountains. "We can't have people sitting on buses freezing to death while we get out there trying to get them restarted," Jones said.
Winter may pose even bigger safety hazards in the vicinity of wind turbines. Some observers say the machines can hurl chunks of ice as they rotate.
"It's like you throw a plate out there and that plate breaks," said Ralph Brokaw, a cattle rancher in southeast Wyoming who has 69 wind turbines on his property. When his turbines ice up, he stays out of the way.
The wind industry admits that turbines can drop ice, like a lamppost or any tall structure. To ameliorate the hazard, some turbines are painted black to absorb sunlight and melt the ice faster. But Ron Stimmel, an expert on small wind turbines at the American Wind Energy Association, denies that the whirling blades tend to hurl icy javelins.
Large turbines turn off automatically as ice builds up, and small turbines will slow and stop because the ice prevents them from spinning — "just like a plane's wing needs to be de-iced to fly," Stimmel said.
Brokaw says that his turbines do turn off when they are too icy, but the danger sometimes comes right before the turbines shut down, after a wet, warm snow causes ice buildup.
From the standpoint of generating power, winter is actually good for wind turbines, because it is generally windier than summer. In Vermont, for example, Green Mountain Power, which operates a small wind farm in the southeastern part of the state, gets more than twice the monthly production in winter as in August.
The opposite is true, however, for solar power. Days are shorter and the sun is lower in the sky during the winter, ensuring less power production.
Even in northern California, with mild winters and little snow, solar panels can generate about half as much as in the summer, depending on how much they are tilted, according to Rob Erlichman, chief executive of Sunlight Electric, a San Francisco solar company.
Operators of the electrical grid do not worry much about the seasonal swings, because the percentage of production from renewable energy is still so low — around 1 percent of the country's power comes from wind, and less from solar panels. In addition, Americans use slightly less electricity in the winter than in the summer because air conditioners are not running. This is especially true in sunny areas, so solar panels' peak production matches the spikes in demand.
But as renewable energy becomes a bigger part of the nation's power mix, the seasonable variability could become more of a problem. Already, power developers are learning that they must make careful plans to avoid the worst impacts of ice and snow.
Trey Taylor, the president of Verdant Power, which has put small turbines in the tidal East River in New York City and plans more for the St. Lawrence River in Canada, said that ice chunks could slide over one another "like a deck of cards," pushing ice below and harming turbines. That may rule out parts of otherwise promising sites like the Yukon River in Alaska, he said.
Kevin Devlin, the vice president for operations of Iberdrola Renewables, a wind developer, said that winter was probably the hardest time of year to maintain turbines, because workers must go out in snow and ice. Occasionally, he said, the turbines will shut down or set off alarms if it is too cold, and workers must brave the elements to fix them.
For homeowners, the upkeep of their power sources can also be a bother.
Stankevitz keeps his panels tilted 40 degrees or higher, but they still become covered with snow — and experts say that if even one cell in a panel is covered, the panel will not produce power.
On the other hand, the panels can get extra power from sunlight reflected off nearby snow. And like other electronic gear, solar panels work better when cold.
Stankevitz said that on some rare winter days, when the Minnesota sky is clear, the weather is freezing and the sun is shining brightly, his panels can briefly churn out more electricity than they were designed to produce, more than on the balmiest days of summer.




Bringing a mixed French city together at the movies
By Steven Erlanger
Friday, December 26, 2008
MARSEILLE: Marseille prides itself on being a port city, a rough melting pot of differences rather like its signature dish, bouillabaisse, which combines various fish, some very expensive and some considered just a cut above trash.
Some of the toughest districts in Marseille, the second-largest French city, are in the hills above L'Estaque, which inspired Braque and Cézanne. But poverty is high, drug use is common and resentments are deep.
Samia Ghali, 40, is the new mayor of two of these districts, or arrondissements, with nearly 100,000 constituents. Of Algerian descent herself - like roughly a quarter of Marseille's 826,700 people - she is consumed by the economic crisis washing over France and its poor, and she is convinced that these neighborhoods are going to burn.
"People identify themselves with Marseille, which has always been a cosmopolitan capital, full of immigrants," she said, trying to explain the "Marseille exception" to most of the urban rioting that took place in Paris and other big cities in 2005.
But with unemployment rising quickly, a shortage of housing, the state reducing job-creation subsidies in poor neighborhoods and nearly 40 percent of the population under the poverty line, "the social cohesion of Marseille won't mean anything," said Ghali, a Socialist. "With the economic crisis, it will finish by exploding here."
She sees danger in the youth riots in Greece, even with their anarchist character. "It's a cry of alarm, a kind of warning," she said. "We shouldn't believe that what's happening in Greece can't happen here."
Not everyone agrees with her dark assessment, of course.
Jean-Claude Gaudin is the longtime mayor of Marseille, a member of the governing center-right party and vice president of the French Senate. A large man of 69, with a voice that echoes around his palatial office, Gaudin dismisses those fears.
"Samia Ghali belongs to the opposition," he said. "There it is. She may be surprised by the calm and serenity of the city, and maybe she would hope that it won't work well. But we've been announcing so many disasters for the last 14 years, and none of them have taken place."
Because of the sea and the beaches, and because the population is so mixed - with poor and Muslim communities inside the city, not funneled into suburban areas - Marseille, he argued, is a model of racial calm. "There are fewer disturbances in Marseille than in any of the other big cities of France," he said. "This is a city used to foreigners."
But diversity is not the same thing as integration, notes one of Gaudin's contemporaries, Jean-Pierre Daniel, who lives and works in these "northern neighborhoods" above L'Estaque. One small safe harbor here is L'Alhambra, a movie palace of the 1930s, lovingly restored by the city of Marseille and Daniel, 69, a determined man in love with cinema.
Son of a merchant mariner, Daniel has run the Alhambra since it reopened in June 1990 - seven years after the city bought it as a wreck. Nearly six of those years were spent in that special form of French debate called "cultural politics."
The left, which dominated the area, finally agreed with the right that a "cultural center" should be built to help "rehabilitate the neighborhood," Daniel said. But the city did not have enough money, "so they bought an old cinema instead, as a political gesture, and they asked me to run it." It is the only public hall in an area of nearly 100,000 people.
The only request, he said, "was not to provoke the voters with politics." With that charge, he created a place for education, relaxation and culture. The theater is of the old style, with 250 seats in steeped rows and a huge screen from floor to ceiling. He shows a mix of classic and modern films, both popular and art-house, featuring Chaplin, Tati and Pagnol as well as current releases from Woody Allen and Claire Simon.
Daniel and his deputy, William Benedetto, 38, soon to succeed him, present 150 different films a year, with 18 showings a week. There are special shows for schoolchildren, many bused from other parts of Marseille. Prices are kept low - €4, or about $5.50, for an adult, €2.50 for those under 13. Some 45,000 people a year come to see films, half of them children.
The theater is owned by the city, which provides half the annual budget of €600,000. About 20 percent of the budget comes from tickets, with the rest from state and regional grants.
Daniel and Benedetto say they believe that attending a cinema is a kind of socialization that cannot be had watching television at home.
"There is an etiquette to entering the cinema, buying a ticket and ascending the staircase to find a seat," Daniel said.
To give younger children the same experience, Benedetto has lowered a special area of the welcome desk so shorter customers can buy or receive their tickets at eye level.
Daniel wrote in the Alhambra's newsletter, "The hall of a cinema, like the theater, the circus, the stadium or the arena, is a space of a precise form designed to welcome the public, assembled to have an experience, to look and listen together to a spectacle that provokes thoughts and emotions."
Or as Benedetto said more pithily, "It's a sort of messianic conviction that the kids will open their eyes and experience these emotions."
Daniel said, "We want to enrich the lives of the children and the people of the neighborhood."
In the lobby, the theater displays an early projector, a praxinoscope, to show people how moving pictures worked, and there are also workrooms and labs for film students, and a small studio. Nearby is the editing table that Pagnol used for his film "Marius."
Ghali praises the theater, as does Gaudin, who said, "It's a very interesting initiative of the city, but it won't overturn the landscape."
Benedetto has a slightly smaller ambition. "It won't change the world" he said. "But we have the conviction that these movies can change the lives of these kids - they will ask themselves questions that resonate."
Maïa de la Baume contributed reporting.

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Building a bridge to a better life
By Charly Wilder
Friday, December 26, 2008
PARIS: Aziz Senni started his career as an entrepreneur early, and for a compelling reason: to have a social life. Raised in a rough neighborhood of Mantes-la-Jolie, a working-class city west of Paris, Senni, who was born in Morocco, didn't have much pocket money as a teenager. So when he wanted to go out with friends or ask a girl on a date, he would ride the train into Paris to the old garment district of Sentier, buy armloads of inexpensive girls' clothing and sell it in the schoolyard during breaks from class.
Today, Senni's entrepreneurship has equally compelling, though more altruistic, motives. Having founded and run a successful taxi company, ATA France, and made millions, Senni, 32, is rallying other businesspeople to reach into rough neighborhoods like his and help other young people.
Soon after the riots that tore up some Parisian suburbs in 2005, Senni began contacting wealthy executives and entrepreneurs, asking them to contribute at least €50,000 each to an investment fund that would provide guidance and start-up capital to businesses from poor areas. Now up and running for more than a year, the fund Senni founded, Business Angels of the Housing Estates - known by the French acronym BAC - has raised over €5 million, or $7 million, from 80 investors like Claude Bébéar, former head of the insurance company AXA, and Gonzague de Blignières, co-president of Barclays Private Equity Europe.
The fund, Senni said, builds "a bridge between two worlds," allowing established entrepreneurs to share their experience with those who have the drive and talent but lack other qualifications.
BAC has invested close to €2 million in 10 projects, all still in business, including a cosmetic line for dark skin tones, a fast-food chain called Kool Halal, a sportswear designer and an online store selling Moroccan crafts. The businesses offer a return to investors, so the fund does not function as a charity.
"The people who come are often very efficient in their field, but they live in a bubble," said Abdel-Basset Zitouni, the director of the French Association of Young Entrepreneurs, who often works with Senni to mentor BAC recipients. "Very often they don't have a grasp on all the things related to the product, like marketing, financing and all the other things on the business end, but their products could potentially be very promising."
After graduating from high school, Senni attended two years of advanced vocational business training but had to drop out for financial reasons. Two years later, at the age of 23, he used money he saved by working, along with €70,000 of state funding, to start his taxi company, which he based on a North African model of collective busing he saw during a family trip to Morocco. This year, Senni said, ATA France earned €3 million. It operates 50 vehicles in 14 locations and employs more than 100 people.
He credits his success in business to his parents' strict emphasis on education and hard work. But Senni also said the anger he felt at being dismissed because of his ethnic and socioeconomic background had instilled in him a more aggressive sense of purpose.
"I wanted to take social revenge - make lots of money, earn social recognition, go from being the child of workers to being the head of a company," Senni said during a recent interview at ATA headquarters, a few blocks from the decaying housing project where he grew up. "The idea I held in my mind was to go as far as possible."
France has the euro zone's second-largest economy, after Germany, but the French unemployment rate has lingered around 10 percent for the past two decades. A 2005 government study found that unemployment in many of the suburbs of major French cities was around 21 percent and rising. Other reports have put the figure as high as 60 percent.
Senni's personal history is speckled with stories of discrimination, from a boss who asked him to introduce himself to customers as Anthony instead of Aziz, to teachers who accused him of cheating because he had scored well on exams. He recounts many of these tales in a memoir, "The Social Elevator Was Broken So I Took the Stairs" - a play on the French expression "l'ascenseur social," meaning upward social and economic mobility.
Because of his visibility as a foreign-born, suburban success story, Senni has been celebrated in the French press and courted by politicians. Jacques Chirac visited the ATA offices in 2004 when he was president, and François Bayrou, head of the Union for French Democracy, a centrist party, appointed Senni as his diversity spokesman.
As the French economy buckles under the weight of the global financial crisis, Senni said the difficulties young minorities face had become even more daunting. Fewer lenders are willing to take risks, and public statements indicate that the government of President Nicolas Sarkozy is backing away from a campaign pledge to help improve the economic situation in the suburbs.
Though unsurprised by the backpedaling, given the downturn, Senni worries that to neglect the suburbs now is to invite devastating results. "The financial crisis is going to have a much bigger impact in the suburbs than it does anywhere else," he said. "When there is a crisis, it's always the weakest areas, the lowest socioeconomic groups that are affected first."
He hopes that BAC will help cushion the blow, taking over where banks and government have left off.
"Crisis or no crisis, I do what I have to do," Senni said. "Simply because I wish someone had done the same for me."

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Dexia may link up with French postal bank
By Joseph Schmid
Friday, December 26, 2008
PARIS: The French business of Dexia, the banking group whose other activities are centered in Belgium and Luxembourg, could be split off and merged with the banking arm of the French postal operator La Poste.
Les Echos, a French business daily, said Friday that the Caisse des Dépôts et des Consignations, the French state-controlled bank that holds a 17.6 percent stake in Dexia, was pushing for the deal as a way to secure funds for Dexia's municipal financing division.
Because Dexia has a relatively small amount of consumer bank deposits, it relies on the financial markets to raise the funds it loans to local governments for their infrastructure investments. But the strains in the markets have pushed up the cost for those funds, squeezing Dexia's ability to offer new loans.
The number of new deals made by Dexia's public and wholesale banking arm fell 23 percent in the third quarter from a year earlier, and the quarterly loss from all operations reached €121 million, or $170 million. The bank warned in November that financing costs had increased even more in the fourth quarter as markets continued to deteriorate.
That prompted analysts at Standard & Poor's this month to lower their credit ratings on Dexia's core banking divisions, to A from A+, saying the difficulties in securing money for its public financing operations "call into question the business's long-term viability."
The Belgian daily La Libre Belgique reported Wednesday that it was mainly the French municipal financing operation that needed to reinforce its capital reserves. This was the main business of Crédit Local de France, which was merged with Crédit Communal de Belgique in 1996 to form Dexia.
A merger with Banque Postale, the consumer banking division of La Poste, would provide Dexia's municipal financing operation with the funds it needs to continue its municipal lending.
Banque Postale had more than 29 million individual accounts at the end of 2007, with €250 billion of client deposits under management. This firepower would allow the Caisse de Dépôts and other shareholders, which include the governments of France and Belgium, to avoid having to provide additional cash to shore up Dexia's balance sheet.
Dexia received €6.4 billion of government aid in September, but investors have not been convinced that it would be enough to revive the bank's fortunes. Its shares have tumbled 63 percent since the capital injection, closing at €2.80 in Paris on Wednesday, the last day of trading before a four-day Christmas break for the Paris stock exchange.
Executives at Dexia and Banque Postale were unavailable for comment Friday.






Japanese data reinforces recession worries
By Bettina Wassener
Friday, December 26, 2008
HONG KONG:
Industrial output in Japan plunged 8.1 percent in November in the biggest decline on record, intensifying worries that the world's second-largest economy was headed for a deeper and more protracted recession than previously thought.
Inflation figures Friday also indicated that Japan faced a possible new bout of deflation next year, while rising unemployment and evaporating consumer spending added to the bleak picture.
Taken together, the figures highlighted how difficult it will be for Japan to extricate itself from the recession it has been in for much of this year as consumer and corporate demand around the world dries up.
"It's a big mess," said Ryutaro Kono, chief economist for Japan at BNP Paribas in Tokyo. "We've never seen anything like it."
The sharp drop in industrial output from October surprised even the most pessimistic of forecasters, despite a flurry of announcements in recent weeks as manufacturers like Honda and Sony raced to scale back production as demand plummeted.
In the latest in a string of such news from corporate Japan, Fuji Heavy Industries, the maker of Subaru-brand cars, said Friday that it would reduce output by a further 10,000 vehicles in the business year ending in March, bringing the total to 70,000. It will also shed 300 additional temporary jobs.
"The output results were very disappointing," said Satoru Ogasawara, an economist at Credit Suisse in Tokyo. "They are much worse than expected."
Japan's export-dependent economy has been hit especially hard by recessions in the United States and Europe as those economies are crucial markets for corporate giants like Panasonic, Nissan and Toyota. Companies are also taking a hit from a strong yen, which makes Japanese goods more expensive.
"It was U.S. excess consumption that was behind Japan's growth in the past few years," said Kono of BNP Paribas.
The data on Friday showed that manufacturers planned to scale output back a further 8 percent this month, putting the manufacturing sector in line for a quarterly drop of 11.1 percent. This trend, combined with figures out Monday indicating that exports in November had dropped a steep 26.7 percent from the level of a year earlier, shows the overall Japanese economy is heading for a sharp contraction this quarter, said Kono of BNP.
Many economists believe the first two quarters of next year also look set for contraction before the economy bottoms out in the second half of 2009.
For next year over all, Ogasawara of Credit Suisse forecasts Japan's economy will shrink 2.1 percent.
Other data Friday showed Japanese manufacturers' inventories continued to swell despite production cutbacks. Data also showed the jobless rate had climbed to 3.9 percent in November from 3.7 percent the previous month. Household spending slid a modest 0.5 percent but was widely expected to deteriorate further.
Meanwhile, annual core consumer inflation slowed to 1 percent in November from 1.9 percent the previous month, thanks largely to a plunge in oil prices. And inflation appears set to slow further: Early December data for the important Tokyo region foreshadowed a December reading of only 0.2 percent for all of Japan.
This indicator puts the country in line for a slight fall in prices - or deflation - by the second quarter of 2009, Kono estimated.
With interest rates in Japan already near zero, the Bank of Japan has very little room to cut the cost of borrowing further and will now have to try to shore up ailing Japanese credit markets by buying commercial paper, which is a way to lend money directly to companies.
The government's already announced stimulus packages have yet to be implemented, but Kaoru Yosano, the economic minister, said Friday the government would act flexibly on possible additional measures if conditions deteriorated.
Other countries in the region, too, have raced to shore up their ailing economies.
In China, where the authorities announced a huge stimulus plan last month, Zhou Xiaochuan, the governor of the central bank, said Friday that the country needed more policies to increase consumption to offset the effects of falling exports.
His comments came as figures showed Chinese industrial companies made a combined 2.4 trillion yuan, or $352 billion, in profits during the first 11 months of this year, up 4.9 percent from a year earlier - the slowest pace in years.
And in South Korea, the economic ministry said the Korean economy was in an "unprecedented crisis," but the government would strive to avert an annual decline in exports in 2009.

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South Korea warns of unprecedented economic crisis
Reuters
Friday, December 26, 2008
SEOUL: South Korea's economy is in an unprecedented crisis with domestic and overseas demand falling at the same time, but the government will strive to avert an annual decline in exports in 2009, the economy ministry said Friday.
The Ministry of Knowledge Economy said in its new year policy report to President Lee Myung Bak that it would aim to boost 2009 exports to $450 billion from around $430 billion projected for this year and post a trade surplus of more than $10 billion.
"The Korean economy is faced with an unprecedented crisis with exports and domestic demand, the two pillars of economic growth, falling at the same time," the ministry said.
But an influential local trade research institute, the Institute for International Trade, said earlier in the day that export prospects for the first quarter of next year appeared to be the worst in at least six years in the face of a deepening global recession.
In November, South Korean exports fell a revised 19 percent from a year earlier, as shipments to the country's largest market, China, fell by a third compared to a year earlier, customs agency figures showed last week.
The South Korean central bank has already warned in its official forecasts that the economy would grow only 2 percent in 2009, which would be the slowest growth since the 1997-1998 Asian financial crisis.
The Bank of Korea has slashed the policy interest rate by a total of 2.25 percentage points since early October to a record-low 3.0 percent and has pledged to supply sufficient funds into the financial system to shore up the economy.
The economy ministry also said the government would try to boost foreign direct investment into the country by 6 percent to $12.5 billion in 2009 from $11.8 billion expected for this year.
The ministry, which is also in charge of energy policy, said the state-run Korea National Oil Corp. will seek to acquire a medium-sized overseas oil company or companies in 2009 to secure more sources of energy supply. South Korea does not produce any oil in its territory.

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Vietnam devalues currency
Reuters
Friday, December 26, 2008
HANOI: Vietnam devalued its currency by 3 percent Thursday, spurred by falling inflation and the weakest annual economic growth in nine years.
The central bank set the dong midpoint at 16,989 per dollar Thursday, from 16,494 on Wednesday after a two-day cabinet meeting in which Prime Minister Nguyen Tan Dung said gross domestic product had grown 6.23 percent this year. That is the slowest pace since 1999, when growth was at 4.77 percent.
Last year Vietnam was a darling of the investment community, with 8.5 percent expansion. After a domestic overheating crisis earlier this year, and faced with the global slowdown, the government has cut its growth forecast to 6.5 percent.
Next year will be worse, Dung predicted. "The year 2009 will be tougher than 2008, as we will be faced with a strong impact from the global economic downturn," a government statement quoted Dung as telling the cabinet in Ho Chi Minh City.
The government forecasts growth of 6 percent to 6.5 percent in 2009, but the International Monetary Fund expects growth to slump to 5 percent.
"The central bank's decision to let the dong fall 3 percent against the dollar is wise, as it eases pressure on the country's foreign currency reserves and stimulates exports in 2009," said Tong Minh Tuan, an economist at Bao Viet Securities. "Moreover, this shows that the central bank is moving in a way that investors expected. That will help boost confidence."
Vietnam's stocks fell 0.61 percent Thursday. The index has tumbled 67 percent so far this year and ranks among the worst performers in Asia.
Vietnamese consumer prices have risen 19.89 percent in December, well below the government's forecast of 22 percent, while average inflation for the year has been 22.97 percent, the government statistics office said Thursday.
December was the 14th consecutive month of double-digit inflation, but the figure has eased for three consecutive months.
Earlier in the year, in response to soaring inflation and a widening trade deficit, the government imposed three interest rate increases and strict measures to curb credit growth. But Hanoi has reversed policy since the global credit crunch started turning into a worldwide economic slowdown.
The State Bank of Vietnam, the central bank, has cut rates five times since late October, unwinding most of the earlier tightening, and has reduced banks' compulsory reserve ratio, which has effectively flooded the financial system with money. Dung has said that promoting exports is a priority, and the government has announced plans for a $6 billion economic stimulus package.
But foreign portfolio investment has fallen, while export revenues have also slowed in Vietnam's major markets, and the dong has come under pressure to slip.

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Rouble devalued again after Russian oil nears $30
Reuters
Friday, December 26, 2008
By Yelena Fabrichnaya and Andrei Ostroukh
Russia's central bank allowed this month's eighth mini devaluation of the rouble on Friday, a day after the country's main export earner, oil, neared $30 per barrel, the lowest level since 2004.
The collapse of oil and other commodity prices coupled with the global economic slowdown and capital flight from emerging markets has turned the rouble around to a depreciation bet from an appreciation play in less than six months.
The central bank has spent more than $100 billion (£68 billion) defending the currency in the last 4-1/2 months to prevent a run on banks and panic among the population, which still has sour memories of savings losses in the 1990s and Soviet times.
Dealers estimate the bank has spent around $10 billion supporting the currency in this week alone.
Faced with an economy potentially heading for its first recession in a decade, Russia started on a gradual depreciation path six weeks ago to preserve reserves -- still the world's third largest at $451 billion -- which will be needed to support the economy.
Russian authorities, which initially denied they would allow the rouble to fall sharply, have softened the tone in the past weeks, saying the rouble cannot remain strong during a sharp downturn on global commodities markets.
Russia had plans to balance its budget at an oil price of $70 per barrel next year but plans to revise it now to $50.
By 1500 GMT the rouble was trading at 34.31 versus a euro-dollar basket, having broken through the 33.86 mark seen as the previous central bank's support level.
A source at the central bank confirmed that the rouble's trading corridor had been widened again, but gave no details.
First Deputy Chairman of the central bank Alexei Ulyukayev, seen as Russia's key forex policy maker, said he will not alter his policy of allowing the rouble to weaken gradually, ruling out a one-off devaluation of the currency.
"This policy, from our point of view, is the least painful for market participants and firms. We think there is no reason to change it in favour of sharp jumps and fluctuations," Ulyukayev told Vesti 24 news channel.
The rouble has weakened versus the euro-dollar basket by almost 13 percent since the bank started its mild rouble devaluation in September.
The rouble eased beyond 29 per dollar on Friday, the weakest level in four years, and was traded at around 41 per euro, the weakest level ever.
The Economy Ministry sees the rouble rate at around 31-32 per dollar next year, but central bank executives say they dislike the forecast and the rate will depend on the euro/dollar rate as well as the oil price.
Traders said they expected another weakening before the end of the year as the central bank was seeking to take advantage of the fact that key foreign players betting against it were on holiday.
"Everyone, including the population, expects the rouble to weaken further. So I don't think there much reason here for the central bank to delay (another move)," said Nikolai Podguzov, an analyst at Renaissance Capital brokerage.
"The faster they do it... the better it is from the point of view of reserves' spending," Podguzov said, adding that Monday would be a good day to do it.
Standard & Poor's ratings agency downgraded Russia this month, the first time since the 1998 financial crisis, citing concerns over shrinking reserves.
On Thursday, Russia's mainstay Urals' crude oil export blend fell close to $30 per barrel but bounced back to $33.5-$33.7 on Friday together with global prices.
(Reporting by Yelena Fabrichnaya and Andrei Ostroukh; Writing by Tanya Mosolova and Gleb Bryanski; Editing by Ruth Pitchford)

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India inflation falls
Reuters
Friday, December 26, 2008
By Rajkumar Ray
Indian inflation fell to a nine-month low in mid-December, helped by cheaper fuel and lower factory taxes, and analysts saw it diving to around 2 percent by March, freeing the central bank to cut rates deeply.
India's wholesale price index, the most widely watched inflation measure, rose 6.61 percent in the 12 months to December 13, slower than 6.84 percent in the previous week but a shade above a Reuters poll of 6.57 percent.
"It certainly means the second-round effects of the fuel price cuts and duty cuts are kicking in and inflation is also tapering off very fast due to the disinflationary effects of manufactured goods," said Rupa Rege Nitsure, an economist at Bank of Baroda.
"I expect inflation at 3 percent by end-March 2009 and expect the central bank to cut interest rates by 100 basis points and reduce banks' cash reserve requirements by 50 basis points."
In early December, the government lowered state-set prices of diesel and petrol and announced a 4-percentage point cut to value-added tax on a range of manufactured products.
The government said this week the central bank had considerable scope for monetary easing next year and aggressive monetary action may be needed if the global downturn continued to hurt manufacturing and slow growth.
This was India's lowest reading since March 1, and inflation has now nearly halved from early August's peak of 12.91 percent.
It is well within the central bank's forecast of around 7 percent for 2008/09 and some economists saw it falling below two percent by March-end.
Most analysts now expect the central bank to cut interest rates by another 100 basis points, a sentiment echoed by a top economic adviser to the government this week.
After slashing rates since mid-October, the central bank's key lending or repo rate now stands at 6.5 percent and the reverse repo rate, at which it absorbs cash from the market, stands at 5.0 percent.
Financial markets were relatively unruffled with the 10-year benchmark bond yield briefly easing one basis point to 6.56 percent and the rupee hovering closed to 48.00 per dollar.
India's $1 trillion (677.2 billion pounds) economy, Asia's third-biggest, has shown palpable signs of slowing after growing at 9 percent or above for the past three years.
Factory output growth has fallen sharply, companies have shelved expansion plans and laid off staff, and export growth has dropped as global demand weakened.
Economists and government advisers and officials expect growth to slow to around 7 percent this fiscal year and the central bank's chief said earlier this month that 2009/10 looked like being an even more challenging year.
(Writing by Saikat Chatterjee; Editing by Mark Williams)



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China foreign debt rises to 300 billion
Reuters
Friday, December 26, 2008
BEIJING: China's foreign debt grew at a slower pace in the third quarter, the country's foreign exchange regulator said on Friday, reflecting a slowdown in investment from abroad amid the weaker global economy.
China's foreign debt reached $442.0 billion (300 billion pounds) at the end of September, up 3.4 percent from $427.4 billion at the end of June, the State Administration of Foreign Exchange (SAFE) said on Friday.
China's foreign debt rose 8.9 percent in the second quarter and 5.1 percent in the first quarter.
The end-September level was up 18.3 percent from the end of 2007, the foreign exchange regulator said on its website (www.safe.gov.cn).
Short-term foreign debt, an indicator of inflows of capital, rose to $280.0 billion at the end of September, up from $265.4 billion at the end of June. That amounted to 63.4 percent of the total.
But medium- and long-term foreign debt, which accounted for 36.6 percent of the total, fell $0.2 billion in the third quarter.
China's short-term foreign debt was about 14.6 percent of its $1.906 trillion in foreign exchange reserves as of the end of September.
China's yuan has stablised against the U.S. dollar since the second half of 2008. The country's foreign exchange reserves fell in October for the first month since December 2003, despite a record high trade surplus of the month, suggesting that speculative capital has begun to flow out of the country.
SAFE issued rules this week allowing exporters to accept 25 percent of the total due as prepayment and allowing importers to delay paying 25 percent of the total they owe, both up from 10 percent previously.
(Reporting by Langi Chiang and Zhou Xin, Editing by Jacqueline Wong)


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China and U.S. bound themselves with linked addictions
By Mark Landler
Friday, December 26, 2008
WASHINGTON: "Usually it's the rich country lending to the poor. This time, it's the poor country lending to the rich."
— Niall Ferguson
In March 2005, a low-key Princeton economist who had become a Federal Reserve governor coined a novel theory to explain the growing tendency of Americans to borrow from foreigners, particularly the Chinese, to finance their heavy spending.
The problem, he said, was not that Americans spend too much, but that foreigners save too much. The Chinese have piled up so much excess savings that they lend money to the United States at low rates, underwriting American consumption.
This colossal credit cycle could not last forever, he said. But in a global economy, the transfer of Chinese money to America was a market phenomenon that would take years, even a decade, to work itself out. For now, he said, "we probably have little choice except to be patient."
Today, the dependence of the United States on Chinese money looks less benign. And the economist who proposed the theory, Ben Bernanke, is dealing with the consequences, having been promoted to chairman of the Fed in 2006, as these cross-border money flows were reaching stratospheric levels.
In the past decade, China has invested upward of $1 trillion, mostly earnings from manufacturing exports, into American government bonds and government-backed mortgage debt. That has lowered interest rates and helped fuel a historic consumption binge and housing bubble in the United States.
China, some economists say, lulled American consumers, and their leaders, into complacency about their spendthrift ways.
"This was a blinking red light," said Kenneth Rogoff, a professor of economics at Harvard and a former chief economist at the International Monetary Fund. "We should have reacted to it."
In hindsight, many economists say, the United States should have recognized that borrowing from abroad for consumption and deficit spending at home was not a formula for economic success. Even as that weakness is becoming more widely recognized, however, the United States is likely to be more addicted than ever to foreign creditors to finance record government spending to revive the broken economy.
To be sure, there were few ready remedies. Some critics argue that the United States could have pushed Beijing harder to abandon its policy of keeping the value of its currency weak — a policy that made its exports less expensive and helped turn it into the world's leading manufacturing power. If China had allowed its currency to float according to market demand in the past decade, its export growth probably would have moderated. And it would not have acquired the same vast hoard of dollars to invest abroad.
Others say the Federal Reserve and the Treasury Department should have seen the Chinese lending for what it was: a giant stimulus to the American economy, not unlike interest rate cuts by the Fed. These critics say the Fed under Alan Greenspan contributed to the creation of the housing bubble by leaving interest rates too low for too long, even as Chinese investment further stoked an easy-money economy. The Fed should have cut interest rates less in the middle of this decade, they say, and started raising them sooner, to help reduce speculation in real estate.
Today, with the wreckage around him, Bernanke said he regretted that more was not done to regulate financial institutions and mortgage providers, which might have prevented the flood of investment, including that from China, from being so badly used. But the Fed's role in regulation is limited to banks. And stricter regulation by itself would not have been enough, he insisted.
"Achieving a better balance of international capital flows early on could have significantly reduced the risks to the financial system," Bernanke said in an interview in his office overlooking the Washington Mall.
"However," he continued, "this could only have been done through international cooperation, not by the United States alone. The problem was recognized, but sufficient international cooperation was not forthcoming."
The inaction was due to a range of factors, political and economic. By the yardsticks that appeared to matter most — prosperity and growth — the relationship between China and the United States also seemed to be paying off for both countries. Neither had a strong incentive to break an addiction: China to strong export growth and financial stability; the United States to cheap imports and low-cost foreign loans.
In Washington, China was treated as a threat by some people, but mostly because it lured away manufacturing jobs. Others argued that China's heavy lending to this country was risky because Chinese leaders could decide to withdraw money at a moment's notice, creating a panicky run on the dollar.
Bernanke viewed such international investment flows through a different lens. He argued that Chinese invested savings abroad because consumers there did not have enough confidence to spend. Changing that situation would take years, and did not amount to a pressing problem for the Americans.
"The global savings glut story did us a collective disservice," said Edwin Truman, a former Fed and Treasury official. "It created the idea that the world was doing it to us and we couldn't do anything about it."
But Bernanke's theory fit the prevailing hands-off, pro-market ideology of recent years. Greenspan and the Bush administration treated the record American trade deficit and heavy foreign borrowing as an abstract threat, not an urgent problem.
Bernanke, after he took charge of the Fed, warned that the imbalances between the countries were growing more serious. By then, however, it was too late to do much about them. And the White House still regarded imbalances as an arcane subject best left to economists.
By itself, money from China is not a bad thing. As American officials like to note, it speaks to the attractiveness of the United States as a destination for foreign investment. In the 19th century, the United States built its railroads with capital borrowed from the British.
In the past decade, China arguably enabled an American boom. Low-cost Chinese goods helped keep a lid on inflation, while the flood of Chinese investment helped the government finance mortgages and a public debt of close to $11 trillion.
But Americans did not use the lower-cost money afforded by Chinese investment to build a 21st-century equivalent of the railroads. Instead, the government engaged in a costly war in Iraq, and consumers used loose credit to buy sport utility vehicles and larger homes. Banks and investors, eagerly seeking higher interest rates in this easy-money environment, created risky new securities like collateralized debt obligations.
"Nobody wanted to get off this drug," said Senator Lindsey Graham, the South Carolina Republican who pushed legislation to punish China by imposing stiff tariffs. "Their drug was an endless line of customers for made-in-China products. Our drug was the Chinese products and cash."
A new economic dance
The United States has been here before. In the 1980s, it ran heavy trade deficits with Japan, which recycled some of its trading profits into American government bonds.
At that time, the deficits were viewed as a grave threat to America's economic might. Action took the form of a 1985 agreement known as the Plaza Accord. The world's major economies intervened in currency markets to drive down the value of the dollar and drive up the Japanese yen.
The arrangement did slow the growth of the trade deficit for a time. But economists blamed the sharp revaluation of the Japanese yen for halting Japan's rapid growth. The lesson of the Plaza Accord was not lost on China, which at that time was just emerging as an export power.
China tied itself even more tightly to the United States than did Japan. In 1995, it devalued its currency and set a firm exchange rate of roughly 8.3 to the dollar, a level that remained fixed for a decade.
During the Asian financial crisis of 1997-98, China clung firmly to its currency policy, earning praise from the Clinton administration for helping check the spiral of devaluation sweeping Asia. Its low wages attracted hundreds of billions of dollars in foreign investment.
By the early part of this decade, the United States was importing huge amounts of Chinese-made goods — toys, shoes, flat-screen televisions and auto parts — while selling much less to China in return.
"For consumers, this was a net benefit because of the availability of cheaper goods," said Lawrence Meyer, a former Fed governor. "There's no question that China put downward pressure on inflation rates."
But in classical economics, that trade gap could not have persisted for long without bankrupting the American economy. Except that China recycled its trade profits right back into the United States.
It did so to protect its own interests. China kept its banks under tight state control and its currency on a short leash to ensure financial stability. It required companies and individuals to save in the state-run banking system most foreign currency — primarily dollars — that they earned from foreign trade and investment.
As foreign trade surged, this hoard of dollars became enormous. In 2000, the reserves were less than $200 billion; today they are about $2 trillion.
Chinese leaders chose to park the bulk of that in safe securities backed by the American government, including Treasury bonds and the debt of Fannie Mae and Freddie Mac, which had implicit government backing.
This not only allowed the United States to continue to finance its trade deficit, but, by creating greater demand for United States securities, it also helped push interest rates below where they would otherwise be. For years, China's government was eager to buy American debt at yields many in the private sector felt were too low.
This financial and trade embrace between the United States and China grew so tight that Ferguson, the financial historian, has dubbed the two countries Chimerica.
'Tiptoeing' around a partner
Being attached at the hip was not entirely comfortable for either side, though for widely differing reasons.
In the United States, more people worried about cheap Chinese goods than cheap Chinese loans. By 2003, China's trade surplus with the United States was ballooning, and lawmakers in Congress were restive. Senator Graham and Senator Charles Schumer, Democrat of New York, introduced a bill threatening to impose a 27 percent duty on Chinese goods.
"We had a moment where we caught everyone's attention: the White House and China," Graham recalled.
At the People's Bank of China, the central bank, a consensus was also emerging in late 2004: China should break its tight link to the dollar, which would make Chinese exports more expensive.
Yu Yongding, a leading economic adviser, pressed the case. The American trade and budget deficits were not sustainable, he warned. China was wrong to keep its currency artificially depressed and depend too much on selling cheap goods.
Proponents of revaluation in China argued that the country's currency policies denied the fruits of prosperity to Chinese consumers. Beijing was investing their savings in low-yielding American government securities. And with a weak currency, they said, Chinese could not afford many imported goods.
The central bank's English-speaking governor, Zhou Xiaochuan, was among those who favored a sizable revaluation.
But when Beijing finally acted to amend its currency policy in 2005, under heavy pressure from Congress and the White House, it moved cautiously. The renminbi was allowed to climb only 2 percent. The Communist Party opted for only incremental adjustments to its economic model after a decade of fast growth.
Little changed: China's exports kept soaring and investment poured into steel mills and garment factories.
But American officials eased the pressure. They decided to put more emphasis on encouraging Chinese consumers to spend more of their savings, which they hoped would eventually bring the two economies into better balance. On a tour of China, John Snow, the Treasury secretary at the time, even urged the Chinese to start using credit cards.
China kicked off its own campaign to encourage domestic consumption, which it hoped would provide a new source. But Chinese save with the same zeal that, until recently, Americans spent.
Shorn of the social safety net of the old Communist state, they squirrel away money to pay for hospital visits, housing or retirement. This accounts for the savings glut identified by Bernanke.
Privately, Chinese officials confided to visiting Americans that the effort was not achieving much.
"It is sometimes hard to change successful models," said Robert Zoellick, who negotiated with the Chinese as a deputy secretary of state. "It is prototypically American to say, 'This worked well but now you've got to change it.' "
In Washington, some critics say too little was done. A former Treasury official, Timothy Adams, tried to get the IMF to act as a watchdog for currency manipulation by China, which would have subjected Beijing to more global pressure.
Yet when Snow was succeeded as Treasury secretary by Henry M. Paulson Jr. in 2006, the IMF was sidelined, according to several officials, and Paulson took command of China policy.
He was not shy about his credentials. As an investment banker with Goldman Sachs, Paulson made 70 trips to China. In his office hangs a watercolor depicting the hometown of Zhu Rongji, a forceful former prime minister.
"I pushed very hard on currency because I believed it was important for China to get to a market-determined currency," Paulson said in an interview. But he conceded he did not get what he wanted.
In late 2006, Paulson invited Bernanke to accompany him to Beijing. Bernanke used the occasion to deliver a blunt speech to the Chinese Academy of Social Sciences, in which he advised the Chinese to reorient their economy and revalue their currency.
At the last minute, however, Bernanke deleted a reference to the exchange rate being an "effective subsidy" for Chinese exports, out of fear that it could be used as a pretext for a trade lawsuit against China.
Critics detected a pattern. They noted that in its twice-yearly reports to Congress about trading partners, the Treasury Department had never branded China a currency manipulator.
"We're tiptoeing around, desperately trying not to irritate or offend the Chinese," said Thea Lee, public policy director of the AFL-CIO "But to get concrete results, you have to be confrontational."
An embrace that won't let go
For China, too, this crisis has been a time of reckoning. Americans are buying fewer Chinese DVD players and microwave ovens. Trade is collapsing, and thousands of workers are losing their jobs. Chinese leaders are terrified of social unrest.
Having allowed the renminbi to rise a little after 2005, the Chinese government is now under intense pressure domestically to reverse course and depreciate it. China's fortunes remain tethered to those of the United States. And the reverse is equally true.
In a glassed-in room in a nondescript office building in Washington, the Treasury conducts nearly daily auctions of billions of dollars' worth of government bonds. An old army helmet sits on a shelf: as a lark, Treasury officials have been known to strap it on while they monitor incoming bids.
For the past five years, China has been one of the most prolific bidders. It holds $652 billion in Treasury debt, up from $459 billion a year ago. Add in its Fannie Mae bonds and other holdings, and analysts figure China owns $1 of every $10 of America's public debt.
The Treasury is conducting more auctions than ever to finance its $700 billion bailout of the banks. Still more will be needed to pay for the incoming Obama administration's stimulus package. The United States, economists say, will depend on the Chinese to keep buying that debt, perpetuating the American habit.
Even so, Paulson said he viewed the debate over global imbalances as hopelessly academic. He expressed doubt that Bernanke or anyone else could have solved the problem as it was germinating.
"One lesson that I have clearly learned," said Paulson, sitting beneath his Chinese watercolor. "You don't get dramatic change, or reform, or action unless there is a crisis."

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Worst slump in decades for Thai tourism
By Ed CropleyReuters
Friday, December 26, 2008
BANGKOK: From empty sun loungers at luxury hotels to vacant bar stools in dingy saloons, tourism in Thailand is going through its worst slump in decades, a result of the global economic slowdown and its own political turmoil.
"Right now, business is so slow. Some nights, only one customer," said Jodie, a 24-year-old transvestite go-go dancer teetering around the capital's Nana red-light district in spike-heeled, thigh-high boots.
Jodie's gloom is echoed by everybody in an industry that accounts for 6 percent of the economy in the self-styled Land of Smiles and directly employs 1.8 million people.
The head of the Tourism Authority of Thailand, Phornsiri Manoharn, estimates the eight-day closure of Bangkok's $4 billion Suvarnabhumi airport by antigovernment protesters a month ago will have caused one million foreign visitors to cancel trips or go elsewhere.
"This is the hardest hit we've ever encountered in the 48 years we've been promoting tourism to Thailand," she said. And that's after the country suffered through the December 2004 tsunami, bird flu and SARS.
With arrival numbers for December likely to be 500,000 — a third of forecasts — the Tourism Authority's goal of attracting 15.5 million tourists in 2008 and 16 million in 2009 is in tatters.
Far from the 70 percent occupancy they normally see in December, Bangkok's top hotels are 25 percent full, forcing management to close floors, lay off contractors and ask employees to take unpaid leave.
"It would be fair to say that this will be the lowest monthly occupancy we've experienced in the history of the hotel," said Wayne Buckingham, managing director of the 740-room Royal Orchid Sheraton.
The corporate and conference business has been hit particularly hard. That segment of the tourism industry was more sensitive than others to the travel warnings issued during the airport occupation, the climax of months of sometimes violent political confrontation.
But Buckingham said that people in Asia had been through downturns before and would get through this one, too. "It's just that this one will take a bit longer," he said, estimating that it will be 12 to 18 months before things return to normal.
With the export-driven economy already feeling the pinch from the global slowdown, many analysts say they believe the airport protests by the People's Alliance for Democracy could tip Thailand into recession.
Even if tourism avoids the large-scale layoffs already hitting manufacturing, getting the industry back on its feet will be yet another problem for the new prime minister, Abhisit Vejjajiva, who heads a shaky coalition.
If he starts diverting provincial cash to Bangkok or the south, where the best beaches and strongest support for his Democrat party are to be found, he risks further alienating voters in the north and northeast, where loyalty to the former leader, Thaksin Shinawatra, runs deep.
However, there was expected to be great pressure to intervene, because the dearth of visitors was hurting a wide range of people, including taxi drivers, antique dealers, gem traders and thousands of service workers.
The only people still smiling are the foreign visitors who decided not to be put off by the likelihood of more political unrest.
"To be honest, it's worked out fairly well — all the sights are pretty much empty and we've been getting a guide all to ourselves," said Michael Gude, a businessman from London.

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COLUMNIST
Paul Krugman: Barack be good
Friday, December 26, 2008
PRINCETON, New Jersey: Times have changed. In 1996, President Bill Clinton, under siege from the right, declared that "the era of big government is over."
But President-elect Barack Obama, riding a wave of revulsion over what conservatism has wrought, has said that he wants to "make government cool again."
Before Obama can make government cool, however, he has to make it good. Indeed, he has to be a goo-goo.
Goo-goo, in case you're wondering, is a century-old term for "good government" types, reformers opposed to corruption and patronage. Franklin Roosevelt was a goo-goo extraordinaire. He simultaneously made government much bigger and much cleaner. Obama needs to do the same thing.
Needless to say, the Bush administration offers a spectacular example of non-goo-gooism. But the Bushies didn't have to worry about governing well and honestly. Even when they failed on the job (as they so often did), they could claim that very failure as vindication of their anti-government ideology, a demonstration that the public sector can't do anything right.
The Obama administration, on the other hand, will find itself in a position very much like that facing the New Deal in the 1930s.
Like the New Deal, the incoming administration must greatly expand the role of government to rescue an ailing economy. But also like the New Deal, the Obama team faces political opponents who will seize on any signs of corruption or abuse - or invent them, if necessary - in an attempt to discredit the administration's program.
FDR managed to navigate these treacherous political waters safely, greatly improving government's reputation even as he vastly expanded it. As a study recently published by the National Bureau of Economic Research puts it, "Before 1932, the administration of public relief was widely regarded as politically corrupt," and the New Deal's huge relief programs "offered an opportunity for corruption unique in the nation's history." Yet "by 1940, charges of corruption and political manipulation had diminished considerably."
How did FDR manage to make big government so clean?
A large part of the answer is that oversight was built into New Deal programs from the beginning. The Works Progress Administration, in particular, had a powerful, independent "division of progress investigation" devoted to investigating complaints of fraud. This division was so diligent that in 1940, when a congressional subcommittee investigated the WPA, it couldn't find a single serious irregularity that the division had missed.
FDR also made sure that Congress didn't stuff stimulus legislation with pork: There were no earmarks in the legislation that provided funding for the WPA and other emergency measures.
Last but not least, FDR built an emotional bond with working Americans, which helped carry his administration through the inevitable setbacks and failures that beset its attempts to fix the economy.
So what are the lessons for the Obama team?
First, the administration of the economic recovery plan has to be squeaky clean. Purely economic considerations might suggest cutting a few corners in the interest of getting stimulus moving quickly, but the politics of the situation dictates great care in how money is spent. And enforcement is crucial: Inspectors general have to be strong and independent, and whistle-blowers have to be rewarded, not punished as they were in the Bush years.
Second, the plan has to be really, truly pork-free. Vice President-elect Joseph Biden recently promised that the plan "will not become a Christmas tree"; the new administration needs to deliver on that promise.
Finally, the Obama administration and Democrats in general need to do everything they can to build an FDR-like bond with the public. Never mind Obama's current high standing in the polls based on public hopes that he'll succeed. He needs a solid base of support that will remain even when things aren't going well.
And I have to say that Democrats are off to a bad start on that front. The attempted coronation of Caroline Kennedy as senator plays right into 40 years of conservative propaganda denouncing "liberal elites." And surely I wasn't the only person who winced at reports about the luxurious beach house the Obamas have rented, not because there's anything wrong with the first family-elect having a nice vacation, but because symbolism matters, and these weren't the images we should be seeing when millions of Americans are terrified about their finances.
O.K., these are early days. But that's precisely the point. Fixing the economy is going to take time, and the Obama team needs to be thinking now, when hopes are high, about how to accumulate and preserve enough political capital to see the job through.

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Russia govt unveils list of strategic enterprises
Reuters
Friday, December 26, 2008
MOSCOW: Russia has unveiled a list of strategic enterprises entitled to preference government support in the economic crisis but said the list was not complete and did not guarantee the receipt of the financial help.
The cabinet published the list made of 295 companies from various industries and compiled by a government commission for increasing sustainability of the economic development on its Web site late on Thursday.
Moscow has pledged over $200 billion (135.7 billion pounds) to stave off the crisis, which has already seen companies cut jobs, salaries and investment plans, forced consolidation in Russia's 1,000-plus banking sector and prompted a rise in corporate debt defaults.
"The inclusion of a company in the list does not guarantee the receipt of the financial support," the government said in a statement on its web site http://www.government.ru.
"The main objective...is supporting their stability using not only credit instruments but other measures," it said adding the measures included restructuring tax arrears, altering tariff policy and granting government orders.
"Besides, if it is needed, the government will (act to) minimise negative social and economic consequences of the closure of these enterprises," the government said.
Among others, the list includes oil pipeline monopoly Transneft , Russian Railways, flag carrier Aerfoflot , gas export monopoly Gazprom , the largest oil producer Rosneft , No.2 mobile operator Vimpelcom , Norilsk Nickel , the world's biggest producer of nickel and palladium, and others.
However, the list lacks some major companies key for their industries, such as Russia's largest silver miner Polymetal or oilfield services firm Integra , while some companies are mentioned twice.
"The list...is not complete and may be modified by resolution of the commission," the government said.
To see the Russian-language version of the list, please click on: http://www.government.ru/content/governmentactivity/mainnews/archive/2008/12/25/943415.htm.
(Writing by Maria Kiselyova; Editing by Victoria Main)

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Germany resists calls to spend its way out of trouble
By Judy Dempsey
Friday, December 26, 2008
BERLIN: With battle lines sharpening, the German government appears determined to resist calls to spend an additional €40 billion to fight its way out of the recession, according to officials attending a meeting in the Chancellery in the past week.
Chancellor Angela Merkel is being pulled in all directions as she plans a Jan. 5 follow-up to a meeting of German government officials, business executives and union leaders she called two weeks ago to discuss ways to counter the recession.
The business community, leaders of German states and other European Union nations are calling for the additional spending, which would amount to $56 billion. Industry chiefs, meanwhile, are calling for tax cuts.
Merkel, facing federal elections in September, has said the focus of any spending measures must be preserving jobs. At the meeting two weeks ago, industry lobbyists promised to go along on that point, but now they have backed away even as they exert more pressure on her.
Jürgen Thumann, president of the Federation of German Industry, said smaller companies could not make any pledges to save jobs because the economic environment was so volatile. These include the Mittelstand, small and medium-sized businesses in Germany, which are mostly family owned.
"A drastic fall in the number of orders means several companies will be forced to cut their work force," Thumann said in an interview with the German news agency DPA.
Already the automobile, chemical and wood processing sectors have introduced shorter working weeks and even some layoffs. In addition to seeking more federal spending, the Federation of German Industry has repeatedly called on Merkel to cut taxes, especially employers' contributions to the social welfare system, to encourage more consumer spending.
The dispute over taxes has even led to a wedge between the two conservative parties that support Merkel, her Christian Democratic Union and its allied party in Bavaria, the Christian Social Union. Taxes must be lowered immediately, the Bavarian party said. Merkel said she preferred to wait until after the federal elections.
Under new leadership, the Bavarian party is aiming to win back disaffected voters in time for the European Parliament elections in June and the federal elections in September largely by adopting a more independent line from the Christian Democratic Union.
The European Union, while weakening its criticism of Merkel's cautious approach to dealing with the economic crisis, still wants the German government to do more because of its size: It has the largest economy in Europe.
Merkel, so far, has kept the lobbyists, the state leaders and the EU guessing about her final package.
After a meeting Tuesday in the Chancellery between representatives from the 16 federal states and Merkel's chief of staff, Thomas de Maizière, it appeared that the government wanted to limit spending in order to keep it well within the limits of the EU's Stability and Growth Pact, according to politicians present. The pact limits deficit spending to 3 percent of gross domestic product, so the limit in Germany's case amounts to about €80 billion.
Ingolf Deubel, finance minister of Rheinland-Palatinate, who attended the Chancellery meeting, told the Rhein-Zeitung newspaper that the Merkel government wanted to keep any extra spending to about €25 billion.
Regional politicians want more public money for big infrastructure projects, to which the government has already allocated €12 billion. It has also made €500 billion in bank guarantees.
Merkel and Peer Steinbrück, the finance minister, seem to have concluded that they will face criticism no matter what action they take.
If they increase spending, they risk violating the Stability and Growth Pact. Less than four years ago, Merkel's predecessor, Gerhard Schröder, disregarded those rules and was accused of undermining Europe's attempts to keep budget deficits under control.
But if they do not increase spending, they face further complaints from other EU countries, notably Britain and France, and from industry here for not doing enough to bring Europe out of the economic crisis.


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OPINION
How to get the money moving
By Bruce Bartlett
Friday, December 26, 2008
GREAT FALLS, Virginia:
There is an old joke about economists: They are people who see something working in practice and try to figure out if it would work in theory. Just recently we have seen an example of this when interest rates on U.S. Treasury bills turned negative, meaning the government got paid for borrowing money rather than paying to do so.
In theory, this isn't supposed to happen. If market interest rates are negative then people normally just hold on to their cash. But these aren't normal times. The fear of risk is so pervasive that individuals and businesses don't trust even cash and are willing to pay a premium to park their money in Treasury bills.
This explains a great deal about what is at the root of the U.S. economy's problem today. People are so risk-averse that they are hoarding money, refusing to spend; banks are refusing to lend even to their best customers; and businesses are so desperate for safety that they would rather get a negative return on a safe asset than invest in something remotely risky, no matter how high the potential return.
When everyone in the economy suddenly stops spending, the number of times that money turns over falls. Since the gross domestic product equals the money supply times its rate of turnover - something economists call velocity - this means that if the money supply is unchanged then the GDP must fall.
Theoretically, the Federal Reserve can compensate for a decline in velocity by increasing the money supply. But in times like these it is very hard for it to do so because of something economists call a liquidity trap. When this occurs, the Fed cannot inject liquidity into the economy because its normal means of doing so no longer works. In a liquidity trap, trying to expand the money supply is like trying to push on a string.
Normally the Fed expands the money supply by buying Treasury bills and paying for them by creating money out of thin air. When it wants to contract the money supply it does the reverse, putting Treasury bills from its portfolio on the market and drawing money out of the economy when financial institutions pay for them.
But when interest rates on Treasury bills fall to zero this process doesn't work because money is essentially nothing but a perpetual government bond that pays no interest. If the Fed creates money to buy a Treasury bill that pays zero interest, it accomplishes nothing, economically. All it does is trade one government security for another that is virtually identical. There is no net increase in liquidity.
Under these circumstances, when the normal rules don't apply, the government must find more creative ways to ease credit conditions and get the economy moving again.
First, it needs to increase the budget deficit. This expands the amount of Treasury bills in circulation and is the same as expanding the money supply, which is necessary to keep the GDP from shrinking due to a fall in velocity.
Second, the Fed needs to revise its operating procedures. Instead of buying only T-bills it needs to buy securities with positive interest rates. These include longer-term Treasury bonds and securities issued by government-sponsored enterprises like Fannie Mae. If necessary, the Fed could also buy corporate bonds, state and local government bonds, or even bonds issued by foreign governments.
Third, the government must try to raise velocity by stimulating aggregate spending in the economy. This is harder than it sounds. Buying bonds and securities may expand liquidity, but it doesn't increase spending. And we know from experience that tax rebates don't work because people save them.
The trick is to find a way to get people and businesses to spend money over and above what they would have spent anyway. A stimulus is not a stimulus unless it causes an incremental increase in aggregate spending. Simply replacing private spending with public spending doesn't do any good unless total spending increases in the process.
Since it is just as stimulating to invest money as to buy things with it, it may be possible to bring forward the plans for future investments that businesses and governments already have. But, again, it is essential that these investments be marginal - over and above what would otherwise be spent - or else there will be no increase in aggregate spending, and we will be no better off.
Above all, policymakers need to understand that the economy's fundamental problem is the decline in aggregate spending, which is pulling down both prices and output and rendering the Fed's usual tools for increasing liquidity useless. To restore the economy to health will require new policies that increase aggregate spending.
Bruce Bartlett was an economist in the Treasury Department during the George H.W. Bush administration.




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Fiscal chaos aside, start-ups bloom in Argentina
By Vinod Sreeharsha
Friday, December 26, 2008
MENDOZA, Argentina: Even in the best of times, Felix Racca faced a formidable task — trying to build a new class of entrepreneurs in a country known for cozy cronyism and political melodrama. And now, the Argentine angel investor is trying to do it in the middle of a global storm that has sucked billions of investor dollars out of emerging markets.
So while the Buenos Aires stock exchange was tumbling to a five-year low in October after the government announced it would nationalize private pension savings, Racca was 600 miles away, coolly discussing the prospects of a start-up with Daniel Caselles.
Racca had provided the seed capital for Caselles's brainchild, AuthenWare, a company that makes biometrics software with security applications for banks and insurance companies.
To outsiders this may seem like an unusual time and place for entrepreneurship. The pension grab was widely seen as an admission that Argentina might not meet 2009's debt payments, approximately $20 billion.
After the government's 2001 default, lack of access to credit became a way of life here. The country remained largely cut off from global capital markets and foreign investment.
As a result, Argentine entrepreneurs started looking inward, and over time created a nascent start-up ecosystem with local venture capital funds and angel investors.
According to the 2008 Venture Capital Observatory Report, $25 million is available this year from those funds and investors. Gabriel Jacobsohn, the report's author and a business professor at the University of Buenos Aires, expects that figure to hold steady next year despite current economic uncertainty.
The volume is small, much less than 1 percent of Argentina's gross domestic product, but it represents a sharp cultural shift. In the past, family inheritance and government contacts often determined who started a business. Now, slowly, Argentines are beginning to trust and invest in each other.
The IAE Angels Club is an example. Its October meeting took place on the day when the Brazilian and Russian stock exchanges had to suspend operations in response to collapsing stocks. But the club's middle-aged members attentively listened to two business pitches by complete strangers in their 20s and 30s. Several new angels attended, one announcing he was starting a sister group in Córdoba province, in the center of Argentina, about 400 miles northwest of Buenos Aires.
The Angels Club has grown to 100 members, from six, in three years and has invested $3 million in 17 projects. Silvia de Torres Carbonell, the group's founder, said that without the club, "their money would go elsewhere, and most likely out of Argentina." Investments are usually not recovered for eight to 10 years.
Argentina's new financiers are also providing expertise. Several began their own start-ups during past crises and not only survived but thrived, with little support.
Racca is one such veteran. He and his partner, Emilio Lopez-Gabeiras, founded Intersoft, Argentina's most successful software company, in the early 1990s, surviving hyperinflation, stagnation and multiple currencies.
When they developed a spinoff with the hope of competing globally, they could not find investment partners here. So Racca moved to the United States. He visited 120 potential suitors over three years before finding Sevin Rosen, a venture capital fund based in Dallas.
The general managing partner, Jon Bayless, said that his first impression of Racca was that "he was a technical visionary, but terribly naïve in terms of how to run a business."
Nonetheless, the fund gave him a management team, led by Ron Brittian, a former Texas Instruments executive, and $9 million, its first investment in a company originating in South America. Three days later, Racca suffered a heart attack.
Still, he pressed forward with the company, Fuego Inc., a pioneer in developing business process management systems to help companies streamline operations. BEA Systems acquired Fuego in 2006 for $87 million. This year Oracle acquired BEA.
Racca says he wants to ensure that his compatriots "do not have to go through what I did."
In Daniel Caselles, he saw a technical genius. Racca invested in him before they had defined a product and after knowing him for barely three years, virtually unheard of in Argentina.
The company, still in its infancy, expects to generate $5 million in revenue by the end of 2009. It has drawn additional investors — Racca said he received a new commitment of $300,000 last month. Another is Brittian, who now lives in Argentina.
He and Racca have begun a venture capital fund that plans to raise $100 million by the end of 2009.
In addition to financing Caselles, Racca is grooming him to be a future investor and business leader, practicing English with him and pushing him to take the lead on calls.
This is another break from the past, when Argentines viewed potential financiers with suspicion. Caselles says he does not worry about his ownership stake being diluted because "our investors take better care of us than we do."
Other pioneers include Emiliano Kargieman and Jony Altszul, who started Core Security Technologies, a software company, in Buenos Aires in the mid-1990s. They succeeded in the United States, landing customers from NASA to the U.S. Army.
Today they run a venture capital fund back home, Aconcagua Ventures. Their first investment, Popego, was founded by a 24-year-old college dropout, Santiago Siri, who has since become the only Latin American selected to participate in both Le Web, one of Europe's most elite technology conferences, and Silicon Valley's TechCrunch50. A catalyst for the evolving start-up culture here was Endeavor, the United States nonprofit that fosters entrepreneurial networking in the developing world. Endeavor's first success was in Argentina 10 years ago, just before the country's last financial collapse.
Today it remains a strong presence here. But the entrepreneurial ecosystem here is now entirely locally run, mostly by people with middle-class backgrounds.
For instance, Santiago Bilinkis and his partner, Andy Freire, founded Officenet, an office supply catalogue service in Argentina, before the last crisis. Staples acquired it in 2004. Mr. Bilinkis has since invested in three start-ups. He said that what he called serial entrepreneurship was "the only way to change the country."
The founders of Globant, an information technology services company based in Buenos Aires, concur. They estimate they will take in $40 million in revenue this year, and last week completed their second acquisition.
Indicative of the changing values in Argentina, Alejandro Mashad, Endeavor Argentina's director, said, "Globant's four founders could sell their company today and each have a private jet, but they want to build a company in Argentina."
Google, a Globant client, cited Argentina's emerging entrepreneurial spirit as a main justification for its decision last year to base its Latin American operations in Buenos Aires.
Alberto Arebalos, Google's Latin American spokesman, says this developing culture "will not change despite the ups and downs of the economy."
An Argentine, Mr. Arebalos listed some of the tumult that Argentine business has endured in the last decades: "We have had at least five or six different economic plans, with completely different politics, a closed economy, an open economy, privatization, nonprivatization, a fixed dollar, a floating dollar, a controlled dollar, an uncontrolled dollar, brutal devaluations, increases in tariffs and frozen tariffs."
The lesson, he said, is "one goes nuts or one becomes a survivor."

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Gold mostly steady
Reuters
Friday, December 26, 2008
By Miho Yoshikawa
Gold was mostly steady on Friday, holding near $845 amid views that the dollar would remain under pressure given the grim outlook of the U.S. economy, but activity was slow due to the holiday season.
New York futures markets were closed on Thursday for Christmas, and will reopen on Friday. All UK financial markets will remain closed on Friday for Boxing Day holiday.
Spot gold inched up to $845.90 an ounce at 3:48 a.m. from $844 late in New York, after moving between $840.00 and $847.75.
Gold has lost about 18 percent of its value from the record high of $1030.80 marked in mid-March.
Koji Suzuki, a senior analyst at SBI Futures, said a weak dollar was benefiting gold, which often trades with an inverse correlation to the dollar due to its role as a hedge against the U.S. currency.
"The lack of liquidity is mostly behind recent market moves as position adjustment takes place, but that is about all that's happening," he said.
Trading activity has been light this week due to the Christmas holiday.
The yen dipped against the dollar and the euro on Friday after the release of poor Japanese economic data, but the Japanese currency's losses were limited in thin holiday trade.
The dollar rose to 90.65 yen from around 90.40 yen seen in late Asian trade the previous day.
The euro was barely changed at $1.4020. Against the yen, the European single currency strengthened to 127.10 yen from around 126.65 yen.
Russia's gold and foreign exchange reserves rose by a record $15.4 billion (10.4 billion pounds) in the latest week thanks to a stronger euro and a rise in commercial banks' foreign currency deposits.
The series of weak Japanese data released on Friday underscored fears that the world's second largest economy after the United States could sink back into deflation next year.
Government data showed that annual nationwide core consumer inflation slowed to 1.0 percent in November from 1.9 percent in October.
In a sign of further trouble for an economy already in recession, the ratio of jobs available to those looking for work fell to a nearly five-year low, while industrial production fell a more-than-expected 8.1 percent in November from a month earlier.
February gold futures was mostly unchanged at $848.2 an ounce on the COMEX division of the New York Mercantile Exchange in early Asian trade after settling at $848 in New York on Wednesday.
U.S. crude futures rose above $36 a barrel on Friday after the UAE joined Saudi Arabia in deepening oil supply curbs to comply with OPEC's biggest-ever output cut last week.
The benchmark December contract on the Tokyo Commodity Exchange rose 12 yen to 2,465 yen per gram.
Platinum rose to $871 from $850 in late New York, while palladium was flat at $174.
Silver inched up to $10.34 from $10.33.
(Editing by Kazunori Takada)









U.K. shoppers to flock to post-Christmas sales
By Matthew ScuffhamReuters
Friday, December 26, 2008
Shoppers were expected to make the most of record discounts in stores on Friday, with retailers looking to make up for dismal trading in the run-up to Christmas as the country headed towards a recession.
High street chains including Debenhams, House of Fraser, Top Shop, Comet, and Currys began their sales today. Heavyweights John Lewis and Marks & Spencer begin their in-store sales tomorrow, along with Next.
Retailers are relying on a strong performance in the post-Christmas sales to shift surplus stock and several are offering discounts of up to 90 percent.
The sector received a boost, however, when John Lewis, which is seen by some observers as a barometer of retail spending, said it had seen improved sales in the final four days before Christmas, reversing a trend of sales declines since September.
The employee-owned group said its department store sales rose by 2.5 percent between December 21 and December 24.
The performance will raise hopes that the traditional last minute rush for gifts and heavy discounting in the run up to Christmas would have boosted consumer spending.
"We had anticipated Christmas would come late to the high street this year but it certainly did arrive," said John Lewis' Managing Director, Andy Street.
Street said John Lewis had benefited from strong sales of speaker docks, iPods, Brain Trainers, fragrance and lingerie.
John Lewis began its online sale immediately following the closure of its stores on Christmas Eve and said it had seen its busiest ever online activity with one order being received every second in the second hour of trading.
Demand had been particularly strong for bedroom and dining furniture and plasma televisions, it said.
Several high profile retailers, including Zavvi, Whittard, and The Officer's Club have been forced into administration in the lead-up to Christmas, underlining the pressure the sector is facing from the consumer downturn.
On Thursday, the British Retail Consortium (BRC) said retail sales figures would reflect a poor Christmas season.
The BRC, which publishes one of the most closely watched retail sales surveys, said conditions were tough and Britons were struggling.
That was backed up by a survey from market researcher Experian, which showed shopper numbers fell 4.3 percent on Christmas Eve compared with the same day last year
Experian said retailers had discounted heavily prior to Christmas in an effort to maintain market share and sales volumes.
"For consumers, this has created an unprecedented 'buyers market' which still for many has not been sufficient to offset concerns about their personal situation," it said.


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A last, late discount blitz, in a dismal season
By Stephanie Rosenbloom
Friday, December 26, 2008
NEW YORK: Retailers began their after-Christmas sales in earnest Friday, but even if business is brisk, it will not make up for the dismal holiday shopping season.
Analysts who visit malls each year said stores were relatively quiet Friday morning compared with previous years. In general, customer traffic has been slower throughout the holiday season, and with retailers offering unprecedented bargains in the weeks before Christmas, postholiday sales lost some allure.
"These are the same discounts we've seen before the holiday," the chief industry analyst for NPD Group, Marshal Cohen, said. "Nothing new, nothing exciting."
Mr. Cohen visited several Long Island malls Friday morning and said that there was a bit of a rush in the wee hours but that it subsided by 6 a.m. or so. He expected a lunchtime surge but said sales would not measure up to Black Friday, the blockbuster shopping day after Thanksgiving.
Customer traffic was light Friday morning at malls owned or managed by Taubman Centers in Norfolk and Richmond, Virginia; Clinton Township, Michigan; and Wellington, Florida.
Cohen said that in the future, retailers should use popular brands and compelling products to lure customers, not just low prices.
One retailer, at least, plans to do just that.
Wal-Mart, which had a 3.4 percent sales increase in November and has been bucking grim retailing trends, said it would sell discounted iPhone 3Gs at nearly 2,500 stores beginning Sunday. A black 8-gigabyte iPhone is $197; the 16-gigabyte black or white model will go for $297, with a service agreement with AT&T. (Not to be outdone by other retailers, Wal-Mart said it would match the price of any local competitor's advertised store price within the same promotional period.)
"Our electronics associates have been preparing for many weeks for the arrival of iPhone 3G," said Gary Severson, a senior vice president of entertainment at Wal-Mart.
As expected, 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 SpendingPulse, a macroeconomic report by MasterCard Advisors that estimates retail sales (including by check and cash).
The report said that in November retail sales sank 5.5 percent compared with a year ago. They were down 8 percent in December, through Christmas Eve. Excluding gasoline, the decrease in holiday sales ranged from 2 to 4 percent.
Snowstorms and chilly temperatures did nothing to inspire already hesitant consumers to go out and shop the last weekend before Christmas, usually one of the busiest periods of the year. The weather, though, may have contributed to some good news in online retailing, as consumers opted to surf the Web rather than brave the cold.
Amazon on Friday reported its "best ever" holiday sales season, but the company did not provide sales figures so there was no telling whether its profits were eroded because of deep discounting. Amazon said that on its peak day, it shipped more than 5.6 million units. Investors sent shares up 0.45 percent, to $51.67, by Friday afternoon.
In an interview Thursday, Michael McNamara, vice president of research and analysis for SpendingPulse, said online commerce sales were a bright spot for retailing, as was news that some sectors appeared to be stabilizing. Over all, online sales declined 2.3 percent compared with the 2007 holiday season, SpendingPulse reported.
"The dramatic declines that we were seeing that kept getting worse started to level off," he said, citing women's apparel as one example. The sector has been down 19 to 22 percent for most of the season. While that may not sound like good news, McNamara said that things must stabilize before they can get better.
"It seems once you take that 20 percent haircut off some of these sectors," he said, "that seems to be the firewall."

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OPINION
Boxing Day is for giving
By Judith Flanders
Friday, December 26, 2008
LONDON:
Ask most British people what Boxing Day is for, and they will answer, "It's the day the sales start." Or, possibly, the day for "visiting the rellies" - Brit-speak for relatives. Ask an Irish person and you will get a history lesson on Christian saints and martyrs, reminding you that it is St. Stephen's Day in Ireland. Ask an American, of course, and the answer is: "Boxing what?"
Boxing Day, usually thought of as Dec. 26, but technically the first weekday after Christmas, has a distinguished pedigree in Britain, and during this time of economic crisis, it is good to be reminded of it. It is on Boxing Day, after all, on the "feast of Stephen," that "Good King Wenceslas" looked out and saw the snow, "deep and crisp and even." The cold was notable not for its beauty, but for the hunger that it brought with it. The king calls for food, wine and "pine logs" not for his own feast, but that he and his page may "bear them thither" to give to the poor.
In Britain, post-Reformation amnesia over saints' days saw St. Stephen's Day renamed, but even "Boxing Day" is a reminder that the day is one for charitable giving. Maundy Thursday, at Easter, is for charity from the great (the queen still hands out what are today Maundy coins of a small but symbolic value, but were once very real money - alms for the poor people); Boxing Day, in contrast, is for giving from everyone.
In the 19th century, the "boxes" of Boxing Day were either literally boxes of gifts or money, given by employers to staff and servants. On Boxing Day 1872, Hannah Cullwick, a maid-of-all-work, the lowest kind of household drudge, wrote in her diary, "I go round every year to the master's or missis' tradesmen and ask for Christmas boxes, and they mostly give me a shilling or half a crown." (Half a crown was two shillings and sixpence, or perhaps two days' pay for a lowly live-in servant.) She and her fellow servants were given this money by the shopkeepers as a thank-you for bringing the household's business - and as an inducement to keep shopping there in the new year.
Servants also expected a tip from the guests who visited their employers at Christmas - and from today's perspective no tip could be too much for the drudgery involved. Cullwick recorded working from 6 a.m. to 4 a.m. to create the "family" Christmas her employers expected: She cooked for nearly 50 people on Christmas Eve and 20 the following day - with one person part-time to help her. As a treat, she was allowed to "run up" from the basement to stand in the hallway and watch some of the amateur play that the guests put on. She added wistfully, "I often think what a most delightful pleasure that must be, going home for Christmas, but I've never once had it."
By definition, before the last third of the 19th century, seasonal presents were Boxing Day gifts, and a "box" was a present from a superior to an inferior, whether in social status (employer to servant) or age (parent to child). Presents were a favor conferred, an act of benevolence - even to a child; they were not something exchanged between equals. When in 1841 it was noted that Queen Victoria's new husband liked "the agreeable accompaniment of Christmas presents," his childlike (servant-like?) taste was odd enough to comment on. At mid-century, the great Lewis' of Liverpool department store sold ready-made Boxing Day parcels for employers to give to servants like Hannah Cullwick: "Seven yards of double-width black merino, two yards of lining, one striped skirt and half a dozen linen handkerchiefs" - in other words, the materials for the servants to sew their own uniforms.
Presents were equated with charity. New Year's treats had long been organized for the poor; in the 19th century many workhouse or laborers' New Year's dinners were held on Boxing Day, after the family had had its own celebrations. The main thrust of these events was that the day was not one to satisfy your own needs, but those of others.
For most of the population, through most of the century, of course, while Boxing Day was a day for boxes, it was otherwise just another working day. It wasn't until 1871 that it became an official bank holiday (the British term for a "legal" holiday - you'd never know Americans and Brits spoke the same language, would you?). Charity was not the same as cessation from labor. "What have you done for the happiness of those below you?" asked Punch, nominally a satirical magazine, in 1843.
"Nothing? Do you dare, with those sirloin cheeks and that port-wine nose, to answer - Nothing?"
Today most householders in Britain continue to give Boxing Day gifts, even if they are end-of-year bonuses handed over before the holiday, and we have forgotten that they were once called boxes. They still go to our "servants," although in the 21st century these servants have been outsourced: Now they are the cleaners, dry cleaners, recycling collectors, delivery people and dustmen (sanitation workers - our word is a survival from the days when they removed coal dust). Unless there is a ghastly event like the Boxing Day tsunami of 2004, unless something literally earthshaking happens, we have stopped seeing Boxing Day as a day for charitable giving. Instead we have a grinding 10-day holiday shutdown, filled with grotesque overeating and drinking, and then a return to the consumerist fray in the Boxing Day sales. This is the modern British Christmas.
In Britain, because there is no Thanksgiving holiday on which to spread some of the family-centered traveling, Boxing Day is most often used as a day for duty visits, for taking children to see their grandparents. It would be good if Boxing Day were added to America's list of legal holidays. (From over here, America looks awfully light on time off anyway.) But not if it just became another day in the round of shop-eat-family-family-family.
Instead Boxing Day could return as a day of giving. Not necessarily cash - and not material to make uniforms - but rather one day a year to donate skills or effort, a day for sharing something of value in the larger community. Help someone whose first language isn't English fill out driver's license forms. Load an old lady's iPod with Rogers and Hammerstein. Teach the boy next door to throw overhand, so the other kids stop teasing him.
What we really need to do is put down the punch bowl and pick up on what Punch magazine wrote more than 150 years ago: Don't just keep "the Christmas of the belly: Keep you the Christmas of the heart. Give - give."
Judith Flanders is the author of "Inside the Victorian Home" and "A Circle of Sisters."


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A fixture in New York's art scene struggles for its survival
By Robin Pogrebin
Friday, December 26, 2008
NEW YORK
Dwarfed by the Guggenheim Museum's commanding Frank Lloyd Wright building and the Cooper-Hewitt National Design Museum's stately Carnegie mansion, the National Academy Museum's graceful but relatively diminutive town house on Fifth Avenue could be a metaphor for its squeezed condition.
The 183-year-old academy, a museum and school that played a pathbreaking role in fostering a New York art scene in the 19th century, is in serious trouble. Having sold two important Hudson River School paintings from its collection this month to pay bills, the institution was recently branded a pariah by the Association of Art Museum Directors. That group views such stopgap measures as a breach of basic principles, stipulating that museums can sell art only to finance new acquisitions.
The association urged its members to cut off all loans to the academy and forgo any collaborations.
To the academy's leadership, such censure was not only an indignity but also a shove for an institution on a financial precipice. The academy has been running a deficit for five years, and this year's shortfall is estimated at around $1 million. It has a $4 million annual operating budget.
The academy has been borrowing heavily from its $10 million endowment - $3 million of which is restricted - to pay the bills and has had difficulty paying the museum guards and the heating bill. Its very mission is in disarray, and several board members have resigned over the last six months to protest the institution's direction - or what some say is a lack thereof.
A recent proposal to sell the academy's Beaux-Arts museum building on Fifth Avenue and two additional buildings on East 89th Street, and to relocate, was supported by the academy's 20-member board, known as the council. But the move was rejected by the institution's professional artist members, known as academicians. The academy also has an advisory board.
Among the 337 academicians, elected by their peers, are many of the country's leading artists and architects, including Chuck Close, Helen Frankenthaler and Frank Gehry. In a practice going back to the institution's founding in 1825, each new academician contributes a piece of art as a membership requirement.
The academy's previous director, Annette Blaugrund, who had championed the sale of the building, resigned last December. The board had difficulty finding a replacement and only this month appointed Carmine Branagan, who has worked at several nonprofit organizations but has no art museum experience.
In an interview in her office Branagan said the academy's main problems were the lack of a strong fund-raising mechanism and of clear direction.
Robert Levinson, vice chairman of the advisory board, said the trustees met last week to discuss changing the academy's constitution so the academicians would no longer have financial control.
Levinson argued that artists are ill equipped to make financial decisions about the institution's future. "They just live in another world and don't understand fiduciary responsibility," he said.
Even though it has been operating essentially hand to mouth, the institution has had no formal fund-raising operation in place, aside from its annual spring gala. An effort last year to start a capital campaign produced very little. Some trustees fault the artist members, who have not leapt into the breach by making big donations or helping to raise funds.
The artist Richard Haas, a member of the academy, called some of the criticisms unfair. "This organization existed for 183 years, in large part because artists are very creative in their thinking," he said. Still, when asked how the academy had landed in its current situation, Haas allowed that some "somewhat intransigent age-75-and-over artists probably had something to do with it."
Founded as the National Academy of Design, with the Royal Academy of Arts in London as a model, the academy serves as an honorary association of American artists, with a museum that focuses on American works and a school. It has one of the largest public American art collections in the country, more than 7,000 works from the 19th century to the present.
The academy raised $13.5 million from its recent sale of Frederic Edwin Church's "Scene on the Magdalene" from 1854 and Sanford Robinson Gifford's "Mount Mansfield, Vermont" from 1859. Branagan said that the deal had been arranged privately and that she did not know the buyer's identity, only that it was a private foundation that had agreed to hang the paintings publicly.
John Driscoll, the director of Babcock Galleries in New York, said that the academy members had refused "over several years to explore graceful and culturally responsible ways to alleviate their financial woes" and that "its artist membership deserves our contempt and any sanctions that can be applied."
"I fear for the collection as a whole, which is now at considerable risk," he continued, "as it is clear there is no one there to keep the barbarians from the gate."
The recent sale was not the academy's first; it sold Thomas Eakins's "Wrestlers" in the 1970s and Richard Caton Woodville's "War News From Mexico" in the 1990s, according to David Dearinger, a former curator. When the academy later applied to the museum association for accreditation, Dearinger recalled, it was asked about the Woodville sale and promised not to repeat such a move.
"I don't blame them for being upset," Dearinger said of the association. "They were made fools out of."
Consultants hired by the academy last year to explore a $5 million capital campaign had concluded that the goal actually needed to be $21 million, but that the institution was capable of raising only $800,000. "I think that woke up the artists," Levinson, the advisory board member, said of their decision. "They started to come out of the dream world."
Haas said the artists agonized over the proposal to sell the works before voting 183 to 1 in favor (with one abstention) in November.
Long-planned shows at the academy are now in jeopardy because the museum directors' association warned other artists against collaborating with the academy.
Currently on view there are a retrospective of George Tooker's works and a show on Ralph Albert Blakelock, both of which run through Jan. 4.
"The collection is wonderful, the shows they do are great," said Brian Allen, director of the Addison Gallery of American Art in Andover, Massachusetts, and a critic of the recent sale. "They just have to find a way to develop a mission that will allow them to succeed."

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Protestant and Catholic leaders in Germany warn against materialism
Judy Dempsey
Friday, December 26, 2008
BERLIN: Leaders of Germany's Protestant and Catholic churches warned Friday that "money has become God" and called for a return to nonmaterialistic values and urged bank managers to be more prudent during their Christmas messages.
Bishop Wolfgang Huber, who represents 25 million Protestants in Germany, criticized the strong profit-driven focus and "culture of greed" of individual bank managers and executives, and even named Josef Ackermann, chief of Deutsche Bank, as anexample.
Banks needed to give more priority to "sustainable value-building" rather than to short-term financial gain and hefty bonuses for its managers, Huber said.
"Money has become akin to God in the current situation," Huber told daily Berliner Zeitung.
Referring to Ackermann, one of Germany's most highly-paid bankers who this month said Deutsche Bank's investment banking businesses would generate a return on equity of 20 to 25 percent after the end of the current financial turmoil, Huber was very critical.
"Never again will a Deutsche Bank CEO set a target of 25 percent on equity returns," warning that it would create expectations that would grow larger and could never be fulfilled. He asked managers to be more prudent and forgo large bonuses."
Cardinal Joachim Meisner, the Catholic Archbishop of Cologne, said a banker was "the custodian for money that doesn't belong to him and with which he has to work said Wednesday .
"It's devastating that this ethos can simply disappear and that people can trade with things that don't exist."

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Religious Turks tested by wealth
By Sabrina Tavernise
Friday, December 26, 2008
ISTANBUL: Turkey's religious businesspeople spent years building empires on curtains, candy bars and couches. But as observant Muslims in one of the world's most self-consciously secular states, they were never accepted by elite society.
Now that group has become its own elite, and Turkey, a more openly religious country. It has lifted an Islamic-inspired political party to power and helped make Turkey the seventh-largest economy in Europe.
And while other Muslim societies are wrestling with radicals, Turkey's religious merchant class is struggling instead with riches.
"Muslims here used to be tested by poverty," said Sehminur Aydin, an observant businesswoman and the daughter of a manufacturing magnate. "Now they're being tested by wealth."
Some say religious Turks are failing that test. They see the recent economic crisis as a lesson for those who indulged in the worst excesses of consumption, summed up in the work of one Turkish interior designer: a bathroom with faucets encrusted with Swarovski crystal, a swimming pool in the bedroom, a couch rigged to rise up to the ceiling by remote control during prayer. "I know people who broke their credit cards," Aydin said.
But beyond the downturn, no matter how severe, is the reality: the religious wealthy class is powerful now in Turkey, a new phenomenon that poses fresh challenges not only to the old secular elite but to what good Muslims think about themselves.
Money is at the heart of the changes that have transformed modern Turkey. In 1950, Turkey was a largely agrarian society, with 80 percent of its population living in rural areas. Its economy was closed and foreign currency was illegal. But a forward-looking prime minister, Turgut Ozal, opened the economy. Now the country exports billions of dollars in goods to Europe, and about 70 percent of its population lives in cities.
Religious Turks helped power that rise, yet for years they were shunned by elite society. That helps explain why many are engaged in such a frantic effort to prove themselves, said Safak Cak, a Turkish interior designer with many wealthy religious clients. "It's because of how we labeled them," he said. "We looked at them as black people."
Cak was referring to Turkey's deep class divide. An urban upper class, often referred to as White Turks, wielded the political and economic power in the country for decades. They saw themselves as the transmitters of the secular ideals of Mustafa Kemal Ataturk, Turkey's founder. They have felt threatened by the rise of the rural religious merchant class, particularly of its political representative, the Turkish prime minister, Recep Tayyip Erdogan.
"The old class was not ready to share economic and political power," said Can Paker, chairman of the Turkish Economic and Social Studies Foundation, a liberal research organization in Istanbul. "The new class is sharing their habits, like driving Mercedeses, but they are also wearing head scarves. The old class can't bear this."
Paker described the White Turks' thinking this way: "They were the peasants; why are they among us?"
Aydin, who wears a scarf, encountered that attitude not long ago in one of Istanbul's fanciest districts. A woman called her a "dirty fundamentalist," when Aydin tried to put trash the woman had thrown out her car window back inside.
"If you're driving a good car, they stare at you and point," said Aydin, 40. "You want to say, 'I graduated from French school just like you,' but after a while, you don't feel like proving yourself."
She does not have to.
Her father started by selling curtains. Now he owns one of the largest home appliance makers in Europe. Aydin grew up wealthy, with tastes no different from the older class. She lives in a sleek, modern house with a pool in a gated community. Her son attends a prestigious private school. A business school graduate, she manages about 100 people at a private hospital founded by her father. Her head scarf bars her from employment in a state one.
Her husband, Yasar Aydin, shrugged. "Rich people everywhere dislike newcomers," he said. In another decade, those prejudices will be gone, he said.
The business owners describe themselves as Muslims with a Protestant work ethic and say hard work deepens faith.
"We can't lie down on our oil like Arab countries," said Osman Kadiroglu, whose family owns a large candy company in Turkey, with factories in Azerbaijan and Algeria. "There's no way out except producing."
Ismail Kavurmaci, an observant Muslim who owns a Cerruti store, said Islam teaches that "nobody likes an idle man."
Fortunes were made, forming new patterns of consumption. Istanbul, Turkey's economic capital, is No.4 on the latest Forbes list of world cities with the highest number of billionaires. Luxury cars stud its streets. Shopping malls, 80 at last count, are mushrooming.
"Now, unfortunately, there is a taste for luxury, excessive consumption and comfort, vanity, exhibitionism and greed," said Mehmet Sevket Eygi, a 75-year-old newspaper columnist who has written extensively about Muslims and wealth.
Recep Senturk, a sociologist at the Center for Islamic Studies in Istanbul, said: "You have money, but do you buy whatever you want? Or should you keep a humble life? This is a debate in Turkey right now."
Islam forbids consuming more than one needs, but the line is blurry, leaving rich Muslims struggling with questions like whether luxury cars can be offset by large donations to charity, a central tenet of Islam.
Donations to Deniz Feneri, one of the largest charities in Turkey, jumped almost a hundredfold in the six years ending in 2006, when they topped $62 million. A large part of the donations came from credit cards on the Internet.
Aydin, for her part, supports 25 families, although she moved out of their district two years ago. The real problem is not finding a place to pray on a busy day out (mall fitting rooms work), but being truly charitable and putting others first in an age when the frenzied pace of life pushes in the opposite direction.
Even house designs take charity into account. Cak described a multimillion-dollar house whose design included an industrial-size kitchen where food was cooked daily and distributed in trucks throughout the Umraniye neighborhood.
"It's the way to find peace in your heart after spending so much money," Cak said. "I'm putting gold in my floor, but I'm feeding all these people."
Sebnem Arsu contributed reporting.

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Ad featuring singer proves bonanza for animal protection charity
By Stephanie Strom
Friday, December 26, 2008
Marie Bedford first saw what has become known as "The Ad" in nonprofit circles about a year and a half ago. "I saw it a couple of times and found I just had to respond," Bedford, an actress living in New York, said. "It's so moving."
The television advertisement, for the American Society for the Prevention of Cruelty to Animals, features heartbreaking photographs of dogs and cats scrolling across the screen while Sarah McLachlan, the Canadian singer-songwriter, croons the haunting song "Angel" in the background.
That simple pitch has raised roughly $30 million for the organization since the advertisements started running in early 2007, making it the ASPCA's most successful fund-raising effort — and a landmark in nonprofit fund-raising, where such amounts are virtually unimaginable for a single commercial. (The organization's annual budget is $50 million.)
McLachlan appears only momentarily to ask viewers to share her support for the ASPCA
"Sarah made it possible to do in two minutes what took 30 minutes before," said Jo Sullivan, the organization's senior vice president for development and communications, referring to the long-form use of celebrities in the past. "She literally has changed the way we fund-raise."
Like Bedford, many of the roughly 200,000 new donors attracted to the organization through the advertisement are "annuity" donors who have pledged an average of $21 a month to the ASPCA, which charges their credit card or receives the money via an automatic electronic transfer from their bank.
The advertisement came about by accident.
The ASPCA had been working with a Canadian firm, Eagle-Com Inc., which helps charities raise money using television and that had helped the ASPCA create spots featuring celebrities like Jason Alexander of "Seinfeld," Kevin Nealon from "Saturday Night Live" and Jennifer Coolidge, who played the manicurist in "Legally Blonde." Those advertisements typically ran in the early hours of the morning, which was all the organization could afford.
Eagle-Com was working on a project for a small animal shelter in Vancouver, British Columbia, that McLachlan supported and asked if she might be interested in doing similar work for the ASPCA
"She asked for information about our mission and programs and just got really excited," Sullivan said. "People keep asking us how we cultivated her — did we send flowers, chocolates — but it really was just a happy accident."
Donations from the McLachlan commercial enabled the A.S.P.C.A to buy prime-time slots on national networks like CNN, which in turn has generated more income. This holiday season, the ASPCA rolled out another advertisement featuring McLachlan singing "Silent Night," and it will release another McLachlan advertisement in January.
"I don't want people to hear $30 million and not understand that we've grown tremendously with that increase in income," Sullivan said.
For instance, over the last decade, the ASPCA has increased its grants to support other animal welfare organizations by 900 percent.
"A big chunk of that has come in the last three years because of this ad," Sullivan said.


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Death toll at 9 in California shooting
The Associated Press
Friday, December 26, 2008
COVINA, California: The killing began when an 8-year-old girl attending a Christmas Eve party answered a knock at the door.
A man dressed as Santa and carrying what appeared to be a present pulled out a handgun and shot her in the face Wednesday night, then began shooting indiscriminately as partygoers tried to flee.
By the time it was over, at least nine people at the party were dead and the house was torched. The gunman, identified as Bruce Jeffrey Pardo, killed himself hours after exacting revenge against his former wife by going on a massacre at his former in-laws' home.
Pardo's former wife and her parents were believed to be among the dead. On Friday, investigators resumed searching what was left of their two-story home on a cul-de-sac in a quiet neighborhood of Covina, about 22 miles, or 45 kilometers, east of Los Angeles.
The house was owned by James and Alicia Ortega, an elderly couple who were retired from their spray-painting business and who often invited their large extended family over for parties, particularly around Christmas.
Pardo, 45, had no criminal record and no history of violence, according to the police, but he was angry after last week's settlement of his divorce.
Court documents show that Bruce and Sylvia Pardo completed their divorce on Dec. 18 after about two years of marriage. She got $10,000, their dog and her wedding ring in the settlement. He kept the house.
Bruce Pardo's lawyer, Stanley Silver, said Friday that his client had still been trying to pay the $10,000 as recently as Tuesday. He said his client had also fallen behind on spousal support payments after he lost his job in July.
The police said Pardo showed up at his former in-laws' home about 11:30 p.m. Wednesday for their annual Christmas party. The gift-wrapped box that Pardo was carrying contained a pressurized homemade device that he used to spray a liquid that quickly sent the house up in flames.
David Salgado, a neighbor, said he saw the 8-year-old victim being escorted to an ambulance as flames consumed the house.
Another neighbor, Jan Gregory, said she saw a teenage boy flee the home, screaming, "They shot my family!"
A 16-year-old girl was shot in the back, and a 20-year-old woman broke her ankle when she escaped by jumping from a second-story window. Those two, and the 8-year-old, have been hospitalized and are expected to recover.
When the fire was extinguished early Thursday, officers found three charred bodies in the living room area. Investigators found five more bodies amid the ashes later in the day, and one more on Friday. None of the dead or missing has been identified. The authorities were unable to immediately determine whether the victims were killed by the flames or the gunfire.
After the shootings, Pardo took off the Santa suit and drove away, witnesses told the police. He went to his brother's home, about 25 miles away in the Sylmar area of Los Angeles. No one was home, so Pardo let himself in, the police said.
They were called to the home early Thursday, and officers found Pardo dead of a single bullet to the head. Two handguns were found at the scene, and two more were discovered in the wreckage of his former in-laws' house. A car that Pardo apparently parked near his brother's home exploded Thursday evening, and more ammunition was found in it, the police said.

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Creator of Usain Bolt's Olympic dance shot dead
Reuters
Friday, December 26, 2008
KINGSTON: The dancer and choreographer who created the popular dance used by Jamaica sprinter Usain Bolt to celebrate his victories at the Beijing Olympics was shot to death at a Kingston nightclub on Friday, police said.
David Alexander Smith, who was known in entertainment circles as "Ice," was shot in the head and chest during an argument with two men who took his keys and fled in his car, police said.
Police said they did not know the motive for the shooting.
Smith created the "Gully Creeper" that Bolt danced each time he won a race at the Olympics last August.
Bolt set world records in the 100 meters and 200 meters and was a member of the Jamaican quartet that won gold in the 4-by-100 metre relay.
Jamaica has one of the world's highest per capita murder rates. More than 1,500 people have been murdered in the Caribbean island this year.
(Reporting by Horace Helps, editing by Jim Loney)


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MEANWHILE
The Ten Days of Newton
By Olivia Judson
Friday, December 26, 2008
Some years ago, the evolutionist and atheist Richard Dawkins pointed out to me that Sir Isaac Newton, the founder of modern physics and mathematics, was born on Christmas Day, and that therefore Newton's Birthday could be an alternative, if somewhat nerdy, excuse for a holiday.
Think of the merchandise! Newton is said to have discovered the phenomenon of gravity by watching apples fall in an orchard. Newton's Birthday cards could feature the great man discovering gravity by watching a Christmas decoration fall from a tree. (This is a little anachronistic - Christmas trees didn't come to England until later - but I don't think we should let that get in the way.)
All very jolly - but then, 'tis the season. Yet things are not so simple. It turns out that the date of Newton's birthday is a little contentious. He was born in England on Christmas Day 1642 according to the Julian calendar - the calendar in use in England at the time. But by the 1640s, much of the rest of Europe was using the Gregorian calendar (the one in general use today); according to this one, Newton was born on Jan. 4, 1643.
Rather than bickering about whether Dec. 25 or Jan. 4 is the better date to observe Newton's Birthday, I think we should embrace the discrepancy and have an extended festival. After all, the festival of Christmas properly continues for a further 12 days, until the feast of the Epiphany on Jan. 6. So the festival of Newton could begin on Christmas Day and then continue for an extra 10 days, representing the interval between the calendars.
The reason the interval became necessary is that the Earth does not orbit the sun in an exact number of days. Instead, the Earth's orbit is 365 days and a bit. The "bit" is just under a quarter of a day.
It wasn't always thus. Some 530 million years ago days had less time. Back then, a day was only 21 hours, and a year was about 420 days. In another 500 million years, perhaps a day will be 27 hours, and a year fewer than 300 days. Because of the friction exerted by the moon, the Earth is slowing down. Indeed, already the days are a tiny bit longer than they were 100 years ago.
Because the orbit isn't an exact number of days, our calendars get out of sync with the seasons unless we correct for the fractional day. The Julian calendar, which was put in place by Julius Caesar in 45 B.C., was the Romans' best effort at making a systematic correction. Before that, the Roman calendar gave 355 days to the basic year, and every other year was supposed to include an extra month of 22 or 23 days.
But over a period of 24 years, that gave too many days; so in some years, the extra month was supposed to be skipped. This didn't always happen. By the time the Julian calendar was introduced, the Roman calendar was so far out of sync with the seasons that the year before the first Julian year had to include a massive correction; that year, referred to as "the last year of confusion," was 445 days. Talk about a long year.
The Julian calendar, which is broadly similar to the one we have now, divided the year into 365 days and a quarter. To implement this practically, three out of four years were given 365 days, and the fourth, 366. But this still wasn't precise enough: by the 16th century, the calendar had fallen 10 days out of sync with the solar year. By introducing a couple of extra fiddles to do with leap years at the ends of centuries, the Gregorian calendar fixed that. Again, however, changing calendars meant introducing a one-off correction to bring the dates back in line with the seasons. Rather than having a year with an extra 90 days like the Romans, Europeans "lost" 10 days as the calendar skipped forward. Hence the interval between the contending dates of Newton's Birthday.
It's strangely suitable that the length of the festival should be due to human efforts to describe the orbit of our planet. For planetary orbits were the subject of one of Newton's key works, "De Motu Corporum in Gyrum," ("On the Motion of Bodies in an Orbit"), which he sent to the astronomer Edmond Halley (of Halley's comet fame) in November of 1684. The proofs and insights contained here allowed the calculation of the orbit of any object, from planet to comet or asteroid, moving through a gravitational field.
Shortly after sending "Motion" to Halley, Newton began work on the treatise for which he is most famous, "Philosophiae Naturalis Principia Mathematica" ("Mathematical Principles of Natural Philosophy"). This is where he articulated his three laws of motion. He explained that gravity causes tides, and that the gravitational force of Jupiter perturbs the orbit of Saturn. The basis of many of his insights rested in a kind of mathematics he had invented as a private tool for himself years before: calculus.
Newton was not merely a thinker of abstract thoughts, however. He was also an experimenter. For example, his experiments with prisms showed that white light is composed of light of other colors. Although it had been known before Newton that shining a beam of sunlight through a prism would produce a rainbow, no one knew why. Newton discovered the reason: Light is composed of different wavelengths that are refracted differently by the glass of the prism. The prism doesn't create colors, it reveals them.
Physics was only one of his interests. He was deeply religious and he wrote more about religion than he did about physics or his other great interest, alchemy. Though he never managed to turn base metal into gold, later in life he became Warden of the Mint - the man in charge of making the country's money. He also went after counterfeiters, several of whom were hanged.
Newton does not seem to have been a pleasant man. He feuded with several of his professional colleagues. But he was also a genius, and his work laid the foundations of our modern understanding of the world.
In honor of Newton's Birthday festival, I therefore propose the following song, to be sung to the tune of "The Twelve Days of Christmas." For brevity, I include only the final verse.
On the tenth day of Newton,
My true love gave to me,
Ten drops of genius,
Nine silver co-oins,
Eight circling planets,
Seven shades of li-ight,
Six counterfeiters,
Cal-Cu-Lus!
Four telescopes,
Three Laws of Motion,
Two awful feuds,
And the discovery of gravity!
Happy Newton, everybody!
Olivia Judson writes "The Wild Side" column at nytimes.com/opinion.

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MEANWHILE
Dumb, childlike wonder
By Garrison Keillor
Friday, December 26, 2008
It is the blessed Christmas season. But of course you know that. Unless you live ten miles up a box canyon deep in the Wasatch Range with only your dog Boomer and are demented from drinking bad water, you are inhaling Christmas night and day and "Adeste Fideles" is stuck in your head like a five-inch nail.
This Christmas I am in New York for the general dazzlement and variety. On Sunday St. Patrick's Cathedral was packed to the rafters for 4 p.m. Mass in Spanish, the name "Jesucristo" drifting around the battlements, and a few blocks south the Jane Austen Society was meeting to discuss Christmas in Olde England, and in between, I stopped in a men's store and bought six pairs of red socks. For myself.
Down deep I am selfish and don't like to feel obliged to do what other people are doing - dancing, leaping, piping, drumming, welcoming the Christ Child with joyful hearts, etc. - at the times when other people are doing them. This city enables one to leap or pipe pretty much whenever you feel like it, even after 10 p.m. on weekdays.
Yesterday I took my sandy-haired bright-faced daughter to dinner at 9 p.m., which is late for a 10-year-old, and introduced her to the idea of Ordering Whatever You Want, No Matter What Others May Think, and she got the chicken Kiev and for dessert an apple tart as big as a Gideon Bible. She is a good eater. She approached her meal with the quiet devotion that a chicken deserves. She loved the candles, the linen, the silver, the formality. I enjoyed a tiny quail egg poached in a toasted brioche with a dollop of caviar, though, thanks to my upbringing, I eat my meals surrounded by gaunt Chinese children holding out empty rice bowls. And when the check arrives, I have visions of debtors' prison, dank stone walls, a wooden bunk, a straw mat, water dripping, and so forth.
Here in New York, Mr. Madoff allegedly made off with billions of dollars of other people's money in a Ponzi scheme, which is selfishness raised to a high level indeed, but the selfishness I am indulging is a simpler kind - for example, if I feel like having a mocha, I just step into a Starbucks and get one. A small one, no pastry, but it feels luxurious, coming from a utilitarian background as I do. Why mocha? How does it further God's work on earth? I don't know. I just like it.
A few weeks ago a pundit wrote about what a wonderful thing it would be to appoint Bill Clinton to the Senate to fill his wife's seat, him being a former president and all, and then that idea vanished. Bloop. I imagine Bill called up a few people and said, "Whom are you kidding?" When a man can jet around the world and be received as a potentate and knock down a hundred grand every time he feels like giving a speech, he is not going to want to sit in the Senate chamber and hear old men drone on about Arbor Day and the crucial role of the forest products industry.
I feel the same way about Christmas parties. It isn't fun to stand around making small talk with other people's friends as they anesthetize themselves. But slipping into St. Patrick's for Mass in Spanish is pretty wonderful. It's like a big family reunion at which I know nobody and so nobody is mad at me. Nothing said in Spanish offends me doctrinally or any other way. I squeeze into the crowd, under the placid stone faces of saints, the sweet smell of burning wax and a hundred varieties of cologne, and feel the religious fervor, and tears come to my eyes, and I light a candle, say a wordless prayer, and out into the cold I go.
It brought back memories of Christmas Eve in Copenhagen twenty years ago and how beautiful the sermons were before I started learning Danish.
A man gets a keener sense of the divine in a church that is not his own. Maybe Luther and Calvin and Jan Hus and all them were dead wrong and literacy is not the key nor an understanding of Scripture, and maybe the essence of Christmas is dumb childlike wonder and the more you think about it, the less you understand. Which makes me glad I am no smarter than I am. Let's go have lunch.
Garrison Keillor's latest Lake Wobegon novel is "Liberty." Distributed by Tribune Media Services.

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Peruvian Jesus born to Virgin Mary on Christmas
Reuters
Friday, December 26, 2008
LIMA: Virgin Mary, a 20-year-old Peruvian woman, gave birth to a baby boy on Christmas day and named him Jesus, Peru's state news agency said on Friday.
The baby's father, Adolfo Jorge Huamani, 24, is a carpenter. Religious Peruvians compared him to Joseph the Carpenter in the Bible.
"Two thousand years later the story of Bethlehem is relived," read the headline about the birth in El Comercio, the main newspaper in Peru, a predominantly Catholic country.
The mother, Virgen Maria Huarcaya, delivered the 7.7 pound (3.5 kg) boy, Jesus Emanuel, in the early hours of Christmas at the central maternity hospital in Lima, the capital.
"A few days ago we had decided to name my son after a professional soccer player," the father said. "But thanks to a happy coincidence this is how things ended up."
(Reporting by Terry Wade; Editing by Vicki Allen)





Maliki faces accusations and rumors
By Alissa J. Rubin
Friday, December 26, 2008
With provincial elections scheduled for the end of January, Iraq appears to be plagued by political troubles that seem closer to Shakespearean drama than to nascent democracy.
There is talk of a coup to oust the prime minister. The speaker of the Parliament has abruptly resigned, making angry accusations on his way out the door. And there have been sweeping arrests of people believed to be conspiring against the government, both in Baghdad and Diyala Province, northeast of the capital.
Beneath the swirl of accusations and rumors is a power play in which different factions within the government - and some outside it - are struggling to gain ground as American influence in the country wanes and elections approach that could begin to reshape the political landscape here.
The real struggle is for the country's identity: how much the government will be controlled from Baghdad and how much from the provinces, who will hold power and who will have to give it up.
The American mantra has been that Iraq remains "fragile" - to use the words of Ambassador Ryan Crocker and General David Petraeus. On the political front that seems especially true. The one source of political unity recently has been frustration with Prime Minister Nuri Kamal al-Maliki, who has been making arrests and using tribes in the provinces to set up personal power bases. His rivals, conscious of Iraq's long history of dictatorship, are crying foul.
"Maliki is monopolizing all the political, security and economic decisions," said Omar Abdul Sattar, a prominent Sunni member of Parliament. He listed political parties that he said were turning against the prime minister, including a powerful Shiite party, the Islamic Supreme Council of Iraq, which is fighting Maliki's drive to centralize power in Baghdad and pushing to give more to the provinces, where the party has important power bases, particularly in the south.
"It's simply the story of the transformation from a democratic prime minister into a dictator," Sattar said.
Fresh in people's minds is the recent detention of 24 employees of the Interior Ministry in Baghdad, and possibly more from other ministries, who, according to some reports, were plotting a coup.
Maliki's office vehemently denied that this was the reason for the detention. In any case, the detentions of at least some of the 24 were politically motivated, according to several senior Iraqi government officials.
In Diyala Province, about 50 people were detained three weeks ago during a rally protesting the detention of a local Sunni political leader. Ten were members of the Iraqi Islamic Party, a leading Sunni party that Shiite parties in Diyala suspect of having some links to Sunni insurgents and would like to hobble.
Equally controversial is Maliki's project to form tribal councils that have a direct relationship with his office and are paid from his budget. The groups, known as support councils, are being created both in predominantly Shiite and predominantly Sunni areas.
Their mandate is vague, but conversations with members suggest that they are a way to bring powerful tribes into Maliki's political orbit so that he has a local power base. Maliki's Dawa Party is not particularly influential in the provinces, unlike the parties of some of his rivals.
Deep resentment at these attempts to bolster his power and especially his exclusion of all but a small inner circle from decision making is prompting serious discussion of forcing Maliki out by holding a no-confidence vote in Parliament. A no-confidence vote removes the prime minister and requires the appointment of a new one.
In 2007, a previous effort to depose Maliki failed, but this time the talk seems more serious.
About two weeks ago the leaders of the major political factions in the government met in northern Iraq to discuss Maliki and whether they could muster the votes to get rid of him, according to high-ranking Iraqi politicians and Western diplomats.
"We have been counting the votes, and we have enough votes to withdraw confidence and nominate a new prime minister," said a senior member of the United Iraqi Alliance, a coalition of Shiite parties and independents that forms the largest bloc in Parliament.
What they do not have, however, is agreement on who would get the top jobs, which the parties want to nail down before making any moves.
The parties' concerns with Maliki vary.
The Sunni parties mostly feel distrusted, slighted and left out of decision making. Many Sunnis remain in detention despite an amnesty law that was supposed to result in the release of thousands from Iraqi jails.
The Kurds are furious that despite promises from Maliki and his government, there has still not been a vote on whether the disputed areas in the north, including Kirkuk, should become part of the Kurdistan region. They are also upset that Maliki has been rallying Arabs in the north against them, trying to shift the political balance of power. However, if Maliki agrees to some of their demands - especially for a referendum on Kirkuk - they might fare better with him than against him.
Among his fellow Shiites there is a more complicated dynamic. Some parties, like the powerful Supreme Council, agree with the Kurds' desire to have strong provincial powers, in part to curtail the power of the central government. But other Shiite groups, like those aligned with the anti-American cleric Moktada al-Sadr, are wary of granting more power to the provinces because they have a vision of a national Iraqi identity bolstered by a strong central government.
The former speaker of Parliament, Mahmoud al-Mashhadani, who resigned this week, accused Maliki's rivals of pushing him out to make a no-confidence vote easier.
"They are hoping that after my resignation, it will be easier for them to dismiss Maliki," he said Tuesday.
A vote of no confidence, however, would not be a coup; it would in fact be a democratic, orderly way to change the government. But unless there is consensus about a successor, the government could drift as it did after the elections in 2005, when there were several months of discussions about who would become prime minister, and in 2006, when the previous prime minister, Ibrahim al-Jaafari, was removed.
There is another problem: The very qualities that lawmakers resent in Maliki - strong-arm tactics combined with efforts to reach out to select local constituencies - have enhanced his profile on the Iraqi street. The question is, will they do better by sticking with him or forcing him out?


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13 killed as Iraqi prisoners try to escape
By Timothy Williams and Mohammed Hussein
Friday, December 26, 2008
BAGHDAD: Six police officers and seven prisoners suspected of being members of Al Qaeda in Mesopotamia were killed early Friday in a fierce gunfight during a brazen jailbreak by militants at a police station in western Iraq, officials said.
Three of the militants, including a man Iraqi police described as being a local leader of Al Qaeda in Mesopotamia, escaped and remained at large, the authorities said. Al Qaeda in Mesopotamia is a homegrown Sunni extremist group that American intelligence agencies say is foreign-led, and the leader who escaped is suspected of having killed several police officers and civilians in the past.
The city of Ramadi, where the jailbreak occurred, was cordoned off Friday morning and a curfew was imposed on its 450,000 residents, said Latif Obaid Ayada, the mayor. Ramadi, the capital of Anbar Province, is located about 60 miles west of Baghdad.
Seven Iraqi police officers and one inmate were wounded in the gun battle, which started inside a police station near the city center and spilled out onto local streets. No bystanders have been reported injured.
Ramadi had been at the heart of the Sunni Arab insurgency against American forces until tribal chiefs began to turn against Al Qaeda in Mesopotamia two years ago and started cooperating with the American military and the Iraqi government.
The escape attempt began about 1 a.m. as an officer at Al Forsan police station was escorting an inmate back to his cell from an interrogation room, said Major General Tareq al-Youssef, police chief of Anbar Province.
As the policeman entered the cell with the prisoner, another inmate, Emad Ahmed Ferhan, the suspected Al Qaeda in Mesopotamia leader, complained that he felt nauseated and needed to use the toilet. As Ferhan was leaving the cell, which held about 30 inmates at the time, he attacked the police officer.
The officer, Majid Latif, was overpowered, stripped of his AK-47 rifle, bound and fatally shot, al-Youssef said.
"They exploited the humanity of the guard to commit the crime," the police chief said. "He paid with his life for his mistake."
Of the 30 men in the cell, the police said 11 fled as part of what officials described as a previously planned escape plot.
The authorities said that 10 of the 11 men were being held for terrorism-related offenses. The other man had been detained because he was suspected of having committed an honor crime.
After the original shooting, a second police officer rushed to the scene, but he was also fatally shot, the authorities said.
Armed with a second automatic weapon at that point, the prisoners made their way to the police station's armory, officials said.
Tha'eer Dulaimi, a policeman wounded in the ensuing shootout, said most of the station's officers had been in bed when the jailbreak began.
"We were sleeping when we heard shouting and realized the prisoners were escaping," said Dulaimi, who was hospitalized with a gunshot wound that was not considered life-threatening. "Instantly, we ran toward the armory. The criminals started shooting at us to prevent us from reaching the armory, but we beat them back and they did not get inside."
Three inmates were shot and killed inside the police station, the authorities said.
After failing to take the armory, the prisoners began to shoot their way out of the station, led by Ferhan, who is suspected of being the mastermind of the plot.
"When they came out of the police station, they were shooting at us," said Mohammed Dulaimi, a police officer who was also wounded. "I shot back and I killed one of them, but some of them escaped."
Among those killed were a lieutenant colonel and a captain, said al-Dulaimi.
On the darkened city streets, four inmates were chased down and fatally shot, the authorities said. One prisoner, the man accused of an honor crime, surrendered and was not seriously injured, the police said.
A door-to-door search with photos of the three men who managed to escape, including Ferhan, continued throughout the day.
There was no immediate information about Ferhan's suspected previous crimes.
Officials in Ramadi said Friday that despite widespread support in the city for Al Qaeda in Mesopotamia in recent years, there was no evidence that residents had aided the prisoners.
Ramadi's mayor said adult males in the city had retrieved their own firearms and had helped the authorities search for the militants.
"The locals have played a prominent role in helping with security in town," Ayada said.
Later, residents said the bold jailbreak does not necessarily mean that the militant group would reassert itself.
"I don't think this attack will take us back to the days of Al Qaeda," said Barzan al-Aliyawi, a 21-year-old student.
Omar al-Reshawi, 25, agreed, saying the local authorities needed to take better precautions with jailed militants.
"It was negligent on the part of the police," he said. "They need to put those criminals in a special place, and the police should take more restrictive measures."

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Iraqi Christians brave violence to celebrate Christmas
By Sam Dagher
Friday, December 26, 2008
MOSUL, Iraq: Iraqi Christians in the northern city of Mosul say this year has been the worst in living memory. After a wave of killings and attacks in October, more than 2,000 families fled to nearby villages.
Mosul remains one of the most dangerous places in Iraq and a stubborn holdout of the insurgency, but security has improved enough that at least half of those families have returned. On Thursday, they braved embattled streets and biting cold and rain to attend Christmas Masses and pray for their safety.
At the nearly thousand-year-old Chaldean church of Miskinta, where a bomb had exploded in October and where graffiti praising the insurgency remains on a nearby wall, about 50 parishioners followed a deacon outside to the courtyard, where a fire was lighted to symbolize the birth of Christ.
Many tried to hold back tears as they prayed for "the rebirth of tormented Iraq to a new life of forgiveness and compassion."
Among those attending the Mass was Fadi Ammar, 5, who lost his father and another relative in a bombing in the Jadid neighborhood of Mosul on Dec. 1, which killed 21 people. The family had just returned to Mosul after fleeing in October to their ancestral village in the adjacent Nineveh Plain, which, although part of the province that includes Mosul, is now under the effective protection of Kurds from the adjacent semiautonomous Kurdistan region and is considered significantly safer than Mosul.
Another Mass, at St. Paul's on the east side of the city, was held on Wednesday afternoon instead of on Christmas Eve because of security precautions.
To the extent that security has improved, it is thanks largely to the nearly 3,000 national police officers sent here from Baghdad in October to bolster the local force.
But many of the Christians who have returned said they did so because they were inspired by the determination and faith of one priest and a handful of nuns who stayed in the city against the odds.
At St. Paul's, Mikhail Ibrahim said the only reason he returned to Mosul after fleeing for a few weeks with his family was because of his faith in the Reverend Basman George Fatouhi, the Chaldean Church's de facto leader in Mosul.
"He was the only one who stayed and took care of the community," Ibrahim said. "He told us to come back, and we did."
Father Fatouhi, a charismatic 27-year-old priest, was foisted into the effective leadership of the Chaldean Church in Mosul after the kidnapping and death this year of its leader, Archbishop Paulos Faraj Rahho. Rahho's closest aide, another senior figure in the church, was killed in 2007.
Fatouhi had negotiated with the archbishop's kidnappers, who abducted him after a church service and killed three of his companions.
Their demands went from $300,000 to $20,000, but, after the lesser sum was paid, the negotiators were told that the archbishop had died in captivity because he did not have his diabetes medication. Fatouhi and another church member dug out his body out of a shallow grave and took it to the morgue.
Since the U.S.-led invasion of Iraq in 2003, Christians have been hit hard, particularly in parts of Baghdad and Mosul. Numerous churches and the Chaldean archdiocese building in Mosul were bombed, and many priests and parishioners were either killed or kidnapped for ransom.
The largest Christian denomination is the Chaldean Church, an Eastern Rite church that is part of the Roman Catholic Church but maintains its own customs and liturgy.
Amid the violence, the few remaining church leaders like Fatouhi and Sister Autour Yousif, who also belongs to the Chaldean Church, are working against the tide to keep their faith alive.
During the depths of the crisis in October, they were not only providing moral and spiritual support, but often venturing out at great risk to buy food and provisions for families who were too scared to even go to the market. They have also been determined to maintain church services in some of the most dangerous parts of the city.
On numerous occasions, the pair have found themselves carrying out the grim task of collecting the bodies of Christians from the morgue because familiy members were too afraid to do it.
Sister Yousif is among three nuns at a convent next to the Miskinta church who have refused to leave Mosul. They care for 27 orphan girls and reach out to Muslims and Christians alike.
"We are like the rest of the people," she says. "We will remain until they all leave. The poor need us."
In his homily on Thursday, Fatouhi compared Jesus to a flame that continues to "warm the hearts" of the faithful during difficult and trying times.



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Israel opens Gaza border for humanitarian aid
The Associated Press
Friday, December 26, 2008
JERUSALEM: Israel reopened its border with Gaza on Friday to allow deliveries of humanitarian aid, despite continued rocket and mortar fire from the coastal strip and growing expectations of a large-scale Israeli military campaign against Palestinian militants.
One rocket fired by militants late Friday landed short of its target and struck a house in northern Gaza, killing two Palestinian girls, ages 5 and 12, said a Health Ministry official, Dr. Moiaya Hassanain. The two girls were cousins, he said, adding that three other children were wounded.
There was no immediate claim of responsibility.
The military said that approximately 90 trucks were delivering medicine, fuel, cooking gas and other vital goods into Gaza. The shipment included a large donation of goods from the wife of President Hosni Mubarak of Egypt as well as more than 400,000 liters, or 150,000 gallons, of fuel and 200 tons of natural gas, the military said.
The Israeli Defense Ministry said it agreed to open its cargo crossings into Gaza to avoid a humanitarian crisis there. Defense Minister Ehud Barak said the decision came after consultations with defense officials as well as calls from the international community. Israel controls Gaza's cargo crossings, which are used to deliver food, fuel and other goods into the territory.
Binyamin Ben-Eliezer, a cabinet minister, said the humanitarian shipment was meant to be a message to the people of Gaza that they were not enemies of Israel.
"We are sending them a message that the Hamas leadership has turned them into a punching bag for everyone," he told Israel Radio. "It is a leadership that has turned school yards in rocket launching pads. This a leadership that does not care that the blood of its people will run in the streets."
The deliveries did not persuade Gaza militants to halt their rocket and mortar fire on Israeli border communities. The military said more than 10 rockets and mortars were fired toward Israel early Friday. One home was struck but no injuries were reported.
Israel had originally agreed to open the cargo crossings with Gaza on Wednesday, but shut the passages after militants began pounding southern Israel with dozens of rockets and mortars. The attacks were the heaviest since an Egyptian-mediated truce between Israel and Gaza's Hamas rulers expired last week. The truce, which had taken effect in June, began unraveling in early November.
Pressure has been mounting in Israel for the military to strike forcefully against Gaza militants and Israeli leaders have been voicing strong threats in recent days. But on Friday, military officials said the army was planning a routine rotation of its troops along the Gaza border in the coming week. That, coupled with winter weather, made an imminent operation seem unlikely, they said.
The officials spoke on condition of anonymity because they are not permitted to discuss military strategy publicly.
Israel has maintained a strict blockade of Gaza since the June 19 cease-fire began unraveling six weeks ago, allowing in only small quantities of essential goods. Egypt has also sealed its border crossing with the territory, the main exit point for Gazans traveling abroad.
Foreign Minister Tzipi Livni was in Cairo on Thursday for meetings with Mubarak, who urged Israel to exercise restraint in response to the rocket fire. Livni brushed aside the calls, however, and said Israel would defend itself.
Prime Minister Ehud Olmert also issued a direct, emotional plea to the people of Gaza to stop firing and turn against their Hamas leaders, whom he called "the main reason for your suffering - for all of ours." He delivered the message in an interview with the Arabic-language Al-Arabiya TV channel.
Israel left Gaza in 2005 after a 38-year occupation. Islamic Hamas militants seized control of Gaza in June 2007, after routing security forces loyal to the Palestinian president, Mahmoud Abbas.
Israel has thus far been reluctant to press ahead with a campaign likely to exact heavy casualties on both sides. Past incursions have not halted the barrages, and officials fear anything short of a reoccupation of Gaza would fail to achieve the desired results.
Israel is expected to continue its military consultations over the weekend.
Also Friday, a poll published in the Maariv daily showed Livni's moderate Kadima Party in a statistical tie with its hawkish Likud rival ahead of Feb. 10 elections. Likud objects to the peace talks that Israeli negotiators, led by Livni, are conducting with Abbas' government.
A Teleseker survey showed Kadima winning 30 of the 120 seats in Parliament, compared with 29 seats for Likud. The poll surveyed more than 800 people and had a margin of error of 2 seats. Previous polls in recent weeks had given Likud a strong lead.

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Lebanese Army dismantles eight rockets aimed at Israel
By Robert F. Worth
Friday, December 26, 2008
BEIRUT: Lebanese Army soldiers found and dismantled eight Katyusha rockets on Thursday afternoon that were pointed south toward Israel, Lebanese military officials said.
The rockets were found near the southern town of Naqura, in the border region where an expanded United Nations peacekeeping force has been monitoring an uneasy truce since the war in the summer of 2006 between Israel and Hezbollah, the Shiite militant group.
The United Nations force is based in Naqura, and United Nations teams were sent on Thursday to help the army dismantle the rockets and investigate the episode, said Yasmina Bouziane, a spokeswoman for the United Nations Interim Force in Lebanon.
The Lebanese Army released a statement saying that the eight rockets were of different weights and calibers, but it did not say how they were found.
Hezbollah is the dominant force in southern Lebanon, but there are also Palestinian camps, where other militant groups bent on fighting Israel have a presence.
In June 2007, three rockets were fired into Israel from southern Lebanon, but they did no damage and the attack did not provoke any wider hostilities. The peacekeepers periodically find and destroy weapons caches.
However, Israeli officials have repeatedly complained that the presence of the peacekeepers and the deployment of the Lebanese Army to southern Lebanon in August 2006 have failed to prevent Hezbollah from rearming. Hezbollah's leader, Sheik Hassan Nasrallah, has said that the group has rearmed and is better prepared than ever to fight Israel.
For its part, the Lebanese government has accused Israel of violating United Nations Resolution 1701, which ended the 2006 war, by trespassing into Lebanese territory during brief raids and by violating Lebanon's airspace with jet flyovers.

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China sends naval task force on anti-piracy mission
By Mark McDonald
Friday, December 26, 2008
HONG KONG: In China's first modern deployment of battle-ready warships beyond the Pacific, a naval task force set out Friday to begin escorts and patrols in the pirate-infested Gulf of Aden, state media reported.
A supply ship and two destroyers - the Wuhan and the Haikou - departed from the port at Sanya, on Hainan Island, carrying a total crew of about 800, according to Xinhua, the official Chinese news agency.
"In addition to missiles, artillery and satellite communications, special troops who are trained for the tasks will also be on board the warships," Xia Xinnian, deputy chief of Chinese naval forces, said in a news broadcast on the state network CCTV.
The task force commander, Rear Admiral Du Jingcheng, said the primary mission of the destroyers, which are also carrying helicopters, would be the protection of Chinese merchant ships passing through the gulf, especially tankers carrying crude oil.
About 60 percent of China's imported oil comes from the Middle East, and most of that passes through the gulf, along with huge shipments of raw materials out of Africa.
Strategic Forecasting, a private intelligence agency based in the United States, said in a report that a Chinese anti-piracy patrol would afford its navy "some very real opportunities for on-the-job training, covering everything from logistics far from home and combat against seaborne opponents to communications and joint operations with other, more experienced navies."
The Statfor analysis also said the Chinese "will very likely monitor the way NATO (and especially U.S.) warships communicate with each other and with their shipborne helicopters."
The navy would acquire new skills, the report said, "under the banner of internationalism."
Lieutenant Nathan Christensen, a spokesman for the U.S. Fifth Fleet, based in Bahrain, said the coalition would welcome the Chinese ships and emphasized they should join the international effort on a day-to-day operational level.
"China is ready to exchange information and cooperate with warships of the other countries in performing humanitarian rescue tasks," Huang Xieping, a spokesman for the Ministry of Defense, said Thursday on CCTV.
The Piracy Reporting Center in Kuala Lumpur said Friday that 110 ships had been attacked in the gulf this year, and 42 had been hijacked. Fourteen ships are still being held for ransom.
A Chinese Foreign Ministry spokesman, Liu Jianchao, said 1,265 Chinese commercial vessels had passed through the gulf so far this year, and seven had been attacked. A Chinese fishing trawler and 18 crew members were still being held by pirates, he said.
A European Union flotilla has begun patrolling the gulf in recent days, joining naval ships from India, the United States, Iran and Russia. On Thursday, a helicopter dispatched from a German frigate drove off a pirate ship that was attacking an Egyptian cargo ship.
The Chinese commander, Du, said the navy had made "special preparations to deal with pirates, even though these waters are not familiar to us."
If pirates are encountered, he said, according to Xinhua, "our primary target is not striking them but dispelling them. If the pirates make direct threats to the warships or the vessels we escort, the fleet will take countermeasures."
Commander Xie Zengling, chief of the special forces unit, told Xinhua that he expected to encounter firefights with pirates.
He said one Chinese special forces soldier could handle several enemies with his bare hands.
Aside from good-will visits, China has not sent warships out of its region since the 15th century, under a Chinese Muslim admiral, Zheng He.
The modern Chinese Navy, officially known as the People's Liberation Army Navy, has concentrated on coastal defense, regional maneuvers and visits to foreign ports. A Chinese guided-missile destroyer, the Qingdao, made a port call in San Diego, California, in 2006.
Both destroyers in the anti-piracy task force, state media said, were designed and manufactured by China.

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Sudan's north-south war still smolders
By Neil MacFarquhar
Friday, December 26, 2008
ABYEI, Sudan: This market town serves as kind of a fulcrum balancing perhaps the most important peace treaty in Africa.
Much rides on the stability of the nearly four-year-old agreement between the Arab Muslim government in Khartoum and the former rebel movement in the mostly Christian and animist southern Sudan: considerable oil wealth; the calm, such as it is, in Sudan and several neighboring states; the future of Darfur.
But Abyei, once a thriving town of 30,000, is now an empty, blackened wreck.
It is still smoldering from the first significant outburst of sectarian violence since the peace pact was signed, an eruption last May that destroyed the town and emphasized the delicate health of the treaty.
"It is fragile but it is fundamental; it is absolutely vital to get it right because if the north-south agreement fails, everything else will also fall apart," said John Holmes, the emergency relief coordinator for the United Nations, during a recent whirlwind tour of the area. "If that goes, you can forget about Darfur; it is just a side show."
While much of the world's attention has been focused on the crisis in Darfur, the stakes are much higher in southern Sudan. At more than 40 years, the war in the south lasted longer and was far more brutal than what Darfur has endured. An estimated two million people were killed and four million displaced in the 15 years before the 2005 treaty.
In Darfur, the death count is not known, but Holmes estimated that up to 300,000 fatalities could be attributed to the outbreak of war.
The fear in the south is that some small spark - like the confrontation of a few soldiers at a checkpoint in Abyei last May - could re-ignite the conflagration not just in one town, but across the south. That might draw in combatants from the governments or rebel movements in the countries around southern Sudan, few of them models of stability. They include Congo, the Central African Republic and Uganda.
But since the two sides reached the peace agreement in 2005, the world has to some extent stopped paying attention.
"We work in the shadow of Darfur," said David Gressly, the regional coordinator in the southern capital, Juba, for the UN mission in Sudan. "In general, there was a lack of engagement in what was going on here."
The thousands who fled the town or its immediate environs remain displaced, their insecurity confirmed by a skirmish early this month that left two police officers dead.
"If there is peace, these things should not happen," said Amol Bol, a 57-year-old sorghum farmer who, like thousands of others, remains stuck in a shantytown of reed and plastic huts around the town of Akog, south of Abyei. "Now we live in fear that this peace will fall apart, because we were attacked in our houses."
Kuol Deng Kuol, the paramount tribal chief, said government soldiers burned all 50 of his tukuls, the mud brick huts with conical thatched roofs that dot the countryside here.
"They want to chase us away from the area, to create a reality that there are no Dinka living in Abyei," he said, referring to his tribe. "The peace may have been signed, but the implementation is not going in the right direction."
Both sides are dragging their feet in carrying out the peace plan, initially envisioned as a six-year transition culminating in a 2011 referendum on whether the south would achieve independence or Sudan would remain united. Complicated national elections are scheduled before that, with the date depending on an uncompleted census.
In theory, there is a government of national unity from both sides overseeing it all, but Sudanese officials and diplomats point out that there is little real integration.
That problem was particularly acute around Abyei. The shock of the violence finally prompted both sides to agree to a set of reinforced peace guidelines last June. Among other things, they call for the integration of police and army units from the north and south, a process that still lags, and the sharing of oil revenues from the area, a continuing problem. Both sides also agreed to submit their border demarcation dispute around Abyei to international arbitration, with a decision due around next June.
But progress is slow, and it is not hard to see why both sides would be stalling.
A sign welcoming passengers approaching the squat terminal of the airport at Juba neatly captures the wrinkle in the fight for autonomy: "Our Peace. Our Land. Our Oil. Our Liberty."
The most significant oil resources in southern Sudan lie right along the still-unmarked border between north and south, with notable deposits underneath Abyei. The inability to agree on how to share that oil is holding up the peace process. As it stands now, though, if the south votes for independence in 2011, it will take some 80 percent of the reserves with it.
It has no way of getting the oil out of the landlocked south without relying on the north, unless it wants to invest billions of dollars in precious resources in building a pipeline to the sea, most likely through Kenya. Thus, diplomats say they believe that the crucial piece of the plan stalling peace is the lack of a long-term deal for sharing oil revenues.
"The fight over land on the border is a proxy discussion for the fight over oil," said Richard Williamson, President George W. Bush's special envoy for Sudan.

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Ugandan LRA rebels said to kill at least 15 in Congo
Reuters
Saturday, December 27, 2008
By Joe Bavier
Ugandan rebels fleeing a multinational offensive have raided a Congolese village and killed at least 15 people, U.N. peacekeepers said on Friday.
Uganda, Congo and South Sudan launched a joint assault on December 14 against bases of the Lord's Resistance Army (LRA), a Ugandan rebel group, in Democratic Republic of Congo. But they have so far failed to corner its reclusive leader, Joseph Kony.
The United Nations mission in Congo (MONUC) said fleeing LRA fighters attacked the village of Faradje, near Congo's porous border with Sudan, on December 24 and 25.
"According to our sources, at least 15 people were killed in the town of Faradje, which suffered looting and destruction of homes," MONUC said in a statement.
A Ugandan military spokesman earlier told Reuters the rebels had killed 35 civilians in five different raids over the two-day period, but this report could not be independently confirmed.
Congo's Foreign Minister Alexis Thambe Mwamba told reporters in Paris earlier this week that he expected to be "totally rid" of the rebels within days.
The joint offensive was launched after Kony, a self-styled mystic, failed again to sign a peace deal to end his rebellion against the Ugandan government. Despite early claims of success, it has so far failed to locate Kony and crush the rebels, infamous for kidnapping women and using children as fighters.
"They are avoiding any possible contact. They are not willing to confront us. They are still elusive," said Captain Chris Magezi, the Ugandan spokesman for the joint operation.
Ugandan authorities have released no death toll from the offensive to indicate the scale of its impact.
LRA BASES BOMBED
MONUC said it transported around 100 Congolese soldiers to Faradje on Friday in an effort to boost security and protect civilians. Uganda was also sending more forces to the area.
On Monday, an LRA spokesman said Kony and his top commanders had survived bombing raids on their bases. He said Kony was calling for peace talks to be relaunched with a new mediator.
The rebels said on Friday they shot down a Ugandan army helicopter, a charge both Ugandan and U.N. officials denied.
Magezi said Ugandan forces believed Kony's fighters were now moving towards the Central African Republic, which borders Congo and Sudan and where the LRA has conducted raids in the past.
"This operation is a success. We are occupying his (Kony's) bases and sitting on his food supplies," Magezi said. "We'll hunt him down even if he goes to CAR. We have been in contact with the government there and they are ready to cooperate."
A spokesman for Central African Republic's President Francois Bozize would not confirm the poor and sparsely populated country had agreed to help the anti-LRA drive.
Kony and two of his deputies have been indicted by the International Criminal Court in The Hague for war crimes allegedly committed during a two-decade bush war that has killed thousands of people and displaced about two million more.
(For full Reuters Africa coverage and to have your say on the top issues, visit: http://africa.reuters.com/)
(Editing by Pascal Fletcher and Mark Trevelyan)



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NATO awaits new leadership
By Stephen Castle
Friday, December 26, 2008
The former secretary general of NATO, George Robertson, once recounted welcoming the first contingent of Russian officials to the alliance's headquarters in Brussels. To Robertson's surprise, his visitors already had an excellent grasp of the layout of a sprawling building none of them had ever visited.
Russia has always taken NATO seriously - invariably seeing it as an aggressive alliance determined, especially since the fall of Communism, to expand right up to Russia's frontiers. By contrast, NATO's Western members often seem to treat it with indifference.
With the Cold War won, the alliance's main raison d'être disappeared. The trans-Atlantic rift over the invasion of Iraq then sapped NATO's ability to act as a crisis intervention force.
Now, as the alliance's main challenge, in Afghanistan, gets bogged down, allies bicker over who should take more of the military strain. In a policy journal called Europe's World, Nick Witney, a former senior British official and ex-head of the European Defense Agency, recently wrote an article under the title "The Death of NATO."
But rumors of its demise may be exaggerated. In 2009, NATO will celebrate its 60th anniversary at a summit meeting in Strasbourg and Kehl, a small German city just across the border.
That meeting should anoint a secretary general to succeed Jaap de Hoop Scheffer, the Dutch diplomat whose low-key period in office ends in July. Already there is discreet jockeying for the job.
History suggests that the successful candidate will be a current minister and a European, to balance the American who occupies the post of supreme allied commander Europe.
Though he has not declared any interest publicly, the front-runner is Anders Fogh Rasmussen, the prime minister of Denmark, an experienced and current leader, albeit of a smallish NATO nation.
His closest challenger is Radek Sikorski, foreign minister of Poland. Again, Sikorski has expressed no desire for the post, though observers noted a speech he made at a recent NATO ministerial meeting with Ukraine. Sikorski spoke in French, thereby, the theory goes, answering criticism that his main weakness as a candidate for NATO's top job is a less than perfect grasp of the language of Molière.
The consensus is that, given its historic ambivalence toward the alliance, it is too soon for France itself to put up a candidate, even though Michèle Alliot-Marie, a former defense minister, would be a strong contender. The names of Alexandr Vondra, deputy prime minister of the Czech Republic, and Norway's defense minister, Anne-Grete Strom-Erichsen, are also mentioned.
After years of safe-hands diplomacy under de Hoop Scheffer, most experts believe it's time for a bigger, noisier, character. Charles Grant, director of the Center for European Reform in London, thinks personal authority will be crucial. "Influence is informal and depends on the strength of the personality, not on formal powers, which are negligible," he said.
If Tony Blair was interested, argued one diplomat, he would walk into the job.
The logic is that whoever wins the post needs to have the confidence of key players as they confront complex challenges. One task is to help re-establish a trans-Atlantic consensus over security. Here there is reason for optimism for NATO's supporters.
The arrival of President-elect Barack Obama heralds an era in which America is more likely to listen to its allies, and coincides with France's offer to rejoin NATO's command structures.
In Washington the new national security adviser, General James Jones, is a respected former supreme allied commander of NATO (who also speaks good French).
Paris, which a few years ago delighted in obstructing Washington at NATO, is now working well with the core powers, the United States, Britain and Germany.
There are difficulties too. Berlin is proving less cooperative, and tensions are likely to increase when Obama asks Europeans for more help in Afghanistan, just as Germany prepares for federal elections.
Even if Europeans do produce more troops, Afghanistan will test the cohesion of the alliance. The greater the European military contribution in Afghanistan, the more it will brush up against the Pentagon's traditional reluctance to share decision-making with allies it sees as military pygmies.
Meanwhile the new secretary general will be trying to repair the dysfunctional relationship between NATO and the European Union, which has military ambitions and overlapping membership. These are currently obstructed by tensions between Turkey (which is in NATO but not the EU) and Cyprus (in the EU but not NATO).
But perhaps the most complex challenge will be steering ties with Russia, frozen after the war in Georgia.
As Obama was elected, Moscow threatened to site missiles in its Baltic enclave of Kaliningrad if Czech and Polish governments participated in U.S. missile defense.
Russia's president, Dmitri Medvedev, has also suggested a new European security architecture - a vague initiative seen by some diplomats as a transparent device to weaken NATO.
Last month the French president, Nicolas Sarkozy, called for a moratorium on missile deployments in Europe until a summit meeting next summer to discuss Russia's security ideas under the auspices of the Organization of Security and Cooperation in Europe.
That idea won very little support at an OSCE meeting this month. But there is now talk of NATO resuming ties established back in May 2002, when, at a summit meeting in Italy, the alliance and Russia pledged to work together on issues from counterterrorism to missile defense.
At a ceremony in a mock-up of a Roman amphitheater, accompanied by an Italian Air Force fly-by, George W. Bush even suggested that the two former foes were "joined as partners, overcoming 40 years of division and a decade of uncertainty."
The idea of NATO as a fulcrum for debate between Russia and the West never took off. Instead, when Moscow's relations with Washington deteriorated, its ties with NATO became a casualty. The NATO-Russia Council, set up in 2002, produced little before it was suspended over Georgia.
But, over an Italian meal on Dec. 19, de Hoop Scheffer and Dmitry Rogozin, Russia's hard-line ambassador to NATO, discussed the gradual resumption of contacts. That the discussion took place at all shows that Russian officials still see NATO as important - just as they did when Robertson first invited them.

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LETTER
Stop bullying Russia
Friday, December 26, 2008
Stop bullying Russia
Regarding your editorial "Forging new relations with Russia" (Dec. 26): In a day and age of so much financial and political instability, Russia can be a tremendous force of stability if the West treats it as an equal partner, and not as an adversary to be exploited and conquered.
Instead, our leaders have been seeking to exploit Russia. The West gave Russia poor financial advice that brought poverty to millions of Russians, made a select few elites fabulously wealthy and expedited the transfer - or theft - of billions of dollars of capital from the fledgling democracy.
America's leaders also sought to continue NATO's now irrelevant existence by having NATO illegally invading the territories of the former Yugoslavia. NATO has also aggressively sought to expand its reach by absorbing territories from the former Soviet Union but does not offer Russia membership in the organization.
The Russians, who have endured centuries of invasions, see the writing on the wall and are reacting accordingly.
Russia still has a sizeable nuclear arsenal - and they do good physics. It's time for Americans to wake up to the reality that U.S. leaders have been leading us toward World War III.
Instead of seeking perpetual war for America's massive military industrial complex, we need to focus our precious and limited resources toward rebuilding America instead of destroying other countries.
Let's begin a new course based on trust and respect for all nations by leading by example, not by force, and ceasing our incessant and desperate bullying of Russia.
Michael Pravica Henderson, Nevada



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OPINION
A Faustian failure
By Adrian Hong
Friday, December 26, 2008
LOS ANGELES:
After five years of effort, the much-vaunted "Six Party Talks" have essentially been acknowledged as an abject failure. Despite America's best efforts, North Korea has proven itself most capable at stalling and swindling.
The U.S. State Department calculated that accusations and actions condemning North Korea's human rights conditions (and China's abhorrent treatment of North Korean refugees) would only make negotiations more difficult with the famously temperamental North. As a result, we have witnessed an astonishing charade - the world's standard-bearer of freedom and justice in essence excusing, downplaying or outright ignoring the actions and the victims of the world's greatest oppressor.
There is a difference between name-calling and accurate description. North Korea is home to the largest modern-day gulag. Hundreds of thousands of innocent political prisoners toil and die in a network of concentration camps. Refugees, their advocates and experts have testified during the past decade about the public executions, rapes, forced abortions, mass starvation and other atrocities that meet the legal definition of "crimes against humanity."
To play off Benjamin Franklin's adage, we essentially gambled their liberty for our security, and won neither. Having gained no verifiable denuclearization by North Korea, we are in the same place today as we were in 2003, except for semi-annual press conferences and photo ops in Seoul, Beijing and Pyongyang, at the cost of thousands more North Koreans tortured, starved and executed.
Negotiation must always be given a legitimate chance, and force must always be the last resort. But for years we have watched the negotiations with apprehension and anxiety. Activists who chained themselves to embassies or found themselves serving time in Chinese jails for trying to aid fleeing North Koreans were condemned as hot-headed and reckless. Underlying such admonishments was the assertion that such urgency is unfounded, that wise government leaders would resolve the situation, if we would only wait.
In 2004, I co-founded a nongovernmental organization to raise awareness of the crisis North Koreans are facing. The organization operates underground shelters throughout Asia; its members risk their own safety to protect refugees and move them covertly to freedom. The group also works on behalf of the North Korean people to lobby agencies, institutions and governments worldwide to help refugees find freedom and resettle to new lives.
For the past four years, I have resisted calling for outright regime change, believing genuine attempts at negotiation to be a moral imperative. I thought the talks were worthwhile if they provided the slightest chance that the North Korean regime would come to realize the critical reasons for reform and change.
I was wrong. Now I cannot deny what I wish were untrue - the North Korean elites will never bargain away the only powers that prevent them from losing authority. They realize that any opening for freedom or reform would only allow breathing space for any potential resistance group. They know that the loosened flow of outside information would condemn the leadership's complicity in the suffering of North Korea's citizens. Most of all, they know the fate of men like Ceausescu, Milosevic and Saddam Hussein.
A small number of North Korean defectors are resorting to desperate measures to change the status quo. One attempted self-immolation in Seoul earlier this year, after an unsuccessful international campaign to halt the public execution in the North of his brother, sentenced to death for practicing Christianity. Others have begun perhaps foolhardy attempts to forcibly win the freedom of imprisoned countrymen. It is becoming increasingly difficult to impress upon them the importance of civil disobedience and reasoned discourse when the grand pledges of presidents and prime ministers have proven to be empty rhetoric.
Now, as we pretend concentration camps are a relic of the 20th century, as a tattered network of activists and defectors attempts to save as many people as it can, as children starve on the streets of cities like Yanji, Shenyang, Wonsan and Hamhung, our leaders and diplomats comfort themselves with the illusion that nothing can be done.
There was a time when we pledged to bear any burden and support any friend to ensure the survival and the success of liberty. We must now rid ourselves of the delusion that we can bring about real change without real sacrifice. We must shelter the broken and malnourished people who have managed to escape and allow them a chance at a new life. Most of all, we must wholeheartedly support those fighting a government that exhibits all signs of an unrelenting totalitarian evil, with more than just empty promises. If this government and its actions cannot be called evil, then the word has lost all meaning.
Adrian Hong is co-founder and former executive director of Liberty in North Korea (LiNK), and was imprisoned in China in 2006 for helping North Korean refugees escape.

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Fighting flares in southern Philippines
By Carlos H. Conde
Friday, December 26, 2008
MANILA: A series of rebel attacks this past week in the southern Philippines that left least nine civilians dead underscores the need for the government and Muslim separatists to resume peace negotiations, analysts said Friday.
While civilian casualties are not uncommon in the troubled region of Mindanao, some analysts view recent actions as the insurgents' way of pressuring the government to restart the peace process that has been stalled since August, when the government nullified a landmark agreement that would have expanded a Muslim autonomous region.
On Tuesday, members of the Moro Islamic Liberation Front, the main group that has been fighting for Muslim self-rule in the predominantly Roman Catholic region since the 1970s, attacked villages in Sultan Kudarat township, killing nine civilians and wounding more, the military said.
The next day, Christmas Eve, the rebels reportedly staged another attack, this time in the town of Alamada.
"The attacks came while the people were setting off firecrackers. The attackers timed their attacks during the revelry," said Ernesto Concepcion, mayor of Alamada, according to ABS-CBN television.
The military said the rebels attacked other areas on Christmas Day, firing rocket-propelled grenades at power lines in Sultan Kudarat and looting.
"They ransacked the houses of civilians and extorted money from them. They even stole the guns of retired soldiers living in the area," Lieutenant Colonel Ernesto Torres Jr., an army spokesman, said Friday.
Officials of the Moro Islamic Liberation Front denied that its forces had tried to attack civilians. Eid Kabalu, a spokesman for the front, instead blamed the military for stepping up its offensives in the past several days.
Julkipli Wadi, an analyst and professor at the Institute of Islamic Studies at the University of Philippines, said, "The recent attacks may be viewed as a strategic offensive" by the insurgents to pressure the government to restart the peace process.
However, Kristian Herbolzheimer, an adviser on peace processes with the Initiatives for International Dialogue, a Mindanao-based group that monitors the negotiations, said more information was needed.
"The fragility of any peace process is that it can easily be affected by episodes of violence that can either be a product of rogue elements who want to put pressure on the government or by spoilers who want it to derail completely," he said. He urged a restoration of cease-fire monitors, with new authority to carry out "binding fact-finding missions" to determine the truth behind the attacks.
In recent months, fighting between separatists and the government has killed dozens from both sides and displaced more than half a million Filipinos from their homes, with tens of thousands in refugee camps in several provinces.
Negotiations broke down in August after the government rescinded the agreement that would have enlarged a Muslim autonomous region.
Many Filipinos, particularly Christian politicians and local officials, opposed the agreement, calling it a sellout of the Philippine patrimony. The issue went to the Supreme Court, which ruled that the pact was unconstitutional.
Since then, the government has been trying to repair the situation. Last week, the government announced a new negotiating panel, in the hope that talks with the Moro Islamic Liberation Front could restart early next year.
But rebel leaders say any future negotiations will have to resume from where both sides left off - with the territorial agreement that was knocked down by the Supreme Court.
"Despite the Supreme Court's declaration of the agreement as unconstitutional, the new government peace panel has no choice but to make the MOA-AD as a frame of reference for the new round of negotiations," said Wadi, the University of the Philippines professor, using the acronym for the territorial agreement. If not, Wadi added, "there is no substantial peace agreement that can be expected."
Herbolzheimer said both sides must work to overcome the profound mistrust that underlies the deadlock. He said opposition to the territorial agreement has "severely affected the trust of many Moros" - a term for Filipino Muslims - "in the existing institutions of the Philippines."
"At the same time," he added, "the majority of the non-Moro public opinion remains with strong prejudices against Muslims."Communists mark 40 years
The Communist Party of the Philippines, which leads one of the longest Communist insurgencies in the world, marked its 40th anniversary Friday by making public a five-year plan that it said should advance its aim of establishing a Marxist state, Carlos H. Conde reported from Manila.
It said that under the plan, government and military officials who committed "treason, plunder and human rights violations" would be subjected to what it called "revolutionary justice." It also said that it intended to establish rebel forces in each of the country's 168 congressional districts.
But some say the Communist movement, whose armed wing, the New People's Army, is down to only 5,000 regular combatants compared with more than 10,000 two decades ago, is too weak to carry out such a plan.
"I don't see where they would get the wherewithal to do something like this," said Scott Harrison, managing director of Pacific Strategies and Assessments, a risk consultancy group.

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Suicide bomber hits foreign forces in Afghanistan
Reuters
Friday, December 26, 2008
HERAT, Afghanistan: A suicide car bomber targeted a convoy of foreign troops on Friday in Afghanistan's western Herat province, wounding one U.S. soldier and two Afghan civilians, a provincial official said.
Violence has surged sharply this year in Afghanistan, the bloodiest period since the Taliban's ouster in 2001, sparking fear the country may slide back into anarchy despite the increasing numbers of foreign troops.
The attack hit the convoy as it was coming out of Herat's airport, said security officer Qadir Agha, adding two vehicles in the convoy were damaged.
Both NATO and the U.S.-led troops operate in Herat which has faced a number of attacks by the Taliban this year.
Separately, U.S.-led coalition forces killed 11 Taliban insurgents and detained two more in an operation aimed in the southern province of Kandahar on Thursday, the U.S. military said in a statement.
One Afghan woman was also wounded in the leg during the operation, it added. The Taliban could not be reached for comment.
(Reporting by Sharafuddin Sharafyar; Writing by Hamid Shalizi; Editing by David Fox)

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Violence in Kashmir lowest in 20 years, police claims
Reuters
Friday, December 26, 2008
SRINAGAR, India: Separatist violence in Indian-administered Kashmir has fallen to its lowest level since an insurgency began nearly two decades ago, the police said Friday, but almost 1,000 Muslim guerrillas are thought to be operating in the region.
Indian officials say that violence between Indian troops and separatist militants started a steady decline in 2004 after India and Pakistan, who both claim the region in full but rule in part, started a slow-moving peace process.
In an offensive against Muslim militants in Jammu and Kashmir state this year, Indian security forces killed 350 guerrillas, including 67 top-ranking commanders of different groups, Kuldeep Khuda, director general of the Kashmir police, said.
The number of militant incidents fell by about 40 percent to 700 compared with last year, the lowest in the insurgency's history, Khuda said in a statement.
There are nearly 250 foreign militants among close to 1,000 guerrillas operating in Indian Kashmir, Khuda added. These include members of the banned Pakistan-based group Lashkar-e-Taiba, which New Delhi blames for last month's attacks in Mumbai that killed 179 people.
India has imposed a "pause" in the dialogue with Pakistan since the strike by 10 Islamist gunmen on the financial hub.
Separatists called for a boycott of state elections in Kashmir, which ended this week, the third ballot since the insurgency began in 1989. The election was relatively trouble-free.
Officials say that more than 47,000 people have been killed in nearly two decades of violence in Kashmir, which was hit by massive anti-India protests earlier this year. Separatists put the toll at 100,000.


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Pakistan cancels army leave as India tensions rise
Reuters
Friday, December 26, 2008
By Bappa Majumdar and Kamran Haider
Pakistan cancelled army leave and redeployed some troops Friday in a sign of rising tension with India.
The United States urged both sides to refrain from further raising tensions, already high after India blamed Islamist militants based in Pakistan for attacks on Mumbai last month that killed 179 people.
The latest strains followed media reports in Pakistan and India that "several" Indian nationals had been held in the last two days after bombings in the Pakistani cities of Lahore and Multan.
The foreign ministry in New Delhi warned Indian citizens on Friday that "it would be unsafe for them to travel (to) or be in Pakistan."
Prime Minister Manmohan Singh had earlier discussed tension with Pakistan during a scheduled meeting about military pay with the chiefs of the army, navy and air force, his office said.
"The prime minister met the tri-services chiefs to discuss the pay commission issues but obviously the situation in the region was also discussed," said an official from Singh's office, who requested anonymity.
The South Asian neighbours both tested nuclear weapons in 1998. They have fought three wars since independence from Britain in 1947, and came to the brink of a fourth after gunmen attacked the Indian parliament in December 2001.
Although many analysts say war is very unlikely, international unease is growing.
"We hope that both sides will avoid taking steps that will unnecessarily raise tensions during these already tense times," U.S. National Security Council spokesman Gordon Johndroe said.
"We continue to be in close contact with both countries to urge closer cooperation in investigating the Mumbai attacks and in fighting terrorism generally."
Brooke Anderson, chief national security spokesperson for President-elect Barack Obama, who will be inaugurated on January 20, declined to comment on the current tensions.
"There is one president at a time, and we intend to respect that," Anderson said.
While there had been no significant troop movements in either India or Pakistan, military officials in Islamabad said army personnel had been ordered to report to barracks and some troops had been moved off the Afghan border.
"A limited number of troops from snow-bound areas and areas where operations are not being conducted have been pulled out," said a senior security official who declined to be identified.
WORRYING DISTRACTION
That is likely to worry Washington, which does not want Pakistan distracted from the battle against al Qaeda and Taliban militants on its western border.
The official declined to say where the troops had been moved to, citing the sensitivity of the issue. Pakistani media have reported some troops had been redeployed to the Indian border.
India, the United States and Britain have blamed the Mumbai attack on Pakistan-based Islamist group Lashkar-e-Taiba, set up to fight Indian rule in the disputed Kashmir region.
Pakistan has condemned the attacks and has denied any state role, blaming "non-state actors." It has offered to cooperate with India but denies Indian claims that it has been handed firm evidence of links to militants in Pakistan.
Islamabad has said that it will defend itself if attacked.
A senior police official in Pakistan's Punjab province denied that any Indians had been arrested over the Lahore and Multan blasts but an intelligence agency official, who declined to be identified, said an Indian had been detained Wednesday.
Several more Indians had been detained based on information obtained from that suspect, the intelligence official said.
Increasingly frenzied media reporting on both sides of the border has fuelled war speculation, affecting India's government bond market Friday, although leaders from both countries have said war would serve no one's interests.
Washington has joined Britain in urging restraint from India, but at the same time has demanded Pakistan act decisively to wipe out banned groups such as Lashkar-e-Taiba.
Chinese Foreign Minister Yang Jiechi also called his counterparts in New Delhi and Islamabad in the past two days.
China has long been a close ally of Pakistan, while India and Washington have been building close ties. A Chinese foreign ministry statement said Yang urged both sides to continue dialogue. China was willing to work with the international community to protect peace and security in South Asia.
A senior government official in New Delhi said Yang had suggested a meeting between Indian and Pakistani officials.
Indian Foreign Minister Pranab Mukherjee told Yang Pakistan must crack down on militants before a meeting would be possible, the official said. A crackdown on Pakistan-based militants after the 2001 parliament attack was seen by India as a sham.
(Additional reporting by Washington and Beijing bureaux; Writing by Paul Tait and Robert Birsel; Editing by Mark Trevelyan)

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Community health clinics increased during Bush years
By Kevin Sack
Friday, December 26, 2008
NASHVILLE, Tennessee: Although the number of uninsured and the cost of coverage in the United States have ballooned under his watch, President George W. Bush leaves office with a health care legacy in bricks and mortar: He has doubled U.S. financing for community health centers, enabling the creation or expansion of 1,297 clinics in medically underserved areas.
For those in poor urban neighborhoods and isolated rural areas, including Indian reservations, the clinics are often the only dependable providers of basic services like prenatal care, childhood immunizations, asthma treatments, cancer screenings and tests for sexually transmitted diseases. As a crucial component of the health safety net, they are lauded as a cost-effective alternative to hospital emergency rooms, where the uninsured and underinsured often seek care.
Despite the clinics' unprecedented growth, wide swaths of the country remain without access to affordable primary care. The recession has only magnified the need as hundreds of thousands of Americans have lost their employer-sponsored health insurance along with their jobs. In response, Democrats on Capitol Hill are proposing even more significant increases, making the centers a likely feature of any health care deal struck by Congress and the Obama administration.
In Nashville, United Neighborhood Health Services, a 32-year-old community health center, has seen its federal financing rise to $4.2 million, from $1.8 million in 2001. That has allowed the organization to add eight clinics to its base of six, and to increase its pool of patients to nearly 25,000 from 10,000. Still, says Mary Bufwack, the center's chief executive, the clinics satisfy only a third of the demand in Nashville's pockets of urban poverty and immigrant need.
One of the group's recent grants helped open the Southside Family Clinic, which moved last year from a pair of public housing apartments to a gleaming new building on a once derelict corner.
As she completed a breathing treatment one recent afternoon, Willie Mai Ridley, a 68-year-old beautician, said she would have sought care for her bronchitis in a hospital emergency room were it not for the new clinic. Instead, she took a short drive, waited 15 minutes without an appointment and left without paying a dime; the clinic would bill her later for her Medicare co-payment of $18.88.
Ridley said she appreciated both the dignity and the affordability of her care. "This place is really very, very important to me," she said, "because you can go and feel like you're being treated like a person and get the same medical care you would get somewhere else and have to pay $200 to $300."
As governor of Texas, Bush came to admire the missionary zeal and cost-efficiency of the not-for-profit community health centers, which qualify for federal operating grants by being located in designated underserved areas and treating patients regardless of their ability to pay. He pledged support for the program while campaigning for president in 2000 on a platform of "compassionate conservatism."
In Bush's first year in office, he proposed to open or expand 1,200 clinics over five years (mission accomplished) and to double the number of patients served (the increase has ended up closer to 60 percent). With the health centers now serving more than 16 million patients at 7,354 sites, the expansion has been the largest since the program's origins in President Lyndon Johnson's war on poverty, federal officials said.
"They're an integral part of a health care system because they provide care for the low-income, for the newly arrived, and they take the pressure off of our hospital emergency rooms," Bush said last year while touring a clinic in Omaha, Nebraska.
With federal encouragement, the centers have made a major push this decade to expand dental and mental health services, open on-site pharmacies, extend hours to nights and weekends and accommodate recent immigrants - legal and otherwise - by employing bilingual staff. More than a third of patients are now Hispanic, according to the National Association of Community Health Centers.
The centers now serve one of every three people who live in poverty and one of every eight without insurance. But a study released in August by the Government Accountability Office found that 43 percent of the country's medically underserved areas lack a health center site. The National Association of Community Health Centers and the American Academy of Family Physicians estimated last year that 56 million people were "medically disenfranchised" because they lived in areas with inadequate primary care.
President-elect Barack Obama has said little about how the centers may fit into his plans to remake American health care. But he was a sponsor of a Senate bill in August that would quadruple federal spending on the program - to $8 billion from $2.1 billion - and increase incentives for medical students to choose primary care. His wife, Michelle, worked closely with health centers in Chicago as vice president for community and external relations at the University of Chicago Medical Center.
And Obama's choice to become secretary of health and human services, former Senator Tom Daschle of South Dakota, argues in his recent book on health care that financing should be increased, describing the health centers as "a godsend."
The federal program, which was first championed in Congress by Senator Edward Kennedy, Democrat of Massachusetts, has earned considerable bipartisan support. Leading advocates, like Senator Bernie Sanders, independent of Vermont, and Representative James Clyburn, Democrat of South Carolina, the House majority whip, argue that any success Obama has in reducing the number of uninsured will be meaningless if the newly insured cannot find medical homes. In Massachusetts, health centers have seen increased demand since the state began mandating health coverage two years ago.
At $8 billion, the Senate measure may be considered a relative bargain compared with the more than $100 billion needed for Obama's proposal to subsidize coverage for the uninsured. If his plan runs into fiscal obstacles, a vast expansion of community health centers may again serve as a stopgap while universal coverage waits for flusher times.
Recent job losses, meanwhile, are stoking demand for the clinics' services, often from first-time users. The United Neighborhood Health Services clinics in Nashville have seen a 35 percent increase in patients this year, with much of the growth from the newly jobless.
"I'm seeing a lot of professionals that no longer have their insurance or they're laid off from their jobs," said Dr. Marshelya Wilson, a physician at the center's Cayce clinic. "So they come here and get their health care."
Studies have generally shown that the health centers - which must be governed by patient-dominated boards - are effective at reducing racial and ethnic disparities in medical treatment and save substantial sums by keeping patients out of hospitals. Their trade association estimates that they save the health care system $17.6 billion a year, and that an equivalent amount could be saved if avoidable emergency room visits were diverted to clinics. Some centers, including here in Nashville, have brokered agreements with hospitals to do exactly that. Many centers are finding that federal support is not keeping pace with the growing cost of treating the uninsured. Government grants now account for 19 percent of community health center revenues, compared with 22 percent in 2001, according to the Health Resources and Services Administration, which oversees the program. The largest revenue sources are public insurance plans like Medicaid, Medicare and the State Children's Health Insurance Program, making the centers vulnerable to government belt-tightening. The centers are known for their efficiency. Though United Neighborhood Health Services has more than doubled in size this decade, Bufwack, its chief executive, manages to run five neighborhood clinics, five school clinics, a homeless clinic, two mobile clinics and a rural clinic, with 24,391 patients, on a budget of $8.1 million.Starting pay for her doctors is $120,000. Patients are charged on an income-based sliding scale, and the uninsured are expected to pay at least $20 for an office visit. One clinic is housed in a double-wide trailer. Because of a nationwide shortage of primary care physicians, the clinics rely on federal programs like the National Health Service Corps that entice medical students with grants and loan write-offs in exchange for agreements to practice as generalists in underserved areas. Of the 16 doctors working for United Neighborhood, seven are current or former participants. Dr. LaTonya Knott, 37, who treated Ridley for her bronchitis, is among them. Born to a 15-year-old mother in south Nashville, she had been a regular childhood patient at one of the center's clinics. After graduating as her high school's valedictorian, she went to college on scholarships and then to medical school on government grants, with an obligation to serve for two years. She said she now felt a responsibility to be a role model. "I do a whole lot of social work," she said, noting that it was not uncommon for children to drop by the clinic for help with homework, or for a peanut butter sandwich. "It's not just that we provide the medical care. I'm trying to provide you with a future." Despite such commitment, national staffing shortages have reinforced concerns about the quality of care at health centers, notably the management of chronic diseases. This year, the government started collecting data at the centers on performance measures like cervical cancer screening and diabetes control. "The question is not just, 'Are you going to have more community health centers?"' said Dr. H. Jack Geiger, founder of the health centers movement and a professor emeritus at the City University of New York. "It's, 'Are you going to have adequate services?"' A deeper frustration for health centers concerns their difficulty in securing follow-up appointments with specialists for patients who are uninsured or have Medicaid. All too often, said Bufwack, medical care ends at the clinic door, reinforcing the need to expand both primary care and health insurance coverage. "That's when our doctors feel they're practicing Third World medicine," she said. "You will die if you have cancer or a heart condition or bad asthma or horrible diabetes. If you need a specialist and specialty tests and specialty meds and specialty surgery, those things are totally out of your reach."

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A father, a son, and a short-lived presidential pardon
By Ken Belson and Eric Lichtblau
Friday, December 26, 2008
The ties that bind fathers and sons come in all shapes and sizes, including 10-foot-high chain-link fences.
That is one of the many connections between Robert Toussie and his son Isaac, who was pardoned and unpardoned by Bush this week, decisions that set abuzz the normally sedate New York community of Manhattan Beach.
Neighbors say the elder Toussie built the fence a decade ago to keep rabble-rousers away from the shoreline promenade on the Rockaway Inlet that abuts his family's waterfront homes, including one where Isaac lives.
While Toussie's fence, which has No Trespassing signs in English and Russian, has largely kept the derelicts at bay, it has also alienated neighbors who might otherwise have little bad to say about him.
It also shines light on the complex relationship between Toussie and his son, who pleaded guilty in 2001 to using false documents to have mortgages insured by the Department of Housing and Urban Development, and in 2002 to mail fraud, admitting that he had persuaded officials in Suffolk County to overpay for land.
The White House said Thursday that when Bush granted Isaac Toussie, 37, a pardon earlier this week, the president and his advisers were unaware that the elder Toussie had recently donated $30,800 to Republicans. Bush took the extraordinary step of rescinding the pardon on Wednesday after reports about the political contributions.
The White House spokeswoman, Dana Perino, said in an e-mail message Thursday that the administration never sought information on political donations in considering pardon applications.
"This would be inappropriate on many levels," Perino said. "Given that no one advising the president knew of the donation by Toussie's father, and because of the possibility of an appearance of impropriety, the counsel to the president withdrew his recommendation."
While the younger Toussie has said nothing publicly since the revelation of the donations on Tuesday, his supporters say he deserved a pardon because he was contrite about his misdeeds and had made significant charitable contributions before and after his convictions. Both of these factors are believed to have been factors in Bush's original decision to grant the pardon.
"There was a long list of charitable donations and work he had done since his sentence," Perino said.
Officials said Fred Fielding, the White House counsel, was unaware in reviewing the petition that Toussie's father had recently donated $28,500 to the Republican National Committee and $2,300 to the presidential campaign of Senator John McCain of Arizona.
People involved in the pardon process say it has become more common in recent months for those seeking clemency to go directly to the White House, as Toussie's lawyer, Bradford Berenson, did, rather than go through the Justice Department.
Bush's revoking of the pardon was so unusual that some legal experts questioned whether he had the authority to reverse the pardon, one of 19 the White House announced Tuesday. But the Justice Department said it believed that the original pardon announcement was not binding and could be revoked because Toussie had not received formal notification of the president's action. Toussie's lawyers hope he might still be granted a pardon once the Justice Department completes a formal review.
The father and son have worked in real estate for years, but in 2001 the elder Toussie sued Suffolk County, saying, in effect, that they had been tied too closely together. The suit, still pending, said the county had refused to sell Robert Toussie 31 parcels of land he won at a county auction because of his son's legal troubles.
Both Toussies are among the defendants in a class-action lawsuit filed in 2001 by about 400 home buyers, most of them black or Hispanic, who say they were sold poorly constructed new homes at inflated prices and were fooled into believing that property taxes would be deferred or reduced. The case is continuing.
Some of his neighbors say Toussie has been protective of his son. He helped him buy a home on Dover Street several years ago, according to a resident who did not want to be named for fear of antagonizing neighbors. He extended the chain-link fence from his homes on Exeter, one street to the east, to his son's home.
But the fence cut through a 104-by-20-foot grass strip abutting the home of Igor Zolotov, who lives between the houses of Toussie and his son. Zolotov and Toussie both claimed that the land was theirs, but in 2003 a state appellate court sided with Zolotov, who removed the fence and replaced it with a smaller one.
The decision did not erase the bad will Toussie had created. Neighbors, some of whom had moved to Manhattan Beach to be by the sea, still do not have easy access to the shore because of another section of Toussie's fence that still stands. And they see Isaac Toussie's legal troubles through the prism of what they call his father's heavy-handedness.
"It's not surprising that the son is following in the footsteps of the father," said Irena Zolotova, 31, Zolotov's daughter. "It caused my father a lot of indignation. It's chutzpah. How do you try to take away somebody's property?"
Some neighbors, including Sabina Gurshumova, 29, a homemaker who lives across the street from the elder Toussie, say the Toussies are "good people."
"Sometimes they have us over for dinner for the holidays," Gurshumova said.
Neither Toussie nor his son answered the doors of their homes on Thursday. But one Toussie family member said the picture of the father and the son was unfair.
"They are philanthropists; they build hospitals and save people," said a woman reached by telephone who identified herself as a cousin, Marie Torgueman. She cited in particular Robert Toussie's donations to NewYork-Presbyterian/Weill Cornell hospital but said both father and son were involved in charitable activities.
While a president has unfettered authority to grant a pardon for any reason he wishes, the suggestion of a linkage to political donations has proved controversial in the past. The most notorious case in recent years was President Bill Clinton's 2001 pardon of the fugitive financier Marc Rich, whose ex-wife had donated $450,000 to the Clinton presidential library.
Experts on pardons said the White House faced a difficult decision on whether to find out if someone seeking a pardon had made political contributions.
On the one hand, the president's advisers would probably want to have that information to avoid the type of appearance problem that arose in the Toussie case. But if the White House did seek information on donations, it could be accused of tilting pardons toward those who had given money.
"I would want to make sure that anything that's potentially embarrassing to the president, he ought to know about it in making the decision," said Margaret Love, a pardon lawyer at the Justice Department in the Clinton administration.

EU entry helps Romanians and Bulgarians understand each other
By Matthew Brunwasser
Friday, December 26, 2008
RUSE, Bulgaria: Bulgarians had grandiose expectations about joining the European Union. The arrival of many Romanians was not among them.
Before both joined the EU on Jan. 1, 2007, Bulgarians and Romanians considered each other with almost total indifference, despite being formal allies in the Warsaw Pact during the Cold War and sharing a Danube River border 470 kilometers, or 290 miles, long.
Even for residents of Ruse, at the Bulgarian end of the only bridge connecting the two nations, the people on the opposite river bank might as well have been on another continent. When they thought of Romanians at all, it was usually to dismiss them as "mamaligari," roughly "polenta-makers," after the Romanians' national dish mamaliga.
Romanians, for their part, would put down Bulgarians as "castravetari" or "cucumber-growers," for their perennial vegetable-gardening.
But shortly after the border between them formally dissolved because of EU membership, a tidal wave of bargain-seeking Romanians crashed over northern Bulgaria.
That initial wave has receded, leaving a multitude of unexpected and enduring relationships in its wake.
Many residents of Ruse are now embarrassed that they were close-minded for so long.
"The new relations with Romania have opened a new world," said Ivelina Belcheva, 40, a television journalist born and raised in Ruse, whose motorcycle club, "Spirit of Freedom," has since started riding with new friends from Romania. "It has always been close by, but always very closed."
Before 2007, Ruse was known for its faded glory, depopulation and rusting behemoths of Soviet-era heavy industry. The birthplace of the Nobel laureate Elias Canetti, it grew wealthy in the 19th century from trade along the Danube. Neo-Baroque and neo-Rococo architecture grace its center, an echo of Central European Habsburg glory far upstream in Vienna and Budapest. Until the early 20th century, when it was eclipsed by Sofia, this was the economic and cultural capital of Bulgaria.
In the past two years, this city of 175,000 has undergone a marked revitalization, fueled by a Romanian spending spree. Romania, which with 22 million people versus 7.5 million in Bulgaria has a far larger economy, boasts average salaries of €450 a month, compared with about €265 for Bulgaria - the lowest in the EU.
Seven separate new shopping malls are planned - five of them already under construction. The biggest, the €100 million Grand Plaza slated for completion in 2010, is to boast a 90,000-square-meter, or 970,000-square-foot, mall; a 5,000-seat arena for sports and cultural events; a 115-room luxury hotel; and 11,000 square meters of offices.
And while the global economic slowdown is starting to be felt here, it did not diminish extra-large holiday crowds from Romania, and so far has not affected construction of the malls.
Romanians come in large numbers on weekend shopping trips. They buy property and start businesses. Restaurants in the city center offer Romanian menus. And Romanian language courses have sprouted, with the tiny supply of translators unable to meet new and growing demand.
Sofia is more than 300 kilometers away, while Bucharest, the Romanian capital, is not 70 kilometers distant, and Ruse is sucked into its economic orbit. Since EU membership has eliminated long waits at the border, people from Ruse now regularly use Bucharest Airport. Traffic congestion in Bucharest means the drive from southern Bucharest to Ruse is often shorter than driving to the northern part of the Romanian capital.
"They say it's good to know Romanian because someday Ruse will be a neighborhood of Bucharest," said Anka Staneva, a long-time Romanian teacher and translator. The six students in her classroom work in the medical profession; many of their clinics participate in exchanges of staff members and patients with Giurgiu, the Romanian town across the bridge.
"Speaking Romanian will be helpful in the future, and I'm looking ahead,"
said Nona Ignatieva, 24, a kinesiotherapist at a private spa.
Several students recalled their shock in the first days of EU membership, when Ruse was so flooded with visitors that cars with Romanian license plates outnumbered Bulgarian ones. The municipalities of Ruse and Giurgiu organized three days of free city bus rides between the towns. Many lifelong residents of both communities crossed the bridge for the first time; up to 1,500 people waited for the buses.
"It made a big impression on me," said Daniela Nikolaeva, a travel agent. It was her first visit to Giurgiu, and she was surprised at how well groomed the town was after years of hearing horror stories. Streets were litter-free, and each tree in the center was fenced and neatly tended. "There isn't any of that kind of thing in Ruse," she said.
In general, traffic between the two countries is helping to dispel negative stereotypes on each side - a tendency shared by many neighbors in the Balkans, long separated by Communist borders and centuries of prejudice.
"I was expecting the worst: poverty, crime and filth," said Sorin Ropotan, 30, a Romanian who works in sales at a communications company.
"But then last year we saw that Ruse is actually very nice," he continued, finding the streets cleaner than Bucharest. "The old architecture is very beautiful. And the waiters are very professional and even speak Romanian."

Elizabeth Alexander: Inaugural poet with an outsize audience
By Dwight Garner
Friday, December 26, 2008
Summoning artists to participate
In the august occasions of the state
Seems something artists ought to celebrate.
Those are pleasant thoughts, but awful poetry - probably the worst three lines Robert Frost ever put to paper. Tellingly, it was work for hire: the opening lines of "Dedication," the poem Frost composed for John F. Kennedy's 1961 inauguration.
Famously, and perhaps blessedly, Frost never had the chance to declaim them. The high wind and strong sun that day conspired to make his typescript unreadable. Unruffled, he pulled a mighty poem from memory, his own "Gift Outright," with its ringing first line: "The land was ours before we were the land's."
Frost was the first poet to read at a presidential inauguration, and there have been only two others in the almost five decades since: Maya Angelou, at Bill Clinton's first inauguration in 1993, and Miller Williams, at Clinton's second, in 1997. (Some would include James Dickey, who composed a poem that he read at Jimmy Carter's inaugural gala but not at the inauguration.) Now America is about to meet its fourth inaugural poet, a 46-year-old Yale professor named Elizabeth Alexander.
Thus far America's inaugural poems have been a mixed, motley bunch. Frost's "Dedication" was stiff and dutiful. Angelou's "On the Pulse of Morning" was touchy-feely, multi-culti and crammed with shout-outs:
So say the Asian, the Hispanic, the Jew
The African, the Native American, the Sioux,
The Catholic, the Muslim, the French, the Greek,
The Irish, the Rabbi, the Priest, the Sheikh,
The Gay, the Straight, the Preacher,
The Privileged, the Homeless, the Teacher.
Miller Williams seemed to get it about right. His inaugural poem, "Of History and Hope," was dignified, with a weather-beaten resonance. It began:
We have memorized America,
how it was born and who we have been and where.
In ceremonies and silence we say the words,
telling the stories, singing the old songs.
(Music fans could not have heard that last line without recalling that Williams is the father of Lucinda Williams, the venerated singer and songwriter.)
But there is little doubt, given the intense global interest in President-elect Barack Obama, that Alexander's verse will be broadcast to more people at one time than any poem ever composed. It is, for Alexander, an outsize platform.
What the world will hear at Obama's inauguration is the work of a woman whose verse makes a sharply different kind of music from that of any of the inaugural poets who have preceded her. The principal obsessions in her four books of verse - race and history, love and family - are played out in poems that can buzz with an electric and angular ellipticity, as in "Emancipation," printed here in its entirety:
Corncob constellation,
oyster shell, drawstring pouch, dry bones.
Gris gris in the rafters.
Hoodoo in the sleeping nook.
Mojo in Linda Brent's crawlspace.
Nineteenth century corncob cosmogram
set on the dirt floor, beneath the slant roof,
left intact the afternoon
that someone came and told those slaves
"We're free."
At other times her voice is calm and plain-spoken, as in this snippet from the poem "Smile":
When I see a black man smiling
like that, nodding and smiling
with both hands visible, mouthing
"Yes, Officer," across the street,
I think of my father, who taught us
the words "cooperate," "officer,"
to memorize badge numbers,
who has seen black men shot at
from behind in the warm months north.
Alexander, who was born in Harlem in New York City and raised in Washington, has been on fellowship at the Radcliffe Institute for Advanced Study at Harvard. Over a recent lunch in Cambridge, Massachusetts, she talked about how surprised and flattered she was to be asked to compose a poem, particularly by this president-elect. "His own use of language, and his respect for it, is so evident," she said. "He is aware of the kind of power language has, and aware of the kind of care with which we ought to try to speak to each other" as "we move forward."
She is going about making a poem for Obama, she said, by casting an eye back. "I have read the previous inaugural poems, as well as many others," she said. "The ones that appeal to me have a sense of focus and a kind of gravitas, an ability to appeal to larger issues without getting corny." One thing Alexander wants to do, she said, is speak clearly but artfully. "I don't want the poem to talk down to some imagined audience," she said. Among the poets she has been reading for guidance are Virgil, W.H. Auden, Ted Hughes, Seamus Heaney and Gwendolyn Brooks.
Is she prepared, I asked, for a Robert Frost moment? What if her manuscript catches fire or blows away? "I am going to have many copies of the poem tucked away," she replied, laughing. "I really am. In a boot. I'm serious. I will have backups. I'm a mom."
Alexander is not a stranger to politics. Her father, Clifford, was a presidential civil rights adviser to President Lyndon B. Johnson and secretary of the army during the Carter administration. Her mother, Adele, teaches African-American women's history at George Washington University. Alexander became friendly with Barack and Michelle Obama when both she and Barack Obama were teaching at the University of Chicago in the 1990s. Her younger brother, Mark, was a senior adviser to Obama's presidential campaign and is working on the Obama transition team.
Alexander's first book of poems, "The Venus Hottentot," was published in 1990. Her other books of poetry are "Body of Life" (1996), "Antebellum Dream Book" (2001) and "American Sublime" (2005), one of three finalists for the Pulitzer Prize, as well as two books of essays. If there is anything critics and readers get wrong about her poetry, and that of her African-American contemporaries, it is that they "focus on content but forget about form and craft," Alexander said. "But they are not just documentaries. It's been a problem through the ages. African-American poetry has been read sociologically."
Alexander is not overly nervous, she said, about performing her inaugural poem. She enjoys reading her work. "By the time you are reading a poem, the real work has been done," she said. "If I ever get nervous before getting up to read, I look at the poem and say: 'You're done. All I have to do is let you out."'

******************

A dashing war hero, but way too Cruise
Reviewed by Manohla Dargis
Friday, December 26, 2008
Valkyrie
Directed by Bryan Singer
There are no discernibly nasty Nazis in "Valkyrie," though Hitler and Goebbels skulk about in a few scenes, shooting dark, ominous looks at the heroic German army officer played by Tom Cruise. Perhaps they're wondering what this Hollywood megastar is doing in their midst, a sentiment that you may come to share while watching Cruise - who gives a fine, typically energetic performance in a film that requires nothing more of him than a profile and vigor - strut about as one of history's more enigmatic players.
That enigma was Claus von Stauffenberg, a count and a colonel who, though he lost one eye, an entire hand and several fingers while fighting on behalf of the Reich, made several attempts to assassinate Hitler and seize control of the government. At the core of his spectacularly ambitious plot was Valkyrie, Hitler's plan for the mobilization of the home army that Stauffenberg hoped to hijack in order to quash the SS and its leaders. It didn't work, of course, for complicated reasons, though also because by 1944, as William L. Shirer bluntly puts it in "The Rise and Fall of the Third Reich," the conspirators were "terribly late."
You don't learn how belated the coup d'état was in "Valkyrie," which opens worldwide through the winter. This might matter if this big-ticket production with Cruise in an eye patch and shiny, shiny boots had something to do with reality. But the director, Bryan Singer (of the "X-Men" franchise), and the writers, Christopher McQuarrie and Nathan Alexander, aren't interested in delivering a history lesson: That's why Ken Burns was born. Slick, facile entertainment is the name of the game here, as it is in all Singer's films, including "Apt Pupil" (about a Nazi war criminal and the American boy next door who outs him) and "The Usual Suspects," an intricately plotted story with men and guns, secrets and shadows that McQuarrie wrote. The secrets have already begun swirling by the time "Valkyrie" opens with Stauffenberg, stationed in North Africa, bitterly recording his opposition to Hitler in a diary right before losing various body parts to the war. After his convalescence he meets Major General Henning von Tresckow (Kenneth Branagh), who, sometime earlier, tries to blow up Hitler with a bomb hidden in bottles of French liqueur. (Russian vodka might have been more effective.)
Stauffenberg soon joins the conspiratorial party that includes other British class acts brandishing high military rank and speaking in lightly accented or unaccented English: Bill Nighy as General Friedrich Olbricht, Tom Wilkinson as General Friedrich Fromm, Terence Stamp as General Ludwig Beck and Eddie Izzard as General Erich Fellgiebel.
Most of the crucial rebellious officers are played by British actors, while some of the Nazi diehards are played by Germans, which wouldn't be worth mentioning if this cacophony of accents weren't so distracting. But, as with the casting of Cruise, whose German voice-over quickly eases into English, this international acting community invokes an earlier studio age, when Peter Lorre and Claude Rains delivered their lines in exotically flavored English and everyone pretended that Rick's Café really was located in Casablanca and not on a back lot. If Cruise doesn't work in "Valkyrie," it's partly because he's too modern, too American and way too Tom Cruise to make sense in the role, but also because what passes for movie realism keeps changing, sometimes faster than even a star can change his brand.
Though Singer's old-fashioned movie habits, his attention to the gloss, gleam and glamour of the image, can be agreeably pleasurable, he tends to gild every lily. Hitler (David Bamber) doesn't need spooky music or low camera angles to be villainous: He just has to show up.
Singer's fondness for exaggeration can even undercut his strongest scenes, as when Stauffenberg visits Hitler to secure approval for the rewritten Valkyrie plan. If implemented, the plan will bring down the Führer, who, for his part, seems intent on bringing down the house with leers and popping eyeballs. Singer appears to have taken cues here from "Black Book," Paul Verhoeven's World War II romp, but he's too serious to make such vaudeville work.
Stauffenberg, who hated Hitler but worshipped the Reich, sacrificed himself on the dual altar of nationalism and militarism, which makes him a more ambiguous figure than the one drawn in "Valkyrie." He's a complex character, too complex for this film, which like many stories of this type, transforms World War II into a boy's adventure with dashing heroes, miles of black leather and crane shots of German troops in lockstep formation that would make Leni Riefenstahl flutter.
It's a war that offers moral absolutes (Nazis are evil) and narratives (Nazis are evil and should die) that seem easier to grasp than any current conflict. Truly, World War II has become the moviemaker's gift that keeps on giving, whether you want it to or not.

EDITORIAL

A challenge for Obama: Getting immigration right
Friday, December 26, 2008
Getting immigration right
It's way too early to tell whether the United States under Barack Obama will restore realism, sanity and lawfulness to its immigration system. But it's never too early to hope, and the stars seem to be lining up, at least among his cabinet nominees.
If Obama's team is confirmed, the United States will have a homeland security secretary, Janet Napolitano of Arizona, and a commerce secretary, Bill Richardson of New Mexico, who understand the border region and share a well-informed disdain for foolish, inadequate enforcement schemes like the Bush administration's border fence. And it will have a labor secretary, Hilda Solis of California, who, as a state senator and congresswoman, has built a reputation as a staunch defender of immigrants.
The confluence of immigrants and labor is exactly what America - particularly, and disastrously, the Bush administration - has not been able to figure out.
In simplest terms, what Solis and Obama seem to know in their gut is this: If you uphold workers' rights, even for those here illegally, you uphold them for all working Americans. If you ignore and undercut the rights of illegal immigrants, you encourage the exploitation that erodes working conditions and job security everywhere. In a time of economic darkness, the stability and dignity of the work force are especially vital.
This is why it is so important to reverse the Bush administration's immigration tactics, which for years have attacked the problem upside down and backward. To appease Republican nativists, it lavished scarce resources solely on hunting down and punishing illegal immigrants. Its campaign of raids, detentions and border fencing was a moral failure.
Among other things, it terrorized and broke apart families and led to some gruesome deaths in shoddy prisons. It mocked the American tradition of welcoming and assimilating immigrant workers.
But it also was a strategic failure because it did little or nothing to stem the illegal tide while creating the very conditions under which the off-the-books economy can thrive. Illegal immigrant workers are deterred from forming unions. And without a path to legalization and under the threat of a relentless enforcement-only regime, they cannot assert their rights.
It's a system that the grubbiest and shabbiest industries and business owners could not have designed better. Through it all, the Bush administration's response to criticism has been ever more enforcement.
Solis, whose father immigrated from Mexico and was a Teamsters shop steward and whose mother, from Nicaragua, worked on an assembly line, promises a clean break from that past. She lives in El Monte, a Los Angeles suburb where two compelling stories of immigrants and labor have emerged in recent years.
The first was tragic: a notorious 1995 raid at a sweatshop where Thai workers were kept in slave conditions behind barbed wire. The second is less well-known but far more encouraging: a present-day hiring site for day laborers at the edge of a Home Depot parking lot.
The Latino men who gather in that safe, well-run space uphold an informal minimum wage and protect one another from abusive contractors. It's good for the store, its customers and the workers.
Solis is a defender of such sites and has opposed efforts in other cities to enact ordinances to disperse day laborers and force them underground. She understands that if day laborers end up in our suburbs, it is better to give them safe places to gather rather than allow an uncontrolled job bazaar to drive wages and working conditions down.
That's a bit of local wisdom that deserves to take root in the federal government.

EDITORIAL

Sri Lanka's ignored war
The Boston Globe
Friday, December 26, 2008
Asia's longest civil war is building to a violent crescendo. In Sri Lanka, the Sinhalese-majority government should be pressed to accept a cease-fire, to permit a political settlement.
Government forces are besieging the rebel Tamil Tigers in the north. Since abandoning a cease-fire in 2006 and a Norwegian-sponsored peace process earlier this year, President Mahinda Rajapaksa and his brother, Defense Minister Gotabhaya Rajapaksa, have been vaunting their intention to crush the Tigers once and for all.
There is little chance the brothers' military campaign will produce anything other than a new phase of protracted guerrilla warfare. Meanwhile, over 200,000 civilians have been uprooted from their homes. On ground flooded by monsoon rains, they struggle to survive in frail lean-tos, dependent on aid agencies that operate under the Sri Lankan Army's severe restrictions.
Both sides have abused civilians. The Sri Lankan military has bombed and shelled villages, schools, hospitals. An official of the World Food Program told the BBC recently that conditions for displaced people in the northern conflict zone are "as basic as in Somalia." And Human Rights Watch has accused the Tigers of preventing 230,000 displaced civilians from fleeing the war zone so they can be used as human shields, and to provide a pool of potential recruits.
Tamil civilians of northern Sri Lanka are suffering a man-made disaster. Ethnic or nationalistic pride should not be allowed to inflict such suffering on civilians who committed no crime but to be trapped in a war zone.
Only when the shooting stops can Sri Lanka's government pursue a lasting peace - by granting the Tamils meaningful autonomy in their homelands.

New Zealand was top of the rugby union world in 2008
By Peter Berlin
Friday, December 26, 2008
Year-end reviews in rugby union invariably start with one team and tend to follow four-year cycles.
That team is New Zealand and for 20 years the pattern has been the same: three years of calling the All Blacks the best team on earth, followed by a fourth asking how it is that they again failed to win the World Cup.
In that seemingly unchanging rhythm, 2008, a post-World Cup year is the start of a new cycle. On the surface it was almost as good a year as New Zealand could have wanted.
New Zealand was eliminated by France at the quarterfinal stage in the 2007 World Cup. It then lost a string of veteran players to European clubs.
Yet New Zealand's officials seem to be learning lessons from the past. Whether they are the right lessons, we will see in three years.
In a break with tradition, New Zealand did not fire its coach, Graham Henry nor cast its captain, Richie McCaw into the outer darkness reserved for All-Black scapegoats.
That did not mean Henry escaped a ritual public humiliation. He was made to re-apply for his own job. He beat some extremely strong candidates, notably Robbie Deans, to retain it.
McCaw might have strengthened his status through an injury that meant he missed the two tests that the All Blacks lost in 2008: consecutive Tri-Nations matches against South Africa, at home in Dunedin and in Sydney.
After he returned, the All Blacks did not lose again. They won the Tri-Nations for a fourth straight year and then swept all four opponents in an autumn tour of Britain and Ireland. Including one match against an Irish provincial team, Munster, the All Blacks played 16 games in 2008 and won 14.
New Zealand ended the year back at No. 1 in the world rankings. Canterbury Crusaders, captained by McCaw and coached by Deans, won the Super 14 - the southern hemisphere inter-provincial competition. New Zealand also won the under-20 World Cup and the sevens world series.
Henry turned the loss of players to European clubs and injury into a plus, blooding a string of young - and not so young - players. Nevertheless the team continues to orbit around McCaw and Dan Carter, the fly half.
The final match of the "grand slam" tour, against England at Twickenham in the fall, demonstrated Carter's qualities. For once he appeared fallible, yet he still dominated the game. His goal-kicking was unusually wayward, but he still booted 17 points. His inspired passing sparked the second-half burst of tries that turned a tight game into another All-Black rout.
Yet the end of Carter's year raised questions about the All Blacks and suggested that others in the rugby world harbored doubts.
Carter did not return home with the All Blacks. He stayed in Europe to play for Perpignan: another New Zealand star seemingly seduced by the wealth of a European club. Yet, perhaps, the All Blacks have found a way to staunch the bleeding. Carter is, apparently, on a six-month "sabbatical" and should return to New Zealand for the next Tri-Nations.
Carter also failed to recapture the world player of the year award. That went to Shane Williams, of Wales.
The tiny winger broke the Wales try-scoring record as his team continued its yo-yo form in the European Six Nations. Wales won a Grand Slam in 2005, then imploded before recapturing the winning touch this year. Under a new coach, Warren Gatland, another Kiwi, it again swept all its games.
Wales ended the year by becoming the only European team to beat one of the Tri-Nations teams in an autumn international, edging Australia.
The Southern Hemisphere clearly remains dominant and the biggest question mark against the All Blacks remains the looming menace of its two Tri-Nations rivals.
Deans, spurned by his own country, took over as Australia coach. While his first year contained two losses to New Zealand, one to Wales and a record defeat in South Africa, it also produced clear progress.
The Achilles' heel of the Australian team in recent years has been a lack of front-row players to match the brilliance of its backs. Somehow, Deans, from the land of props and hookers, seems to have solved the problem in a few months.
South Africa made symbolical strides off the field while seeming to slip back on it. It appointed its first black head coach, Pieter de Villiers. He, in turn increased the proportion of non-white players in the squad. The authorities decided to downgrade the freighted Springbok logo. The protea flower, a symbol of the post-apartheid nation, will become the principle emblem on the shirt.
Critics were not surprised when South Africa finished last in the Tri-Nations. Yet it remains the world champion and showed that it still has the ability to grind out victories. It won in New Zealand for the first time in a decade and, with the return of its own talismanic captain, John Smit, completed its own, far uglier, sweep on its autumn tour.

Death toll in Ukraine apartment blast rises to 26
The Associated Press
Friday, December 26, 2008
KIEV: The death toll from an explosion that leveled an apartment building in southern Ukraine reached 26 on Friday, as the country observed a day of national mourning, officials said.
The search for survivors continued after rescuers pulled 21 people from under the mounds of concrete and glass following the huge blast Wednesday at the five-story building in the Crimean peninsula resort of Yevpatoriya.
But officials do not know how many people could remain beneath the rubble and hold out little hope of finding more survivors given that temperatures over the two nights since the blast reaching minus 6 degrees Celsius (21 degrees Fahrenheit).
The entire central section of the building came down, exposing apartments on either side. Sixty-two people were registered inhabitants of the destroyed section of the apartment and rescuers paused their work every hour to listen for cries for help. Two children were among those killed, officials said.
Friday was designated a day of national mourning in Ukraine, with entertainment events canceled and flags lowered to half-mast.
Officials believe oxygen canisters in the building's basement exploded, said Volodymyr Ivanov, a spokesman for Crimea's branch of the Emergency Situations Ministry.
Ivanov said one canister was found intact and sent to forensic investigators. Ivanov said that other possible causes had not been ruled out, without elaborating.
President Viktor Yushchenko and Prime Minister Yulia Tymoshenko of Ukraine both flew to Yevpatoriya to inspect rescue efforts and talk to survivors on Thursday. Tymoshenko said in televised remarks that survivors would be given free housing before the end of the year.
Yushchenko thanked Russia for offering to send naval personnel from Russia's Black Sea fleet, stationed at the Ukrainian port city of Sevastopol, to help with the rescue, but said they were not needed.
Neglect of safety precautions has led to frequent explosions in apartment buildings and public facilities in the ex-Soviet nations.

Turner and the Italian experience
By Roderick Conway Morris
Friday, December 26, 2008
FERRARA, Italy: J.M.W. Turner did not see Italy until 1802, the same year he was elected to the Royal Academy at 27, then the youngest member ever.
But the idea of Italy had already become an essential element in the precociously accomplished young painter and draftsman's productions while he was still in his teens. And his later visits to the peninsula had a radical effect on the development of his mature work.
The lifelong impact of the Italian experience on the English artist is the subject of "Turner and Italy," a splendid exhibition of nearly 90 paintings and drawings, expertly curated by James Hamilton. The show continues at Palazzo dei Diamanti here until Feb. 22, then travels on to the National Gallery in Edinburgh and the Museum of Fine Arts in Budapest.
Turner began to imbibe Italy in his youth through English buildings influenced by Italian architecture (he grew up near Inigo Jones's Palladian Covent Garden Piazza, and his first apprenticeships were with an architect and an architectural draftsman), Old Master Italian paintings, the landscapes of Claude Lorraine and Italian views by British painters, notably Richard Wilson and John Robert Cozens. All three of these artists are represented by fine pieces in the exhibition.
Although of lowly stock - his father was a barber - the artist found patrons who would have been willing to commission him to travel to Italy to execute works for them and extend his artistic education, but the Continent was closed to him by the Napoleonic Wars.
A brief pause in this long conflict, after the Peace of Amiens in 1802, precipitated a rush of English visitors to France. Artists in particular seized the chance to visit Paris and the Louvre, then stuffed with looted masterpieces from all over Europe, advertised over the museum's cornice as "Les fruits de nos victoires" (The Fruits of Our Victories).
With his patrons' assistance Turner, too, traveled to Paris and surveyed the Louvre but was anxious to press on to Italy while he could. On the way, he discovered the Alps, the most enduring added bonus of his determination to see Italy itself. The profound impression that these mountains had on him is illustrated here by drawings and watercolors, including the spectacular "St Gotthard Pass from the Middle of the Devil's Bridge." The painting depicts a narrow mule path vertiginously snaking its way beneath overhanging rocks on the sheer cliff-face, streaked with frozen cascades above and the dizzying chasm below, half-concealed by the icy mists billowing through it.
On this trip, the artist made it only as far as Aosta on the southern side of the Alps, where he saw his first Roman remains on Italian soil.
Brief though this taste of Italy was, it stimulated Turner to produce further colorful scenes of cities there he was yet to visit himself, among them Rome and Naples. Meanwhile, the renewed outbreak of hostilities impeded his return to the Continent for many years.
That long-term Italian resident and Turner hero, Claude Lorraine, was a primary influence on the English artist's undertaking of his "Liber Studiorum." Claude had compiled a catalogue of drawings of his own paintings, the "Liber Veritatis." From 1806 onward, Turner began a similar project of etchings of his own paintings, intended for publication. Italian landscapes, often with architectural features, figured prominently in this collection.
But Turner went further, transforming, for example, rural Thames-side views to the west of London into Claudian Italianate pastoral scenes. A fascinating case on show here is "Isleworth," a print from the "Liber Studiorum" of the (still picturesque) riverside village where Turner lived after his return to England. The medieval church tower, cottages and a mill appear mistily in the background, but in sharp focus in the foreground Turner has conjured up on the tree-lined riverbank a circular Roman temple and imbued the whole scene with a distinctly Claudian atmosphere.
"Isleworth" is dated "January 1, 1819." In the summer of that year, Turner set out for Italy again to see the real thing.
He had prepared for years for this opportunity: immersed himself in classical literature, the Roman poets and historians, and Alexander Pope's translations of the "Iliad" and "Odyssey"; studied the available travel literature, both poetic and prosaic; and made a personal notebook (on show here) of thumbnail sketches, a dozen to a page, of the places he intended to seek out and record for himself.
The artist traversed the Alps again and took a zigzag route down the peninsula, making his first visit to Venice, passing through Bologna, Rimini and Ancona, crossing the Apennines, and going through Umbria on the way to Rome and Naples.
Vesuvius perversely erupted shortly after he returned to Rome. But he made an absolutely exquisite unfinished watercolor sketch (lent by the Tate) of the volcano seen from across the bay, emitting (as he acutely observed) twin plumes of decorative smoke, drifting lazily inland against a tranquil but subtly darkening sky.
Exposure to the full force of Mediterranean light and the strong, contrasting colors of Italy's land- and seascapes had dramatic consequences for Turner's palette, as he adopted a whole new range of vibrant yellows, blues and reds. Nor were these only applied to his Italian paintings - which he worked up from his hundreds of often minutely detailed drawings and sketches into oils and watercolors in his studio when he returned home - but also to new works depicting his native land.
Over the next decade, as vividly demonstrated in the exhibition, sooty Edinburgh became a Caledonian Roman forum basking in the southern sun; Minehead in Somerset, a northern Bay of Naples; Hythe in Kent was transposed to the Gulf of Salerno; and Virginia Water, a small lake in Surrey to the west of London, took on the glassy, miasmic air of the Venetian lagoon in midsummer.
This proved too much for some British critics, who complained that Turner's painting was suffering from some kind of "yellow fever." In 1828, the artist returned to Rome for an extended sojourn to try out the life of the resident artist as opposed to that of the itinerant visitor. He held an exhibition of his work at a palazzo on the Quirinal Hill. Instead of wood he used ship's ropes painted with yellow ochre to frame the pictures. The antiquary David Laing laconically recorded that "the people here cannot understand his style at all."
Nonetheless, at least two of his large oils that resulted from this last Roman stay - "Rome Seen from the Aventine Hill" and "Modern Rome: Campo Vaccino" (both here from Edinburgh) - must now surely be considered among the greatest of his Italian pictures.
Turner spent only about a month in all in Venice over three stays, in 1819, 1833 and 1840. James Hamilton rightly points out in the catalogue that in terms of production the artist's special passion for the place was "an idiosyncrasy of his old age," rather than something that occupied him, as did Italy in general, throughout his career. At the same time, Venice was a significant factor in the adventurous experimentation of the artist's last years, as is witnessed by the striking selection of Venetian and other late works with Italian settings, which gave rise to such English masterpieces as "Rain, Steam and Speed," now at the Tate Gallery.

ALL PHOTOGRAPHS COPYRIGHT IAN WALTHEW 2008

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